Company Code：600690.SH, 690D.DE Short Name：Haier Smart Home
Haier Smart Home Co., Ltd.
2022 Annual Report
Haier Smart Home Co., Ltd. Annual Report 2022
Important Notice
I. The Board of Directors, the Board of Supervisors, directors, supervisors and senior
management of Haier Smart Home Co., Ltd. (‘the Company’) hereby assure that the content
set out in the annual report is true, accurate and complete, and free from any false record,
misleading representation or material omission, and are individually and collectively
responsible for the content set out therein.
II. All Directors of the Company have attended the board meetings.
III. Hexin Certified Public Accountants Limited LLP has issued a standard and unqualified audit
report for the Company.
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 annual report is true, accurate and complete.
V. Proposal of profit distribution or proposal of capitalizing capital reserves for the reporting
period resoluted and adopted by the Board
Proposal of profit distribution for the reporting period are examined and reviewed by the Board: to
declare a cash dividend of RMB5.66 per 10 shares (tax inclusive) to all shareholders based on the total
number of shares held on record date and after deducting the repurchased shares from the
repurchase account upon the execution of distribution proposal, with proposed distribution amounting
to RMB5,297,529,553.10 (tax inclusive). The proportion of cash distribution is 36.01% of the net profit
attributable to shareholder of parent company of the Company for the year. If there is any change in
the total share capital of the Company during the period from the date of this report to the record
date of the equity distribution, the total distribution amount will be remained unchanged with
corresponding adjustment to the proportion of distribution per share.
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 the Company’s 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 the prescribed decision-making
procedures?
No
Haier Smart Home Co., Ltd. Annual Report 2022 1
Important Notice
IX. Are there more than half of the Directors who are unable to guarantee the truthfulness,
accuracy and completeness of the annual 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.
XI. Others
□ Applicable √ Not Applicable
Chairman: Li Huagang
Haier Smart Home Co., Ltd
30 March 2023
2 Haier Smart Home Co., Ltd. Annual Report 2022
Contents
LETTER TO SHAREHOLDERS 4
SECTION I DEFINITIONS 7
SECTION II GENERAL INFORMATION OF THE COMPANY AND KEY FINANCIAL INDICATORS 9
SECTION III MANAGEMENT DISCUSSION AND ANALYSIS 16
SECTION IV CORPORATE GOVERNANCE 53
SECTION V ENVIRONMENTAL AND SOCIAL RESPONSIBILITIES 93
SECTION VI SIGNIFICANT EVENTS 108
SECTION VII CHANGES IN SHARES AND INFORMATION ABOUT SHAREHOLDERS 127
SECTION VIII RELEVANT INFORMATION OF PREFERRED SHARES 140
SECTION IX RELEVANT INFORMATION OF BONDS 141
SECTION X FINANCIAL REPORT 144
(I) Financial statements with signatures and seals of the legal representative,
chief accountant and person in charge of accounting department.
DOCUMENTS (II) Original audit report with seals of accounting firm, signatures and seals of
AVAILABLE FOR registered accountants.
INSPECTION
(III) Originals of all documents and announcements of the Company which have
been publicly disclosed on the newspaper designated by China Securities
Regulatory Commission during the reporting period.
Haier Smart Home Co., Ltd. Annual Report 2022 3
Letter to shareholders
Haier Smart Home delivered another year of record performance in 2022. Our global sales revenue grew
7.2% to RMB243.514 billion, net profit increased by 12.5% to RMB14.711 billion and recurring net profit
rose by 18% to RMB13.963 billion under China GAAP. Our products are gaining grounds in almost all
markets around the world.
As one of the Fortune 500 companies, Haier Smart Home is committed to meeting the expectations of our
stakeholders on ESG practices by lowering carbon emissions through the lifetime of our products,
advocating diversity and inclusion, implementing responsible sourcing, creating value in the interest of the
society, and promoting sustainable corporate governance. Haier Smart Home continued to be named “Most
Admired Company” by Fortune in 2022, and our subsidiary GE Appliances was once again certified as Great
Place to Work in the US.
In 2022, unprecedented inflationary pressure in the US and looming energy crisis in Europe caused
retraction in demand for home appliances; while our supply chain, distribution network, logistic operation and
fulfilment system in the Company’s biggest market were disrupted by public health emergency in the fourth
quarter. What we have achieved in an extraordinary year like 2022 was truly remarkable, and it could only be
made possible with winning spirit, shared goal and decisive actions from the entire organization in fulfilling
our commitment to always prioritize consumer experience.
In taking on the role of Chairman of Haier Smart Home in June 2022, I have spent a great deal of time with
our customers, employees, partners as well as Haier Group, amongst other shareholders. What has been
reinforced is our stakeholders’ shared expectation for Haier Smart Home to become a long-standing leader
with sustainability that transcends the ups and downs in the economy. This requires Haier Smart Home to
continue outperforming the industry in the next three years, in order to attract and retain talents, while
creating greater value for shareholders and employees. During this time, we must be more efficient and
transparent not only in the way we interact with our users, in the product we make and in the service we
provide, but also in the business operations and supply chain system; we ought to become the elephant
that can dance by being agile and embrace the latest technological development. In the next three years,
Haier Smart Home will strengthen the foundation of our sustainable development. As a responsible corporate
citizen of global influence, we remain committed to reducing carbon emissions in product design,
manufacturing and recycling; building a sustainable and ethical supply chain; creating a workplace for our
people to fulfil their dreams and realize individual value; eliminating bureaucracy and avoiding disorientation
in processes. Across the globe, we will enhance our commitment to local communities, and strengthen our
ties with the places where we operate.
Looking ahead, the abrupt reversal in globalisation and increasing financial volatility remain source of
uncertainty during Haier Smart Home’s global brand portfolio building. The way to success lies with placing
users experience at the heart of our business while transforming ourselves by accelerating digitalisation and
innovation.
4 Haier Smart Home Co., Ltd. Annual Report 2022
Letter to shareholders
The pandemic appears to be over, however lingering aftereffects such as lower labour participation rate and
supply chain fragmentation will inevitably impact demand in home appliance and HVAC sectors, against this
backdrop, quality growth is only made possible in countries with substantial domestic market, manufacturing
scales and ample supply of engineering talents; and businesses that can achieve rapid profit growth are
those with engaged workforce, production efficiency and consumer goodwill. Capitalising on our advantages
in the world’s largest home appliance market, efficient supply chain and engineering expertise in China, Haier
Smart Home is in the best position to strengthen our global competitiveness as long as we drive innovation
with technology, redefine experience with digitalization and manage the business with start-up sensibility.
The Internet of Things (IoT) and advancements in energy efficiency are two driving forces that will transform
the industry. Harnessing these technologies is the focus of Haier Smart Home’s future R&D. IoT technology
gives home appliance businesses better consumer insights via interactive experience. After the initial
configuration, home appliance businesses can accelerate product upgrades and improve algorithm to
enhance user recognition based on feedback on product quality, functionality and scenario applications
utilising sensors, user behaviour analysis and big data applications. In addition to the breakthrough in
consumer robotics and smart lighting we made in 2022, future IoT development will focus on appliances for
elderly, cleaning robots and whole house smart management systems.
In January 2023, the Company established a rotary compressor joint venture with Shanghai Highly, a leading
manufacturer of residential compressors, to facilitate integrated R&D of our home air conditioning products.
In addition, we consolidated leadership with air-sourced heat pump & solar water heater solutions designed
to provide efficient alternative heating solutions for hotels, campuses and hospitals. Since 2006, we have
been developing magnetic centrifugal chiller in Chinese market since 2006. Compared to MRV systems, this
technology could increase COP/IPLV by 100% and we have been number one globally in magnetic chillers
for four consecutive years. The Company has also developed air levitation centrifugal chiller and integrated
energy management solutions, which will become solid foundation facilitating innovations in our global
commercial HVAC business.
Aspired to be the global leader like refrigerator and washing machine businesses, our home and central air
conditioner businesses ought to become the new pillar of future growth, while investments must continue in
small appliance and kitchen appliance to grow R&D and supply chain competitiveness. We have established
leadership in the more significant markets of China and the US, but our position and profitability demand
further progress in other regions. The way forward is through relentless product innovation and brand
building, during which process Haier Smart Home must remain committed to designing high quality and
creative appliances that deliver user-centric experience. We must stay attuned to local markets and build a
solid reputation with reliable and attentive services. This strategy also requires us to allocate our supply
chain and distribution resource to cater for the characteristics of each product category, for instance, we do
not necessarily have to make all of the small appliances in our own factories and digital applications online
could be playing a more important role in marketing our small appliance.
Haier Smart Home Co., Ltd. Annual Report 2022 5
Letter to shareholders
The new generation of consumers is demanding personalised and customised scenarios that integrate
appliances with home furnishings, thus unlocking significant business opportunities that inspired us to create
scenario-based project of Three-Winged Bird, specializing in redefining in-store experience by creating
immersive display of smart lighting, smart kitchen, smart air & temperature solution as well as water
management, all of which could be mixed & matched to suit personal taste. More importantly, we would like
this entire process to be efficient and transparent, and we are committed to being their trustworthy partner
in creating the smart home experience right from the beginning.
It is rather lamentable that as companies grow bigger, they often lose touch with the latest trends and
technological breakthroughs when the organization becomes too entwined with bureaucracy. In order to
achieve long-standing prosperity, our next step is to make Haier a place that inspires young generation Z
with dreams, to take pride in creating amazing value for our users, instead of burying their passion with
frivolous details. Adopting a ‘start-up’ mindset is fundamental to the vitality of our organisation. We have
initiated an internal debate trying to encourage practices that lead to operational excellence and eliminate
those who don’t. I would like our marketing department to look beyond sales figures, and spend more time
with our customers and focus on their future prospects in Haier’s ecosystem. I have tasked our product and
scenario designers to better understand what end-users think of our products, and draw inspirations through
user engagement. Decisions should be made based on critical consumer insights generated from sharing of
market demand in a boundaryless organization. The next three years will see a determined drive to
re-engineer the organisation, not only to improve operational efficiency, but to free up financial resources
that will fuel investments in talents and technologies for the future.
I feel a great sense of responsibility during this turbulent time, a bold transformation is what will position
Haier Smart Home better in value creation. Motivated by our winning spirit and guided by our goals, we look
forward to embarking upon this exciting journey to a brighter future.
Once again, I would like to thank all our shareholders for your trust and support as we embrace a
sustainable future together!
6 Haier Smart Home Co., Ltd. Annual Report 2022
Section I Definitions
I. DEFINITIONS
Unless otherwise stated in the 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 Home Co., Ltd., its original name is ‘Qingdao Haier Co.,
Haier Smart Home Ltd.’, and the original short name is ‘Qingdao Haier’.
Four Major Securities China Securities Journal, Shanghai Securities News, Securities Times,
Newspapers Securities Daily
Haier Electrics, 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 Electrics has been
privatized by way of H shares issuance on 23 December 2020 and
became a wholly owned subsidiary of the Company since then.
GEA GE Appliances, household appliances assets and business of General
Electric Group, have currently been owned by the Company.
FPA Fisher & Paykel Appliances Holdings Limited (Chinese name: 斐雪派克),
was established in 1934 and is known as the national appliance brand
of New Zealand, the global top-level kitchen appliance brand and the
famous luxury brand of the world. It has products including ventilator,
gas stove, oven, dishwasher, microwave oven, built-in freezer, washing
machine, clothes dryer and etc. Its business covers over 50 countries/
regions across the world. FPA is a 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
ten 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 household appliances area, was established in 1994
and has been focusing on research of retail sales in China consumption
market ever since.
Haier Smart Home Co., Ltd. Annual Report 2022 7
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.
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.
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.
IEC The International Electrotechnical Commission, founded in 1906, 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’is the 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 “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.
8 Haier Smart Home Co., Ltd. Annual Report 2022
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 海尔智家
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 the Representative of Company Secretary
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 Room 3513, 35th /
Securities of Haier Securities of Haier Floor, The Center,
Smart Home Co., Smart Home Co., 99 Queen’s Road
Ltd., Haier Science Ltd., Haier Science Central, Central,
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 /
Haier Smart Home Co., Ltd. Annual Report 2022 9
Section II General Information of the Company and Key Financial Indicators
III. SUMMARY OF THE GENERAL INFORMATION
Registered Address Haier Industrial Park, Laoshan District, Qingdao City (now known as
Haier Science and Technology Innovation Ecological Park, Laoshan
District, Qingdao City)
Historical Changes to 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 business 266101
address
Website https://smart-home.haier.com/cn/
Email 9999@haier.com
IV. PLACE FOR INFORMATION DISCLOSURE AND DEPOSIT
Newspapers and websites Shanghai Securities News, Securities Times, China Securities Journal,
for annual report Securities Daily
disclosure
Stock Exchange Website for www.sse.com.cn
annual report disclosure
as designated by the
CSRC
Other websites for annual https://smart-home.haier.com/cn/, www.xetra.com, www.dgap.de,
report disclosure https://www.hkexnews.hk
Deposit place of annual Department of Securities of Haier Smart Home Co., Ltd.,
report Haier Science and Technology Innovation Ecological Park,
No.1 Haier Road, Qingdao City
V. SUMMARIZED INFORMATION OF SHARES OF THE COMPANY
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-shares Shanghai Stock Haier Smart Home 600690 Qingdao Haier
Exchange
D-shares Frankfurt Stock Haier Smart Home 690D Qingdao Haier
Exchange
H-shares Hong Kong Stock Haier Smart Home 6690 /
Exchange
10 Haier Smart Home Co., Ltd. Annual Report 2022
Section II General Information of the Company and Key Financial Indicators
VI. OTHER RELATED INFORMATION
Accounting firm engaged Name Hexin Certified Public Accountants LLP
by the Company Business Address 24th Floor, Century Building,
(domestic) No.39 Donghai Road West, Qingdao City
Name of signing Zhao Bo, Li Xiang Zhi
accountant
Accounting firm engaged Name HLB Hodgson Impey Cheng Limited
by the Company Business address 31st Floor, Gloucester Tower, The Landmark,
(overseas) 11 Pedder Street, Central, Hong Kong Special
Administrative Region
Name of signing Jack, Tian Sun Kit
accountant
Note:
Accounting firm engaged by the Company (domestic and overseas): Pursuant to the motion for the appointment of an auditor
approved at the Company’s 2021 Annual Shareholders‘Meeting, the Company engaged Hexin Certified Public Accountants LLP and
HLB Hodgson Impey Cheng Limited to issue the China Accounting Standards and International Accounting Standards auditing
report respectively for the Company’s 2022 annual report.
VII. KEY ACCOUNTING DATA AND FINANCIAL INDICATORS IN THE
RECENT THREE YEARS
(I) Key accounting data
Unit and Currency: RMB
Yoy
change
Key accounting data 2022 2021 (%) 2020
After adjustment Before adjustment
Operating revenue 243,513,563,670.73 227,105,817,641.69 227,556,143,618.17 7.22 209,723,430,081.03
Net profit attributable to
shareholders of the
listed company 14,710,923,491.99 13,078,840,517.10 13,067,038,271.85 12.48 8,883,129,055.16
Net profit after
deduction of
non- recurring profit
or loss attributable to
shareholders of the
listed company 13,962,931,853.78 11,831,272,558.29 11,831,272,558.29 18.02 6,457,813,335.37
Net cash flows from
operating activities 20,153,505,783.35 23,235,380,690.95 23,129,640,417.72 –13.26 17,609,513,831.64
Haier Smart Home Co., Ltd. Annual Report 2022 11
Section II General Information of the Company and Key Financial Indicators
Yoy
change
At the end of 2022 At the end of 2021 (%) At the end of 2020
After adjustment Before adjustment
Net assets attributable
to shareholders of
the listed company 93,422,647,664.43 79,985,092,528.06 79,810,927,325.55 16.80 66,837,525,701.87
Total assets 235,842,254,826.77 217,741,133,577.31 217,459,494,212.74 8.31 203,498,169,276.71
(II) Key financial indicators
Yoy
Key financial change
indicators 2022 2021 (%) 2020
After adjustment Before adjustment
Basic earnings per
share(RMB/share) 1.58 1.41 1.41 12.06 1.34
Diluted earnings per
share (RMB/share) 1.57 1.40 1.40 12.14 1.31
Basic earnings per
share after deducting
non-recurring profit
or loss (RMB/share) 1.50 1.27 1.27 18.11 0.97
Decreased
Weighted average by 0.45
return on net assets percentage
(%) 16.81 17.26 17.29 point 17.68
Weighted average
return on net assets Increased
after deducting by 0.30
non- recurring profit percentage
or loss (%) 15.95 15.65 15.65 point 12.85
Explanation of the key accounting data and financial indicators of the Company as at the end of
the reporting period for the previous three years
□ Applicable √ Not applicable
12 Haier Smart Home Co., Ltd. Annual Report 2022
Section II General Information of the Company and Key Financial Indicators
VIII. DIFFERENCES IN ACCOUNTING DATA UNDER DOMESTIC AND
OVERSEAS ACCOUNTING STANDARDS
(I) Differences in net profit and net asset attributable to shareholders of listed
company in financial report disclosed in accordance with International
Accounting Standards and China 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 disclosed in accordance with
International Accounting Standards and China Accounting Standards.
(II) Differences in net profit and net asset attributable to shareholders of the listed
company in financial statements disclosed in accordance with overseas
accounting standards and China Accounting Standards
□ Applicable √ Not applicable
Apart from the financial statements prepared in accordance with International Accounting
Standards, the Company did not prepared any financial statements in accordance with other
overseas accounting standards.
(III) Explanation on the difference between the domestic and overseas accounting
standards:
□ Applicable √ Not applicable
IX. KEY FINANCIAL DATA OF 2022 BY QUARTER
Unit and Currency: RMB
Q4
Q1 Q3 (October-
(January-March) Q2 (April-June) (July-September) December)
Operating revenue 60,250,997,851.46 61,606,524,610.76 62,891,243,547.88 58,764,797,660.63
Net profit attributable to shareholders of
the listed Company 3,517,044,899.45 4,432,039,573.25 3,716,522,018.59 3,045,317,000.70
Net profit after deduction of non-
recurring profit or loss attributable to
shareholders of the listed Company 3,190,978,313.06 4,299,715,392.32 3,730,558,477.25 2,741,679,671.15
Net cash flows from operating activities 1,154,796,354.40 4,809,451,302.82 5,240,826,180.55 8,948,431,945.58
Explanation on the difference between quarterly data and disclosed regular reporting data
□ Applicable √ Not applicable
Haier Smart Home Co., Ltd. Annual Report 2022 13
Section II General Information of the Company and Key Financial Indicators
X. NON-RECURRING PROFIT AND LOSS ITEMS AND AMOUNT
Non-recurring profit and loss items Amount in 2022 Amount in 2021
Profit and loss from disposal of non-current assets 209,436,774.95 95,443,538.78
Government subsidies included in current profit or loss,
except for government subsidies that are closely related to
the Company’s normal business operations and gained
constantly at a fixed amount or quantity according to
certain standard based on state policies 766,426,467.17 717,084,575.78
Net profit and loss of subsidiaries arising from business
combinations under common control of the current period
from the beginning of the period to the date of
consolidation 12,934,615.51 10,786,626.61
Profit and loss from fair value changes of financial assets
held for trading, derivative financial assets, financial
liabilities held for trading and derivative financial liabilities,
as well as investment gains arising from disposal of
financial assets held for trading, derivative financial assets,
financial liabilities held for trading and derivative financial
liabilities and other debt investments, except the effective
hedging related to the normal operations of the Company –23,321,060.42 512,402,328.52
Other non-operating income and expenses except the
aforementioned items –29,750,173.25 60,282,401.05
reduction: Effect of income tax 167,413,005.22 135,105,480.15
Effect of minority equity interest (After Tax) 20,321,980.53 13,326,031.78
Total 747,991,638.21 1,247,567,958.81
For the Company’s designation of extraordinary gain or loss items as defined in the”Explanatory
Announcement on Information Disclosure for Companies Offering Their Securities to the Public No.1 —
Extraordinary Gains or Losses”, and for extraordinary gain or loss items as illustrated in
the”Explanatory Announcement on Information Disclosure for Companies Offering Their Securities to the
Public No.1 — Extraordinary Gains or Losses“designated as recurring gain or loss items, reasons shall
be specified.
□ Applicable √ Not applicable
14 Haier Smart Home Co., Ltd. Annual Report 2022
Section II General Information of the Company and Key Financial Indicators
XI. ITEMS MEASURED BY FAIR VALUE
√ Applicable □ Not applicable
Unit and Currency: RMB
Affected amount
Changes in the to profit of current
Items Opening balance Closing balance current period period
Wealth management products 2,168,622,090.00 14,638,968.26 –2,153,983,121.74 92,094,300.47
Investment in other equity instruments 4,851,884,944.63 5,851,882,930.20 999,997,985.57 31,607,357.22
Investment in trading equity instruments 330,557,610.82 336,743,065.02 6,185,454.20 106,216,247.55
Investment funds 150,516,274.37 168,430,847.63 17,914,573.26 –37,211,579.82
Derivative financial instruments 176,525,574.88 61,674,330.75 –114,851,244.13 142,693,890.40
Total 7,678,106,494.70 6,433,370,141.86 –1,244,736,352.84 335,400,215.82
XII. OTHERS
□ Applicable √ Not Applicable
Haier Smart Home Co., Ltd. Annual Report 2022 15
Section III Management Discussion and
Analysis
I. DISCUSSION AND ANALYSIS ON OPERATIONS
In 2022, the Company realized sales revenue of RMB243.514 billion, representing an increase of 7.2%
from 2021. Revenue growth was driven by: (1) the strengths of high-end brands which enhanced user
value, along with the promotion of Three-Winged Bird brand that boosted sales of scenario-based
product sets and increased transaction value; (2) overseas market expansions leveraging globalised
supply chain and R&D platforms as well as in-depth market network to launch leading products and
improve price index; (3) the development of new product categories including tumble dryers,
dishwashers, heat pumps and home cleaning robots.
In 2022, net profit attributable to the owners of the Company amounted to RMB14.711 billion,
representing a growth of 12.5% from 2021; net profit attributable to owners of the Company after
non-recurring items reached RMB13.963 billion, up 18.0% from 2021. (1) Gross profit margin remained
flat to 2021 at 31.3%, domestic gross margin expansion was driven by product mix upgrade,
development of globalised platforms, digitalization in procurement and R&D, as well as lower
commodities prices in the second half of the year; the overseas market recorded minor gross margin
contraction as the benefits of better product mix and price increases were offset by cost pressure
related to rising commodities prices. (2) Selling expense ratio reduced by 0.3 percentage points to
15.9%, attributable to efficiency enhancement from digitalizing marketing, logistics and warehouses. (3)
Administrative expense ratio reduced by 0.2 percentage points to 4.5%, achieved by digitally enhanced
operational processes and organizational efficiency. (4) Financial expense ratio went down by 0.4
percentage points to –0.1%, the reduction was attributable to increase in interest income, improved
exchange risk management, however this was partially offset by higher interest expense caused by
interest rate increase overseas.
Net cash flow from operating activities in 2022 was RMB20.154 billion, operations remained solid with
net cash flow to net profit ratio reached 1.37, attributable to improved working capital management in
China.
(I) Smart Home Business in China
In 2022, revenue of smart home business in China grew by 4.6% from 2021 reaching
RMB126.379 billion, the growth was attributable to ① market share gains from outperforming the
industry in refrigerators, washing machines, air conditioners, and water heaters; ② distribution
network expansion to capture strong momentum from e-commerce and franchised stores; ③
increased sales of product sets with higher average ticket price from Three-Winged Bird
scenario-based solutions; ④ enhanced user engagement and conversions through providing
services and design solutions in first and second tier markets, and offering door-to-door services
to rural households.
1. Household Food Storage and Cooking Solutions
(1) Refrigerator and Freezer Business
In 2022, refrigerator business achieved sales revenue of RMB43.199 billion,
representing an increase of 3.5% year-on-year. According to CMM, the Company’s
retail share of refrigerators went up 2.5 percentage points to 43.9% offline; and
increased 0.5 percentage points to 39.2% online.
16 Haier Smart Home Co., Ltd. Annual Report 2022
Section III Management Discussion and Analysis
The Company spearheaded industry development in food preservation, large-volume
products and connectivity. The Company served a variety of user needs through
brand portfolio of Casarte, Haier and Leader. (1) Leveraging breakthroughs in built-in
design, structural configuration and heat dissipation technology, Casarte was able to
introduce seamless built-in range and achieved 180% revenue growth from its built-in
refrigerators during the reporting period. (2) Featuring cutting-edge freshness
preservation and refrigeration technologies, more than one million units of Haier
full-space freshness preservation refrigerator were sold, including Boguan (博 觀)
series, could maintain humidity level at 90% in the refrigerator zone with zero
temperature fluctuations in the freezer, allowing ingredients to stay fresh for 7 and 15
additional days in the chilled and frozen sections compared to ordinary refrigerators,
over 50,000 units were sold in its first year on the market at an average price of over
RMB15,000.
During the reporting period, freezer business achieved a revenue growth of 11%
partly driven by the introduction of large-size upright freezers designed for home use.
In May 2022, Haier’s upright freezer was awarded the highest honour of recognition
by Stiftung Warentest, Germany’s leading consumer testing institution. Meanwhile,
revenue of commercial freezers also grew by 19%.
Export business
The Company focused on brand premiumisation and product innovation featuring
large multi-door refrigerators and freshness preservation technology to expand market
share overseas. In Europe, Haier ranked first in large multi-door refrigerators with
market share of over 40%. In Japan, the Company launched ultra-thin large-volume
TZ freezer series, boosting market share of large refrigerators by 4.6 percentage
points to 43%. In Vietnam, market share of high-end large refrigerators reached 40%.
(2) Kitchen appliance business
In 2022, kitchen appliance segment recorded sales revenue of RMB3.763 billion, a
year-on-year increase of 7.7% and Casarte’s revenue contribution continued to
increase. According to CMM, the Company’s offline retail share of kitchen appliances
rose 1.4 percentage points year-on-year to 8.4%, ranking top three in the industry for
the first time.
The Company launched a series of innovative products that were well-received by the
market. Casarte’s constant air volume range hood was equipped with wind pressure
sensor and automatic fan adjustment, to provide strong ventilation and efficient
extraction, while reducing noise level by 5dB to 43dB. Casarte’s ovens created
self-cooking technology at 300C, a pizza could be cooked within three minutes, and
baking is automatically stopped once the food is ready. This product ranked first in
market share among ovens priced above RMB11,000. Casarte’s dishwashers
featuring drawer-style compartments equipped with large-diameter spray arm that
rinsed dishes at 360 to achieve thorough cleaning. During the reporting period,
revenue of Casarte’s dishwashers recorded double-digit revenue growth.
Haier Smart Home Co., Ltd. Annual Report 2022 17
Section III Management Discussion and Analysis
Export business
Export revenue grew 25% in 2022. In addition, the Company continued making effort
to increase in-house production and improve operational efficiency.
2. Household Laundry Management Solutions
During the reporting period, the Company’s washing machine business achieved sales
revenue of RMB31.614 billion, a year-on-year increase of 3.1%. According to CMM, the
Company’s offline retail share of washing machines rose 1.8 percentage points to 46%,
and retail share stayed flat at 40.4% online. Retail share of tumble dryers increased 6.4
percentage points to 39.3% offline and 6 percentage points to 31% online.
The Company has strengthened high-end washing machine market leadership through
product innovation. (1) Casarte’s Zhongzihemei (中 子 和 美) washer & dryer combo
integrated washing, drying and clothes caring with real-time data sharing during each
process. It was designed to reduce creases, wear & tear, and consume less energy. (2)
Haier brand is committed to developing innovative technologies that enhance energy and
water efficiency. Its Essence Wash washing machine was equipped with a premix
compartment and high-pressure spraying technology to achieve powerful stain removal and
reduce wear & tear by pre-mixing detergent. More than 200,000 units have been sold
within three months since its launch. The Company also captured new opportunities in
tumble dryers with revenue growth of over 80% in 2022. Casarte Xiannuo (纖 諾) dryer
helped grow the Company’s market share in units above RMB10,000 to 46.6%.
Export Business
The Company focused on product upgrade and user interaction to enhance experience.
Despite industry-wide weakness, IoL data indicates that the Company still managed to
grow export revenue by 4%, by capturing energy efficiency market opportunities with swift
upgrade of entire washing machine range to energy efficiency Class A in Europe; in Japan,
heat pump and front-load washer combo contributed to the 50% revenue growth.
3. Air and Energy Solutions
During the reporting period, the Company’s air and energy solution business realized sales
revenue of RMB33.947 billion, up 5.4% year-on-year.
(1) Home air conditioner business
During the reporting period, home air conditioner business achieved significant market
share increase by consolidating distribution network, boosting distributor and user
reputation, increasing in-house components production, and accelerating supply chain
integration. According to CMM, offline retail share rose 2.8 percentage points
year-on-year to 19.5% in 2022, and retail share increased 0.8 percentage points
year-on-year to 14.4% online. In addition, retail share in the high-end market
(wall-mounted units priced above RMB4,000 and standing units priced above
RMB10,000) grew 3.9 percentage points, reaching 24.2%.
18 Haier Smart Home Co., Ltd. Annual Report 2022
Section III Management Discussion and Analysis
The Company capitalised on the development of home central air-conditioners by
improving design, installation and service standards, while enhancing distributors’
service capabilities through trainings to garner consumer goodwill. According to China
IoL, the Company’s market share of home central air-conditioners increased 0.25
percentage points year-on-year to 14.7% in 2022.
The Company strived to provide users with healthier, more comfortable,
energy-efficient and environmentally friendly air solutions by utilizing IoT technologies.
For example, Casarte’s Yunding (雲 鼎) deluxe air conditioners could wash and purify
air through a 19-layer water curtain, effectively removing seven types of pollutants
including formaldehyde and PM2.5. It is also equipped with Smart Home system that
could identify users and surrounding environment in order to provide customized and
personal temperature settings.
The Company created immersive experience to improve store traffic conversion by
demonstrating technological strengths in cooling and heating efficiency, ultra-low
noise, and health benefits. The Company also increased average contribution of
individual models by streamlining SKUs and increasing the volume of each order.
The Company strengthened supply chain and optimized design & procurement costs
by increasing in-house manufacturing of core components and enhancing
management of tier two & three suppliers. In January 2023, the Company formed a
compressor joint venture with Shanghai Highly, aiming to secure an integrated supply
of compressors, enhance production stability, reduce costs, in order to improve
overall profitability and enhance competitiveness through coordinated development of
compressors and air-conditioning units.
Export business
Export revenue rose by over 25% in 2022, ranking number one in the industry
according to China IoL. The growth was driven by breakthroughs in new products
such as dehumidifiers and strong performance in the US and Europe markets
leveraging localized distribution network and product innovation.
(2) Commercial air-conditioner business
During the reporting period, revenue from commercial air conditioners grew over 20%.
According to China IoL, the Company’s share increased 0.9 percentage points
year-on-year to 11.1% in the domestic market and 0.7 percentage points to 14.2% in
the export market as compared to 2021.
During the reporting period, the Company started expanding from commercial HVAC
equipment to energy management and smart integrated solutions for buildings. By
creating MetaBuilding control system that integrates air conditioners, elevators,
lighting, water, electricity and security, the Company aims at offering green and smart
building solutions that combine technology, experience and space.
Haier Smart Home Co., Ltd. Annual Report 2022 19
Section III Management Discussion and Analysis
Drawing on strengths in magnetic centrifugal chillers, the Company won contract of
37 underground lines in 17 cities in 2022, reinforcing number one position in
domestic market. In addition, the Company developed air-suspending central
air-conditioners and pioneered magnetic & air-centrifugal chillers solutions leveraging
air-suspending centrifugal compressor technology to enhance energy efficiency and
eliminate frictions in the switch on/off process.
During the reporting period, heat pump revenue grew by 26%. The Company
launched –37C Low Ambient heat pumps with performance above and beyond the
scope of China Energy Label grade 1 products by adopting leading R32 refrigerant
system. The Company also launched Air to Water heat pump that could provide
constant 90C water under wide temperature, making it an efficient alternative to
fossil-fuel boilers in many industrial settings. In 2022, the Company won Tangshan’s
Guye District (古 冶 區) Heating Renovation Project, the largest project of its kind in
China.
Export business
The Company also developed oil-free magnetic centrifugal chillers overseas, with
export revenue up by over 40% in 2022. During the reporting period, the Company
also won several contracts including Suvarnabhumi Airport in Thailand and the
Ministry of Health in Malaysia.
4. Household Water Solutions
During the period, water heaters and purifiers revenue grew by 9.1% to RMB13.855 billion.
According to CMM, the Company strengthened its leadership in 2022, with market share
increase of 1.3 percentage points to 29.8% offline, and online retail share rose 2.4
percentage points to 34.0%.
Following the launch of Casarte’s Crystal Tank Galaxy series, the Company expanded
dual-tank line-up to capture demand for water heaters with small-size, tasteful appearance
and large-capacity. Leveraging gas-electric hybrid technology, the Company was able to
consolidate premium leadership in gas water heaters with revenue growth of 16% in 2022;
and the Company remained number one in units priced above RMB8,000. During the
period, the offline retail share of gas water heaters increased by 1.9 percentage points
year-on-year to 22.2%. Air-sourced heat pump water heater accelerated R&D in high water
temperature, disinfection, frequency conversion and energy saving. In 2022, its domestic
revenue grew by 19% and overseas revenue rose by over 290%. Casarte’s Tianhe (天 合)
NC7 air-sourced water heater could rapidly heat up at –15C and reduce electricity usage
by over 76%.
20 Haier Smart Home Co., Ltd. Annual Report 2022
Section III Management Discussion and Analysis
The water purifier business strengthened competitiveness through product innovation and
supply chain optimization. During the period, the Company expanded high-end market
share with cutting edge technologies including zinc-strontium mineral spring. Since April
2021, Haier smart water purifier factory has not only been able to produce the entire
under-sink range in house, but also its own filter, water circuit board and moulding
modules, all of which contributed to increase cost competitiveness.
5. Sales Platform in China
Despite macro uncertainties during the reporting period, the Company remained committed
to enhancing user experience, increasing user recognition and growing average user value
via several initiatives to enhance efficiency of franchised network with digital transformation
and service innovation; accelerate development in new retail channels and improve user
interaction online; increase presence in home improvement channels, establish design,
installation & service one-stop stores, as well as establishing partnerships with designers.
According to CMM, the Company’s overall retail market share went up 2 percentage points
year-on-year to 27.2% in China in 2022.
Challenged by declining traffic and store closures in KA channels, the Company accelerated
omni channel network expansion, and strengthened its franchised stores with digital tools to
improve traffic acquisition and conversion. The Company stimulated replacement demand in
the rural market by offering door-to-door appliance cleaning services, while driving the sales
of product sets in the urban areas by building showrooms featuring tailored design
solutions. Furthermore, the Company actively developed shopping mall channels through
scenario-based solutions and integrated offline/online interactions, showcasing quality
lifestyle and boosting replacement demand.
Increasing number of consumers started to buy appliances online. During the reporting
period, the Company expanded product portfolio online, while strengthening the premium
Casarte brand by introducing over 70 new units. The Company also made efforts to
improve membership management by streamlining online and offline user database utilizing
digital tools. In 2022, the Company topped the industry with 20% growth of its aggregated
GMV online; user engagement efficiency increased 23%; total number of Haier brand
membership surged 41% to over 45 million.
The Company made dedicated effort to capture the growth opportunities of live streaming
platforms and short video marketing by creating quality content integrating brand stories to
increase consumer recognition. In 2022, over 40,000 short videos were released, and daily
average live streaming coverage exceeded 16 hours in flagship store online. Streaming
related transaction value exceeded RMB10 billion in 2022, ranking first amongst major
home appliance businesses online.
Haier Smart Home Co., Ltd. Annual Report 2022 21
Section III Management Discussion and Analysis
Growing number of consumers started to buy major appliances at the beginning of their
renovation project, thus the Company enhanced traffic conversion and average ticket price
by showcasing scenario-based solutions in Three-Winged Bird stores, providing professional
design toolkit to distributors and promoting existing home renovation and kitchen
renovation solutions. In 2022, over 900 new Three-Winged Bird stores were added, and
retail sales of Three-Winged Bird stores went up by 257% year-on-year.
Amid the growing traffic towards home improvement channels, the Company established
wide partnership with home furnishing industry and expanded distribution network in
building material markets with retail sales increase of 51% and 401 new sales outlets
added in 2022.
In 2022, business operations remained under constant pressure offline, the weakness in KA
channels also had an impact on sales of mid and high-end products. During the reporting
period, Casarte brand managed to grow against the headwind through product renovation,
development of set product portfolio and distribution network enhancement. In 2022,
revenue contribution from product sets went up by 2.4 percentage points, according to
CMM, Casarte’s core appliance market share went up by 1.4 percentage points from 2021
to 12.3%.
6. Accelerating digitalization to facilitate end-to-end innovation, enhance operational
efficiency and user experience.
During the reporting period, the Company implemented digital transformation in
procurement, lean manufacturing, marketing, and R&D, achieved cost reduction and
efficiency improvement through data integration, operational digitalization and
transformation.
Improve procurement efficiency
The Company established selective vendor database to reduce supplier complexity,
increase commonly used parts and improve material quality. In 2022, the number of
components was reduced by 17.5% and proportion of common parts increased by 12%,
the Company also cut new supplier process time by 10% and shortened supplier
inspection time by 10% to accelerate new product pipeline.
Improved efficiency of lean manufacturing
The Company has successfully increased scheduling accuracy to 85%, increased factory
UPH by 9.3%. and reduced inventory of semi-finished goods by 20% thanks to promoting
manufacturing digitalization, integrated scheduling in assembly, pre-process, and sequential
production. Loading efficiency of finished goods logistics also enhanced 30% by integrating
logistics data.
In 2022, the Company reduced OTD lead time by reduced by 7% in China through
advancing SKU classification system, as well as simplifying process during examination,
scheduling, and shipment to reduce order fulfilment delays. Meanwhile, the Company also
optimized inventory replenishment model in e-commerce channels and implemented VMI
model, to reduce inventory turnover days in regional branches by 10%.
22 Haier Smart Home Co., Ltd. Annual Report 2022
Section III Management Discussion and Analysis
(II) Overseas home appliances and smart home business
Revenue amounted to RMB125.424 billion in 2022, up 10.3% from 2021, driven by product
innovation leveraging globalised platforms, several new products have been successfully launched
globally including the large front-load washer; flexible and efficiency from globalised supply chain;
worldwide deployment of production capacity to cater for local demand; continued growth in
price index thanks to global premium brand building.
1. North America
The North American Home Appliance market encountered a significant challenge in 2022.
Fears of recession exacerbated the weakness of consumer spending, and the core
appliance industry declined by around 6%, while costs faced severe inflationary pressures.
However, the Company acted decisively in implementing its strategy during the reporting
period and again delivered a solid performance, with sales revenue increasing by 9.0% (up
4.6% in local currency). The Company’s resilience and sustainability are built on long-term
investments in technology, product innovation, distribution network expansion, brand
building, and supply chain management, ultimately continuing to meet its commitment to its
users.
During the reporting period, the Company adhered to its high-end strategy and launched
new differentiated premium products such as the first Profile Front Load and Top Load
washing machine with built-in Alexa voice assistant, Café counter-depth multi-door
refrigerator, industry-leading Striker smart cooktop with precise temperature control and
ultra-fresh dishwasher with stainless steel tub to improve product mix and support
double-digit growth of premium brands.
The Company continues to expand the growing space for new categories. During the
reporting period, the product line-up of HVAC continued to improve, and the launch of
ducted AC marked the Company’s entry into the mainstream HVAC market in the United
States; the water heater factory in South Carolina went into operation, becoming the core
manufacturing base for premium water heater products; the small domestic appliance
category expanded, and Opal ice maker ranked in the top in the premium countertop ice
maker category at Amazon, etc.
The Company has always been committed to continuously improving user experience,
building the end-to-end digital platform to improve the Company’s efficiency internally and
interact with users externally. The Company has remotely upgraded the Steakhouse Mode
and Turkey Mode for tens of thousands of users successively; during the same time the
Company opened a micro-factory in the Co-Creation Centre in Stamford, Connecticut. The
Company once again won the annual “Smart Appliance Company of the Year” and
“Cybersecurity Breakthrough Award” in the United States.
Facing the challenging of a downward market environment and raw material inflation etc.,
the Company continues to deepen RenDanHeYi to motivate employees. Employees set up
five teams spontaneously to build a synergistic system of sales and operation in the areas
of material cost takeout, operation efficiency, structure improvement, revenue, and cash
flow respectively to achieve sustainable growth. With high recognition of the employees, the
Company was again certified as the “Great Place to Work” in the US in 2022.
Haier Smart Home Co., Ltd. Annual Report 2022 23
Section III Management Discussion and Analysis
The Company continues to be a local corporate citizen. During the reporting period, the
Company launched the Every Voice program, which aims to provide jobs for refugee
groups who have left their homes; the first batch of Einride electric trucks have been put
into service, effectively reducing carbon emissions during the Company’s operation while
improving supply chain efficiency; and Blue Wave public service program has expanded
from the U.S. to a global scale and will contribute to public welfare around the world.
2. Europe
In 2022, the Company recorded revenue of RMB23.032 billion in Europe, an increase of
16.7% year-on-year. GFK statistics suggests the Company was the fastest growing
appliances business with retail volume market share up by 1 percentage point to 7.4%,
and retail revenue market share increase of 1.4 percentage points to 6.8%. The Company
achieved growth against the headwind by strengthening high-end brand strategy, seizing
market opportunities for energy-saving and built-in products, as well as accelerating supply
chain localization. During the period, Haier brand’s price index rose to 131; the Company
capture market opportunity for energy-efficient products by launching Haier905CD
refrigerator, ultra-thin Ipro7plus washing machine, 939 washing machine and 979Plus12kg
washing machine with an energy-efficiency rating of A-20%. Heat pump revenue grew by
200% and the Company launched air-source heat pump water heater which provides
heating under –30C to meet growing demand. In the meantime, the Company accelerated
go-to market strategy by utilizing local facilities from dishwasher & kitchen appliance
factories Turkey and refrigerator factory in Romania.
3. Australia and New Zealand
During the reporting period, the Company recorded revenue of RMB6.962 billion, down by
0.7% year-on-year (up by 5.9% in local currency) in Australia and New Zealand, market
share exceeded 18% in main-stream channels (including TGG & NARTA) in Australia with
strengthening leadership in New Zealand. The growth was attributable to continued product
innovation driven by long term technological advancement. In 2022, the Company launched
60cm Contemporary and New Minimal series equipped with full steam to provide users with
a healthier gourmet experience, and FPA’s premium 7, 8 and 9 series contributed to
almost 50% of total kitchen appliance revenue. FPA brand Rf605T refrigerator with precise
temperature control and variable temperate zone was created to deliver superior
preservation performance, it was an instant best-seller and soon became number one in
market share of units’ capacity between 600–650L. On the other hand, the Company also
made greater efforts in customizing smart and comprehensive solutions in the offline
channels, while establishing partners with designs leveraging FPA’s premium product
portfolio.
24 Haier Smart Home Co., Ltd. Annual Report 2022
Section III Management Discussion and Analysis
4. South Asia
During the period, revenue from South Asia market grew 16.1% year-on-year to RMB8.284
billion. Retail market share in India grew by 2 percentage points to 11% leveraging brand
portfolio of Casarte, Haier and Candy to meet mid to high-end demand for large-capacity
and health-oriented products, while catering to the third and fourth-tier market with
energy-saving and entry level products. High-end market share grew by 3.5 percentage
points to 14% leveraging continued product launches including Haier high-end T-door
refrigerators and front-load washers with heating function. In Pakistan, the Company
outperform the industry in all categories and remained number one with overall market
share, an increase of 2 percentage points year-on-year to 36%. High end market share
rose by 5 percentage points, driven by introducing Casarte products that cater for premium
market demand of smart and stylish appliances; the Company also developed deep
freezing and rapid cooling freezer to meet demand for large freezing capacity in third and
fourth tier markets.
5. Southeast Asia
During the period, the Company realized revenue of RMB5.18 billion in Southeast Asia, up
9.3% year-on-year. The Company accelerated brand premiumization in response to growing
demand for large capacity, health oriented and energy efficient products. In Thailand, high
end refrigerators revenue grew 165%, air-conditioners ranked first in market share, and
T-door refrigerators rose to number one online. In Vietnam, the Company became number
one in washing machines supported by successful launch of 601 large front-load washer. In
Malaysia, retail volume market share rose 1.3 percentage points year-on-year to 6.1%, and
revenue contribution of mid and high-end products reached 38%. In Indonesia, mid and
high-end market share continued to grow and dual brand strategies of Candy and AQUA
have been established.
6. Japan
During the period, revenue from amounted to RMB3.569 billion in Japan, up 2.2% (up
16.5% in local currency) year-on-year. The Company’s combined market share for freezers,
refrigerators and washing machines reached 17.3%, amongst 15.3% in refrigerators and
43.3% in freezers, ranked the Company number one in the industry. Through differentiating
product portfolio, high-end revenue contribution went up by 2 percentage points to 51%.
The Company became the fastest growing refrigerators business with several launches
including AQUA ultra-thin T-style and Delie series, as well as 468/406 T-door and
ultra-narrow 3-door series under Haier brand. The Company also grasped the
pandemic-driven market opportunity of health-conscious laundry with AQUA
variable-frequency washing machine, high-end heat pump front-load washers, and Haier
medium and large size variable-frequency washing machines. More than 50,000 units of
heat pump front-load washer-dryer combo have been sold in the first year since its launch.
Haier Smart Home Co., Ltd. Annual Report 2022 25
Section III Management Discussion and Analysis
II. INTRODUCTION OF THE INDUSTRY WHERE THE COMPANY OPERATES
DURING THE REPORTING PERIOD
(I) Industry Overview for 2022
1. The Chinese market
In 2022, home appliance industry was sluggish amid real estate downturn, weak consumer
sentiment and rising commodity prices. Data from CMM showed that the retail sales of the
China’s home appliance (excluding 3C & digital products) retail revenue across all channels
in China was RMB799.9 billion in 2022, down 6.4% year-on-year when compared to 2021,
amongst which refrigerator retail sales was RMB96.4 billion, down 1.7% year-on-year;
washing machine retail sales was RMB68.1 billion, down 7.3%; thanks to hot temperature
in July and August, home air-conditioner retail sales grew by 1.6% year-on-year to
RMB160.1 billion; retail sales of range hoods and stoves amounted to RMB54.0 billion,
down 13.9% year-on-year. Impacted property weakness and saturating penetration, water
heater retail sales went down by 14.5% to RMB52.0 billion. The rise of the middle class
and the growing consumer sophistication drive the popularity of new categories such as
tumble dryers, whose retail sales reached RMB9.3 billion in 2022, up 22.5% year-on-year.
On the other hand, consumption momentum was weakened by lower income expectation,
and people started to make fewer impulsive purchases; consumer preference is becoming
polarized with high end focusing on quality and wellbeing while entry level users appreciate
value-for-money offerings. Nonetheless, high end market continued to expand, for example,
consumers started to appreciate compartmentalized storage and healthy preservation
technologies, while built-in refrigerators that blend in well with ambience at home has
become one of the main directions of appliance upgrade. According to AVC, share of
refrigerators priced above RMB10,000 went up 5.4 percentage points to 37.1% in the
offline market in 2022.
In a well penetrated market, appliances business ought to make dedicated effort in
developing consumer insights and unlocking new opportunities with constant product
innovation, while increasing value of existing users with a variety of product sets that also
echo the trend of appliances and home furnishing integration. Wall-mounted washing
machine, micro washers and separated laundry washers have become popular with
growing number of families choose to have more than one child. New-air ventilation system
and kitchen-specialised air conditions are the latest revenue drivers. According to AVC,
New-air ventilation AC revenue contribution went up by 2.2 percentage points to 8.4% in
2022, and washer-dryer combo contributed 40.4% of the revenue in the offline market in
the first nine months of 2022, up 5.5 percentage points year-on-year.
Export markets
In 2022, China’s home appliance industry was under significant pressure caused by
inflation, over-consumption from previous years and high level of inventories. According to
China Household Electrical Appliances Association, total annual export was USD97.25 billion
in 2022, down 6.9%; with quarterly growth of 1.8%, –1.3%, –7% and –20.2% from Q1 to
Q4. Refrigerators, air conditioners, freezers and washing machines export revenue grew by
–23.1%, 4.2%, –9.6% and –6.3%, respectively, in 2022.
26 Haier Smart Home Co., Ltd. Annual Report 2022
Section III Management Discussion and Analysis
2. Overseas markets
The global economy recovered gradually in 2022. IMF estimated global GDP growth to be
3.4%. According to Euromonitor, global home appliances retail revenue (including major
appliances and small appliances) was USD518.3 billion in 2022, increased by 0.5% for the
year, of which, retail sales of core appliances dropped 0.3%, while small appliances grew
1.5% year-on-year.
By market:
(1) The U.S.: Costs remained under inflationary pressure from raw materials, commodities,
logistics and labour. Competition in the home appliance industry was intense, and
interest rate increases have slowed down new home constructions and home sales.
Consumer confidence and spending remained subdued. Core appliances shipment
went down by 6.4% in 2022.
(2) Europe: According to GFK, overall sales volume amounted to approximately 96.27
million units in Europe, down 8.9% year-on-year due to various factors including
inflation. At the same time, the energy crisis spurred rapid growth of alternative
energy product such as heat pumps. Consumers continue to favour large-volume,
health-conscious and energy efficient products.
(3) South Asia: ① In India, demand for large-volume, health-conscious and variable-frequency
products grew steadily in the mid-range to high-end market, whereas demand for
energy-saving entry level products in third- and fourth-tier markets were on the rise.
Chain retailors expanded rapidly across the country, and e-commerce channel
continued to increase in revenue contribution. ② Due to flood damages and inflation
in Pakistan, people’s purchasing power plummeted causing appliance market volume
to decline by 10%. Import policy change led to structural shortages of raw materials.
However, mid and high-end products continued to grow.
(4) Southeast Asia: As markets fully reopened economic recovery continued, however
industry performances varied in the region. According to GFK, appliance industry
suffered a decline in Thailand while, Vietnamese market experienced a mild growth.
Demand for mid to high end products with large-volume, health-conscious, protection
and sterilization features continued to dominate.
(5) Australia & New Zealand: ① In 2022, sales volume in Australia recorded a mild increase
of 3%, with falling demand in the fourth quarter due to interest rate hikes and
inflation. Average unit prices rose year-on-year driven by inflation and growth in high
end products. ②According to customs’ data, white goods market experienced a
double-digit year-on-year volume decline in New Zealand in 2022.
(6) Japan: White goods market was sluggish in Japan due to currency depreciation and
pandemic resurgence, annual sales volume of refrigerators, freezers and washing
machines dropped by 1.5% year-on-year. Demand grew for large-volume, small-sized,
health-conscious, energy-saving, and smart products.
Haier Smart Home Co., Ltd. Annual Report 2022 27
Section III Management Discussion and Analysis
(II) Industry Outlook for 2023
1. The Chinese market
Domestic GDP is expected to accelerate in 2023 after re-opening, positive for income
prospects and confidence. Market momentum could benefit from concrete housing demand
unleased by policy support in the property sector, appliances replacement & upgrade, and
green & smart appliance initiatives.
CMM estimates appliance retail sales to grow 5% in 2023, with new opportunities from the
home improvement channel unlocked by appliances and interior integration; and growing
traffic from social media platforms such as TikTok and Xiaohongshu.
Export markets
Home appliance exports is expected to stay flat in 2023 as fundamental improvements
remain less likely for global economy, particularly in Europe and the US. Sequential
recovery could be expected in the second half as inflationary pressure, inventory build-up
and high comps should start to ease. The pandemic and Russia-Ukraine conflict will
continue to reshape global supply chains, with accelerated manufacturing localization that
could affect China’s export in the long run.
2. The Global Market
According to IMF’s World Economic Outlook, global economic recovery is slow amid
tightening monetary policy and financial conditions worldwide. The global GDP is forecasted
to grow at 2.9% in 2023.
Euromonitor forecasts global core appliance industry will exceed USD290 billion in 2023,
up 2.5% year-on-year. Recovery of high-end market offline could accelerate innovation and
promote appliance connectivity; demand remain strong for efficient products amid energy
shortage; on the other hand, regional instabilities could put global appliance supply chain
under pressure.
III. INTRODUCTION OF THE COMPANY’S 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 new
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 13 consecutive years. The Company has a global portfolio of brands,
including Haier, Casarte, Leader, GE Appliances, Candy, Fisher&Paykel and AQUA. From 2008 to
2022, Haier brand refrigerators and washing machines ranked first among global major home
appliance brands in sales volume for 15 and 14 consecutive years respectively.
28 Haier Smart Home Co., Ltd. Annual Report 2022
Section III Management Discussion and Analysis
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. Three-Winged Bird focuses on customising smart home experience, by building
up five core competencies including the Smart Home Brain, scenario-based solutions, experiential
stores, the Three-Winged Bird interior design tool and the digital platform, we provide end-to-end
and full life cycle services that “design a home, build a home and serve a home” for users.
Over the years, the Company has established three business segments, namely the Chinese Smart
Home Business, the Overseas Home Appliance and Smart Home Business, and Other Business
Smart Home Business in China
The Company provides a full range of home appliance products and value-added services in China
market through Haier Smart Home APP and Three-Winged Bird APP, supplemented by our offline
experience centres, in order to cater for users’ needs for different lifestyle scenarios. Smart Home
Business in China comprises Household Food Storage and Cooking Solutions (Internet of Food),
Household Laundry Solutions (Internet of Clothing), Air Solutions (Internet of Air), and Household Water
Solutions (Internet of Water).
Household Food Storage and Cooking Solutions (Internet of Food): Through selling in domestic
market and exporting products such as refrigerators, freezers, kitchen appliances, 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 Solutions (Internet of Clothing): 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 (中子和美) 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 domestic sales in China and exports, 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.
Haier Smart Home Co., Ltd. Annual Report 2022 29
Section III Management Discussion and Analysis
Commercial air conditioners: 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 selling in domestic market and exporting,
the Company provides 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, at the same time, we offer 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.
Overseas Home Appliance and Smart Home Business
In addition, 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 market, 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 in 2021 is as follows: ranked first in Asia in terms of retail volume, with a 21.4% market
share; ranked second in America, with a market share of 15.6%; ranked second in Australia and New
Zealand, with a market share of 12.8%. The Company ranked third in Middle East and Africa with a
market share of 7.5%, and ranked fourth in Europe with a market share of 8.3%.
30 Haier Smart Home Co., Ltd. Annual Report 2022
Section III Management Discussion and Analysis
Other Businesses
Building on our established smart home businesses, the Company has also developed small home
appliances, 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 2022 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 2022.
At the same time, the Company was named among Fortune’s first China ESG Impact list and Forbes’
The World’s Best Employers 2022 list. The Company’s ESG effort has also been recognized by
external rating agencies, receiving an MSCI ESG rating of BBB and a Wind ESG rating of AAA, both of
which are at leading levels in China. Thanks to the above performance, 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.
IV. ANALYSIS ON CORE COMPETITIVENESS DURING THE REPORTING
PERIOD.
√ Applicable □ Not applicable
The Company has established a solid strategic presence and competitive advantage in China and
overseas markets. 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 in 2022. 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 (人 單 合 一)’ 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) Dominance in China’s high-end market; rapid growth of overseas high-end
brands
Riding the trend of consumption upgrade in China, 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 required not only focus, experience and patience, but also continuous innovation of
technological standards and differentiated service capabilities to fulfil user demand for high-quality
Haier Smart Home Co., Ltd. Annual Report 2022 31
Section III Management Discussion and Analysis
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 2022, 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 washing machines and refrigerators reached
77.2% and 38.5% respectively in the market with product price above RMB10,000 in China, while
its share of air conditioners priced above RMB15,000 in the China’s market reached 30.6%. Our
overall average price for Carsate refrigerators, air conditioners and washing machines is two to
three times the average price of the industry.
In the North American market, the Company owns high-end brands such as Monogram, Café,
and GE Profile. We enhanced our high-end brand profile through launching leading products
including high-end steam ovens, drawer-style microwave ovens and lift-up cooker hoods.
Through the creation of luxurious, customizable and smart technology-enabled user experience,
our high-end brands Monogram, Café and GE Profile have grown rapidly.
(ii) Smart household solutions that continue to expand and upgrade
As users continued to demand for higher living quality, coupled with the development of
technologies such as Internet of Things, big data, cloud computing and artificial intelligence, the
industry has shown a smart and high-end development trend that prioritized product suites,
based upon scenarios, and home appliances integrated with home furnishings. With leading user
insights, extensive product coverage and technological accumulation from intelligent AI
algorithms, home big data and IoT equipment technology, the Company provided scenario
solutions on whole-house water usage, air, and smart control for five major spaces at home
including the living room, kitchen, bathroom, bedroom and balcony.
First of all, the Smart Home Brain created the best intelligent experience for users by upgrading
the brain technology system. Through iteration of the whole-house sensing system, we unified
data collection from multiple devices and constructed a whole-house sensing service model. At
the same time, through software and hardware integration and end-to-end cloud integration, we
enabled diversified and multi-modal voice and image interactions which opened up a new form of
multi-dimensional connectivity.
Secondly, in terms of our capabilities in scenario solutions, Three-Winged Bird continued to build
insightful smart scenarios that boosted health, comfort, safety and energy efficiency based on its
strategic focus on tailored smart home experience. We addressed user needs on intelligence
through the design and implementation of nine thematic scenarios of kitchen, sleep, ambience,
low carbon, air, water, cleaning, security, and perception.
In addition, Three-Winged Bird’s interior design tool focused on “building a home”, providing
users with smart home appliances + smart home solutions. The VR function allowed users to
virtually visualise the look, size and style of their smart appliances from different viewing angles.
The Three-Winged Bird interior design tool has now facilitated more than 30,000 localised design
solutions.
32 Haier Smart Home Co., Ltd. Annual Report 2022
Section III Management Discussion and Analysis
Finally, Three-Winged Bird’s digital platform is integrated with the Three-Winged Bird APP and the
Smart Home APP to offer full life cycle service for users, thereby enhancing the value added to
active users and increasing conversion of scenario-based transactions.
(iii) Extensive and solid global presence with localized operational capability
In addition to success in the Chinese market, the Company also prospered in 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.
In 2022, 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 point of
sales in overseas 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, so as
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. Annual Report 2022 33
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 (人 單 合 一)’ 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 its successful market 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 overall leadership in product performance.
Global collaborative product development: The Company has established a global
product development mechanism to coordinate global collaborative product development,
which can enable 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. The HRT-683 refrigerator jointly developed by this collaboration has
become a local mainstream high-end product.
34 Haier Smart Home Co., Ltd. Annual Report 2022
Section III Management Discussion and Analysis
Global collaborative procurement: The Company has established a global procurement
guidance committee to coordinate global procurement activities. The committee has built a
global 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 common resources at the Group level. By unifying procurement
rules and processes, the Company established a standardised operating system with
differentiated procurement strategies to enhance procurement efficiency while lowering risks.
We have also developed a Group-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 global production capacity, and factories across the globe could
share and develop smart manufacturing technologies to boost manufacturing
competitiveness.
Global collaborative marketing and brand promotion: the Company operates a
multi-level brand portfolio on a global scale, which can realize global collaborative brand
promotion. The Company also promotes and introduces successful marketing strategies
among regional markets around the world. For example, the Company successfully
replicated its sales and marketing model from third and fourth-tier markets in China, in
markets such as India, Pakistan, and Thailand, which have strengthened the Company’s
brand image and its regional market competitiveness.
(vii) Industry-leading R&D and technological capabilities
To ensure better living experience for users, the Company has established a global leading R&D
system under the premise of developing original technologies. In early 2022, the Company
established a science and technology committee to leverage our technological innovation system
and strengthen our enterprises’ innovation capabilities, which have facilitated our high-end
brands, scenario brands and ecosystem brands to achieve leadership positions.
Leadership in terms of original technologies: In 2022, the Company has innovated a
range of solutions that exceeded users’ expectations and made technology more integral to
everyday life. For example, the seamless built-in refrigerator adopted the innovative bottom
heat dissipation technology to realise a zero-gap integration with the cabinet. The use of
the dual-axis variable hinges allowed the fridge door to be opened to 113 without hitting
surrounding walls. By advancing the foam layer technology, the thickness of the whole
fridge was reduced to 600mm which matched the international standard depth of cabinets,
hence enabling the refrigerator to be flush with the cabinet.
Haier Smart Home Co., Ltd. Annual Report 2022 35
Section III Management Discussion and Analysis
Certification from state authorities: As of the end of 2022, the Company received a total
of 16 State Science and Technology Progress Award and 245 leading international
achievements, more than any other company in the industry. Haier Smart Home was
among the first batch of “Leading Digital Enterprises” selected by the Ministry of Industry
and Information Technology. The HOPE Platform was selected by Innovation China as one
of the “Top 10 Industry-Academia Collaboration Organisations” and part of the first batch of
Innovation Bases. The Platform also earned the Golden Bridge Award from the China
Technology Market Association, was named as the only five-star technology service
organisation in the home appliance industry, and became the Model National Public Service
Platforms for Small and Medium-Sized Enterprises.
Leadership in terms of patent quality: As of the end of 2022, Haier Smart Home has
accumulated more than 92,000 patents applications globally, including more than 59,000
invention patents. The number of overseas invention patents exceeded 16,000, covering
more than 30 countries, making us the Chinese home appliance enterprise with the largest
number of overseas patents. The Company also accumulated 11 state patent gold awards,
ranking first in the domestic market. In the ‘Global Smart Home Invention Patent Ranking’
in 2022, Haier Smart Home once again topped the list with 5,691 published patent
applications, ranking first in the world for the eighth consecutive times.
Leadership in terms of international standards: As of the end of 2022, Haier Smart
Home has cumulatively led and participated in the formulation of 92 international standards
and 637 state/industrial standards. We are the only company in the industry to obtain
comprehensive coverage of 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 Council Board and the IEC Market Strategy Board, which have enabled
the Company to stay actively involved in international standardization efforts and have a
voice in the formulation of standards.
Leadership in terms of experience design: In the Red Dot Design Awards 2022, Haier
Smart Home broke its own record and earned 56 product design awards, once again
topped the industry with the highest cumulative number of awards. Haier Smart Home also
won 42 accolades from the German iF Design Awards, ranking first in the industry. The
Company has cumulatively received more than 500 international design awards, as well as
5 China Excellent Industrial Design Awards, which is the only enterprise in China that have
earned three consecutive gold awards.
(viii) 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’ (人 單 合
一) model, Haier encourages every employee to maximize their own values while creating values
for users. In Haier’s ‘Rendanheyi’ (人單合一) 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’ (人 單 合 一)
model.
36 Haier Smart Home Co., Ltd. Annual Report 2022
Section III Management Discussion and Analysis
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.
V. MAJOR OPERATIONS DURING THE REPORTING PERIOD
Please refer to “I. DISCUSSION AND ANALYSIS ON OPERATIONS” and “III. INTRODUCTION OF THE
COMPANY’S BUSINESS DURING THE REPORTING PERIOD” under this section.
(I) Analysis of principal business
1. Table of movement analysis on the related items in income statement and cash flow
statement
Unit and Currency: RMB
Corresponding
Items Current Period Period of Last Year Change (%)
Operating revenue 243,513,563,670.73 227,105,817,641.69 7.22
Operating cost 167,223,167,396.20 155,949,547,009.40 7.23
Selling expenses 38,597,810,391.10 36,584,438,840.05 5.50
Administrative expenses 10,837,316,878.50 10,471,531,966.20 3.49
Financial expenses –245,629,371.05 684,721,619.75 –135.87
R&D expenses 9,499,191,097.85 8,363,868,872.76 13.57
Net cash flow from operating
activities 20,153,505,783.35 23,235,380,690.95 –13.26
Net cash flow from investing activities –8,920,323,018.92 –8,062,743,538.43 N/A
Net cash flow from financing activities –3,822,128,075.36 –15,660,138,902.78 N/A
Gain on fair value change –122,442,933.65 119,277,623.85 –202.65
Gain from disposal of assets 206,742,815.79 110,983,720.04 86.28
Non-operating income 136,527,269.96 199,068,358.48 –31.42
Analysis on the reasons of signification changes in certain indicators:
1) Reasons for the changes in gain from fair value change: Gain from fair value change
decreased by 202.65% over the corresponding period, which was mainly due to the
decrease in fair value change of forward contracts;
2) Reasons for changes in gain on disposal of assets: Gain on disposal of assets increased
by 86.28% over the corresponding period, which was mainly due to the increase in
gain on disposal of assets in the current period;
3) Reason for changes in non-operating revenue: Non-operating revenue decreased by
31.42% over the corresponding period, which was mainly due to the decrease in
revenue not related to ordinary operation in the current period.
Haier Smart Home Co., Ltd. Annual Report 2022 37
Section III Management Discussion and Analysis
Detailed explanation of significant changes in the operation types and the components of
profit or sources of profit of the company during the period
□ Applicable √ Not applicable
2. Analysis of Income and Cost
□ Applicable √ Not applicable
(1). Principle Operating Activities by Sector, Product, Region and Sales Mode
Unit and Currency: RMB
Principal operating activities by product
Operating Operating
revenue cost
increased/ increased/ Gross profit margin
Operating Gross profit decreased decreased increased/decreased
By product revenue Operating cost margin (%) yoy (%) yoy (%) yoy (%)
Air conditioner 40,059,458,698.75 28,599,397,831.67 28.61 6.74 5.73 Increase by 0.68
percentage points
Refrigerator 77,637,761,907.85 52,883,745,098.80 31.88 8.48 8.29 Increase by 0.12
percentage points
Kitchen appliances 38,740,706,547.12 26,213,735,106.82 32.34 9.92 10.44 Decrease by 0.31
percentage points
Water Appliances 13,786,852,209.99 7,443,373,512.28 46.01 10.55 10.10 Increase by 0.22
percentage points
Washing Machine 57,721,991,613.33 38,583,555,563.97 33.16 5.41 6.19 Decrease by 0.49
percentage points
Equipment parts and 14,484,542,254.19 13,065,622,141.68 9.80 –0.42 0.59 Decrease by 0.90
channel integrated percentage points
services
Principal operating activities by region
Operating Operating
revenue cost
increased/ increased/ Gross profit margin
Operating Gross profit decreased decreased increased/decreased
By region revenue Operating cost margin (%) yoy (%) yoy (%) yoy (%)
Domestic 116,330,655,265.51 74,630,330,387.89 35.85 4.43 1.76 Increase by 1.69
percentage points
Overseas 126,100,657,965.72 92,159,098,867.33 26.92 9.91 11.90 Decrease by 1.29
percentage points
38 Haier Smart Home Co., Ltd. Annual Report 2022
Section III Management Discussion and Analysis
Principal operating activities by sales mode
Operating Operating
revenue cost
increased/ increased/ Gross profit margin
Operating Gross profit decreased decreased increased/decreased
Sale mode revenue Operating cost margin (%) yoy (%) yoy (%) yoy (%)
Domestic — direct sale 11,085,779,646.45 6,024,135,893.08 45.66 2.18 –4.93 Increase by 4.06
customers percentage points
Domestic — distribution 105,244,875,619.06 68,606,194,494.81 34.81 4.67 2.39 Increase by 1.45
and others percentage points
Overseas — direct sale 4,695,394,135.44 4,181,889,393.40 10.94 18.98 15.80 Increase by 2.45
customers percentage points
Overseas — trading 121,405,263,830.28 87,977,209,473.93 27.53 9.59 11.72 Decrease by 1.38
companies sales percentage points
(2) Table of production and sales analysis
√ Applicable □ Not applicable
Production
volume Sales volume Inventory
increased/ increased/ increased/
Production Sales decreased decreased decreased
Main products Units volume Volumn Inventory yoy (%) yoy (%) yoy (%)
Home Appliance 10,000 units/sets 11,397 11,263 2,502 7.8 –1.1 1.6
(3). Performance of major purchase contracts and major sales contracts
□ Applicable √ Not Applicable
(4). Table of cost analysis
Unit: RMB0’000
By sector
Percentage of
change of the
amount for the
Percentage of the current period
Percentage of the amount for the compared to the
amount for the Amount for the corresponding corresponding
Amount for the current period in corresponding period of last year period of last year
By sector Cost component current period total costs (%) period of last year in total costs (%) (%)
Home Appliance Primary operation 15,372,381 100.0 14,468,983 100.0 6.24
Industry costs
Raw materials 13,135,824 85.5 12,400,431 85.7 5.93
Labor 950,481 6.2 893,832 6.2 6.34
Depreciation 254,004 1.7 238,331 1.6 6.58
Energy 81,621 0.5 72,363 0.5 12.79
Others 950,450 6.2 864,026 6.0 10.00
Haier Smart Home Co., Ltd. Annual Report 2022 39
Section III Management Discussion and Analysis
(5). Change of consolidation scope due to changes on shareholdings of major
subsidiaries during the reporting period
□ Applicable √ Not applicable
(6). Relevant information on significant changes or adjustments in the Company’s
business, products or services during the reporting period
□ Applicable √ Not Applicable
(7). Major distributors and major suppliers
A. Major distributors of the Company
√ Applicable □ Not Applicable
Revenue from the top five distributors was RMB54,151.39 million, representing
22.2% of the total sales for the year; among the revenue from the top five
distributors, the revenue from related parties was RMB0 million, representing
0% of the total sales for the year.
The proportion of sales to a single distributor exceeded 50% of the total during
the reporting period, and new distributor or depending heavily on a few
distributors were seen among the top five distributors.
□ Applicable √ Not Applicable
B. Major suppliers of the Company
√ Applicable □ Not Applicable
The purchase amount from the top five suppliers amounted to RMB41,880.79
million, representing 19.3% of the total purchase amount for the year; among
the purchase amount from the top five suppliers, the purchase amount from
related parties was RMB21,131.01 million, representing 9.8% of the total
purchase amount for the year.
The proportion of purchase from a single supplier exceeded 50% of the total
during the reporting period, and new supplier or depending heavily on a few
suppliers were seen among the top five suppliers.
□ Applicable √ Not Applicable
3. Expenses
√ Applicable □ Not applicable
Financial costs decreased by 135.87% over the corresponding period, which was mainly
due to the increase in interest income and exchange gain in the current period.
40 Haier Smart Home Co., Ltd. Annual Report 2022
Section III Management Discussion and Analysis
4. R&D expenditure
(1). Table of R&D expenditure
√ Applicable □ Not applicable
Unit: RMB
Expensed R&D expenditure for the current period 9,499,191,098
Capitalized R&D expenditure for the current period 741,064,144
Total R&D expenditure 10,240,255,242
Total R&D expenditure as a percentage in operating revenue
(%) 4.21
Proportion of capitalization of R&D expenditure (%) 7.24
(2). Table of R&D Personnel
√ Applicable □ Not applicable
Number of R&D personnel 24,647
Percentage of R&D personnel took up in the total employees
(%) 22
Educational structure of R&D personnel
Number of
Categories of educational structure personnel
Doctor’s degree 121
Master’s degree 4,103
Bachelor’s degree 12,764
College Diploma 5,207
High School diploma or below 2,452
Age structure of R&D personnel
Number of
Categories of age structure personnel
Under 30 years old (not including 30) 9,010
30–40 years old (including 30 and not including 40) 10,506
40–50 years old (including 40 and not including 50) 3,765
50–60 years old (including 50 and not including 60) 1,150
60 years old and above 216
Haier Smart Home Co., Ltd. Annual Report 2022 41
Section III Management Discussion and Analysis
(3). Explanation
√ Applicable √ Not Applicable
Haier Smart Home always focuses on user experience. Under the guidance of
adhering to the strategy of original technology, it has continuously increased its
innovation investment, established a global leading R&D system, and has seen a
continuous emergence of innovative achievements. Original technologies have
supported the overall industry-leading positions of the Company’s high-end brands,
scenario brands and ecosystem brands. In terms of products, in 2022, the Company
created a series of excellent solutions that were beyond users‘expectations with
lifestyle embodied in technology, such as flat-back refrigerator, essence washing
machine, mechanic window air conditioner and constant airflow range hood, etc. In
the next step, we will continue to increase investment in basic research and
subversive technology research. In terms of intelligence promotion: focusing on all-
scenario solutions such as Smart Home APP and whole house intelligence, we have
constructed smart living scenarios based on user demand. We are continuously
increasing our investment in the research and development of IoT, cloud computing,
artificial intelligence and related advanced technologies to advance the development of
home appliances towards intelligence and scenario-based development. In terms of
green and dual-carbon: we will undertake the national dual-carbon strategy and
actively implement the ESG concept. In 2022, the construction of the first domestic
recycling interconnected factory was completed and put into operation, integrating low
carbon and energy saving into the whole life cycle of products, driving the green
development of the whole industry chain and leading the high-quality development of
the industry.
(4). Reason for significant change in the composition of R&D personnel and its
impact on the future development of the Company
□ Applicable √ Not applicable
5. Cash flow
√ Applicable □ Not applicable
Net cash outflows from financing activities decreased by 75.59% over the corresponding
period, which was mainly due to the new policy borrowing raised in China, the new
working capital borrowing raised overseas and additional issuance of proceeds during the
current period.
(II) Explanation for major changes in profit caused by non-principal businesses
□ Applicable √ Not applicable
42 Haier Smart Home Co., Ltd. Annual Report 2022
Section III Management Discussion and Analysis
(III) Analysis of assets and liabilities
√ Applicable □ Not applicable
1. Assets and liabilities
Unit: RMB
Change in the
Percentage of Percentage of Amount at the
Amount at the Amount at the end of Current
Amount at the End of Current Amount at the End of Previous Period to the
End of Current Period to Total End of Previous Period to Total End of Previous
Name of Item Period Assets (%) Period Assets (%) Period (%) Description
Trading financial assets 519,812,880.91 0.22 2,786,075,529.09 1.28 –81.34 Mainly due to the expiration
of short-term wealth
management products
measured at fair value
Derivative financial assets 183,185,160.51 0.08 79,819,974.01 0.04 129.50 Mainly due to the
fluctuation in value of
foreign currency
forward contracts
Debt investments 1,034,222,222.22 0.44 100.00 Mainly due to the new
long-term deposits
Right-of-use assets 3,795,225,353.89 1.61 2,734,678,906.53 1.26 38.78 Mainly due to the increase
in lease
Development expenses 154,480,515.67 0.07 227,892,229.13 0.10 –32.21 Mainly due to the transfer
of R&D expenses
Trading financial liabilities 6,294,014.40 0.00 –100.00 Mainly due to the expiration
of foreign currency
forward contracts
Derivative financial liabilities 104,594,040.66 0.04 80,212,433.24 0.04 30.40 Mainly due to the
fluctuation in value of
foreign currency
forward contracts
Non-current Liabilities due within 6,294,750,667.08 2.67 9,624,339,170.46 4.42 –34.60 Mainly due to the
one year repayment of long-term
borrowings due within
one year
Long-term borrowings 13,590,866,873.43 5.76 3,038,573,824.53 1.40 347.28 Mainly due to the
replacement of
long-term borrowings
due within one year and
new policy borrowing
Bonds payable 334,730,048.82 0.15 –100.00 Mainly due to the
conversion of the
convertible bonds
during the period
Lease liabilities 2,824,477,670.61 1.20 1,960,894,981.47 0.90 44.04 Mainly due to the increase
in lease
Long-term payables 44,240,087.94 0.02 99,602,707.76 0.05 –55.58 Mainly due to the
repayment of long-term
payables
Other non- current liabilities 107,332,101.07 0.05 49,461,683.90 0.02 117.00 Mainly due to the increase
in forward payments for
purchase of assets
Treasury stock 3,857,807,196.38 1.64 2,424,038,819.70 1.11 59.15 Mainly due to the share
repurchase
Haier Smart Home Co., Ltd. Annual Report 2022 43
Section III Management Discussion and Analysis
Change in the
Percentage of Percentage of Amount at the
Amount at the Amount at the end of Current
Amount at the End of Current Amount at the End of Previous Period to the
End of Current Period to Total End of Previous Period to Total End of Previous
Name of Item Period Assets (%) Period Assets (%) Period (%) Description
Other equity instruments 118,017,507.59 0.05 –100.00 Mainly due to the decrease
in the conversion equity
component of the
convertible bonds
Other comprehensive income 1,990,683,498.45 0.84 –1,176,851,699.92 –0.54 269.15 Mainly due to the
translation of foreign
currency financial
statements
2. Overseas Assets
√ Applicable □ Not Applicable
(1) Scope of assets
Among the assets, overseas assets amounted to 10,856,027 (unit and currency:
RMB0,000), representing 46% of the total assets.
(2) Explanation of high percentage of overseas assets
√ Applicable □ Not Applicable
Unit and Currency: RMB
Operating Revenue
Name of overseas during the reporting Net Profit of the
asset Reason for Formation Operating mode period reporting period
Overseas Home Overseas mergers & Localized Operations 125,423,825,543.85 6,249,105,890.26
Appliance and acquisitions and the with the integration of
Smart Home Company’s own R&D, manufacturing
Business development and marketing
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 industry operating information
□ Applicable √ Not Applicable
44 Haier Smart Home Co., Ltd. Annual Report 2022
Section III Management Discussion and Analysis
(V) Analysis of investment
Overall analysis on external equity investment
√ Applicable □ Not applicable
In the purpose of promoting the business development of the Company and enhancing the
Company’s corporate governance, subsidiaries of the Company have made a series of
investment layouts. In order to promote the development of the Company’s home robot
business, upon the consideration and approval at the 28th meeting of the 10th session of the
Board of Directors of the Company on 28 April 2022, Qingdao Haier Smart Life Appliance Co.,
Ltd. (青 島 海 爾 智 慧 生 活 電 器 有 限 公 司), a wholly-owned subsidiary of the Company, acquired
100% equity in Qingdao TAB Robotics Co., Ltd. (青 島 塔 波 爾 機 器 人 技 術 有 限 責 任 公 司) (now
known as “Haier Robot Technology (Qingdao) Co., Ltd. (海 爾 機 器 人 科 技（青 島）有 限 公 司)) at a
transaction consideration of RMB125 million. As at the end of the Reporting Period, the
transaction was completed. In order to reduce routine connected transactions and enhance
governance, upon the consideration and approval at the 2nd meeting of the 11th session of the
Board of Directors of the Company on 29 August 2022, Qingdao Haier Special Refrigerator Co.,
Ltd., a wholly-owned subsidiary of the Company, acquired 100% equity in Qingdao Haier Special
Plastic R&D Co., Ltd. (青 島 海 爾 特 種 塑 料 研 製 開 發 有 限 公 司) at a transaction consideration of
RMB152 million. As at the end of the Reporting Period, the transaction was completed.
1. Significant equity investment
√ Applicable □ Not Applicable
Unit and Currency: RMB00’000’000
Is subject a
main Progress Impact of
investment Statement Update as at profit or loss Lawsuit Disclosure
business or Investment Consolidated or items (if Capital Partners (if Investment Balance Expected during the related or Disclosure Indexes
Name of investee Main Business not Investment amount Shareholding not applicable) source applicable) Term (if any) Sheet Date gains (if any) Period not date (if any) (if any)
Qingdao TAB Robotics Smart home No Acquisition 1.25 100% Yes / Self-owned / / Transaction / / No 29 April 2022 L2022–027
Co., Ltd. (青島塔波爾 robot business funds completed
機器人技術有限責任公
司)
Qingdao Haier Special Refrigerator door No Acquisition 1.52 100% Yes / Self-owned / / Transaction / / No 30 August L2022–065
Plastic R&D Co., Ltd. body business funds completed 2022
(青島海爾特種塑料研
製開發有限公司)
Total / / / 2.77 / / / / / / / / / / / /
2. Significant non-equity investment
□ Applicable √ Not Applicable
Haier Smart Home Co., Ltd. Annual Report 2022 45
Section III Management Discussion and Analysis
3. Items measured at fair value
√ Applicable □ Not Applicable
Unit and Currency: RMB
Profits or Losses Cumulative Provision for
of Changes in Changes in Fair Impairment of Purchases Sold/Redeemed
Opening Fair Value during Value Included in during the during the Amount during
Asset Type Balance the Period Equity Period Period the Period Other Changes Closing Balance
Wealth management 2,168,622,090.00 60,591,951.03 5,360,147,787.60 7,574,722,860.37 14,638,968.26
products
Investments in other equity 4,851,884,944.63 –150,669,101.68 1,032,370,425.42 118,296,661.83 5,851,882,930.20
instruments
Investments in trading 330,557,610.82 104,729,258.75 99,999,996.80 245,376,295.96 46,832,494.61 336,743,065.02
equity instrument
Investment funds 150,516,274.37 –37,211,579.82 42,532,603.96 12,593,549.12 168,430,847.63
Derivative financial 176,525,574.88 –67,337,319.58 2,817,487.53 –50,331,412.08 61,674,330.75
instruments
Total 7,678,106,494.70 60,772,310.38 –147,851,614.15 6,535,050,813.78 7,820,099,156.33 127,391,293.48 6,433,370,141.86
Note: As of 31 December 2022, the aggregate balance of foreign exchange derivative transaction amounted to
approximately US$ 1.953 billion.
Investment in securities
√ Applicable □ Not Applicable
Unit and Currency: RMB
Profit and loss
arising from Accumulated fair
Carrying amount changes in fair value changes Investment profit Carrying amount
Type of Securities Securities Initial investment Sources of at the beginning value during the included in Purchases during Disposals during or loss during the at the end of the
securities code abbreviation cost funding of the Period Period equity the Period the Period period Period Accounting items
Stock 601328 Bank of 1,803,769.50 Self-funding 6,279,981.72 177,092.76 6,457,074.48 Investments in other
Communications equity instruments
Stock 600827 Bailian Group 154,770.00 Self-funding 525,042.04 –47,659.48 477,382.56 Investments in other
equity instruments
Stock 300183 Neusoft Carrier 18,713,562.84 Self-funding 14,250,135.78 –4,830,819.48 9,419,316.30 Investments in other
equity instruments
Stock 000959 Beijing Shougang 99,999,996.80 Self-funding 224,266,143.39 –55,678,783.06 99,999,996.80 245,206,369.12 46,693,359.19 70,074,347.20 Trading financial assets
Stock 688455 KENGIC 29,450,000.00 Self-funding 46,832,494.61 110,349,395.39 157,181,890.00 Trading financial assets
Total / / 150,122,099.14 / 292,153,797.54 54,670,612.33 –4,701,386.20 99,999,996.80 245,206,369.12 46,693,359.19 243,610,010.54 /
46 Haier Smart Home Co., Ltd. Annual Report 2022
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 RRS Chuangzhi Investment Management Co., Ltd. (青島日日順創智投資管理有限
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% 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.
Derivative investment
√ Applicable □ Not Applicable
RMB0’000
Proportion
of closing
investment
Initial Amount amount over
investment purchased Amount sold net assets at Actual profit
Operator name amount of Opening during the during the Provision for Closing end of or loss for
of derivatives Type of derivatives derivatives Starting investment reporting reporting impairment investment reporting the reporting
investment investment investment date Ending date amount period period (if any) amount period period
Bank Forward foreign 1,247,880 2022/1/1 2022/12/31 1,247,880 1,360,076 20,134
exchange contract
Bank Interest rate/exchange 209,737 2022/1/1 2022/12/31 209,737 0 –822
rate swap
Haier Smart Home Co., Ltd. Annual Report 2022 47
Section III Management Discussion and Analysis
Funding sources of derivatives
investments Own funds of the Company
For changes in the market price or fair Changes in market prices or fair value of
value of the invested derivatives products,
products during the reporting period,
the specific methodology used and the 1. The profit or loss of the foreign exchange
settings of relevant assumptions and forward contracts amounted to RMB201.34
parameters should be disclosed in the million during the reporting period;
fair value analysis of the derivatives.
2. The profit and loss arising from the interest
rate/exchange rate swap was RMB –8.22
million during the reporting period.
The specific methodology used and the related
assumptions and parameter settings are based on
the forward quotations of foreign exchange and
interest rate swaps of the financial institutions
4. Detailed progression of material asset regroup and integration during the reporting
period
□ Applicable √ Not applicable
(VI) Sale of material assets and equity
√ Applicable □ Not applicable
In order to focus on the main business of smart home, optimize resources allocation and realize
investment income, upon consideration and approval at the 28th meeting of the 10th session of
the Board of Directors of the Company on 28 April 2022, Haier Shareholdings (Hong Kong)
Limited, a wholly-owned subsidiary of the Company, transferred 25% equity interest in Qingdao
Haier Mold Co., Ltd. at a transaction consideration of RMB277 million. As at the end of the
reporting period, the transaction was completed.
(VII) 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.
(VIII) Structured entities controlled by the Company
□ Applicable √ Not applicable
48 Haier Smart Home Co., Ltd. Annual Report 2022
Section III Management Discussion and Analysis
VI. DISCUSSION AND ANALYSIS ON THE COMPANY’S FUTURE
DEVELOPMENT
(I) Setup and trend of the industry
√ Applicable □ Not applicable
For details, please refer to the relevant contents of “II. INTRODUCTION OF THE INDUSTRY
WHERE THE COMPANY OPERATES DURING THE REPORTING PERIOD” under “Section III
Management Discussion and Analysis” in this report.
(II) Development strategy of the Company
√ Applicable □ Not applicable
It is the Company’s development strategy to become a user-oriented digital enterprise in the IoT
era and achieve leadership as the world’s first IoT-based smart home ecosystem brand.
Through product & solution upgrades and scenario innovation of competitive refrigerator, washing
machine and water heater businesses, the Company continues to enhance user value and
achieve market growth and business expansion. By accelerating end-to-end transformation of the
home air conditioner and kitchen appliance businesses, the Company enhance business
competitiveness, achieve rapid revenue growth, and improve profitability. The Company will forge
new paths for growth by capitalising on the replacement demand for energy-efficient products
and focusing on smart buildings. By accelerating growth in new product categories such as
tumble dryers and dishwashers, and actively expanding into new business areas such as lifestyle
appliances and cleaning appliances, the Company establishes a second growth curve. The
Company develops a competitive edge for today’s world by strengthening the Three-Winged Bird
scenario brand, enhancing competitiveness in high-end suite products, design & installation &
service capabilities in home improvement channels, and store digitalisation.
(III) Business plan
√ Applicable □ Not applicable
In 2023, the Company will press ahead with the three-level brand upgrade strategy of ‘high-end
brand → scenario brand → ecosystem brand’, improving operational efficiency through
end-to-end digital transformation, and implementing profit-oriented institutional changes to
improve operational quality.
Haier Smart Home Co., Ltd. Annual Report 2022 49
Section III Management Discussion and Analysis
In the domestic market: ① By focusing on user experience, transforming retail touch points
with digital platforms that integrate the five networks of distribution channel, marketing, service,
logistics and recycling, the Company will integrate online and offline touch points, digitalise all
processes of user engagement, transaction, and delivery, and reach users more precisely.
Through reconstructing “objectives, models, mechanisms and organisations”, the Company will
build an efficient system to manage resources and improve cost efficiency. ② The Three-Winged
Bird scenario brand, backed by its strong footholds of the Smart Home Brain, scenario-based
solutions, along with digitalised design tools, store operation and platforms, will create
customised design solutions for users while enhancing store efficiency and user value for the
business.
In the overseas markets: By pursuing high-end transformation, leveraging innovative spirit, and
proactively creating opportunities even amid difficult industry conditions, the Company aims to
become the number one company in the global market. The Company will ① adhere to high-end
brand strategy by launching differentiated new products to meet user needs; ② prioritise
localisation and develop regional markets to become self-sustainable; ③ capitalise on industry
trends and cultivate room for growth by accelerating innovation of new products such as built-in
units and heat pumps; and ④ strengthen global competitiveness through leveraging synergies
across global platforms in branding, R&D, procurement, supply chain, and human resources.
(IV) Potential risks of the Company
√ 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.
2. Risk of price war caused by intensified industry competitions. The white goods industry
is highly competitive with a high degree of product homogeneity, 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.
50 Haier Smart Home Co., Ltd. Annual Report 2022
Section III Management Discussion and Analysis
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 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.
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.
Haier Smart Home Co., Ltd. Annual Report 2022 51
Section III Management Discussion and Analysis
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.
9. Risk of changes in retail channels. The retail channel landscape in China is experiencing a major
shift. National retail chains, which previously dominated first- and second-tier markets, are shrinking in
size. As these chains accounted for a significant share of mid-range to high-end product sales, their
decline will impact high-end sales for a certain period.
(V) Others
□ Applicable √ Not applicable
VII. EXPLANATION OF CIRCUMSTANCES AND REASONS FOR NON-
DISCLOSURE BY THE COMPANY IN CONSIDERATION OF
INAPPLICABLE REGULATIONS, STATE SECRETS AND COMMERCIAL
SECRETES
□ Applicable √ Not applicable
52 Haier Smart Home Co., Ltd. Annual Report 2022
Section IV Corporate Governance
I. EXPLANATION OF CORPORATE GOVERNANCE
√ Applicable □ Not applicable
During the reporting period, the Company has strictly complied with the requirements of the relevant
laws and regulations, including the Company Law of the People’s Republic of China, Securities Law of
the People’s Republic of China, Code of Corporate Governance of Listed Companies and the listing
rules of its listed jurisdictions. While maintaining high quality development in terms of performance, the
Company has been continuously improving its governance structure, regulating its operation, enhancing
the transparency and quality of its information disclosure, treating various investors fairly, focusing on
shareholder return, implementing its equity incentive mechanism and upgrading the level of its
corporate governance.
1. Improving the governance structure
The Company has set up a standardized and orderly corporate governance structure composed
of the general meeting of shareholders, the Board of Directors and its special committees
(including the Strategy Committee, Audit Committee, Nomination Committee, Remuneration and
Assessment Committee and ESG Committee (i.e. Environmental, Social and Governance
Committee)), the Board of Supervisors, and the senior management. We have established a
governance mechanism with clear lines of authority and responsibility, mutual coordination and
checks and balances, which has guaranteed efficient and compliant corporate governance.
General meeting of shareholders
Strategy Committee
Board of Supervisors
Audit Committee
Board of Directors
Nomination Committee
Senior management Remuneration and Assessment Committee
ESG Committee
Governance structure
During the reporting period, the Company has convened a total of four general meeting of
shareholders, six Board meetings, six meetings of the Board of Supervisors, two meetings of the
Strategy Committee, six meetings of the Audit Committee, two meetings of the Remuneration
and Assessment Committee, two meetings of the Nomination Committee and two meetings of the
ESG Committee. All meetings and voting procedures complied with relevant provisions specified
in laws and regulations, the Articles of Association and rules of negotiation, and all voting results
were legal and valid. These laid a solid foundation for the Company’s standardized operation.
Haier Smart Home Co., Ltd. Annual Report 2022 53
Section IV Corporate Governance
2. General meetings
The Company has strictly complied with the provisions of the Articles of Association and the
Rules of Procedure for the General Meetings in convening and holding general meetings. General
meetings are witnessed by lawyers on site and legal opinions are issued on their legality. The
Company has established and improved effective channels of communication between
shareholders and the Board of Directors to ensure the shareholders’ right to information,
participatation and voting in respect of any significant issues of the Company. During the
reporting period, the Company has held a total of four general meetings.
3. Board of Directors
The Board of Directors is mainly responsible for deciding the Company’s operational and
investment plans, formulating the Company’s annual financial budget and final account plans,
formulating the Company’s profit distribution plan and loss recovery plans, formulating the
Company’s plans for the increase or reduction of registered capital, issuance of bonds or other
securities and listing, as well as the powers as stipulated in other laws and regulations and the
Articles of Association. During the reporting period, the Board of Directors has held 6 meetings.
The Board of Directors operated in accordance with rules and were able to perform their duties
under Articles of Association and relevant laws and regulations and practically implement relevant
decisions at the general meetings. The decision-making procedure and particulars of the
resolutions of the Board of Directors were in compliance with Articles of Association and relevant
requirements under laws and regulations, and the resolutions made were legal and valid.
(1) Board Diversity
The Company is fully aware that board diversity will help to improve the efficiency in
decision-making of the Board of Directors, reduce management risks, and make better
decisions for the sustainable and healthy development of the Company. In determining the
composition of the Board of Directors, the Company took full account of the diversity of the
members of the Board, including but not limited to gender, age, culture, education
background, industry experience, professional skills, knowledge, term of service and other
relevant factors. The Nomination Committee is responsible for reviewing the effectiveness
and implementation of the Board Diversity Policy and conducting regular annual diversity
assessments.
During the reporting period, the Company completed the change of session of the Board of
Directors. The new Board of Directors consists of 9 directors, including two executive
directors, three non-executive directors and four independent directors. 2 directors are
female, accounting for 22.2% of the Board of Directors, representing an increase of 13.2%
as compared with the previous Board of Directors (9%); 4 of whom are independent
directors, accounting for 44.4% of the Board of Directors, representing an increase of 8.1%
as compared with the previous Board of Directors (36.3%). The new members of the Board
have extensive knowledge and experience in industry experience, Internet of Things,
corporate governance, global market experience, financial management and risk
management, which will help the Board to make the best decisions and promote the
sustainable and healthy development of the Company.
54 Haier Smart Home Co., Ltd. Annual Report 2022
Section IV Corporate Governance
(2) Board Independence
The independent directors of the Company are all senior professionals with expertise in
accounting, finance and business management. During the reporting period, the
independent directors of the Company performed specific duties in accordance with the
Articles of Association and the listing rules of its listed jurisdictions, including participating in
the meetings of each of the Company’s special committees, providing advice to the
Company on its operation and management; and providing independent opinion on
connected transactions, profit distribution plans and other significant transactions of the
Company. By performing their duties as mentioned above, the independent directors help
protect the interests of the Company and the shareholders as a whole, and promote the
development of the Company. The chairman of each of the Company’s special committees
(except the Strategy Committee and ESG Committee) are all independent directors. The
number of independent directors present at the meetings of the Audit Committee, the
Remuneration and Assessment Committee, the Nomination Committee and the Strategy
Committee accounted for at least one-half of the quorum of such meeting (inclusive).
4. Board of Supervisors
During the reporting period, the Board of Supervisors operated in accordance with rules and
were able to perform their duties under Articles of Association and relevant laws and regulations.
The number and composition of the members of the Board of Supervisors complied with
requirements under laws and regulations. During the reporting period, the Supervisors of the
Company performed their duties earnestly and supervised finance matters of the Company and
performance of duty by the Company’s director and senior management in accordance with
requirements under Articles of Association and Rules of Procedure for the Board of Supervisors.
5. ESG Governance Structure
Good ESG governance is important in ensuring the stability of a company’s operations,
responding to unexpected crises and seizing development opportunities. The Company has
formed an ESG governance structure comprising governance, management and execution
covering its overseas business units. The ESG Committee has been established by the Board of
Directors of the Company to conduct comprehensive supervision over the ESG related matters of
the Company and perform relevant ESG governance duties on behalf of the Board of Directors.
The ESG Executive Office and Working Group have been set up under the ESG Committee to
take charge of specific ESG work of the Company.
The Company’s overseas subsidiaries, GEA, FPA, CANDY and the subsidiary in India, have also
established sustainable development management structures to promote the relevant ESG work
in accordance with their applicable laws and regulations. For details, please refer to relevant
information in 2022 Environmental, Social and Governance Report of Haier Smart Home Co., Ltd.
published on the same date of this report.
Haier Smart Home Co., Ltd. Annual Report 2022 55
Section IV Corporate Governance
6. Information disclosure
Haier Smart Home has strictly complied with the regulatory requirements on information
disclosure in China and overseas and fulfilled its information disclosure obligations. During the
reporting period, on the basis of high-quality mandatory information disclosure, the Company
increased voluntary disclosure on matters of key concern to domestic and overseas investors and
the capital market, such as corporate strategy, corporate governance, green operations and
supply chain management, so as to continuously enhance the quality and transparency of
disclosure.
7. Treating various investors fairly and focusing on shareholder return
During the reporting period, the Company strengthened communication and exchange with
investors in an active, open, innovative and professional manner so as to enhance investors’
understanding and recognition of the Company and safeguard the legal rights of investors. In
accordance with guideline of the Management System for Investor Relation, the Company
integrated business and financial resources by the office of the board of Directors and realized
positive and all-around access to investors in a multi-layer and diversified format through
introduction reference, annual investor conference, result announcement conference, and online
forum. Meanwhile, the Company replied investors on a timely basis by ways of interview, e-mail,
phone, fax and the website (http://sns.sseinfo.com) and enhanced interaction with investors, so
as to respect and protect the interests of investors, with the aim of achieving harmonious and
mutual success with the Company, staff and investors.
The Company has always applied a stable and sustainable profit distribution policy. During the
reporting period, the Company strictly followed the requirements set out in the Articles of
Association and in the Shareholder Return Plan for the Next Three Years of the Company in
implementing the profit distribution policy. As at 31 December 2022, the Company had achieved
cumulative cash dividends of RMB24,389 million. During the reporting period, the Company
repurchased a total of 59,055,239 shares in the A-share market, with a payment of RMB1,491
million; in the H-share market, a total of 14,970,200 shares were repurchased, with a payment of
HK$364 million.
8. Sustainable performance evaluation and incentive mechanisms
The Company has been adhering to the management model of”RenDanHeYi”, and taking
the”maximization of the value of people“as the core. In line with the global landscape of the
capital market, the Company has established a short-term plus mid to long-term incentive
system which aligns the interests of employees and all shareholders. During the reporting period,
the Company has continued its incentive plan for 2021 and continued to introduce domestic and
overseas incentive plans with various appraisal cycle, multi-level and all-round benefits, including
A-Share Core Employee Stock Ownership Plan, H-Share Core Employee Stock Ownership Plan,
H-Share Overseas Trust Incentive Plan, and A-Share Option Incentive Scheme.
Whether there is a significant difference between the corporate governance and requirements in
respect of corporate governance of listed companies of laws, administrative regulations and the
CSRC; if so, the reasons should be explained
□ Applicable √ Applicable
56 Haier Smart Home Co., Ltd. Annual Report 2022
Section IV Corporate Governance
II. SPECIFIED MEASURES ADOPTED BY THE CONTROLLING
SHAREHOLDERS AND ULTIMATE CONTROLLERS TO MAINTAIN
INDEPENDENCE WITH RESPECT TO ASSETS, PERSONNEL, FINANCE,
ORGANIZATION, BUSINESS, AND THE SOLUTIONS ADOPTED,
WORKING PROGRESS AND SUBSEQUENT WORKING PLANS IN CASE
OF THE COMPANY’S INDEPENDENCE BEING AFFECTED
□ Applicable √ Applicable
Controlling shareholders, ultimate controllers and other parties controlled by them engaged in business
that are same as or similar to the company, peer competition and impact of significant changes in
peer competition on the company, solutions adopted, working progress and subsequent solution plans
□ Applicable √ Applicable
III. BRIEF INTRODUCTION TO THE GENERAL MEETINGS OF
SHAREHOLDERS
Index for details of websites designated
Meetings Date for publishing resolutions Date of disclosure Resolutions approved
2021 Annual General 28 June 2022 For details, please refer to the Announcement 29 June 2022 Considered and approved the
Meeting on Resolutions Passed at the 2021 Annual resolutions related to annual
General Meeting, 2022 First A Shares report, internal control audit
Class Meeting, 2022 First D Shares Class report, profit distribution
Meeting and 2022 First H Shares Class proposal, reappointment of
Meeting of Haier Smart Home Co., Ltd. auditor, external guarantees,
(L2022–042) published by the Company on daily connected transactions,
the website of Shanghai Stock Exchange general mandate to additional
(www.sse.com.cn) and the four major issue/repurchase, equity
securities Newspapers. incentive, election of new
session of the Board/
Supervisory Committee,
amendments to the
Company’s rules and
regulation, etc.
2022 First A Shares Class Considered and approved the
Meeting resolutions for equity incentive,
general mandate to
repurchase
2022 First D Shares Class
Meeting
2022 First H Shares Class
Meeting
Preferred shareholders whose voting rights have been restored requested an extraordinary general
meeting
□ Applicable √ Not applicable
Haier Smart Home Co., Ltd. Annual Report 2022 57
Section IV Corporate Governance
Explanation of Shareholders‘general meeting
√ Applicable □ Not applicable
The 2021 Annual General Meeting and the 2022 First A/D/H Shares Class Meetings of the Company
was held in successive order by way of on-site voting and network voting by poll at Room B101, Haier
RenDanHeYi Research Center, Haier Information Park, No.1 Haier Road, Qingdao, the PRC, in the
afternoon on 28 June 2022, considering the annual report and other relevant resolutions. The total
number of the shares of the Company carrying voting right amounted to 9,337,037,472 shares (of
which 6,198,798,156 shares were A shares, 271,013,973 shares were D shares and 2,867,225,343
shares were H shares). 820 shareholders and proxies, representing 6,456,427,607 shares or 69.15% of
the total number of the shares of the Company carrying voting right, were present at the 2021 Annual
General Meeting. 770 shareholders and proxies, representing 4,203,253,922 shares or 67.81% of the
total number of A shares of the Company carrying voting rights, were present at the 2022 First A
Shares Class Meeting; 40 shareholders and proxies, representing 147,537,203 shares or 54.44% of the
total number of D shares of the Company carrying voting rights, were present at the 2022 First D
Shares Class Meeting; 9 shareholders and proxies, representing 2,103,823,118 shares or 73.37% of
the total number of H shares of the Company carrying voting rights, were present at the 2022 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 four meetings were convened by the Board of the Company, and Chairman Mr. Liang
Haishan presided over these meetings. The Company had 11 Directors, of whom directors XIE Juzhi
and WU Qi were unable to attend the meetings due to personal engagement); the Company had 3
supervisors, of whom 3 supervisors attended the meetings. The secretary of 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.
58 Haier Smart Home Co., Ltd. Annual Report 2022
Section IV Corporate Governance
IV. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
(I) Changes of shareholding and remuneration of current and retired directors,
supervisors and senior management during the reporting period
√ Applicable □ Not Applicable
Unit: share
Total
remuneration
received from
the Company Whether
during the receive
Increase/ reporting remuneration
Expiration Shareholdings Shareholdings decrease in period from the
Appointment date of at the beginning at the end of the shares for the Reason for increase/ (RMB0’000) Company’s
Name Title (note) Gender Age date appointment of the year year year decrease (before tax) related party
Liang Haishan Chairman Male 57 2019/6/18 2022/6/28 16,411,209 16,749,309 338,100 Employee shareholding 77.03 YES
(retired) scheme vested
Li Huagang Chairman, Chief Executive Male 54 2019/6/18 2025/6/27 764,145 814,245 50,100 Employee shareholding 246.21 NO
Officer scheme vested
Shao Xinzhi Vice president Female 53 2022/6/28 2025/6/27 YES
Gong Wei Director, Chief Financial Male 50 2019/6/18 2025/6/27 1,911,970 1,943,498 31,528 Employee shareholding 142.61 NO
Officer, vice president scheme vested
Yu Hon To Director Male 75 2021/3/5 2025/6/27 30.58 NO
Li Kam Fun Director Female 71 2021/3/5 2025/6/27 30.58 NO
Chien Da-chun Independent director Male 70 2019/6/18 2025/6/27 30.58 NO
Wong Hak Kun Independent director Male 67 2020/5/19 2025/6/27 30.58 NO
Li Shipeng Independent director Male 56 2021/3/5 2025/6/27 30.58 NO
Wu Qi Independent director Male 56 2021/6/25 2025/6/27 30.58 NO
Wu Changqi Director Male 68 2019/6/18 2022/6/28 17.25 NO
(retired)
Lin Sui (retired) Director Male 67 2019/6/18 2022/6/28 17.25 NO
Liu Dalin Chairman of the Supervisory Male 43 2021/6/25 2025/6/27 11,470 11,470 Employee shareholding YES
Committee scheme vested
Ma Yingjie Supervisor Female 54 2021/6/25 2025/6/27 3,904 7,045 3,141 Employee shareholding 32.65 NO
scheme vested
Yu Miao Employee supervisor Male 41 2019/6/18 2025/6/27 2,479 2,479 Employee shareholding 36.34 NO
scheme vested
Xie Juzhi Vice president Male 57 2021/3/5 2025/6/27 33,695 33,695 Employee shareholding 181.05 NO
scheme vested and
shares acquired from
secondary market
Li Pan Vice president Male 47 2021/2/7 2025/6/27 533,218 567,225 34,007 Employee shareholding 141.63 NO
scheme vested
Zhao Yanfeng Vice president Male 46 2021/2/7 2025/6/27 53,500 81,229 27,729 Employee shareholding 152.84 NO
scheme vested
Li Yang Vice president Male 47 2021/2/7 2025/6/27 23,020 23,020 Employee shareholding 145.44 NO
scheme vested
Song Yujun Vice president Male 48 2021/2/7 2025/6/27 100,000 130,345 30,345 Employee shareholding 136.72 NO
scheme vested
Guan Jiangyong Vice president Male 45 2021/2/7 2025/6/27 64,218 95,609 31,391 Employee shareholding 139.31 NO
scheme vested
Wu Yong Vice president Male 45 2021/2/7 2025/6/27 146,743 176,208 29,465 Employee shareholding 130.35 NO
scheme vested
Haier Smart Home Co., Ltd. Annual Report 2022 59
Section IV Corporate Governance
Total
remuneration
received from
the Company Whether
during the receive
Increase/ reporting remuneration
Expiration Shareholdings Shareholdings decrease in period from the
Appointment date of at the beginning at the end of the shares for the Reason for increase/ (RMB0’000) Company’s
Name Title (note) Gender Age date appointment of the year year year decrease (before tax) related party
Huang Xiaowu Vice president Male 46 2021/2/7 2025/6/27 26,234 26,234 Employee shareholding 98.00 NO
scheme vested
Liu Xiaomei Secretary to the board of Female 38 2022/6/28 2025/6/27 800 5,106 4,306 Employee shareholding 46.83 NO
directors scheme vested
Ming Guozhen Secretary to the board of Female 59 2019/6/18 2022/6/28 1,395,489 1,440,474 44,985 Employee shareholding 25.57 NO
(retired) directors scheme vested
Wang Li (retired) Vice president Female 58 2021/2/7 2022/4/27 575,100 632,557 57,457 Employee shareholding 3.81 NO
scheme vested
Total / / / / / 21,960,296 22,739,748 779,452 / 1,954.38 /
Note: (1) “Shareholdings at the beginning of the year” as stated in the above table represent the later of “the beginning of
the year” of the appointment or “appointment date” of such directors, supervisors and senior management; (2) all the
aforesaid shares are A-shares.
Name Major working experience
Liang Haishan Male, born in 1966, is a senior engineer. He served as head of the
(retired) quality department of Qingdao Haier Refrigerator Co., Ltd., general
manager of Qingdao Haier Air Conditioner Gen Corp., Ltd, vice president
of Haier Group, senior vice president of Haier Group, rotating president of
Haier Group, vice chairman, Chairman and president of Haier Smart
Home Co., Ltd. He is currently the vice chairman of the board of
directors of Haier Group and president of Haier Group; he was awarded
the National May 1st Labor Medal, Outstanding Leadership Award of the
National Light Industry Enterprise Information (全 國 輕 工 業 企 業 信 息 化 優
秀 領 導 獎), Top 10 Leaders in China Strategic Emerging Industries; Prize
of Technology Advancement for China Household Appliances, First Prize
Award of Science and Technology Progress of China National Light
Industry Council, China Patent Gold Prize, Labor Model of Shandong
Province, Taishan Industry Leading Talent of Shandong Province.
60 Haier Smart Home Co., Ltd. Annual Report 2022
Section IV Corporate Governance
Name Major working experience
Li Huagang Male, born in 1969. He graduated from Huazhong University of Science
and Technology in 1991 with a Bachelor’s degree of Economics, and
from China Europe International Business School in 2014 with a degree
of Executive Master of Business Administration (EMBA). He is currently
chairman and president of Haier Smart Home Co., Ltd. Mr. LI Huagang
joined Haier in 1991 and served as the sales head of the Marketing and
Promotion Division of Haier (海爾商流本部銷售事業部長) and the general
manager of China operations of Haier Smart Home. From August 2017 to
March 2019, he served as the chief executive officer of Haier Electronics.
Since March 2019, Mr. LI has been appointed as an executive director of
Haier Electronics. He has been an executive director and president of the
Company since 2019. Mr. LI Huagang has extensive experience in the
fields of corporate management, marketing, brand operation, and global
business operation. Mr. LI Huagang was successively awarded 2015
China Home Appliance Marketing Leader, Award of Outstanding
Contribution in 40-Years Development of China’s Home Appliance
Industry 2018, 2019 Person of the Year of China’s Top Ten Brands and
2021 Taishan Industry Leading Talent.
Shao Xinzhi Female, born in 1970. She graduated from the University of International
Business and Economics with a degree of Executive Master of Business
Administration. She is currently the vice president and Chief Financial
Officer of Haier Group, as well as the vice chairman of Haier Smart
Home. Ms. SHAO adheres to the goal of innovation and value-
enhancement, empowering the high-quality development of the industry,
and comprehensively builds the group’s financial ecosystem through
financial strategy formulation, financial system construction and operation,
asset management, capital operation and other financial full value chain
management. In 2000, Ms. SHAO served as the chief accountant of Haier
Air Conditioning Division and the general manager of the strategy center
of Haier Group’s financial management department. In 2007, Ms. SHAO
established the first financial sharing center in the home appliance
industry, pioneering the “cloud + end” financial management innovation
model with Chinese characteristics to provide enterprises with
comprehensive financial best solutions, becoming one of the industry
benchmarks and winning the first prize of the National Enterprise
Management Modernization Innovation Achievement. In 2019, Ms. SHAO
was appointed as the vice president of Haier Group and the operator of
the Big Sharing Empowerment Platform. In 2020, Ms. SHAO was
appointed as vice president and Chief Financial Officer of Haier Group.
Ms. SHAO has been honored as “National Advanced Accounting
Worker”, “Qingdao Top Talent”, “ACCA Outstanding Achievement Award”
and “IMA Outstanding Contribution Leader in Management Accounting”
over the years.
Haier Smart Home Co., Ltd. Annual Report 2022 61
Section IV Corporate Governance
Name Major working experience
Gong Wei Male, born in 1973. He graduated from the University of International
Business and Economics in December 2011, and obtained a degree of
Executive Master of Business Administration. He also holds membership
in the CIMA Chartered Institute of Management Accountants. Mr. Gong
Wei served as the financial manager of Haier Smart Home Co., Ltd, the
senior finance manager and senior financial analyst of Haier Group, the
Chief Financial Officer of Haier Washing Machine Division, the Chief
Financial Officer of Haier Air Conditioning Division, the Chief Financial
Officer of Haier White Goods Group, with extensive experience in
financial management. Mr. Gong Wei was granted honorary titles such as
Young Post Expert in Qingdao City (青 島 市 青 年 崗 位 能 手), Outstanding
Accounting Workers in Shandong Province (山 東 省 優 秀 會 計 工 作 者) and
National Outstanding Accounting Workers (全 國 優 秀 會 計 工 作 者), and
received several awards, including 2011 Top Ten CFO in China by “New
Money” Magazine 《新理財雜志》), 2020 International Finance Leaders of
the Year in China. He is currently a director, the Chief Financial Officer
and vice president of Haier Smart Home Co., Ltd.
Yu Hon To Male, born in 1948. He holds a Bachelor of Social Science degree from
Chinese University of Hong Kong. He is a Fellow of the Institute of
Chartered Accountants in England and Wales and an Associate Member
of Hong Kong Institute of Certified Public Accountants. Mr. Yu is a
chartered accountant with over 40 years’ experience in the fields of
auditing, corporate finance (including advisory on IPO, mergers &
acquisitions and financial restructuring), financial investigation and
corporate governance. Mr. Yu was formerly a partner of Coopers &
Lybrand (now merged as PricewaterhouseCoopers) in Hong Kong with
extensive experience in the corporate finance advisory assignments in
Greater China for Hong Kong corporations, private equity groups and
multinationals. Mr. Yu also served as an independent non-executive
director and the chairman of the audit committee of Haier Electronics,
over the past three years. Mr. Yu had served various public offices
including being a member of the Listing Committee of the Hong Kong
Stock Exchange from 1992 to 1995, a member of the Investment
Committee and the Audit Committee of Employees Retraining Board
(established under the Employees Retraining Ordinance of Hong Kong)
from 1999 to 2020, and a member of the Board of Review (established
under Inland Revenue Ordinance of Hong Kong) from 2006 to 2012. He
is currently a director of 11th session of the Board of Directors of Haier
Smart Home Co., Ltd.
62 Haier Smart Home Co., Ltd. Annual Report 2022
Section IV Corporate Governance
Name Major working experience
Li Kam Fun Female, born in 1952. She graduated from University of Hong Kong with
Bachelor of Arts and Master of Business Administration degrees. She was
conferred with the degree of Doctor of Business Administration, honoris
causa, from the Open University of Hong Kong in 2014. Ms. Li Kam Fun
currently serves as an independent non-executive director of Nestle S.A,
a publicly listed company on the SIX Swiss Exchange. Ms. Li Kam Fun
served as an independent non-executive director of Haier Electronics,
over the past three years. Prior to joining Our Hong Kong Foundation,
Ms. Li Kam Fun had a distinguished career that spanned 34 years with
Amway Corporation. When she retired in 2011, she held the concurrent
positions of Executive Vice President of Amway Corporation and
Executive Chairman of Amway China Co. Ltd. responsible for Amway
Greater China & Southeast Asia Region. During the last three years, Ms.
Li Kam Fun had also been an independent non-executive director of
Amcor Limited (a company listed on the Australian Securities Exchange)
from 2014 to 2019, an independent non-executive director of Trinity
Limited (a company listed on the Main Board of the Hong Kong Stock
Exchange) from 2011 to 2020, and the president of Our Hong Kong
Foundation from 2015–2022. Ms. Li Kam Fun’s leadership was well
recognised in the business community. She was twice named the
“World’s 100 Most Powerful Women” by Forbes Magazine in 2008 and
2009. CNBC awarded Ms. Li Kam Fun with the “China Talent
Management Award” in its 2007 China Business Leaders Awards. Ms. Li
Kam Fun currently holds several positions in public service including
member of the Election Committee of Hong Kong (2021–2025), deputy
secretary of Hong Kong Coalition, director of the Chinese Association of
Hong Kong & Macao Studies, honorary special representative, conference
consultant and honorary president of All-China Women’s Federation 、
honorary president of the Hong Kong Federation of Women, permanent
honorary director of The Chinese General Chamber of Commerce 、court
member of the Open University of Hong Kong and member of the
advisory panel of the Xiqu Centre of the West Kowloon Cultural District
Authority. She is currently a director of the 10th Board of Directors of
Haier Smart Home Co., Ltd.
Chien Da-chun Male, born in 1953. He served as Chief Executive Officer of IBM ASEAN/
South Asia, Chairman and Chief Executive of IBM Greater China region.
He graduated from the Department of Mathematics of Tamkang
University of Taiwan, and studied advanced management courses in the
Institute of Business Administration of Harvard University, as well as the
global senior manager courses of International Business Machines
Corporation (IBM). He is currently an independent director of the 11th
Board of Directors of Haier Smart Home Co., Ltd, a director of ENN
Group and professor of Management Practice at the School of Business
of Renmin University of China/Academic Director of EE Centre.
Haier Smart Home Co., Ltd. Annual Report 2022 63
Section IV Corporate Governance
Name Major working experience
Wong Hak Kun Male, born in 1956. He received a Bachelor’s of Social Science degree
from University of Hong Kong. He has over 36 years of experience in
auditing, assurance and management in Deloitte China. He has been a
partner of Deloitte China since 1992 and served as a member of the
board of directors of Deloitte China from 2000 to 2008. Prior to his
retirement in May 2017, he was Deloitte China’s National Managing
Partner of Audit & Assurance. Mr. Wong is an associate of the Hong
Kong Institute of Certified Public Accountants (HKICPA), an associate of
the Association of Chartered Certified Accountants (ACCA), an associate
of the Chartered Institute of Management Accountants (CIMA), an
associate of The Chartered Governance Institute (previously known as
“The Institute of Chartered Secretaries and Administrators”). He currently
serves as an independent non-executive director of Yue Yuen Industrial
Holdings (Limited), Lung Kee (Bermuda) Holdings Limited, Guangzhou
Automobile Group Co., Ltd., Hangzhou SF Intra-City Industrial Co., Ltd.
and Haier Smart Home Co., Ltd.
Li Shipeng Male, born in 1967. He holds a bachelor’s and Master’s degree from
University of Science and Technology of China, and a PhD degree from
Lehigh University, USA. Mr. Li has extensive experience in Internet of
Things technology and artificial intelligence. Mr. Li is currently the director
of Applied Intelligence Research Center of Suzhou Industrial Technology
Research Institute. Prior to that, he served as the Chief Researcher and
Deputy Dean of Microsoft Research Asia, Chief Technology Officer of
Cogobuy Group, Vice President of iFlytek Group, Executive President and
Chief Scientist of Shenzhen Institute of Artificial Intelligence and Robotics.
Mr. Li is a member of the International Eurasian Academy of Sciences
and a fellow of the International Institute of Electrical and Electronics
Engineers (IEEE fellow). He was listed as one of the world’s top 1,000
computer scientists by Guide2Research and ranked top 20 in Mainland
China in 2020. Mr. Li is a renowned expert in Internet, computer vision,
cloud computing, Internet of Things and artificial intelligence. He is
currently an independent director of the 11th Board of Directors of Haier
Smart Home Co., Ltd.
64 Haier Smart Home Co., Ltd. Annual Report 2022
Section IV Corporate Governance
Name Major working experience
Wu Qi Male, born in 1967. He has 25 years of (New PCEBG) experience in
world-class management and consulting companies. He is currently an
independent director of the 11th session of the Board of Haier Smart
Home Co., Ltd. He served as the vice president (Global) and vice
chairman (Greater China) of Accenture, and the chairman of Shun Zhe
Technology Development Co., Ltd. He was a member and the president
(Greater China) of Roland Berger’s Global Management Committee, a
member of Roland Berger’s Global Supervisory Board, a senior
consultant for Foxconn’s D sub-business group strategy and intelligent
manufacturing and a consultant of Xnode, a famous accelerator for
startups. He was awarded 2015 Outstanding Talent in Jing’an District,
Shanghai. Mr. Wu’s experience in consulting industry involves
transportation/logistics, high-tech manufacturing, tourism, finance,
consumer goods, real estate, government departments and other
industries. His has extensive experience in development strategy,
organizational change, sales and brand strategy, corporate innovation,
digital transformation and intelligent manufacturing, post-merger
integration, regional industrial and economic development and upgrading.
He is a well-known expert in China in Industry 4.0, transportation and
regional planning and development. He served as a consultant for
Hangzhou Bay Development Planning, a member of the Intelligent
Manufacturing Expert Committee of Municipal Government, deputy head
of the 13th Five-Year Planning Expert Committee of Zhengzhou City,
Henan Province, vice chairman of China Cold Chain Alliance.
Wu Changqi (retired) Male, born in 1955. He is currently a professor of strategic management
and doctoral supervisor of Guanghua School of Management, Peking
University. He graduated from Shandong University with a Bachelor’s
degree of Economics in 1982, and Katholieke Universiteit Leuven in
Belgium with a Master’s degree of Business Administration and a
Doctoral degree in applied economics in 1990. He served as an assistant
professor and associate professor in the Department of Economics of
School of Business and Management of Hong Kong University of Science
and Technology, a professor and head of the Department of Strategic
Management of Guanghua School of Management of Peking University, a
deputy dean of the Guanghua School of Management of Peking
University, a director of the EMBA degree programme center and a
director of Haier Smart Home. He is currently the executive vice
president of the Academy of Development Strategy for National High-tech
Industry Zones, Peking University and the dean of the School of
Management of Shandong University.
Haier Smart Home Co., Ltd. Annual Report 2022 65
Section IV Corporate Governance
Name Major working experience
Lin Sui (retired) Male, born in 1956. He was a partner of Deloitte Touche Tohmatsu
China (retired on 31 May 2019). He has been engaged in international
tax consultancy in USA and China for nearly 30 years. He participated in
transactions, mergers and acquisitions, initial public offerings, financing
projects, supply chain taxation optimization, internal tax risk control and
other aspects of professional tax consultancy of many PRC international
enterprises, and has abundant experience in restructuring, acquisition,
equity arrangement, tax accounting and business transformation. In recent
years, he has been mainly engaged in the consulting of digital
transformation of corporate financial and tax management. In 1989, he
pursued his studies in USA and obtained a Master’s degree in Business
Administration and a Master’s degree of Science in Taxation. He joined
Deloitte Touche Tohmatsu USA in 1993 and was transferred to Deloitte
Touche Tohmatsu China in 2002. Mr. Lin Sui is a Certified Public
Accountant in USA. Prior to his return to China, he was employed by
Ministry of Science and Technology of China as a member of the
overseas scholars’ advisory committee of the National High-tech
Development Torch Program and an expert on the United Nations
development projects in China. He served as a director of Haier Smart
Home. At present, he has been invited as an external lecturer of China
Europe International Business School and Shanghai National Institute of
Accounting, a part-time master degree tutor of Fudan University and
Shanghai University of Finance and Economics, Deputy Director of the
Advisory Committee of China Tax Institute of Large Business (TILB) and a
council member of the Shanghai branch of China Association for Fiscal
and Tax Law.
66 Haier Smart Home Co., Ltd. Annual Report 2022
Section IV Corporate Governance
Name Major working experience
Liu Dalin Male, born in 1980, Chinese nationality with no right of permanent
residency abroad. He graduated from the School of Mechanical
Engineering of Jinan University and holds a Master’s degree in Business
Administration from Renmin University of China. He is a senior engineer.
From August 2005 to September 2010, he served as a designer of water
heater department of Heater Head Office at Haier Group, an assistant
R&D engineer, a R&D engineer and a R&D model manager of the heater
R&D center of the Heater Head Office of Haier Group successively. From
September 2010 to October 2015, he was the deputy secretary of the
Youth League Committee of Haier Group. From October 2015 to July
2020, he was the deputy secretary of the Disciplinary Committee of Haier
Group. From July 2020 to March 2021, he was the executive deputy
secretary of the Disciplinary Committee of Haier Group and the president
of the Supervisory Committee of Gooday Supply Chain Technologies Co.,
Ltd. From March 2021 to June 2022, he served as the president of the
Supervisory Committee, the secretary of Society and Community
department and executive deputy secretary of the Disciplinary Committee
of Haier Group. From June 2022 to date, he serves as a member of the
Party Committee, chairman of the Supervisory Committee and head of the
organization department of Haier Group. Mr. Liu has been the president
of the Supervisory Committee of Haier Smart Home Co., Ltd. since June
2021.
Ma Yingjie Female, born in 1969. She once served as the secretary of the Youth
League Committee of Haier Smart Home Co., Ltd., the secretary of the
labour union of Haier Smart Home Co., Ltd., the contact person of the
customer service department of Qingdao Haier Dishwasher Co., Ltd.
Currently, she is the head of Society and Community department and the
supervisor of the 11th session of the Supervisory Committee of Haier
Smart Home Co., Ltd.
Yu Miao Male, born in 1982, Chinese nationality. Mr. Yu holds a master’s degree.
He serves as the legal manager of Haier Smart Home Co., Ltd. since
April 2012, and serves as the employee supervisor of Haier Smart Home
Co., Ltd. since January 2019.
Haier Smart Home Co., Ltd. Annual Report 2022 67
Section IV Corporate Governance
Name Major working experience
Xie Juzhi Male. He graduated from Shandong University of Finance and Economics
in July 1989 with a Bachelor’s degree, and joined Haier in the same year.
Mr. Xie has experience in whole-process product management, product-
wide services and product-wide marketing. Mr. Xie has held senior
positions in Electrothermal Division of Haier Group and East China
Marketing and Promotion Division of the Haier Group. Since August
2002, he has been the general manager of Haier Customer Service
Company (海 爾 顧 客 服 務 公 司). Since July 2012, he has been the Vice
President of Haier Group in charge of the Group’s integration of
community sales services in first and second-tier cities, and developing
the online and offline sales of new household products. Since December
2015, he has been managing the newly developed business segments of
Haier Group, including water purification, logistics, Haier home and
Gooday services. He is also in charge of the water heater business since
2019 and has been appointed as Chief Executive Officer and executive
director of Haier Electronics since 27 March 2019. Since April 2021, he is
responsible for supervising the smart living appliances segment. Mr. Xie
was awarded honorary titles including the Gold Award of Outstanding
Contribution Award of China’s Home Appliance Services Industry (中國家
電服務行業突出貢獻獎金獎) and Outstanding Entrepreneur of Shandong
Province (山 東 省 優 秀 企 業 家). He is currently responsible for supervising
the intelligent industrial platform and is the vice president of Haier Smart
Home.
Li Pan Male, born in 1976, is a senior engineer. He graduated from Wuhan
University in 1997 and obtained the double degree in economics and
international business administration. He obtained a Master’s degree from
China Europe International Business School in 2017. He joined Haier in
1997 and currently serves as the general manager of the overseas
platform of Haier Smart Home. Mr. Li has held various positions in Haier
Group, including the assistant director of Asia-Pacific Division, the
manager of the Haier ASEAN Center, the manager of the Overseas
Brands Marketing Center, the manager of the Overseas Strategic Center
and the director on the operation of overseas markets. He has held
important positions of the overseas platform of Haier Group since 2004
with extensive frontline management experience in product planning,
brand marketing, market exploration and corporate operation. He is
currently the vice president of Haier Smart Home Co., Ltd.
68 Haier Smart Home Co., Ltd. Annual Report 2022
Section IV Corporate Governance
Name Major working experience
Zhao Yanfeng Male, born in 1977. He graduated from Tianjin Institute of Light Industry
and obtained a Bachelor’s degree in Mechanical and Electronic
Engineering in 2001. He graduated from Renmin University of China and
obtained an Executive Master degree in Business Administration in 2019.
He is currently the vice president and general manager of the
refrigeration business of Haier Smart Home Co., Ltd. Mr. Zhao joined
Haier in 2001 and served as the general manager of Haier Group’s
regional branch, general manager of the domestic market of refrigeration
business and general manager of the refrigeration business in China. He
possesses whole-process management experience in product planning,
research and development, manufacturing and marketing.
Li Yang Male, born in 1976, is a senior engineer. He currently serves as the
general manager of washing machine and the internet of clothing
platform and vice president of Haier Smart Home Co., Ltd. Mr. Li Yang
graduated from Qingdao University of Science & Technology in 1998 and
obtained a Bachelor’s degree in Fine Chemical Engineering. He joined
Haier in August. Mr. Li was the head of quality department of Haier
Smart Home and the manufacturing director and he has held important
positions of the internet of clothing platform since 2008 with extensive
experience in the quality and systemic management of washing
machines, production and manufacturing. He obtained a degree of
Executive Master of Business Administration (EMBA) from Xi’an Jiaotong
University in 2022. The ecological platform of the internet of clothing
incubated under his leadership was awarded the first prize for “Innovation
Results in Modern Management of National Light Industry Enterprises”
(全 國 輕 工 業 企 業 管 理 現 代 化 創 新 成 果) in 2019. He received the “Most
Promising Entrepreneur in Qingdao in 2018” and the “Advanced Individual
in Management Innovation of National Light Industry Enterprises”. He is
currently the vice president of Haier Smart House Co., Ltd.
Song Yujun Male, born in 1975. He graduated from Shandong University of
Technology with a bachelor’s degree in equipment engineering and
management in 1998, and received a degree of Executive Master of
Business Administration from Tsinghua University in 2015. He joined Haier
in 1998 and served as general manager of the Operation Department of
Haier Overseas Promotion Headquarters, director and general manager of
Haier Pakistan Company, executive director of Haier India Company,
director of Haier Overseas businesses in South Asia and Southeast Asia
region, and vice president of Haier Home Appliance Industry Group.
Since 1998, he has held various important positions in Haier overseas
companies and has rich experience in product, manufacturing, R&D and
marketing. He was awarded the Labor Model of Qingdao City, the
Outstanding Talent in Professional Technology in Qingdao City, Qingdao
High-level Service Talent and other honorary titles. He is currently the
general manager of Haier Air Industry Group and vice president of Haier
Smart Home Co., Ltd.
Haier Smart Home Co., Ltd. Annual Report 2022 69
Section IV Corporate Governance
Name Major working experience
Guan Jiangyong Male, born in 1978. He graduated from Northeast Electric Power
University in 2001 and obtained a Bachelor’s degree in Management
Information System. Mr. Guan joined Haier in 2001 and currently serves
as the general manager of water heater and the internet of water
platform. Mr. Guan has been responsible for product management,
production and manufacturing, product marketing and industrial pipeline
management and served as a regional general manager, the market
director of the water heater business and the general manager of the
internet of water platform and the water heater business. He possesses
whole-process management experience in product manufacturing,
marketing, corporate planning management and industrial platforms. He is
currently the vice president of Haier Smart Home Co., Ltd.
Wu Yong Male, born in 1978. He graduated from Tianjin College of Commerce in
2001 and obtained a Bachelor’s degree in Heat Supply, Ventilation and
Air-conditioning Engineering. He obtained the double degree of EMBA
from the School of Economics and Management of Tsinghua University
and the INSEAD in 2015. Mr. WU Yong joined Haier Group in 2001 and
currently serves as the general manager of the kitchen appliances and
the internet of food platform of Haier Smart Home. Mr. WU has served
as the general manager of the PRC Region on manufacturing and
production of refrigerators, overseas marketing and the air-conditioning
business since joining the Group and possesses whole-process
management experience in high-end manufacturing, marketing and
industrial platforms.
Huang Xiaowu Male, born in 1977. He graduated from the College of Photoelectric
Engineering, Chongqing University with a Bachelor’s degree in
engineering in 1998 and graduated from the Faculty of Business and
Economics of the University of Hong Kong with a master’s degree in
business administration in 2004. Mr. Huang has many years of extensive
working experience in commercial banking, strategic investment, industrial
fund, corporate finance and capital market operation and management,
and has participated in and led important strategic investment and
financing projects involving numerous fields such as marketing channels,
logistics, home appliances and technology industry. Mr. Huang was
appointed as the vice president of the Company in 2021, responsible for,
amongst others, investor relations, capital market, equity financing and
strategic investment, and served as the Director of the ESG Executive
Office of Haier. Prior to that, Mr. Huang worked as the deputy general
manager of Haier Electronics Group Co., Ltd., a company listed on the
Stock Exchange, which is controlled by the Company. Before joining
Haier Group, Mr. Huang worked at the Ningbo branch and Shanghai
branch of the Industrial and Commercial Bank of China, Investment
Banking Division of Guosen Securities and Anglo Chinese Investment
Banking Group (英 高 投 資 銀 行 集 團).
70 Haier Smart Home Co., Ltd. Annual Report 2022
Section IV Corporate Governance
Name Major working experience
Liu Xiaomei Female, born in 1985. She graduated from the Law School of Minzu
University of China with a double bachelor’s degree in law and literature
in 2009, and graduated from the Department of International Law of the
China Foreign Affairs University with a master’s degree in international
law in 2011, and is qualified to practice law in China. Ms. Liu joined the
Company in June 2015 and has been in charge of legal and compliance
matters of corporate governance, capital market, M&A and corporate
finance at Haier Electronics Group Co., Ltd. and Haier Smart Home. Prior
to joining the Company, Ms. Liu worked for Jingtian & Gongcheng in
Beijing. Ms. Liu has accumulated extensive work experience in corporate
governance, capital market, industrial fund, and investment and financing.
Ming Guozhen Female, born in 1964. She graduated from Southwestern University of
(retired) Finance and Economics with a Master’s degree in Economics in 1986.
She is a senior economist, and she was the lecturer of investment
department of China Institute of Finance, deputy head of the Teaching
and Research section of Investment Economy Department, a member of
treasury department of Everbright International Investment Consultancy
Company, deputy director and director of general manager office, general
manager of business management department and general manager of
personnel department, assistant to the general manager, executive vice
president of Everbright International Investment Consultancy Company;
she was the office director of analysts professional committee of the
Securities Association of China, vice director of Qualification Management
Department of the Securities Association of China, vice director of
Practice Standards Committee (執 業 標 準 委 員 會) of the Securities
Association of China. She joined Haier in August 2007 and served as the
business director and merger & acquisition director of Haier Asset
Operation Division from August 2007 to May 2008. She has been a vice
general manager since May 2008 and the board secretary since April
2009 of Haier Smart Home. She has played a leading role and
participated in the introduction of strategic investors, M&A of GEA/FPA
and internal integration, issue of convertible bonds/exchangeable bonds,
issue of D-Share/H-Share. She was awarded as a member of “Board
Secretary Hall of Fame (金 牌 董 秘 名 人 堂)” at the 12th session of New
Finance Election in June 2016.She served as the secretary to the Board
of Haier Smart Home.
Haier Smart Home Co., Ltd. Annual Report 2022 71
Section IV Corporate Governance
Name Major working experience
Wang Li (retired) Female, born in 1965. She graduated from Qingdao University of Science
& Technology in 1986 and obtained a Bachelor’s degree in Heat Supply,
Ventilation and Air-conditioning Engineering. She obtained a Master’s
degree in Business Administration from Renmin University of China in
June 2013. Ms. Wang Li joined Qingdao Air-conditioner Company in
1988. She has held various positions since 1988, including general
manager of Haier’s central air-conditioner business, general manager of
Haier’s residential facilities business and general manager of Haier’s air
business. Ms. Wang Li has management experience in products and
marketing. Ms. Wang Li has served various industrial positions, including
a member of China Refrigeration and Air-Conditioning Industry
Association. Ms. Wang Li receives grants from the State Council and was
awarded the Outstanding Entrepreneur in Light Industry in Shandong
Province, the Labor Model of Qingdao City, the Outstanding Talent in
Professional Technology in Qingdao City and other honorary titles. She
served as the vice president of Haier Smart Home Co., Ltd.
Other information
□ Applicable √ Not Applicable
(II) Appointment of current and departing of Directors, Supervisors and Senior
Management during the reporting period
1. Appointment in shareholder units
√ Applicable □ Not Applicable
Start date of End date of
Name Name of shareholder unit Position appointment appointment
Liang Haishan Haier Group Vice chairman of the Board, vice
president
Liang Haishan Haier COSMO Co., Ltd. Director, general manager
Shao Xinzhi Haier Group Vice president and Chief Financial 2020
Officer of Haier Group
Shao Xinzhi Qingdao Haier Venture & Supervisor
Investment Information
Co., Ltd.
Liu Dalin Haier Group Corporation Member of the Party Committee, June 2022
president of the Supervisory
Committee, head of the
organization department
Explanation of Nil
appointment in
shareholder units
72 Haier Smart Home Co., Ltd. Annual Report 2022
Section IV Corporate Governance
2. Appointment in other units
√ Applicable □ Not applicable
Start date of End date of
Name Name of other unit Position appointment appointment
Liang Haishan Haier Group Finance Co., Ltd. Director
Li Huagang Qingdao Haier multimedia Co Chairman
Ltd.
Gong Wei Haier Group Finance Co., Ltd. Director
Gong Wei Qingdao Haier multimedia Co., Director
Ltd.
Shao Xinzhi Haier Group Finance Co., Ltd. Chairman
Shao Xinzhi Qingdao Junyi Holding Group Supervisor
Co., Ltd.
Shao Xinzhi Wanlian Holding Co., Ltd. Supervisor
Yu Hon To Keck Seng Investments (Hong Independent non-executive director April 2013
Kong) Limited
Yu Hon To MS Group Holdings Limited Independent non-executive director May 2018
Yu Hon To China Resources Gas Group Independent non-executive director December 2012
Limited
Yu Hon To One Media Group Limited Independent non-executive director June 2005
Yu Hon To China Renewable Energy Independent non-executive director April 2008 January 2022
Investment Limited
Yu Hon To Playmates Toys Limited Independent non-executive director May 2021
Li Kam Fun Nestle S.A Independent non-executive director
Wong Hak Kun Yue Yuen Industrial (Holdings) Independent director June 2018
Limited
Wong Hak Kun Lung Kee (Bermuda) Holdings Independent director June 2018
Limited
Wong Hak Kun Guangzhou Automobile Group Independent director May 2020
Co., Ltd.
Wong Hak Kun Hangzhou SF Intra-City Independent director December 2021
Industrial Co., Ltd.
Li Shipeng Applied Artificial Intelligence Director
Research Center Of the
Suzhou Industrial
Technology Research
Institute
Li Shipeng The Chinese University of Visiting Professor
Hong Kong (Shenzhen)
Wu Changqi Wanhua Chemical Group Co Independent director April 2022
Ltd
Wu Changqi Peking University Professor
Wu Changqi Shandong University Dean of School of Management October 2019
Wu Changqi Tianneng Battery Group Co., Independent director February 2019
Ltd.
Wu Changqi Shenwan Hongyuan Group Independent director May 2021
Co., Ltd.
Lin Sui Focus Hotmelt Company Ltd. Independent director August 2020 July 2023
Liu Dalin Gooday Supply Chain Chairman of the Supervisory March 2021
Technologies Co., Ltd. Committee
Xie Juzhi Gooday Supply Chain Director
Technologies Co., Ltd.
Haier Smart Home Co., Ltd. Annual Report 2022 73
Section IV Corporate Governance
Start date of End date of
Name Name of other unit Position appointment appointment
Xie Juzhi Qingdao Eoroom Technology Director
Co., Ltd.
Explanation of Nil
appointment in other
units
(III) Compensation of Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
Decision-making process of The Remuneration and Assessment Committee of the
compensation of Directors, Company shall formulate the remuneration standards,
Supervisors and Senior adjust principles, and assess and implement the principles
Management of the remuneration of directors, supervisors and senior
management personnel and submit to the Board of
Directors for consideration and approval.
Determining basis of matrix The cash remuneration of executives in 2022 consists of
compensation of Directors, monthly remuneration, bonuses and sharing, and is linked
Supervisors and Senior to orders triggered by the upgrade of the Company’s
Management Internet of Things from”high-end brands“to”scenario
brands“to”ecological brands”. Focusing on the rapid
impr ov e me nt of pr ofit a bilit y a nd t hr ough digi tal
transformation, the Company maintained its
competitiveness as a leader in the whole process, and
achieved the commitment targets and sharing of high
added-value. Through the innovation of the mechanism, the
Company encouraged its executives to achieve higher
market goals, thus achieving a win-win situation for users,
employees, enterprises and stakeholders. At the same
time, the Company continues to promote the
implementation of the employee stock ownership and other
long-term incentive plans; multiple incentive tools will be
effectively utilised to mobilise competent management,
frontline managers and business and technical backbones
on a wider scale, further aligning the interests of
shareholders, the Company and incentive recipients, and
bringing more efficient and sustainable returns to
shareholders. After the approval by the general meeting,
the allowance for directors is RMB320,000/year before tax.
The travelling expenses of directors attending Board
meetings and general meetings and the expenses required
for performing their duties and according to the Articles of
Association will be reimbursed.
74 Haier Smart Home Co., Ltd. Annual Report 2022
Section IV Corporate Governance
Actual compensation paid to Paid as prescribed.
Directors, Supervisors and Senior
Management
Total of actual compensation paid RMB19,543,800
to all Directors, Supervisors and
Senior Management at the end
of the reporting period
(IV) Changes in of Directors, supervisors and senior management of the Company
√ Applicable □ Not Applicable
Name Position Method of Change Reason for Change
Li Huagang Chairman, president Election Election of the new session of the Board and
Senior Management
Liang Haishan Chairman Retirement Election of the new session of the Board
Shao Xinzhi Vice chairman Election Election of the new session of the Board
Xie Juzhi Vice chairman Retirement Election of the new session of the Board
Gong Wei Director, Chief Financial Election Election of the new session of the Board and
Officer, vice president Senior Management
Wu Changqi Director Retirement Election of the new session of the Board
Lin Sui Director Retirement Election of the new session of the Board
Xie Juzhi Vice president Appointment Election of the new session of the Senior
Management
Song Yujun Vice president Appointment Election of the new session of the Senior
Management
Zhao Yanfeng Vice president Appointment Election of the new session of the Senior
Management
Wang Li Vice president Retirement Election of the new session of the Senior
Management
Liu Xiaomei Secretary to the board of Appointment Election of the new session of the Senior
directors Management
Ming Guozhen Secretary to the board of Retirement Election of the new session of the Senior
directors Management
(V) Explanation of penalties imposed by securities regulators in the past three years
□ Applicable √ Not Applicable
(VI) Others
□ Applicable √ Not Applicable
Haier Smart Home Co., Ltd. Annual Report 2022 75
Section IV Corporate Governance
V. RELEVANT INFORMATION ON THE BOARD MEETINGS HELD DURING
THE REPORTING PERIOD
Meeting Date Resolutions approved
The 26th meeting of the Tenth session of 6 January 2022 Considered and approved the Resolution on the Placing of New H Shares Under the
the Board of Directors General Mandate of Haier Smart Home Co., Ltd.
The 27th meeting of the Tenth session of 30 March 2022 Considered and approved Report on the 2021 Annual Financial Statements of Haier Smart
the Board of Directors Home Co., Ltd., 2021 Annual Report and Annual Report Summary of Haier Smart Home
Co., Ltd., 2021 Annual Work Report of the Board of Directors of Haier Smart Home Co.,
Ltd., 2021 Annual Internal Control Evaluation Report of Haier Smart Home Co., Ltd., 2021
Annual Internal Control Audit Report of Haier Smart Home Co., Ltd., 2021 Annual Profit
Distribution Plan of Haier Smart Home Co., Ltd., the Proposal on Re-appointment of PRC
GAAP Auditor of Haier Smart Home Co., Ltd., the Proposal on Re-appointment of IFRS
Auditor of Haier Smart Home Co., Ltd., the Risk Assessment Report on Haier Finance Co.,
Ltd. in 2021 of Haier Smart Home Co., Ltd., the Resolution on the Anticipated Provision of
Guarantees for its Subsidiaries in 2022 of Haier Smart Home Co., Ltd., the Resolution on
the Conduct of Foreign Exchange Fund Derivatives Business of Haier Smart Home Co., Ltd.,
the Resolution on the Special Report on the Deposit and Actual Use of Raised Funds in
2021 of Haier Smart Home Co., Ltd., the Resolution on Adjusting the Allowance of Directors
of Haier Smart Home Co., Ltd., the 2021 Environment, Social and Governance Report of
Haier Smart Home Co., Ltd., the Resolution on the Proposed Registration and Issue of Debt
Financing Instruments of Haier Smart Home Co., Ltd., the Resolution on Proposing the
General Meeting to Grant General Mandate to the Board of Directors on Additional Issuance
of A-shares of Haier Smart Home Co., Ltd., the Resolution on Proposing the General
Meeting to Grant General Mandate to the Board of Directors on Additional Issuance of
H-shares of Haier Smart Home Co., Ltd., the Resolution on Proposing the General Meeting
to Grant General Mandate to the Board of Directors on Additional Issuance of D-shares of
Haier Smart Home Co., Ltd., the Resolution in Relation to the Repurchase Plan of a Portion
of Public A Shares of Haier Smart Home Co., Ltd., the Resolution on Proposing the General
Meeting to Grant the General Mandate to the Board of Directors to Repurchase not more
than 10% of the Total Number of H-shares of the Company in Issue of Haier Smart Home
Co., Ltd., the Resolution on Proposing the General Meeting to Grant the General Mandate to
the Board of Directors to Repurchase not more than 10% of the Total Number of D-shares
of the Company in Issue of Haier Smart Home Co., Ltd., the Resolution on Amending the
Articles of Association of Haier Smart Home Co., Ltd., the Resolution on Amending the
Rules of Procedure for the General Meetings of Haier Smart Home Co., Ltd., the Resolution
on Amending the Rules of Procedure for the Board of Directors of Haier Smart Home Co.,
Ltd., the Resolution on Amending the Management System of Investment of Haier Smart
Home Co., Ltd., the Resolution on Amending the Management Practices for Fundraising of
Haier Smart Home Co., Ltd., the Resolution on Amending the Fair Decision-Making System
for Related-party Transactions of Haier Smart Home Co., Ltd., the Resolution on Amending
the System of Independent Directors of Haier Smart Home Co., Ltd., the Resolution on
Amending the Management System of External Guarantees of Haier Smart Home Co., Ltd.,
the Resolution on Amending the Management System of Foreign Exchange Derivative
Transaction Business of Haier Smart Home Co., Ltd., the Resolution on Amending the
Management System of Entrusted Wealth Management of Haier Smart Home Co., Ltd., the
Resolution on Amending Systems Including the Registration System of Insider and the
Management System of Investor Relations of Haier Smart Home Co., Ltd., the Resolution on
Convening the 2021 Annual General Meeting and the First A-shares/D-shares/H-shares
Class Meetings of 2022 of Haier Smart Home Co., Ltd.
76 Haier Smart Home Co., Ltd. Annual Report 2022
Section IV Corporate Governance
Meeting Date Resolutions approved
The 28th meeting of the Tenth session of 28 April 2022 Considered and approved the 2022 First Quarterly Report of Haier Smart Home Co., Ltd.,
the Board of Directors the Resolution of Haier Smart Home Co., Ltd. on the Acquisition of 100% Equity Interest in
Qingdao TAB Robot Technology Co., LTD. by a Subsidiary and Connected Transaction, the
Resolution of Haier Smart Home Co., Ltd. on the Transfer of 25% Equity Interest in Qingdao
Haier Mold Co., Ltd. by a Subsidiary and Connected Transaction, the Resolution of Haier
Smart Home Co., Ltd. on the Renewal of the Product and Materials Purchase Framework
Agreement between Haier Smart Home Co., Ltd. and Haier Group Corporation, the
Resolution of Haier Smart Home Co., Ltd. on the Renewal of the Service Purchase
Framework Agreement between Haier Smart Home Co., Ltd. and Haier Group Corporation,
the Resolution of Haier Smart Home Co., Ltd. on the Renewal of the Product and Materials
Sales Framework Agreement between Haier Smart Home Co., Ltd. and Haier Group
Corporation, the Resolution of Haier Smart Home Co., Ltd. on the Renewal of the Service
Provision Framework Agreement between Haier Smart Home Co., Ltd., the Resolution of
Haier Smart Home Co., Ltd. on Investing in Large Refrigerator Project with an Annual
Capacity of 2 Million Units, the 2022 A Share Core Employee Stock Ownership Plan of Haier
Smart Home Co., Ltd (draft) and its Summary, the 2022 H Share Core Employee Stock
Ownership Plan of Haier Smart Home Co., Ltd (draft) and its Summary, the 2022 A Share
Option Incentive Scheme of Haier Smart Home Co., Ltd. (draft) and its Summary, the
Management Practices for the Assessment of the 2022 A Share Option Incentive Scheme of
Haier Smart Home Co., Ltd., the Resolution of Haier Smart Home Co., Ltd. on Proposal to
the General Meeting to Authorize the Board of Directors and its Authorized Persons to Take
Full Control of the Matters Relating to the Company’s 2022 A Share Option Incentive
Scheme, the Resolution of Haier Smart Home Co., Ltd. on the Appointment of Vice
President, the Resolution of Haier Smart Home Co., Ltd. on the Appointment of Vice
President, the Resolution of Haier Smart Home Co., Ltd. on the Re-election of the Board of
Directors and the Election of Independent Directors, the Resolution of Haier Smart Home
Co., Ltd. on the Re-election of the Board of Directors and the Election of Non-independent
Directors
The 1st meeting of the Eleventh session of 28 June 2022 Considered and approved the Resolution of Haier Smart Home Co., Ltd. on the Election of
the Board of Directors Chairman of the Company, the Resolution of Haier Smart Home Co., Ltd. on the Election of
Vice-chairman of the Company, the Resolution of Haier Smart Home Co., Ltd. on the
Election of Members of the Strategy Committee of the Board of Directors, the Resolution of
Haier Smart Home Co., Ltd. on the Election of Members of the Nomination Committee of the
Board of Directors, the Resolution of Haier Smart Home Co., Ltd. on the Election of
Members of the Audit Committee of the Board of Directors, the Resolution of Haier Smart
Home Co., Ltd. on the Election of Members of the Remuneration and Appraisal Committee
of the Board of Directors, the Resolution of Haier Smart Home Co., Ltd. on the Election of
Members of the ESG Committee of the Board of Directors, the Resolution of Haier Smart
Home Co., Ltd. on the Appointment of President of the Company, the Resolution of Haier
Smart Home Co., Ltd. on the Appointment of Vice-president of the Company, the
Resolution of Haier Smart Home Co., Ltd. on the Appointment of Chief Financial Officer of
the Company, the Resolution of Haier Smart Home Co., Ltd. on the Appointment of
Secretary to the Board of Directors of the Company, the Resolution of Haier Smart Home
Co., Ltd. on the Appointment of Representative of Securities Affairs of the Company, the
Resolution of Haier Smart Home Co., Ltd. on Adjusting the 2022 A Share Option Incentive
Scheme, the Resolution of Haier Smart Home Co., Ltd. on the Grant of Share Options to
Incentive Scheme Participants, the Resolution of Haier Smart Home Co., Ltd. on Adjusting
the Composition of the Administration Committee of the H Share Restricted Share Unite
Scheme (2021–2025)
Haier Smart Home Co., Ltd. Annual Report 2022 77
Section IV Corporate Governance
Meeting Date Resolutions approved
The 2nd meeting of the Eleventh session of 29 August 2022 Considered and approved the 2022 Interim Report of Haier Smart Home Co., Ltd. and its
the Board of Directors Summary, the Risk Assessment Report on Haier Finance Co., Ltd. in the First Half of 2022
of Haier Smart Home Co., Ltd., the Special Report on the Deposit and Actual Use of Raised
Funds in the First Half of 2022 of Haier Smart Home Co., Ltd., the Resolution of Haier
Smart Home Co., Ltd. on the Acquisition of 100% Equity Interest in Qingdao Haier Special
Plastic Development Co., Ltd. by a Subsidiary.
The 3rd meeting of the Eleventh session of 28 October 2022 Considered and approved the 2022 Third Quarterly Report of Haier Smart Home Co., Ltd.
the Board of Directors of Haier Smart
Home Co., Ltd.
VI. PERFORMANCE OF DUTIES BY DIRECTORS
(I) Attendance of board meetings and general meetings by directors
Whether an Attendances at
Independent general
Name of director director or not Attendance of Board meetings meetings
Absence from Number of
Required two consecutive attendance of
attendances of Attendance in Attendance by Attendance by meetings in general
Board meetings person telecommunication proxy Absence person or not meetings
Liang Haishan NO 3 3 1 0 0 NO 4
Li Huagang NO 6 6 1 0 0 NO 4
XieJuzhi NO 3 3 1 0 0 NO 0
Shao Xinzhi NO 3 3 0 0 0 NO 0
Gong Wei NO 3 3 0 0 0 NO 0
Wu Changqi NO 3 3 3 0 0 NO 4
Lin Sui NO 3 3 3 0 0 NO 4
Chien Da-chun YES 6 6 6 0 0 NO 4
Wong Hak Kun YES 6 6 6 0 0 NO 4
Li Shipeng YES 6 6 6 0 0 NO 4
Wu Qi YES 6 6 6 0 0 NO 0
Yu Hon To NO 6 6 6 0 0 NO 4
Li Kam Fun NO 6 6 6 0 0 NO 4
Explanation for absence from two consecutive Board meetings in person
□ Applicable √ Not applicable
Number of Board meetings held in the year 6
Of which: Number of on-site meetings 0
Number of meetings held by telecommunication 1
Number of meetings held both on site and by telecommunication 5
(II) Directors’ objection to the relevant matters of the Company
□ Applicable √ Not applicable
(III) Others
□ Applicable √ Not applicable
78 Haier Smart Home Co., Ltd. Annual Report 2022
Section IV Corporate Governance
VII. THE SPECIAL COMMITTEES OF THE BOARD
√ Applicable □ Not Applicable
(1). Personnel of The Special Committees of the Board
Categories of
The Special Committees Name of Personnel
Audit Committee Wong Hak Kun, Yu Hon To, Chien Da-chun, Wu Qi, Shao Xinzhi
Nomination Committee Wu Qi, Li Shipeng, Li Huagang
Remuneration and Appraisal Chien Da-chun, Li Shipeng, Li Huagang
Committee
Strategy Committee Li Huagang, Li Shipeng, Wu Qi, Gong Wei
ESG (“Environment, Society Li Kam Fun, Chien Da-chun, Gong Wei
and Governance”)
Committee
(2). The Company convened 6 Audit Committee meetings during the reporting period
Major Opinions and Other Notes on
Date of Meeting Contents of Meeting Suggestions Performance of Duty
23 March 2022 Considered and Approved the 2021 Annual No Objections Nil
Financial Report of Haier Smart Home Co., Ltd.,
the 2021 Annual Audit Report of Internal
Control of Haier Smart Home Co., Ltd.
28 March 2022 Considered and approved the 2021 Annual No objections Nil
Financial Accounts Report of Haier Smart Home
Co., Ltd., the 2021 Annual Report on the
Self-Assessment on Internal Control of Haier
Smart Home Co., Ltd., the 2021 Annual Audit
Report of Internal Control of Haier Smart Home
Co., Ltd., the Resolution of Haier Smart Home
Co., Ltd. on the Re-assignment of China
Accounting Standards Auditor, the Resolution of
Haier Smart Home Co., Ltd on the Re-
assignment International Accounting Standards
Auditor, the Resolution of Haier Smart Home
Co., Ltd. on the Expected Provision of
Guarantee for Subsidiaries in 2022, the
Resolution of Haier Smart Home Co., Ltd. on
Conducting Foreign Exchange Funds Derivatives
Business, 2021 Annual Profit Distribution Plan of
Haier Smart Home Co., Ltd., the Resolution of
Haier Smart Home Co., Ltd. on the Special
Report on the Deposit and Actual Use of Funds
Raised in 2021, 2021 Annual Report on
Performance of Duties of the Audit Committee
of the Board of Haier Smart Home Co., Ltd.
Haier Smart Home Co., Ltd. Annual Report 2022 79
Section IV Corporate Governance
Major Opinions and Other Notes on
Date of Meeting Contents of Meeting Suggestions Performance of Duty
27 April 2022 Considered and approved the 2022 First Quarterly No Objections Nil
Financial Report of Haier Smart Home Co., Ltd.,
the Resolution of Haier Smart Home Co., Ltd.
on the Acquisition of 100% Equity in Qingdao
TAB Robot Technology Co., Ltd. by its
Subsidiary and Connected Transaction, the
Resolution of Haier Smart Home Co., Ltd. on
the Transfer of 25% Equity in Qingdao Haier
Mold Co., Ltd. by its Subsidiary and Connected
Transaction, the Resolution of Haier Smart
Home Co., Ltd. on Renewing the Product and
Material Purchase Framework Agreement
between Haier Smart Home Co., Ltd. and Haier
Group Corporation, the Resolution of Haier
Smart Home Co., Ltd. on Renewing the
Services Purchase Framework Agreement
between Haier Smart Home Co., Ltd. and Haier
Group Corporation, the Resolution of Haier
Smart Home Co., Ltd. on Renewing the Product
and Material Sales Framework Agreement
between Haier Smart Home Co., Ltd. and Haier
Group Corporation, the Resolution of Haier
Smart Home Co., Ltd. on Renewing the
Services Provision Framework Agreement
between Haier Smart Home Co., Ltd. and Haier
Group Corporation.
25 August 2022 Considered and approved the 2022 Interim No Objections Nil
Financial Report of Haier Smart Home Co., Ltd.,
the 2022 Interim Risk Assessment Report on
Haier Group Finance Co., Ltd. by Haier Smart
Home Co., Ltd., the Special Report on the
Deposit and Actual Use of Funds Raised in the
First Half of 2022 by Haier Smart Home Co.,
Ltd., the Resolution of Haier Smart Home Co.,
Ltd. on the Acquisition of 100% Equity in
Qingdao Haier Special Plastics Research and
Development Co., Ltd. by its Subsidiary and
Connected Transaction.
27 October 2022 Considered and approved the 2022 third quarterly No Objections Nil
Financial Report of Haier Smart Home Co., Ltd.
8 December Considered and approved the 2022 Annual Report No Objections Nil
2022 on Audit work Plan of Haier Smart Home Co.,
Ltd.
80 Haier Smart Home Co., Ltd. Annual Report 2022
Section IV Corporate Governance
(3). The Company convened 2 Nomination Committee meetings during the reporting
period
Major Opinions and Other Notes on
Date of Meeting Contents of Meeting Suggestions Performance of Duty
30 March 2022 Considered and approved the Report of Haier No Objections Nil
Smart Home Co., Ltd. on the Performance of
Duty of Current Directors, Supervisors and
Senior Management, the 2021 Annual Report on
the Performance of Duty of the Nomination
Committee of the Board of Haier Smart Home
Co., Ltd.
27 April 2022 Considered and approved the Resolution on the No Objections Nil
Proposed Candidates of Independent Directors
for the Eleventh Session of the Board of Haier
Smart Home Co., Ltd., the Resolution on the
Proposed Candidates of Non-independent
Directors for the Eleventh Session of the Board
of Haier Smart Home Co., Ltd., the Resolution
on the Proposed Candidates of Vice President
of Haier Smart Home Co., Ltd.
(4). The Company convened 2 Remuneration and Appraisal Committee meetings
during the reporting period
Major Opinions and Other Notes on
Date of Meeting Contents of Meeting Suggestions Performance of Duty
30 March 2022 Considered and approved the 2021 Annual Report No Objections Nil
of Haier Smart Home Co., Ltd. on Incentives for
Senior Management of the Company and
Implementation of Remuneration Assessment for
Directors and Senior Management, the 2022
Annual Report of Haier Smart Home Co., Ltd.
on Remuneration and Assessment Scheme of
Directors and Senior Management, the
Resolution of Haier Smart Home Co., Ltd. on
the Adjustment of Director Allowance, the 2021
Annual Report of Haier Smart Home Co., Ltd.
on Performance of Duties of the Remuneration
and Appraisal Committee of the Board
27 April 2022 Considered and approved the 2022 Stock No Objections Nil
Ownership Plan of A Share Core Employee of
Haier Smart Home Co., Ltd. (Draft) and
Summary, the 2022 Stock Ownership Plan of H
Share Core Employee of Haier Smart Home
Co., Ltd.(Draft) and Summary, the 2022 A
Share Option Incentive Scheme of Haier Smart
Home Co., Ltd. (Draft) and Summary, the 2022
Management Practices for the Assessment of A
Share Option Incentive Scheme of Haier Smart
Home Co., Ltd.
Haier Smart Home Co., Ltd. Annual Report 2022 81
Section IV Corporate Governance
(5). The Company convened 2 Strategy Committee meetings during the reporting
period
Major Opinions and Other Notes on
Date of Meeting Contents of Meeting Suggestions Performance of Duty
30 March 2022 Considered and approved the 2021 Annual Report No Objections Nil
on the Performance of Duties of the Strategy
Committee of the Board of Haier Smart Home
Co., Ltd.,
28 April 2022 Considered and approved the Resolution of Haier No Objections Nil
Smart Home Co., Ltd. on the Acquisition of
100% Equity in Qingdao TAB Robot Technology
Co., Ltd. by its Subsidiary and Connected
Transaction, the Resolution of Haier Smart
Home Co., Ltd. on the Transfer of 25% Equity
in Qingdao Haier Mold Co., Ltd. by its
Subsidiary and Connected Transaction, the
Resolution of Haier Smart Home Co., Ltd. on
the Investment of a New Refrigerator Project
with an Annual Production Capacity of 2 Million
Units.
(6). The Company convened 2 meetings of the ESG Committee during the reporting
period
Major Opinions and Other Notes on
Date of Meeting Contents of Meeting Suggestions Performance of Duty
28 March 2022 Considered and approved the 2021 Corporate No Objections Nil
Environmental, Social and Governance Report of
Haier Smart Home Co., Ltd.
25 August 2022 Considered and approved the Report on the No Objections Nil
Progress of ESG Works in the First Half of
2022 and Related Plans in the Second Half of
the year.
(7). Details of Disagreements
□ Applicable √ Not applicable
VIII. SUPERVISORY COMMITTEE’ EXPLANATION ON RISKS ABOUT THE
COMPANY
□ Applicable √ Not applicable
Supervisory Committee had no objections to the supervising items during the reporting period.
82 Haier Smart Home Co., Ltd. Annual Report 2022
Section IV Corporate Governance
IX. INFORMATION ON STAFF OF THE PARENT COMPANY AND PRINCIPAL
SUBSIDIARIES AT THE END OF THE REPORTING PERIOD
(I) Staff Information
Number of staff of the parent company 55
Number of staff of Principal subsidiaries 109,531
Total number of staff 109,586
Number of employees whose retirement expenses are borne by the parent 0
company and the principal subsidiaries
Breakdown by Function
Function Number
Production 61,967
Sales 18,844
Technical 24,647
Financial 1,741
Administrative 2,387
Total 109,586
Breakdown by Education Background
Education Number (person)
Bachelor and above 36,332
College Diploma 28,534
Secondary vocational training diploma and below 44,720
Total 109,586
(II) Remuneration policies
√ Applicable □ Not applicable
Under the guidance of the”RenDanHeYi“management model, the Company adheres to the
remuneration philosophy of uniting user pay, value creation and value sharing, and provides
employees with a short, medium and long-term remuneration incentive system that combines
labour income, super-profit sharing and capital gain, as well as all-rounded welfare policies and
employee caring schemes. The Company encourages its employees to work with an
entrepreneurial mindset, aligning employee value with company value and shareholder value,
continuously improving user experience and achieving a win-win development for both the
Company and its employees.
The Company has established a rich and multi-dimensional incentive mechanism and continues
to implement the”A+H“global incentive system covering both domestic and overseas employees
to attract, motivate and stabilise the Company’s core talent.
Haier Smart Home Co., Ltd. Annual Report 2022 83
Section IV Corporate Governance
(III) Personnel Training
√ Applicable □ Not applicable
The Company puts high priority on talent cultivation and has set up a hierarchical system for
talent training accordingly. By providing employees with rich learning resources through
diversified methods such as course training, special training and temporary exchange, the
Company promotes talent growth in multiple dimensions for employees with different needs, thus
assisting them in improving their professionalism, expertise and leadership skills. In 2022, the
Company organized a number of trainings with courses covering corporate culture, office
management, professional skills and other contents, and adopted live broadcast, community
forums and other learning methods.
For details, please refer to relevant information in 2022 Environmental, Social and Governance
Report of Haier Smart Home Co., Ltd. published on the same date of this announcement.
(IV) Labor Outsourcing
□ Applicable √ Not applicable
X. PROPOSAL OF PROFIT DISTRIBUTION OR CAPITALIZATION OF
CAPITAL RESERVE
(I) Formulation, implementation or adjustment of the cash dividend policies
√ Applicable □ Not applicable
The Company’s 2021 profit distribution plan was passed on its 2021 Annual General Meeting
held on 28 June 2022: based on the Company’s total existing shares (deducting the repurchased
shares) of 9,364,586,585 (including 6,224,810,911 A shares, 271,013,973 D shares and
2,868,761,701 H shares), it was proposed that the Company would distribute cash dividends of
RMB4.61357 (tax inclusive) per 10 shares to all shareholders, with a total amount before tax of
RMB4,320,413,011.54(tax inclusive). The plan was implemented and completed in August 2022.
Details were set out in the Announcement on Implementation of Rights and Interests Distribution
of A-shares for 2021 of Haier Smart Home Co., Ltd. (No: L2022–062) published by the Company
on the four major securities newspapers and the website of Shanghai Stock Exchange on 17
August 2022 and relevant announcements in respect of dividend distribution of D shares and H
shares published on the Company’s website, Hong Kong Stock Exchange and other publication
platforms.
84 Haier Smart Home Co., Ltd. Annual Report 2022
Section IV Corporate Governance
The Company has always applied a stable and sustainable profit distribution policy. During the
reporting period, the Company strictly followed the requirements set out in the Articles of
Association and in the Shareholder Return Plan for the Next Three Years of the Company. During
the formulation of the profit distribution plan, the Company took full account of return for
investors, the long-term interests of the Company, overall interests of all shareholders and
sustainable development of the Company, and continued to implement the stable dividend
distribution policy to provide investors an opportunity to share the growth of value, so that
investors could form the expectation of a stable return. The procedures and mechanisms for
decision-making such as Articles of Association and planning of return of shareholders
implemented by the Company were complete in compliance with laws and regulations. The
process was open and transparent while the standard and ratio of dividends was clear.
Responsibilities of independent directors were clear during the policy-making process, and
independent directors were given the opportunities to play their roles. Minority shareholders were
also given the opportunity to fully express their views and demands, and the legitimate interests
of minority shareholders were adequately protected.
The dividend distribution plan of 2022 of the Company: based on the total number of shares
after deducting the repurchased shares on equity interest record date for future profit
distribution, it is proposed that the Company will distribute cash dividend of RMB5.66 per 10
shares (tax inclusive) with cash dividend of RMB5,297,529,553.10. The retained undistributed
profit would be for the Company’s principal business in order to maintain sustainable and stable
development and to create value for investors. The proportion of this distribution is 36.01% of
the net profit attributable to owners’ parent company in 2022 (In 2022, the Company spent
RMB1.491 billion and HK$364 million on the purchase of A shares and H shares; if this is
included in cash dividends, the ratio of cash dividends to net profit attributable to owners’ parent
company for the year would be more than48%).100% dividend is paid in cash. If there is any
change in the total share capital of the Company during the period from the date of this report
to the record date of the equity distribution, the total distribution amount will be remained
unchanged with corresponding adjustment to the proportion of distribution per share.
(II) Notes to the cash dividend policies
√ Applicable □ Not Applicable
Whether in compliance with regulations of the Articles of Association and √ Yes □ No
Requirements of the resolutions of the general meeting
Whether the standard and ratio of dividends were clear √ Yes □ No
Whether relevant procedures and mechanisms for decision-making were √ Yes □ No
complete
Whether independent directors performed their duties and responsibilities √ Yes □ No
Whether minority shareholders were given the opportunity to fully express their √ Yes □ No
views and demands, and whether their legitimate interests were adequately
protected
Haier Smart Home Co., Ltd. Annual Report 2022 85
Section IV Corporate Governance
(III) The Company made profits and the profits for distribution to the owners’ Parent
Company was positive during the reporting period, but no cash profit
distribution plan was proposed; the Company should disclose the reasons in
detail and the purpose of undistributed profits
□ Applicable √ Not Applicable
(IV) Profit distribution and conversion of capital reserve into share capital for the
reporting period
√ Applicable □ Not Applicable
Unit and Currency: RMB
Number of shares to be distributed for every ten shares (share) 0
Amount to be distributed for every ten shares (RMB) (tax inclusive) 5.66
Number of shares to be converted into share capital for every ten 0
shares (share)
Amount of cash dividend (tax inclusive) 5,297,529,553.10
Net profit attributable to ordinary shareholders of listed company in the 14,710,923,491.99
consolidated financial statement during the year of distribution
Percentage of the net profit attributable to the ordinary shareholders of 36.01
the listed companies in the consolidated financial statement (%)
Repurchase of shares by cash included in the amount of cash dividend 1,816,280,590.58
Total dividend amount (tax inclusive) 7,113,810,143.68
Percentage of total dividend amount to the net profit attributable to the 48.36
ordinary shareholders of the listed companies in the consolidated
financial statement (%)
Note: The above figures involving conversion in Hong Kong dollars to RMB are translated at the exchange rate as at 30
December 2022.
86 Haier Smart Home Co., Ltd. Annual Report 2022
Section IV Corporate Governance
XI. THE COMPANY’S SHARE OPTION INCENTIVE SCHEME, EMPLOYEE
SHAREHOLDING PLAN OR OTHER EMPLOYEE INCENTIVE MEASURES
AND ITS INFLUENCE
(I) Matters disclosed in temporary announcements and without any subsequent
progress or change
√ Applicable □ Not Applicable
Summary of matters Query index
Completion of registration of grant of reserved For details, please refer to the
options under the 2021 A Share Option Announcement of Haier Smart Home Co.,
Incentive Scheme: According to the relevant Ltd. on the Completion of Registration of
resolutions of the 25th meeting of the 10th the Grant of the Reserved Share Options
session of the Board of Directors held by under the 2021 A Share Option Incentive
the Company on 15 December 2021, it Scheme disclosed by the Company on 19
was confirmed that the total number of January 2022 and relevant contents.
reserved options granted under the
Company’s 2021 A Share Option Incentive
Scheme was 4,525,214. In accordance with
this resolution, the Company completed the
registration of the aforementioned grant of
shares on 17 January 2022.
Introduction of 2022 A Share Option Incentive For details, please refer to the 2022 A
and completion of grant and registration: Share Option Scheme of Haier Smart
The 2022 A Share Option Incentive Home Co., Ltd (draft) disclosed by the
Scheme wasconsidered and approved at Company on 29 April 2022, the
the General Meeting and Class Meeting Announcement on the Adjustment to the
convened on 28 June 2022. On the same Company’s 2022 A Share Option
date, as considered and approved at the Incentive Scheme and Grant of 2022 A
Board Meeting, 104,756,896 options were Share Option to Incentive Recipients by
granted to the incentive recipients. The Haier Smart Home Co., Ltd disclosed by
Company completed the registration of the the Company on 29 June 2022, and
aforementioned grant of shares on 13 July relevant contents of the announcements of
2022. resolutions at the General Meeting and the
Announcement of Haier Smart Home Co.,
Ltd. on the Completion of Registration of
the Grant of the 2022 A Share Option
Incentive Scheme disclosed by the
Company on 15 July 2022.
Haier Smart Home Co., Ltd. Annual Report 2022 87
Section IV Corporate Governance
Summary of matters Query index
Introduction of New Phase of A Share and H For details, please refer to the 2022 A
Share Core Employee Stock Ownership Share Core Employee Stock Ownership
Plan and Completion of Position Opening： Plan of Haier Smart Home Co., Ltd (Draft),
In order to further improve the corporate the 2022 H Share Core Employee Stock
governance mechanism, create value for Ownership Plan of Haier Smart Home Co.,
shareholders and promote the full Ltd (Draft) disclosed by the Company on
implementation of the Company’s IoT smart 29 April 2022, the Announcement of Haier
home ecological brand strategy, as Smart Home Co., Ltd. on the Completion
considered and authorized at the 2020 of Non-trading Transfer of Shares under
Annual General Meeting held by the the 2022 A Share Core Employee Stock
Company on 25 June 2021, the Company Ownership Plan disclosed by the
considered and introduced the 2022 H Company on 22 July 2022, the
Share Core Employee Stock Ownership Announcement of Haier Smart Home Co.,
Plan of Haier Smart Home Co., Ltd (Draft) Ltd. on the Completion of Share Purchase
and the 2022 A Share Core Employee under the 2022 H Share Core Employee
Stock Ownership Plan of Haier Smart Home Stock Ownership Plan disclosed by the
Co., Ltd (Draft) at the 28th meeting of the Company on 26 July 2022 and relevant
10th session of the Board of Directors held contents.
by the Company on 28 April 2022. During
the reporting period, the Company
completed the position opening and other
related works for the 2022 A Share and H
Share Core Employee Stock Ownership
Plan.
(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
88 Haier Smart Home Co., Ltd. Annual Report 2022
Section IV Corporate Governance
(III) Share option granted to directors and senior management during the reporting
period
√ Applicable □ Not Applicable
Unit: 10,000 shares
Number of Shares Number of
Number of new stock subject to stock
stock options Exercisable stock option options held Market value
options held granted shares exercised Stock at the ending at the end of
at the during the during the during the options of the the reporting
beginning of reporting reporting reporting exercise reporting period
Name Position the year period period period price (RMB) period (RMB)
Li Huagang Chairman, President 91.39 0 0 0 91.39
Gong Wei Director, Chief 45.70 0 0 0 45.70
Financial Officer, Vice
President
XieJuzhi Vice President 91.39 0 0 0 91.39
Li Pan Vice President 45.70 0 0 0 45.70
Song Yujun Vice President 31.21 0 0 0 31.21
Zhao Yanfeng Vice President 46.82 0 0 0 46.82
Huang Xiaowu Vice President 45.70 0 0 0 45.70
Wu Yong Vice President 22.85 0 0 0 22.85
Li Yang Vice President 45.70 0 0 0 45.70
Guan Jiangyong Vice President 22.85 0 0 0 22.85
Liu Xiaomei Secretary to the board 0 11.65 0 0 11.65
of directors
Total / 489.31 11.65 0 0 500.96 /
(IV) Establishment and implementation of appraisal and incentive mechanism for
senior management during the reporting period
√ Applicable □ Not Applicable
The cash remuneration of executives in 2022 consists of monthly remuneration, bonuses and
sharing, and is linked to orders triggered by the upgrade of the Company’s Internet of Things
from”high-end brands“to”scenario brands“to”ecological brands”. Focusing on the rapid
improvement of profitability and through digital transformation, the Company maintained its
competitiveness as a leader in the whole process, and sharing of high added-value. Through the
innovation of the mechanism, the Company encouraged its executives to achieve higher market
goals, thus achieving a win-win situation for users, employees, enterprises and stakeholders. At
the same time, the Company continues to promote the implementation of the employee stock
ownership and other long-term incentive plans; multiple incentive tools will be effectively utilised
to mobilise competent management, frontline managers and business and technical backbones
on a wider scale, further aligning the interests of shareholders, the Company and incentive
recipients, and bringing more efficient and sustainable returns to shareholders.
Haier Smart Home Co., Ltd. Annual Report 2022 89
Section IV Corporate Governance
XII. CONSTRUCTION AND IMPLEMENTATION OF INTERNAL CONTROL
SYSTEM DURING THE REPORTING PERIOD
√ Applicable □ Not applicable
In accordance with the”Rules for the Preparation and Reporting of Information Disclosure by Listed
Issuers of Securities No. 21— General Provisions on the Annual Internal Control Assessment
Report“jointly issued by the China Securities Regulatory Commission and the Ministry of Finance,
the”Guidelines for Self-regulation of Listed Companies on the Shanghai Stock Exchange No. 1 —
Regulation of Operations”, the “Guidelines for Self-Regulation of Listed Companies on the Shanghai
Stock Exchange No. 2 — Business Handling” and other relevant guidelines and requirements, the
Company has conducted a self-assessment of its internal control work. Based on the identification of
significant deficiencies in the Company’s internal control of financial reporting, no significant
deficiencies in the Company’s internal control of financial reporting were identified as at the basis date
of the internal control assessment report, and the Company had maintained effective internal control of
financial reporting in all material respects in accordance with the requirements of the internal control
regulatory system and relevant regulations. Based on the identification of significant deficiencies in the
Company’s internal control of non-financial reporting, no significant deficiencies in the Company’s
internal control of non-financial reporting were identified as at the basis date of the internal control
assessment report. No events have occurred between the basis date of the internal control
assessment report and the date of issuance of the internal control assessment report that would affect
the effectiveness of the internal control assessment.
For details, please refer to the 2022 Internal Control Assessment Report of Haier Smart Home Co.,
Ltd. disclosed on the same day of this report.
Explanations on material defects found in internal control during the reporting period
□ Applicable √ Not applicable
XIII. CONTROL OVER MANAGEMENT OF SUBSIDIARIES DURING THE
REPORTING PERIOD
√ Applicable □ Not applicable
The listed company established an internal control and management system covering all subsidiaries
within the scope of consolidated statement, which included four major areas of strategy, finance,
operation and compliance with a total of 22 primary business processes and control metrics. In
particular,
1. Unified control environment, such as strategy and culture, risk management system, internal control
manual, Rendanheyi remuneration system, unified accounting and information system in the
financial sharing center, etc.
90 Haier Smart Home Co., Ltd. Annual Report 2022
Section IV Corporate Governance
2. The company has clear selection methods and terms of reference in respect of appointment of
directors, supervisors and important senior management to their controlling subsidiaries.
Meanwhile, relevant departments of the parent company stipulate the criteria and scope of
authorization for major decision and important events, formulate the approval procedure for major
decision and important events beyond the scope of authorization. The management of
subsidiaries at different levels shall exercise their authority and take responsibility within the
scope of authorization.
3. Management of major events of subsidiaries: The relevant authority of the parent company of the
listed company stipulates the criteria and scope of authorization for major decision and important
events, formulate the approval procedure for major decision and important events beyond the
scope of authorization. If the Company and its subsidiaries provide external guarantees, the total
amount of which shall propose for consideration at the general meetings after approval by the
Board. Subject to the authorization by the general meetings, the Board decides the Company’s
external investment, acquisition and disposal of assets, external guarantees, entrusted wealth
management, related-party transactions and other events.
4. Management of budget: The finance and budget center formulates the budget preparation policy
and guidance for the following year at the end of each year, and distributes them to each
subsidiary together with the budget template, requiring the preparation of a comprehensive
budget in accordance with the unified budget preparation policy and guidance, which contains
details of the preparation principles, explanation of filling the template, submission process and
examination. Each subsidiary has prepared a comprehensive budget in accordance with the
unified budget preparation policy and guidance. Annual budgeting of the following year is
commenced in the third quarter every year by making profit and loss budgets for each industry
and subsidiaries based on market forecasts to ensure accurate estimation in advance. The
execution and adjustment of budgets are regularly monitored and evaluated.
For non-fixed assets investment projects, the person in charge of fund of each subsidiary will
summarize the actual investment situation and report it to the manager of the investment,
financing and fund management department of Haier Smart Home. The manager of the
investment, financing and fund management department will monitor the execution of the budget
of investment and financing by comparing the report with the corresponding budget of the
investment plan.
5. Operation analysis and performance evaluation: The Company regularly convenes global and
industry-specific performance and operations meetings to discuss the operations and
performance and carries out performance evaluation.
Haier Smart Home Co., Ltd. Annual Report 2022 91
Section IV Corporate Governance
6. Information transmission: The Company widely collects macroeconomic and industry development
information, market information, regulatory compliance and other external information through
various channels, and analyzes and organizes the collected information into research reports
every month, which are submitted to different levels of management after review. The
management of the parent company holds regular meetings with industries and segments to
convey the management requirements of the parent company and to be aware of the operation
status of subsidiaries in a timely manner. At the same time, the Company has formulated the
information security and internal report confidentiality system, which specifies the confidentiality
content, confidentiality measures, confidentiality level and transmission scope to prevent the
disclosure of commercial secrets.
7. Test and audit of internal control: During the reporting period, the parent company conducts internal
test and audit of subsidiaries, more than 91% and 90% of revenue and assets of which belong
to the parent Company, respectively, to identify problems in a timely manner and facilitate the
closed-loop rectification of problems.
During the reporting period, there were no new significant subsidiaries.
XIV. RELEVANT EXPLANATIONS ON THE AUDIT REPORT OF INTERNAL
CONTROL
√ Applicable □ Not applicable
The Company’s auditor Hexin Certified Public Accountants LLP has audited the efficiency of internal
control relating to the financial report of the Company, and has issued its standard unqualified audit
report for the Company’s internal control (He Xin Shen Zi (2023) No. 000367).
For the details of Audit Report of Internal Control of Haier Smart Home Co., Ltd., please refer to
relevant announcements published on the website of Shanghai Stock Exchange (www.sse.com.cn) on
the same day of this report.
Whether to disclose the audit report on internal control: Yes
Type of opinion on the audit report on internal control: Standard unqualified opinion
XV. RECTIFICATION OF THE SELF-ASSESSMENT PROBLEMS UNDER THE
GOVERNANCE SPECIAL ACTION OF THE LISTED COMPANY
Not Applicable
XVI. OTHERS
□ Applicable √ Not Applicable
92 Haier Smart Home Co., Ltd. Annual Report 2022
Section V Environmental and Social
Responsibilities
I. ENVIRONMENTAL INFORMATION
Established environmental protection related mechanism or not Yes
Environmental protection funds invested during the Reporting Period 54,128
(Unit: RMB10,000)
Note: During the reporting period, environmental protection funds were invested in aspects of R&D of environmental protection
technology, clean production, environmental protection equipment purchase and renovation, pollution control, ecological
protection, environmental management expenditure, etc.
(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 indirect non-wholly owned subsidiaries Qingdao Jiaonan Haier Washing
Machine Co., Ltd. (Jiaonan Washing Machine), Hefei Haier Refrigerator Co., Ltd. (“Hefei
Refrigerator”), Wuhan Haier Water Heater Co., Ltd. (“Wuhan Water Heater”), Wuhan Haier
Freezer Co., Ltd. (“Wuhan Freezer”), Qingdao Haier (Jiaozhou) Air-conditioning Co., Limited
(“Jiaozhou Air-conditioning”), Qingdao Haier Special Refrigerator Co., Ltd. (“Qingdao Special
Refrigerator”), Qingdao Economy and Technology Development Zone Haier Water Heater
Co., Ltd. (“Development Zone Water Heater”), Qingdao Haier Refrigerator Co., Ltd.
(“Qingdao Refrigerator”), Qingdao Haier Special Freezer Co., Ltd. (“Qingdao Special Freezer
Factory I”), Qingdao Haier Special Freezer Co., Ltd. (“Qingdao Special Freezer Factory II”),
Qingdao Haier Special Plastic Research and Development Co., Ltd. (“Huangdao Special
Plastic”) and Tianjin Haier Cleaning Electrical Appliances Co., Ltd. (“Tianjin Washing
Machine”) are among the key emission units announced by the local environmental
protection department. The main information on pollutant discharge is as follows:
(1) Jiaonan Washing Machine
① Main pollutants：
Wastewater. According to the Technical Specification for Application and
Issuance of Pollutant Permit — Wastewater Treatment (for Trial) (HJ 978–2018),
Development Zone Energy should apply for the Receipt on the Registration of
Pollution Discharge for Fixed Pollution Sources and detect 17 types of
pollutants (including specific pollutants), namely, total cadmium, total chromium,
total mercury, total lead, total arsenic, hexavalent chromium, COD (Chemical
oxygen demand), ammonia nitrogen, total phosphorus, total nitrogen, PH,
suspended solids, chroma, petroleum, BOD, rate of flow and temperature.
② Way of discharge: intermittent discharge
③ Number and distribution of discharge outlets: one, north of the wastewater
treatment plant, pipeline discharge
Haier Smart Home Co., Ltd. Annual Report 2022 93
Section V Environmental and Social Responsibilities
④ 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:
Total Approved Whether it is
Name of Concentration amount of total amount excessive
No. pollutant of discharge discharge of discharge discharge
1 COD 61.2mg/L 8.085 tons 60 tons No
2 Ammonia 6.96mg/L 0.971 tons 6 tons No
nitrogen
⑤ Pollutant discharge standards implemented: Wastewater Quality Standards for
Discharge to Municipal Sewers (GBT 31962–2015)
(2) Hefei Refrigerator
① Main Pollutants：
Wastewater. According to the Technical Specification for Application and
Issuance of Pollutant Permit — Wastewater Treatment (for Trial) (HJ 978–2018),
Development Zone Energy 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), rate of flow, suspended solids, value of PH,
Chemical oxygen demand (COD), ammonia nitrogen (NH3-N) and five-day
biochemical oxygen demand (BOD5).
Exhaust gas. According to the Volatile Organic Unorganized Emission Control
Standard (GB 37822–2019), Development Zone Energy should apply for a
pollutant discharge permit and detect pollutants. Main types of atmospheric
pollutants: particle matter, non-methane total hydrocarbons
② Way of discharge: continuous discharge
③ Number and distribution of discharge outlets: 1 for sewage, at the north entrance
of the refrigerator Park; 22 for exhaust gas, at the refrigerator block A(10), B
factories(10) and Phase III Factory(2).
94 Haier Smart Home Co., Ltd. Annual Report 2022
Section V Environmental and Social Responsibilities
④ 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 are as follows:
Total Approved Whether it is
Name of Concentration amount of total amount excessive
No. pollutant of discharge discharge of discharge discharge
1 COD 99.95 mg/L 37.55 tons 300 tons No
2 ammonia 12.59 mg/L 4.93 tons 28 tons No
nitrogen
3 total nitrogen 30.28 mg/L 11.69 tons 20 tons No
4 total phosphorus 2.19 mg/L 0.87 tons 5 tons No
⑤ Pollutant discharge standards implemented: Wastewater Quality Standards for
Discharge to Municipal Sewers (GBT 31962–2015)
(3) Wuhan Water Heater
① 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.
② Way of discharge: indirect discharge
③ Number and distribution of discharge outlets: one, on the southwest of the
wastewater treatment plant, pipeline discharge
④ 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:
Total Approved Whether it is
Name of Concentration amount of total amount excessive
No. pollutant of discharge discharge of discharge discharge
1 COD 40 mg/L 3.196 tons 9.075 tons No
2 Ammonia 0.336 mg/L 0.391 tons 0.9075 tons No
nitrogen
⑤ Pollutant discharge standards implemented: Wastewater Quality Standards for
Discharge to Municipal Sewers (GBT 31962–2015)
Haier Smart Home Co., Ltd. Annual Report 2022 95
Section V Environmental and Social Responsibilities
(4) Wuhan freezer
① Main pollutants：
Wastewater. According to the Technical Specification for Application and
Issuance of Pollutant Permit — Wastewater Treatment (for Trial) (HJ 978–2018),
Wuhan freezer 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.
② Way of discharge: indirect discharge
③ Number and distribution of discharge outlets: one, on the south of the wastewater
treatment plant, pipeline discharge
④ 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:
Total Approved Whether it is
Name of Concentration amount of total amount excessive
No. pollutant of discharge discharge of discharge discharge
1 COD 46 mg/L 0.96 tons 4.3628 tons No
2 Ammonia 0.497 mg/L 0.01 tons 0.4365 tons No
nitrogen
⑤ Pollutant discharge standards implemented: Wastewater Quality Standards for
Discharge to Municipal Sewers (GBT 31962–2015)
(5) Jiaozhou Air-conditioning
① Main Pollutants：
Hazardous waste. According to the national directory, 10 types of hazardous
waste detected are namely: waste oil, sludge, slag powder, computer boards,
activated carbon, cotton filters, lightning tubes, soldering flux buckets, paint
buckets and packaging bags.
② Way of discharge: Hazardous waste is transferred to a qualified hazardous waste
disposal unit for disposal
96 Haier Smart Home Co., Ltd. Annual Report 2022
Section V Environmental and Social Responsibilities
③ Total amount of discharge and approved total amount of discharge:
Total amount Total amount Whether it is
of transfer of managed excessive
No. Name of hazardous waste (tons) plan (tons) discharge
1 Packaging bags 0.08 0.5 No
2 Waste oil 24.88 40 No
3 Slag powder 15.48 30 No
4 Forklift battery 17.92 22 No
5 Sludge 18.06 18.1 No
6 Paint buckets 1 4 No
7 Computer board 14.76 15 No
④ 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
(6) Qingdao Special Refrigerator
① Main Pollutants：
Exhaust gas. According to legislative requirements, Qingdao Special Refrigerator
should apply for a pollutant discharge permit and detect the primary type of
pollutant in the atmosphere, namely non-methane hydrocarbon, with the
maximum concentration of discharge not exceeding 60mg/m; particulate
matter, with the maximum concentration of discharge not exceeding 150mg/m.
A qualified third-party testing unit is commissioned to conduct organic exhaust
gas concentration testing and issue a report on a quarterly basis.
② Way of discharge: Continuous emission
③ Number and distribution of discharge outlets: four in total, one for absorption
exhaust port at the northeast corner of the plant roof, and two for welding
exhaust ports and one for foam exhaust port at the west side of the plant roof.
④ Concentration and total amount of discharge and approved total amount of
discharge: No control regarding the total amount of discharge of organic
exhaust gas and particulate matter
Whether it is
Name of Concentration of Total amount Approved total amount of excessive
No. pollutant discharge of discharge discharge discharge
1 Non-methane 1.23 mg/m / No total amount of No
hydrocarbon discharge control
Haier Smart Home Co., Ltd. Annual Report 2022 97
Section V Environmental and Social Responsibilities
⑤ Pollutant discharge standards implemented: Volatile Organic Compounds
Discharge Standards Part 7: Other Industries DB37/2801.7–2019, Integrated air
pollutants discharge standard GB16297–1996.
(7) Development Zone Water Heater
① Main pollutants:
Exhaust gas. According to the requirements of laws and regulations,
Development Zone Water Heater should apply for a pollutant discharge permit
and detect the primary types of pollutant in the atmosphere, namely, non-
methane hydrocarbons, with the maximum concentration of discharge not
exceeding 50mg/m; particulate matter, with the maximum concentration of
discharge not exceeding 150mg/m. A qualified third-party testing unit is
commissioned to conduct organic exhaust gas concentration testing and issue
a report on a quarterly basis.
Wastewater: There is no wastewater treatment plant in the business department
and thus wastewater is transported by pipeline to the wastewater treatment
plant of energy companies for discharge after treatment.
② Way of discharge: Continuous discharge
③ Number and distribution of discharge outlets: twelve in total, two for exhaust
ports for powder coating line at the southeast and northeast side of the plant
respectively, nine for welding exhaust ports at the plant roof and one for foam
exhaust port at the east side of the plant roof.
④ 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
Whether it is
Name of Concentration of Total amount Approved total amount of excessive
No. pollutant discharge of discharge discharge discharge
1 non-methane 1.29mg/m / No control regarding the no
hydrocarbons total amount of discharge
of non-methane
hydrocarbons
⑤ Pollutant discharge standards implemented: Volatile Organic Compounds
Discharge Standard Part 5:Surface coating industry DB37/2801.5–2019,
Integrated emission standard of air pollutants GB16297–1996.
98 Haier Smart Home Co., Ltd. Annual Report 2022
Section V Environmental and Social Responsibilities
(8) Qingdao Refrigerator
① Main pollutants:
Exhaust gas. According to requirements of laws and regulations, Qingdao
Refrigerator should apply for a pollutant discharge permit and detect the
primary type of pollutant in the atmosphere, namely non-methane hydrocarbon
with the maximum concentration of discharge not exceeding 60mg/m and
particulate matter with the maximum concentration of discharge not exceeding
150mg/m. A qualified third-party testing unit is commissioned to conduct
organic exhaust gas concentration testing and issue a report on a quarterly
basis.
② Way of discharge: Continuous discharge
③ Number and distribution of discharge outlets: Four in total, one for absorption
exhaust port, one for welding exhaust port on the west side of the plant roof,
and two foam exhaust ports with one on the west side and one on the east
side of the plant roof.
④ Concentration and total amount of discharge and approved total amount of
discharge: No control regarding the total amount of discharge of organic
exhaust gas and particulate matter
Whether it is
Name of Concentration of Total amount Approved total amount of excessive
No. pollutant discharge of discharge discharge discharge
1 non-methane 1.2mg/m / No control regarding the No
hydrocarbon total amount of discharge
⑤ Pollutant discharge standards implemented: Volatile Organic Compounds
Discharge Standards Part 7: Other Industries (DB37/2801.7–2019),
Comprehensive Emission Standards of Air Pollutants (GB16297–1996).
(9) Qingdao Special Freezer factory I
① Main pollutants:
Exhaust gas. According to requirements of laws and regulations, it should apply
for a pollutant discharge permit and detect the primary type of pollutant in the
atmosphere, namely non-methane hydrocarbon with the maximum concentration
of discharge not exceeding 50mg/m and particulate matter with the maximum
concentration of discharge not exceeding 150mg/m. A qualified third-party
testing unit is commissioned to conduct organic exhaust gas concentration
testing and issue a report on a quarterly basis.
Wastewater. There is no sewage station in the business department, and the
production wastewater is piped to the sewage station of the energy company
for treatment and discharge.
Haier Smart Home Co., Ltd. Annual Report 2022 99
Section V Environmental and Social Responsibilities
② Way of discharge: Continuous discharge
③ Number and distribution of discharge outlets: Six in total, one for exhaust port
for powder coating on the north of the plant, one for welding exhaust port on
the east of the plant, and four for foam exhaust ports on the east side of the
plant roof.
④ Concentration and total amount of discharge and approved total amount of
discharge: No control regarding the total amount of discharge of organic
exhaust gas and particulates
Whether it is
Name of Concentration of Total amount Approved total amount of excessive
No. pollutant discharge of discharge discharge discharge
1 non-methane 1.53mg/m / No control regarding the No
hydrocarbon total amount of discharge
⑤ Pollutant discharge standards implemented: Volatile Organic Compounds
Discharge Standards Part 5: Surface Coating Industry (DB37/2801.5–2019),
Comprehensive Emission Standards of Air Pollutants (GB16297–1996).
(10) Qingdao Special Freezer Factory II
① Main pollutants:
Exhaust gas. According to the requirements of laws and regulations, Qingdao
Special Freezer Factory II should apply for a pollutant discharge permit and
detect the primary types of pollutant in the atmosphere, namely, non-methane
hydrocarbons, with the maximum concentration of discharge not exceeding
50mg/m; particulate matter, with the maximum concentration of discharge not
exceeding 150mg/m. A qualified third-party testing unit is commissioned to
conduct organic exhaust gas concentration testing and issue a report on a
quarterly basis.
Wastewater: There is no wastewater treatment plant in the business department
and thus wastewater is transported by pipeline to the wastewater treatment
plant of energy companies for discharge after treatment.
② Way of discharge: continuous discharge
③ Number and distribution of discharge outlets: five in total, one for exhaust port
for powder coating line at the north side of the plant, one for absorption
exhaust port at the east side of the plant roof and three for foam exhaust ports
at the east side of the plant roof.
100 Haier Smart Home Co., Ltd. Annual Report 2022
Section V Environmental and Social Responsibilities
④ 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
Whether it is
Name of Concentration of Total amount Approved total amount of excessive
No. pollutant discharge of discharge discharge discharge
1 Non-methane 1.44mg/m / No control regarding the no
hydrocarbons total amount of discharge
of non-methane
hydrocarbons
⑤ Pollutant discharge standards implemented: Volatile Organic Compounds
Discharge Standard Part 5:Surface coating industry DB37/2801.5–2019,
Integrated emission standard of air pollutants GB16297–1996.
(11) Huangdao Special Plastic
① Main pollutants:
Exhaust gas. According to the requirements of laws and regulations, Huangdao
Special Plastic should apply for a pollutant discharge permit and detect the
primary type of pollutant in the atmosphere, namely non-methane hydrocarbons,
with the maximum concentration of discharge not exceeding 60mg/m. A
qualified third-party testing unit is commissioned to conduct organic exhaust gas
concentration testing and issue a report on a quarterly basis.
② Way of discharge: continuous discharge
③ Number and distribution of discharge outlets: three in total, one for absorption
exhaust port at the northwest corner of the plant roof and two for foam exhaust
ports at the south side of the plant roof.
④ Concentration and total amount of discharge and approved total amount of
discharge
Whether it is
Name of Concentration of Total amount Approved total amount of excessive
No. pollutant discharge of discharge discharge discharge
1 Non-methane 1.17mg/m / No control regarding the no
hydrocarbons total amount of discharge
of non-methane
hydrocarbons
Haier Smart Home Co., Ltd. Annual Report 2022 101
Section V Environmental and Social Responsibilities
⑤ Pollutant discharge standards implemented: Volatile Organic Compounds
Discharge Standard Part 7: Other industries DB37/2801.7–2019, Integrated
emission standard of air pollutants GB16297–1996.
(12) Tianjin Washing Machine
① Main Pollutant：
Wastewater. According to requirements of laws and regulations, a pollutant
discharge permit should be applied and enforced, and 4 types of pollutants
should be tested, namely, COD, ammonia nitrogen, PH and suspended solids.
Exhaust gas: According to requirements of laws and regulations, a pollutant
discharge permit should be applied and enforced, and 4 types of pollutants
should be tested, namely, particulate matter, sulphur dioxide, nitrogen oxides
and VOCs.
② Way of discharge: indirect discharge for wastewater, continuous discharge for
exhaust gas
③ Number and distribution of discharge outlets: one for wastewater, the wastewater
treatment plant, pipeline discharge; eleven for exhaust gas, two in the plastic
injection department, six in the powder coating department and three in the
boiler room.
④ Concentration and total amount of discharge and approved total amount of
discharge: No control regarding the total amount of discharge of organic
exhaust gas
According to the discharge permit, the concentration and total amount of
pollutant discharge subject to approval for the total amount are as follows:
Total Approved Whether it is
Name of Concentration amount of total amount excessive
No. pollutant of discharge discharge of discharge discharge
1 COD 23mg/L 0.177 34.742 no
tonnes tonnes
2 ammonia 0.628mg/L 0.0048 3.127 tonnes no
nitrogen tonnes
⑤ Pollutant discharge standards implemented: Integrated wastewater discharge
standard (DB12356–2018)
102 Haier Smart Home Co., Ltd. Annual Report 2022
Section V Environmental and Social Responsibilities
2. Construction and operation of pollution prevention and treatment facilities:
√ Applicable □ Not Applicable
Jiaonan Washing Machine, Jiaozhou Air-conditioning, Wuhan Freezer, Wuhan Water Heater,
Tianjin Washing Machine have one, one, one, two and one wastewater treatment plants
with a designed treatment capacity of 600 tonnes/day, 300 tonnes/day, 550 tonnes/day,
300 tonnes/day,260 tonnes/day and 300 tonnes/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. 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.
5. Self-monitoring environmental programs
√ Applicable □ Not Applicable
The Company complies with national and local environmental standard requirements in
respect of all pollutant discharge. 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 second review and audit was conducted on the
operation of ISO14001 system in 2021.
Haier Smart Home Co., Ltd. Annual Report 2022 103
Section V Environmental and Social Responsibilities
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
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 industry leading 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 all plants
across the country by utilizing automatized and informationalized technology and an
integrated management model. It automatically 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) Relevant information favorable to ecological protection, pollution prevention and
control and environmental responsibility fulfillment
√ Applicable □ Not Applicable
In order to better protect our homeland, the Company has been committed to implementing
national “dual carbon” strategy by integrating low-carbon, recycling, energy conservation and
emission reduction into daily operation and actively exploring a model for achieving carbon
reduction throughout the product lifecycle. We continuously promoted green technologies
upgrading in the industry by capitalizing on our industrial leading role in green technologies, and
worked together to move towards a greener, win-win and sustainable future.
104 Haier Smart Home Co., Ltd. Annual Report 2022
Section V Environmental and Social Responsibilities
For details, please refer to relevant information in 2022 Environmental, Social and
Governance Report of Haier Smart Home Co., LTD. published on the same date of this
report.
(IV) Measures taken during the Reporting Period to reduce its carbon emission and
their effectiveness
Whether carbon reduction Yes
measures were implemented
Reduction of carbon dioxide 14,017
equivalent emission (unit:
tonnes)
Types of carbon reduction The Company’s carbon reduction measures mainly include:
measures (such as using clean
energy for power generation, (1) Identifying the carbon emission of products:
using carbon reduction The Company has conducted carbon review of its
techniques in the production factories to understand the current status of its carbon
process, developing and emission and the carbon footprint of some of its
producing new products products, and will take targeted carbon reduction
which help reduce carbon actions based on the results of the carbon review.
emission, etc.)
(2) Practising green concept throughout the lifecycle:
The Company actively cooperates with parties along the
upstream and downstream industrial chain, from raw
material manufacturers to logistics enterprises, from
consumers to recycling and dismantling factories, in
order to explore carbon reduction throughout the
product lifecycle centering around”R&D, raw materials,
production, packaging and transportation, and product
recycling“Carbon reduction.
(3) Climate-related financial information disclosure
The Company actively identifies, evaluates and manages
the impact of climate change risks and opportunities on
its operations, and formulates risk management and
strategic planning to prepare for strict compliance with
the TCFD disclosure framework for climate-related
financial information.
For details of the above-mentioned measures, please
refer to relevant information in 2022 Environmental,
Social and Governance Report of Haier Smart Home
Co., LTD. published on the same date of this report.
Note: The scope of the aforementioned CO2 equivalent emission reduction statistics is the scope 1 and scope 2 data for
the Company’s domestic operations.
Specifications
□ Applicable √ Not Applicable
Haier Smart Home Co., Ltd. Annual Report 2022 105
Section V Environmental and Social Responsibilities
II. PERFORMANCE OF SOCIAL RESPONSIBILITIES
1. Whether the social responsibility report, sustainable development report or ESG
report is disclosed individually
√ Applicable □ Not Applicable
Haier Smart Home has actively participated in health education, rural construction, voluntary
service, and other community public charity while striving to create social value and practising
social responsibility in order to make its contribution to promoting the construction of a fairer and
better society wholeheartedly and sincerely.
1. Caring about education and health
The Company pays attention to the growth and education of young people by participating
in the establishment of the Haier Education Foundation, the Hope Project and the”Light
Catcher Project“to support public welfare activities in respect of the health and education of
young people and children around the world.
2. Supporting rural construction
The Company is actively involved in the revitalisation of villages by providing paired-up
assistance with villages in the areas of industry, employment, education and health, and
using its skills and knowledge to help build beautiful villages and improve their standard of
living.
3. Helping rescue and relief enthusiastically
The Company has extensively participated in disaster assistance around the world, took the
lead in rescue operations and donated disaster relief materials.
4. Volunteering to serve the society
All members of the Company at home and abroad insist on participating in social
governance through voluntary services, creating public value with their professional ability in
their spare time, and giving back to the society with love.
For details, please refer to the 2022 Environment, Social and Governance Report of Haier
Smart Home Co., Ltd. disclosed on the date of this report.
2. Details of social responsibility works
√ Applicable □ Not Applicable
External donation, public welfare projects Quantity/Content
Total Contribution (RMB10,000) 797
Among which: Funds (RMB10,000) 797
Specifications
√ Applicable □ Not Applicable
106 Haier Smart Home Co., Ltd. Annual Report 2022
Section V Environmental and Social Responsibilities
For details, please refer to the 2022 Environment, Social and Governance Report of Haier Smart
Home Co., Ltd. disclosed on the date of this periodic report.
III. PARTICULARS ON THE EFFORTS TO CONSOLIDATE AND EXPAND ITS
ACHIEVEMENTS IN POVERTY ALLEVIATION AND RURAL AREA
INVIGORATION
√ Applicable □ Not Applicable
Poverty alleviation and rural revitalization projects Quantity/Content
Total Contribution (RMB10,000) 1,117
Among which: Funds (RMB10,000) 1,117
Forms of assistance (such as poverty alleviation through Assistance is mainly provided in the form
industry development, poverty alleviation through of poverty alleviation through education
employment, poverty alleviation through education, etc.) and poverty alleviation in health
Specifications
√ Applicable □ Not Applicable
In accordance with the national targeted poverty alleviation plan and documents requirements, the
Company emphasizes poverty alleviation and conducts targeted poverty alleviation within the authority
granted on the general meeting in respect of, among others, donations.
For years, the Company has made genuine contributions to education to improve the basic cultural
quality of people in poverty and skills of families in poverty, with an emphasis on shoring up the weak
link of the education sector and stopping inter-generational poverty. As of now, the Company, Haier
Group Companies (the effective controller of the Company) and its subordinate enterprises (hereafter,
the “Haier Group”) have constructed over 300 hope primary schools and hope secondary schools,
covering 26 provinces, municipalities and autonomous regions in the PRC. It also offers continuous
resource assistance to such schools every year to effectively boost the base education capacity in
poverty regions and improve education quality. At the same time, during the earthquake in Ganzi,
Sichuan, the Company set up an earthquake relief service commando to go to the front line to provide
the affected people with three free services for home appliances, i.e. free inspection, free repair and
free relocation, and opened an exclusive call channel for user services in the disaster area; on the
other hand, the Company donated RMB3 million, taking up social responsibilities voluntarily and
supporting the reconstruction of disaster areas. The Company maintains its support to rural
development in respect of poverty alleviation in agricultural development and poverty alleviation in
farmers’ health to promote beautiful rural development. During the Reporting Period, it offered, among
other assistance, funds to Pangxi Village, Yuxi Town and Yuya Village, Zunyi City.
In 2022, the Company’s capital expenditure in targeted poverty alleviation amounted to approximately
RMB11.17 million, primarily attributable to education poverty alleviation, poverty alleviation in health and
construction of disaster areas, etc., to proactively respond to the government’s call for social
responsibility fulfillment.
Haier Smart Home Co., Ltd. Annual Report 2022 107
Section VI Significant Events
I. FULFILLMENT STATUS OF UNDERTAKINGS
(I) The undertakings made by the ultimate controller, shareholders, related parties,
acquirer as well as the Company and other relevant parties during or up to the
reporting period
√ Applicable □ Not Applicable
Whether
Date and Any performed in
Background of term of deadline for a timely and
undertakings Type of undertaking s Covenanter Contents of undertakings undertakings performance strict way
Undertaking Eliminate the right defects Haier Group During the period from September 2006 to May 27 September Yes Yes
related to in land property etc. Corporation 2007, the Company issued shares to Haier 2006,
significant Group Corporation (“Haier Group”) to purchase long-term
reorganization 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 Holding 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 three
companies, 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 Holding 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 current condition of each Covenantee, Haier
Group will constantly assure that Covenantees
will lease the land and property owned by Haier
Group for free. Haier Group will make
compensation in the event that the Covenantees
suffer loss due to the unavailability of such land
and property.
Address peer competition Haier Smart Home Prior to the Transaction (hereinafter “the 31 July 2020, Yes Yes
Co., Ltd. Transaction” refers to the transaction in relation long-term
to the privatization of Haier Electronics by Haier
Smart Home), Haier Electric was a controlling
subsidiary of the Company and did not have
peer competition with the Company; after the
completion of the Transaction, Haier Electric
became a wholly-owned or controlling subsidiary
of the Company and no new peer 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 controller of the Company.
108 Haier Smart Home Co., Ltd. Annual Report 2022
Section VI Significant Events
Whether
Date and Any performed in
Background of term of deadline for a timely and
undertakings Type of undertaking s Covenanter Contents of undertakings undertakings performance strict way
Address connected Haier Group 1. The Transaction constitutes a connected 29 July 2020, Yes Yes
transactions Corporation transaction and the connected transaction long-term
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. Annual Report 2022 109
Section VI Significant Events
Whether
Date and Any performed in
Background of term of deadline for a timely and
undertakings Type of undertaking s Covenanter Contents of undertakings undertakings performance strict way
Address peer competition Haier Group 1. The Company and its controlling subsidiary, Haier 29 July 2020, Yes Yes
Corporation COSMO Co., Ltd., were principally engaged in long-term
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 per
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 peer
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 peer competition
with Haier Smart Home.
110 Haier Smart Home Co., Ltd. Annual Report 2022
Section VI Significant Events
Whether
Date and Any performed in
Background of term of deadline for a timely and
undertakings Type of undertaking s Covenanter Contents of undertakings undertakings performance strict way
Others Haier Group Upon completion of the Transaction, the company 29 July 2020, Yes Yes
Corporation will strictly comply with the Company Law, the long-term
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. Annual Report 2022 111
Section VI Significant Events
Whether
Date and Any performed in
Background of term of deadline for a timely and
undertakings Type of undertaking s Covenanter Contents of undertakings undertakings performance strict way
Address connected HCH (HK) 1. The Transaction constitutes a connected 29 July 2020, Yes Yes
transactions INVESTMENT transaction and the connected transaction long-term
MANAGEMENT procedures performed under the Transaction are
CO., LIMITED 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.
112 Haier Smart Home Co., Ltd. Annual Report 2022
Section VI Significant Events
Whether
Date and Any performed in
Background of term of deadline for a timely and
undertakings Type of undertaking s Covenanter Contents of undertakings undertakings performance strict way
Undertaking Eliminate the right defects Haier Group Haier Group Corporation undertakes that it will 24 December Yes Yes
related to in land property and Corporate assure Haier Smart Home and its subsidiaries of 2013,
refinancing etc. the constant, stable and unobstructed use of the long-term
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. Annual Report 2022 113
Section VI Significant Events
Whether
Date and Any performed in
Background of term of deadline for a timely and
undertakings Type of undertaking s Covenanter Contents of undertakings undertakings performance strict way
Undertakings Others Haier Smart Home The Company will not provide loans or any other 15 September Yes Yes
related to Co., Ltd. forms of financial assistance, including 2021/28 June
Equity guaranteeing their loans, to any incentive 2022, the
incentive recipient for acquiring relevant stock options completion of
under this incentive plan. equity incentive
implementation
Other Asset injection Haier Group Inject the assets of Haier Photoelectric to the December 2015 to Yes Yes
undertakings Corporation Company or dispose such assets through other June 2025
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.
(II) The Company’s explanation on whether the earnings forecast on assets or
projects was met and its reasons in the situation that earnings in the
Company’s assets or projects have a forecast, and the period of which
includes the reporting period.
□ Reached □ Not Reached √ Not Applicable
(III) Completion of performance commitments and their impact on the impairment
test of goodwill
□ Applicable √ Not Applicable
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. EXPLANATION OF THE BOARD OF THE COMPANY ON THE ‘NON-
STANDARD AUDIT REPORT’ ISSUED BY THE ACCOUNTING FIRM
□ Applicable √ Not Applicable
114 Haier Smart Home Co., Ltd. Annual Report 2022
Section VI Significant Events
V. EXPLANATION OF THE COMPANY’S ANALYSIS ON REASONS AND
EFFECTS OF CHANGES IN ACCOUNTING POLICIES AND
ACCOUNTING ESTIMATES OR CORRECTION OF SIGNIFICANT
ACCOUNTING ERRORS
(I) Explanation of the Company’s analysis on reasons and effects of changes in
accounting policies and accounting estimates
□ Applicable √ Not Applicable
(II) Explanation of the Company’s analysis on reasons and effects of correction of
significant accounting errors
□ Applicable √ Not Applicable
(III) Communication with former accounting firm
□ Applicable √ Not Applicable
(IV) Other explanations
□ Applicable √ Not Applicable
VI. APPOINTMENT AND DISMISSAL OF ACCOUNTING FIRM
Unit and Currency: RMB million
Current appointment
Name of domestic accounting firm Hexin Certified Public Accountants
LLP
Remuneration of domestic accounting firm 6.55
Audit period of domestic accounting firm 10 years
Names of certified public accountants of domestic accounting Zhao Bo, Li Xiang Zhi
firm
Number of consecutive years of audit services of certified 10
public accountants in domestic accounting firms
Name of overseas accounting firm HLB Hodgson Impey Cheng Limited
Remuneration of overseas accounting firm 3.89
Audit period of overseas accounting firm 3 years
Haier Smart Home Co., Ltd. Annual Report 2022 115
Section VI Significant Events
Name Remuneration
Accounting firm for Internal control audit Hexin Certified Public 2.23
Accountants LLP
Explanation of appointment and dismissal of accounting firm
□ Applicable √ Not Applicable
Explanation of change of accounting firm during the auditing period
□ Applicable √ Not Applicable
VII. POSSIBILITY OF DELISTING
(I) Reasons of warning for delisting risks
□ Applicable √ Not Applicable
(II) Response measures to be taken by the Company
□ Applicable √ Not Applicable
(III) Circumstances and reasons for termination of listing
□ Applicable √ Not Applicable
VIII. MATTERS RELATING TO BANKRUPTCY AND RESTRUCTURING
□ Applicable √ Not Applicable
IX. MATERIAL LITIGATION AND ARBITRATION MATTERS
□ Material litigation and arbitration matters during the year
√ No material litigation and arbitration matters during the year
116 Haier Smart Home Co., Ltd. Annual Report 2022
Section VI Significant Events
X. 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
XI. EXPLANATION OF THE INTEGRITY STATUS OF THE COMPANY AND
ITS CONTROLLING SHAREHOLDERS AND ULTIMATE CONTROLLER
DURING THE REPORTING PERIOD
□ Applicable √ Not applicable
XII. SIGNIFICANT RELATED-PARTY TRANSACTIONS
(I) Related-party transactions from 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
Pursuant to the “Resolution on Proposal to the General Meeting to Authorize the Board of
Directors and its Authorized Persons to Sign the Framework Agreement on Connected
Transactions for 2020–2022” 《關於提請股東大會授權董事會及其授權人士簽署 2020–2022
年 關 聯 交 易 框 架 協 定 的 議 案》 considered and approved at the 10th meeting of the 10th
session of the Board of Directors and the Second Extraordinary General Meeting of 2020,
the “Resolution on Signing the Framework Agreement on Connected Transactions” 《關 於
簽署關聯交易框架協定的議案》 considered and approved at the 14th meeting of the 10th
session of the Board of Directors, and the “Resolution of Haier Smart Home Co., Ltd. on
Renewing the Framework Agreement on Financial Services with Haier Group Corporation
and Estimated Amount of Connected Transactions” 《海爾智家股份有限公司關於與海爾集
團公司續簽暨預計關聯交易額度的議案》 considered and approved at the 18th meeting of
the 10th session of the Board of Directors and the 2020 Annual General Meeting, the
Company has made estimation on the connected transactions for the next three years, as
detailed in the aforesaid announcements regarding the resolutions of the meetings.
For the actual performance of the Company’s connected transactions in the year of 2022,
please refer to”XII. Related parties and related-party transactions “under Section X —
Financial and Accounting Report set out in this regular report.
3. Matters not disclosed in temporary announcements
□ Applicable √ Not applicable
Haier Smart Home Co., Ltd. Annual Report 2022 117
Section VI Significant Events
(II) Related-party transactions regarding acquisition or disposal of assets/equity
1. Matter disclosed in temporary announcements and with no subsequent progress or
change
√ Applicable □ Not Applicable
Summary of matters Query index
The acquisition of 100% equity interest in For details, please refer to the”Announcement
Qingdao TAB Robot Technology Co., in relation to the Acquisition of 100% Equity
LTD* (青 島 塔 波 爾 機 器 人 技 術 有 限 責 任 Interest in Qingdao TAB Robot Technology
公 司) and connected transaction: in Co., LTD* (青 島 塔 波 爾 機 器 人 技 術 有 限 責 任
order to establish the competitiveness of 公 司) by a Subsidiary of Haier Smart Home
service robots for household cleaning, Co., Ltd.* (海 爾 智 家 股 份 有 限 公 司) and
promote the development of the Connected Transaction” as disclosed by the
Company’s cleaning appliance business, Company on 29 April 2022
as well as to enhance its corporate
governance and reduce routine
connected transactions, Qingdao Haier
Smart Life Electric Co. Ltd.* (青 島 海 爾
智 慧 生 活 電 器 有 限 公 司), a wholly-
owned subsidiary of the Company,
acquired 100% equity interest in
Qingdao TAB Robot Technology Co.,
LTD* (青 島 塔 波 爾 機 器 人 技 術 有 限 責 任
公 司) held by Qingdao Haier
Interconnect Technology Co. Ltd.* (青島
海 爾 互 聯 科 技 有 限 公 司) for a
consideration of RMB125 million in
cash.
118 Haier Smart Home Co., Ltd. Annual Report 2022
Section VI Significant Events
Summary of matters Query index
Transfer of 25% equity interest in Qingdao For details, please refer to the”Announcement
Haier Mold Co., Ltd.* (青 島 海 爾 模 具 有 in relation to the Transfer of 25% Equity
限 公 司) and connected transaction: in Interest in Qingdao Haier Mold Co., Ltd.* (青
order to focus on our principal business 島海爾模具有限公司) by a Subsidiary of Haier
of smart home, optimize resource Smart Home Co., Ltd.* (海爾智家股份有限公
allocation and acquire investment 司) and Connected Transaction” as disclosed
income, Haier Shareholdings (Hong by the Company on 29 April 2022
Kong) Limited, a wholly-owned
subsidiary of the Company transferred
to Qingdao Haier Mold Smart Cloud
Technology Co., Ltd.* (青島海模智雲科
技 有 限 公 司) 25% equity interest in
Qingdao Haier Mold Co., Ltd.* (青 島 海
爾 模 具 有 限 公 司) for a consideration of
RMB277 million in cash.
Acquisition of 100% equity interest in For details, please refer to the”Announcement
Qingdao Haier Special Plastic R&D Co., in relation to the Acquisition of 100% Equity
Ltd. (“Qingdao Special Plastic”) by a Interest in Qingdao Haier Special Plastic R&D
subsidiary and connected transaction: Co., Ltd.* (青 島 海 爾 特 種 塑 料 研 製 開 發 有 限
Qingdao Haier Special Refrigerator Co., 公 司) by a Subsidiary of Haier Smart Home
Ltd. (“Haier Special Refrigerator”), a Co., Ltd.* (海 爾 智 家 股 份 有 限 公 司) and
wholly-own subsidiary of the Company, Connected Transaction” as disclosed by the
intends to acquire 30.23% equity Company on 30 August 2022
interest in Qingdao Haier Special Plastic
R&D Co., Ltd. held by Haier Group
Corporation for RMB45,953,500,
65.58% equity interest in Qingdao
Special Plastic held by Haier COSMO
Co. Ltd. for RMB99,683,700 and 4.19%
equity interest in Qingdao Special
Plastic held by Qingdao Haier Tooling
Development Co., Ltd. for
RMB6,362,800. After the completion of
the transaction, the subject company
became a wholly-owned subsidiary of
Haier Special Refrigerator.
Haier Smart Home Co., Ltd. Annual Report 2022 119
Section VI Significant Events
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
(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 that haven’t been disclosed in temporary announcements
□ Applicable √ Not applicable
(V) Financial business between the Company and the finance company with which
it has a related relationship, or it is the company’s controlling finance company
and related parties
√ Applicable □ Not applicable
120 Haier Smart Home Co., Ltd. Annual Report 2022
Section VI Significant Events
1. Deposit business
√ Applicable □Not applicable
Unit and Currency: RMB
Changes of the period
Balance as at the Total amount Total amount
Maximum daily Range of deposit beginning of the deposited during withdrawn during Balance as at the
Related party Relationship deposit limit interest period the period the period end of the period
Haier Finance Co., Subsidiary of Haier 32 billion 0.385% to 3.50% 28,870,880,571.84 451,072,007,538.64 448,518,469,390.35 31,424,418,720.13
Ltd. Group
Total / / / 28,870,880,571.84 451,072,007,538.64 448,518,469,390.35 31,424,418,720.13
2. Lending business
√ Applicable □ Not applicable
Unit and Currency: RMB
Changes of the period
Total
Balance as at Total loan repayment Balance as at
Range of loan the beginning amount for amount for the end of the
Related party Relationship Loan limit interest of the period the period the period period
Haier Finance Subsidiary of 7 billion 336,507,659.12 60,000,000.00 336,507,659.12 60,000,000.00
Co., Ltd. Haier Group
Total / / / 336,507,659.12 60,000,000.00 336,507,659.12 60,000,000.00
3. Credit business or other finance businesses
√ Applicable □ Not applicable
Unit and Currency: RMB
Actual amount
Related party Relationship Type of business Total amount of occurrence
Haier Finance Co., Subsidiary of Haier Foreign exchange 5.5 billion 412,724,607.88
Ltd. Group derivatives
products
Haier Finance Co., Subsidiary of Haier Service charge 80 million 29,446,933.09
Ltd. Group
Haier Smart Home Co., Ltd. Annual Report 2022 121
Section VI Significant Events
4. Other explanations
□ Applicable √ Not Applicable
(VI) Others
□ Applicable √ Not Applicable
XIII. SIGNIFICANT CONTRACTS AND THEIR EXECUTION
(I) Trusteeship, contracting and leasing
1. Trusteeship
□ 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. Contracting
□ Applicable √ Not applicable
3. Leasing
□ Applicable √ Not applicable
122 Haier Smart Home Co., Ltd. Annual Report 2022
Section VI Significant Events
(II) Guarantee
√ 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 Commencement Expiration guarantee Whether the amount of there is a party
the listed Secured Amount of (date of date of date of Type of Collateral has been guarantee is the counter- guarantee
Guarantor company party guarantee agreement) guarantee guarantee guarantee (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 1,868,555
Total balance of guarantees for subsidiaries at the end of the reporting period (B) 1,284,382
Total amount of guarantees provided by the Company (including guarantees for subsidiaries)
Total amount of guarantee (A + B) 1,284,382
Ratio of total amount of guarantees to net assets of the Company (%) 13.7
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) 687,732
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) 687,732
Explanation of possibly bearing related discharge duty for premature guarantees Nil
Explanation of guarantee status Nil
Haier Smart Home Co., Ltd. Annual Report 2022 123
Section VI Significant Events
(III) Entrusted others to manage cash assets
1. Entrusted wealth management
(1) Overall of entrusted wealth management
√ Applicable □ Not applicable
Unit and Currency: RMB
Past due
Sources of Premature uncollected
Type funds Amount balance amount
Wealth Self-owned funds 14,286,710,000 1,464,000,000 0
management in
banks
Wealth Fundraising 475,000,000 175,000,000 0
management through CB
in banks
Others Self-owned 14,638,968 14,638,968 0
funds (Asset
management
account for
employee
stock
ownership)
Others
√ Applicable □ Not applicable
By the end of the reporting period, the balance of the Company’s entrusted wealth
management amounted to RMB1,654 million, including three parts:①Temporarily-idle
funds wealth management by certain subsidiaries of the Company: Under the premise
of ensuring sufficient capital required by the principal operating activities and daily
operations, some subsidiaries of the Company purchased some short-term principal-
guaranteed 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. By the end of the reporting period, the balance of
the entrusted wealth management amounted to RMB1,464 million; ②Temporarily-idle
fundraising wealth management: at the end of December 2018, the Company’s
proceeds for the issuance of convertible corporate bonds were fully landed. In order
to improve the yield of temporarily-idle funds, the Company intended to carry out
cash management with the amounts not exceeding RMB0.5 billion after approved by
the Board of Directors. By the end of the reporting period, the balance of the
entrusted wealth management amounted to RMB175 million; ③Idle funds in the asset
management account of the Employee Stock Ownership Scheme: the asset
management institution purchased cash products such as money funds according to
the liquidity of the products with some idle funds in the asset management account
of the Employee Stock Ownership Scheme of the Company. The balance of cash
assets amounted to RMB15 million.
124 Haier Smart Home Co., Ltd. Annual Report 2022
Section VI Significant Events
(2) Individual entrusted wealth management
√ Applicable □ Not applicable
Unit and Currency: RMB
Expiration Any future Amount of
Type of Amount of Commencement date of Whether plan for provision
entrusted entrusted date of entrusted entrusted Expected approved entrusted for
wealth wealth wealth wealth Sources of Determination Annualized return Actual gains by due wealth impairment
Trustee management management management management funds Investment of return yield (if any) or losses Collection process management (if any)
Qingdao branch of Linked 600,000,000 2022/11/21 2023/2/21 Self-owned Not YES YES
Shanghai Pudong structured funds expired
Development Bank deposit
Qingdao branch of Linked 200,000,000 2022/10/8 2023/1/9 Self-owned Not YES YES
Shanghai Pudong structured funds expired
Development Bank deposit
Qingdao branch of Linked 314,000,000 2022/10/17 2023/1/17 Self-owned Not YES YES
Bank of structured funds expired
Communications deposit
Haier Road sub-branch Linked 75,000,000 2022/6/10 2023/1/3 Fundraising Not YES YES
of Construction Bank structured through expired
deposit CB
Haier Road sub-branch Linked 100,000,000 2022/7/6 2023/1/3 Fundraising Not YES YES
of Construction Bank structured through expired
deposit CB
Asset management Short-term 14,638,968 Self-owned Not YES YES
account of Industrial wealth funds expired
Bank CO., LTD. management
Qingdao Sub-branch of Linked 176,000,000 2022/10/26 2023/1/12 Self-owned Not YES YES
Bank of China structured funds expired
deposit
Qingdao Sub-branch of Linked 174,000,000 2022/10/25 2023/1/11 Self-owned Not YES YES
Bank of China structured funds expired
deposit
Others
□ Applicable √ Not applicable
(3) Provisions for impairment of entrusted wealth management
□ Applicable √ Not applicable
2. Entrusted loans
(1) Overall entrusted loans
□ Applicable √ Not applicable
Others
□ Applicable √ Not Applicable
(2) Individual entrusted loans
□ Applicable √ Not applicable
Others
□ Applicable √ Not Applicable
Haier Smart Home Co., Ltd. Annual Report 2022 125
Section VI Significant Events
(3) Provisions for impairment of entrusted loans
□ Applicable √ Not Applicable
3. Others
□ Applicable √ Not Applicable
(IV) Other Major Contracts
□ Applicable √ Not Applicable
XIV. EXPLANATION OF OTHER SIGNIFICANT MATTERS THAT HAVE A
SIGNIFICANT IMPACT ON THE VALUE JUDGMENTS AND INVESTMENT
DECISIONS OF INVESTORS
□ Applicable √ Not Applicable
126 Haier Smart Home Co., Ltd. Annual Report 2022
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
Unit: share
Prior to the change Increase and decrease of the change ( ,-) After the change
Shares
Percentage New shares Bonus converted Percentage
Number (%) issued shares from reserve Others Subtotal Number (%)
I. Shares with selling
restrictions
1. Shares held by
the state
2. Shares held by
the state-owned
legal entities
3. Shares held by
other domestic
investors
Including:
shares held
by Domestic
non-state-
owned legal
entities
Shares held by
domestic
individuals
4. Shares held by
foreign investors
Including:
shares held
by foreign
legal entities
Shares held by
foreign
individuals
II. Tradable shares
without selling
restrictions 9,398,704,530 100.00 41,413,600 6,480,363 47,893,963 9,446,598,493 100.00
1. RMB ordinary
shares 6,308,552,654 67.12 6,308,552,654 66.78
2. Domestic listed
foreign shares
3. Overseas listed
foreign shares 3,090,151,876 32.88 41,413,600 6,480,363 47,893,963 3,138,045,839 33.22
4. Others
III. Total shares 9,398,704,530 100.00 41,413,600 6,480,363 47,893,963 9,446,598,493 100.00
Haier Smart Home Co., Ltd. Annual Report 2022 127
Section VII Changes in Shares and Information about Shareholders
2. Statement on the changes in shares
√ Applicable □ Not Applicable
(1) H-share convertible bonds: On 27 October 2020, the China Securities Regulatory
Commission issued the Reply to the Approval of Issuance of Overseas Listed Foreign
Shares and Convertible Corporate Bonds by Haier Smart Home Co., Ltd. 《關於核準
海 爾 智 家 股 份 有 限 公 司 發 行 境 外 上 市 外 資 股 及 可 轉 換 公 司 債 券 的 批 复》 (Zheng Jian
Xu Ke [2020] No. 2768), which approved that: (1) the Company issued no more than
2,856,526,138 overseas listed foreign shares (including additional shares issued by
holders of convertible corporate bonds not exceeding HK$8.0 billion or equivalent in
foreign currencies upon the exercise of the convertible rights), with a par value of
RMB1 each, all of which are ordinary shares. After the completion of this issuance,
the Company can be listed on the main board of the Stock Exchange of Hong Kong
Limited (hereinafter referred to as the “Hong Kong Stock Exchange”); (2) the issuance
of corporate bonds not exceeding HK$8.0 billion or equivalent in foreign currencies
that can be converted into the Company’s overseas listed foreign shares by the
overseas wholly-owned subsidiaries guaranteed by the Company. On 23 December
2020, 2,448,279,814 H shares of the Company, issued for the privatisation of Haier
Electronics Group Co., Ltd. (a Hong Kong listed company), were listed and traded on
the Main Board of the Hong Kong Stock Exchange and the related convertible bonds
under the H share convertible bonds scheme became valid and in effect immediately
after the listing amounting to HK$7,993,000,000. During the reporting period,
HK$394,000,000 of the convertible bonds were converted into a total of 21,450,563
H shares of the Company.
(2) Placing of H share: Pursuant to the Resolution on Granting General Mandate to the
Board of Directors on Additional Issuance of H shares of the Company considered
and passed at the Company’s 2020 Annual General Meeting, the Resolution of Haier
Smart Home Co., Ltd. on the Issue and Listing of New H Shares on the Main Board
of the Stock Exchange of Hong Kong Limited considered and passed at the 23rd
meeting of the 10th session of the Board of Directors of the Company, etc. and the
China Securities Regulatory Commission’s “Reply to the Approval of Issuance of
Overseas Listed Foreign Shares by Haier Smart Home Co., Ltd.” 《關 於 核 準 海 爾 智
家 股 份 有 限 公 司 發 行 境 外 上 市 外 資 股 的 批 复》 (Zheng Jian Xu Ke [2021] No. 4055),
the Company can additionally issue no more than 73,000,000 overseas listed foreign
shares (H shares), with a par value of RMB1 each, all of which are ordinary shares.
On the 26th meeting of the 10th session of the Board of Directors of the Company
on 11 January 2022, the Resolution on the Placing of New H Shares Under the
General Mandate of Haier Smart Home Co., Ltd. was considered and passed and
41,413,600 H shares will be issued by the Company.
128 Haier Smart Home Co., Ltd. Annual Report 2022
Section VII Changes in Shares and Information about Shareholders
On 21 January 2022, in accordance with the aforesaid resolutions and reply, the
Company issued 41,413,600 overseas listed foreign shares (H shares). The new
shares accounted for 0.439% of the total number of issued shares and 1.448% of the
total number of H shares, respectively, upon completion of placing and the Stock
Exchange of Hong Kong Limited has granted the approval for the listing of and
permission to deal in the shares on its Main Board.
(3) Cancellation of H share repurchase: On 28 June 2022, the 2021 Annual General
Meeting, the First Class Meeting of 2022 for A shares, the First Class Meeting of
2022 for A D shares and the First Class Meeting of 2022 for H shares of the
Company considered and approved the Resolution on Proposing the General Meeting
to Grant the General Mandate to the Board of Directors to Repurchase not more
than 10% of the Total Number of H shares of the Company in Issue of Haier Smart
Home Co., Ltd., in which the Company intends to repurchase H shares and cancel
them within the agreed period. During the reporting period, the Company
repurchased a total of 14,970,200 H shares and all such shares have been
cancelled.
Based on the above, during the reporting period, the share capital of the Company
was changed from 9,398,704,530 shares at the beginning of the reporting period to
9,446,598,493 shares.
3. Effect of changes in shares on the financial indicators such as earnings per share
and net assets per share (if any) over the last year and the last reporting period
√ Applicable □ Not Applicable
In 2022, the Company achieved net profit attributable to shareholders of the Parent
Company of RMB14,710,923,491.99, equity attributable to owners of the Parent Company
of RMB93,422,647,664.43, in terms of total share capital of 9,398,704,530 shares at the
beginning of the period, profit per share was RMB1.57 and net asset was RMB9.94 per
share accordingly; in terms of total share capital of 9,446,598,493 shares at the end of the
period, profit per share was RMB1.56 and net asset was RMB9.89 per share accordingly.
4. Other disclosure deemed necessary by the Company or required by
securitiesregulatory authorities
□ Applicable √ Not Applicable
(II) Changes in shares with selling restriction
□ Applicable √ Not Applicable
Haier Smart Home Co., Ltd. Annual Report 2022 129
Section VII Changes in Shares and Information about Shareholders
II. ISSUANCE AND LISTING OF SECURITIES
(I) Issuance of securities as of the reporting period
√ Applicable □ Not Applicable
Unit: share Currency: HKD
Issuing
price (or Number of
Type of shares and its Date of interests Number of Date of shares under Date of
derivative securities issue rate) issuance listing listing approval termination
Convertible corporation bonds,
convertible bonds with
warrants
Corporate bonds convertible 23 December / 7,993,000,000 23 December 7,993,000,000 21 November 2022
into H-shares 2020 2020
Details of issuance of securities as of the reporting period (please specify separately for bonds
with different interest rates within the duration):
√ Applicable □ Not Applicable
On 27 October 2020, China Securities Regulatory Commission (CSRC) issued the Reply on
Approval of the Foreign Public Issuance of Convertible Bonds by Qingdao Haier Co., Ltd.” (Zheng
Jian Xu Ke [2020] No. 2768, hereinafter referred to as “CSRC Reply”), which approved: (1) Haier
Smart Home shall issue not more than 2,856,526,138 overseas listed foreign capital shares
(including not more than HK$8 billion or the equivalent in foreign currencies of shares issued for
the holders of convertible corporate bonds upon the exercise of conversion rights), with a par
value of RMB1 each and all of which are ordinary shares. Upon the completion of this issue,
Haier Smart Home can be listed on the Main Board of The Stock Exchange of Hong Kong
Limited; (2) the overseas wholly-owned subsidiary guaranteed by Haier Smart Home can issue
corporate bonds of not exceeding HK$8 billion or equivalent in foreign currencies that can be
converted into overseas listed foreign capital shares of the issuer. Pursuant to which and with
the approval of the relevant parties, the Company and Harvest International Company, a wholly-
owned subsidiary of the Company, issued 2,448,279,814 H-shares and convertible bonds
respectively on Hong Kong Stock Exchange on 23 December 2020 (the ex-changeable bonds of
HK$8 billion issued in November 2017 were converted into convertible bonds, and the
convertible bonds in effect amounted to HK$7,993 million, which can be converted into H-shares
of the Company). For details, please refer to the prospectus and other relevant documents
disclosed in Hong Kong market during the reporting period of the Company and the Report on
the Implementation of Material Asset Purchase and Related Party Transactions and other relevant
documents disclosed on 26 December 2020.
130 Haier Smart Home Co., Ltd. Annual Report 2022
Section VII Changes in Shares and Information about Shareholders
For the above-mentioned H-share convertible bonds, 105.11% of the remaining par value of the
bonds were repaid in a one-off repayment of principal and interest upon maturity. During the
listing and transaction period, the H-share convertible bonds can be converted into H-shares of
the Company. Upon the maturity in November 2022, the Company repaid the principal and
interest on the outstanding H-share convertible bonds of HK$5 million. The H-share convertible
bonds were fully repaid and delisted.
(II) Changes in total shares and shareholder structure as well as assets and liabilities
structure of the Company
√ Applicable □ Not Applicable
For the total number of ordinary shares of the Company and changes in shareholder structure,
please refer to the relevant explanations in ‘I. Changes in share capital’ and ‘III. Information on
shareholder and ultimate controllers’ in this section. For the impact of the aforesaid changes on
‘Paid-in capital (or share capital)’ in the Company’s balance sheet and other items, please refer
to the relevant content in ‘Section X Financial Report’ of this report.
(III) Information on existing shares specifically issued for staff
□ Applicable √ Not Applicable
III. INFORMATION ON SHAREHOLDERS AND ULTIMATE CONTROLLERS
(I) Total number of shareholders
Total number of ordinary shareholders up to the end of the reporting period 137,372
Total number of ordinary shareholders as at the end of the last month prior to 130,537
the disclosure day of the annual report
Haier Smart Home Co., Ltd. Annual Report 2022 131
Section VII Changes in Shares and Information about Shareholders
(II) Table of top ten shareholders, top ten common shareholders (or the shareholders
not subject to selling restrictions) by the end of the reporting period
Unit: share
Shareholdings of top ten shareholders
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 Number
HKSCC NOMINEES LIMITED 2,239,834,552 23.71 Unknown Unknown
(Note)
Haier COSMO Co., Ltd. (海尔卡 1,258,684,824 13.32 None Domestic non-state-
奥斯股份有限公司) owned legal entity
Haier Group Corporation 1,072,610,764 11.35 None Domestic non-state-
owned legal entity
Hong Kong Securities Clearing 706,522,861 7.48 None Unknown
Co., Ltd.
HCH (HK) INVESTMENT 538,560,000 5.70 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 1.82 None Domestic non-state-
Investment Information Co., owned legal entity
Ltd. (青島海爾創業投資諮詢
有限公司)
Qingdao Haichuangzhi 120,622,416 1.28 None Domestic non-state-
Management Consulting owned legal entity
Enterprise (Limited
Partnership) (青島海創智管
理諮詢企業 (有限合伙))
ALIBABA INVESTMENT LIMITED 83,823,993 0.89 Unknown Foreign legal entity
China Merchant Bank Co., Ltd. 71,347,982 0.76 None Unknown
— Yifangda Consumer
Industry Equity Securities
Investment Fund
132 Haier Smart Home Co., Ltd. Annual Report 2022
Section VII Changes in Shares and Information about Shareholders
Shareholdings of top ten shareholders not subject to selling restrictions
Number of
tradable shares
without selling
Name of shareholder restrictions Class and number of shares
Class Number
HKSCC NOMINEES 2,239,834,552 Overseas listed foreign 2,239,834,552
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 706,522,861 RMB ordinary 706,522,861
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.
(青島海爾創業投資諮
詢 有 限 公 司)
Qingdao Haichuangzhi 120,622,416 RMB ordinary 120,622,416
Management
Consulting Enterprise
(Limited Partnership)
(青島海創智管理諮詢
企 業（有 限 合 伙）
ALIBABA INVESTMENT 83,823,993 Overseas listed foreign 83,823,993
LIMITED shares
China Merchant Bank 71,347,982 RMB ordinary 71,347,982
Co., Ltd. — Yifangda
Consumer Industry
Equity Securities
Investment Fund
Explanation on The Company’s repurchase account held a total of 86,292,743
repurchase account of shares
top ten shareholders
Haier Smart Home Co., Ltd. Annual Report 2022 133
Section VII Changes in Shares and Information about Shareholders
Number of
tradable shares
without selling
Name of shareholder restrictions Class and number of shares
Class Number
Explanation on Nil
delegated voting
rights, entrusted
voting rights,
abstained voting
rights of the aforesaid
shareholders
Related parties or (1) Haier COSMO Co., Ltd. (海爾卡奧斯股份有限公司) is a holding
parties acting in subsidiary of Haier Group Corporation. Haier Group
concert among the Corporation holds 51.20% of its equity. Each of Qingdao
aforesaid Haier Venture & Investment Information Co., Ltd.(青 島 海 爾 創
shareholders 業 投 資 諮 詢 有 限 公 司), HCH (HK) INVESTMENT
MANAGEMENT CO., LIMITED and Qingdao Haichuangzhi
Management Consulting Enterprise (Limited Partnership) (青島
海創智管理諮詢企業（有限合伙） is a party acting in concert
with Haier Group Corporation;
(2) The Company is not aware of the existence of any connections
of other shareholders.
Explanation of Not applicable
preferential
shareholders with
restoration of voting
rights and their
shareholdings
Number of shares held by top ten shareholders with selling restrictions and the selling
restrictions
□ Applicable √ Not Applicable
Note: HKSCC NOMINEES LIMITED is the Banking Collection Account for the shareholders of the Company’s H-shares, which
is the original data provided by China Hong Kong securities registration agency to the Company after the merger
according to local market practices and technical settings, not representing the ultimate shareholder.
134 Haier Smart Home Co., Ltd. Annual Report 2022
Section VII Changes in Shares and Information about Shareholders
(III) Strategic investors or general legal persons who became the top ten
shareholders due to placing of new shares
□ Applicable √ Not Applicable
IV. CONTROLLING SHAREHOLDER AND THE ULTIMATE CONTROLLER
(I) Status of controlling shareholder
1 Legal person
√ Applicable □ Not Applicable
Name Haier COSMO Co., Ltd. (海 尔 卡 奥 斯 股 份 有 限 公 司)
Person in charge of the Zhou Yunjie (周 雲 杰)
Company or legal
representative
Establishment date 1988–06–30
Principal business Information technology integration and Internet of Things
technology services: industrial automation technology
research and development, technical consulting; research
and development and manufacturing of electrical
appliances, electronic products, mechanical products,
communication equipment and related accessories,
industrial automation control equipment, computer
hardware and software and auxiliary equipment; import
and export business (operated within the scope
approved by MOFCOM); wholesale and retail: domestic
commerce (except for merchandises prohibited by the
state); investment in medical industry; investment
advisory services; enterprise management consulting.
(For projects subject to approval, business activities can
only be carried out after the approval by relevant
departments)
Shareholding of other Indirect controlling/participating Company: ‘Qingdao Haier
controlling and Biomedical Co., Ltd.’ (青 島 海 爾 生 物 醫 療 股 份 有 限 公 司)
participating domestic (stock name: ‘Haier Biomedical’, stock code: 688139),
and overseas listed Yingkang Life Technology Co., Ltd. (盈 康 生 命 科 技 股 份
companies in the 有 限 公 司)(stock name: ‘Yingkang Life’, stock code:
reporting period 300143), ‘Qingdao Bank Co., Ltd.’ (青島銀行股份有限公
司) (stock name: ‘Bank of Qingdao’, stock code: 002948
and 3866.HK), ‘China International Capital Corporation
Limited’ (stock name: ‘CICC’, stock code: 601995 and
3908.HK), etc.
Other explanation Nil
Haier Smart Home Co., Ltd. Annual Report 2022 135
Section VII Changes in Shares and Information about Shareholders
2 Natural person
□ Applicable √ Not Applicable
3 Explanation on the absence of controlling shareholders of the Company
□ Applicable √ Not Applicable
4 Explanation on the change in controlling shareholders during the reporting period
□ Applicable √ Not Applicable
5 Framework of the ownership and controlling relationship between the Company and
its controlling shareholder
√ Applicable □ Not Applicable
Haier COSMO Co., Ltd.
( )
13.32%
Haier Smart Home Co., Ltd.
136 Haier Smart Home Co., Ltd. Annual Report 2022
Section VII Changes in Shares and Information about Shareholders
(II) Status of the ultimate controller
1 Legal person
√ Applicable □ Not Applicable
Name Haier Group Corporation
Person in charge of the Zhou Yunjie (周 雲 杰)
Company or legal
representative
Establishment date 1980–03–24
Principal business Technology development, technology consultation,
technology transfer and technology services (including
industrial Internet, etc.); data processing; digital
technology, intelligent technology, software technology;
research and development, sales and after-sales service
of robots and automation equipment products; logistics
information service; research and development and sales
of software technology for smart home products and
solutions systems; manufacturing of household
appliances, electronic products, communication
equipment, electronic computers and accessories,
general machinery, kitchen utensils, industrial robots;
wholesale and retail of domestic commerce (except for
the national dangerous prohibition franchise exclusive
control merchandises); import and export business (see
the foreign trade enterprise finalized certification for
details); economic and technological consultation;
research and development and transfer of technological
achievements; rental of owned properties. (For projects
subject to approval, business activities can only be
carried out after the approval by relevant departments)
Shareholding of other Indirect controlling/participating Company: ‘Qingdao Haier
controlling and Biomedical Co., Ltd.’ (青 島 海 爾 生 物 醫 療 股 份 有 限 公 司)
participating domestic (stock name: ‘Haier Biomedical’, stock code: 688139),
and overseas listed Yingkang Life Technology Co., Ltd. (盈 康 生 命 科 技 股 份
companies in the 有 限 公 司) (stock name: ‘Yingkang Life’, stock code:
reporting period 300143), ‘Qingdao Bank Co., Ltd.’ (青島銀行股份有限公
司) (stock name: ‘Bank of Qingdao’, stock code: 002948
and 3866.HK), China International Capital Corporation
Limited’ (stock name: ‘CICC’, stock code: 601995 and
3908.HK), ‘Qingdao Thunderobot Technology Co., Ltd.’
(stock name: ‘THUNDEROBOT’, stock code: 872190)
etc.
Other explanation Nil
Haier Smart Home Co., Ltd. Annual Report 2022 137
Section VII Changes in Shares and Information about Shareholders
2 Natural person
□ Applicable √ Not Applicable
3 Explanation on the absence of ultimate controller of the Company
□ Applicable √ Not Applicable
4 Explanation on the change in control over the Company during the reporting period
□ Applicable √ Not Applicable
5 Framework of ownership and controlling relationship between the Company and the
ultimate controllers
√ Applicable □ Not Applicable
Haier Group Corporation
100% parties 13% 100%
in concert 51.20%
Qingdao Haichuangzhi
Qingdao Haier Venture &
Management Consulting Haier COSMO HCH (HK)
Investment Information
Enterprise Co., Ltd.
67% INVESTMENT
Haier
Co., Ltd. International
(Limited Partnership) ( MANAGEMENT
( Co. Limited
( ) CO., LIMITED
)
)
1.82% 1.28% 11.35% 13.32% 5.70% 0.62%
(A Shares) (A Shares) (A Shares) (A Shares) (H Shares) (D Shares)
Haier Smart Home Co., Ltd.
6 The ultimate controller controls the Company by way of Trust or other assets
management
□ Applicable √ Not Applicable
(III) Introduction of controlling shareholders and ultimate controllers
√ Applicable □ Not Applicable
Haier Group Company is registered as a joint-stock enterprise. According to the statement
issued by the State-owned Assets Management Office of Qingdao on 1 June 2002, it is believed
that the enterprise nature of Haier Group Company is a collective owned enterprise.
V. THE PROPORTION OF THE ACCUMULATED NUMBER OF SHARES
PLEDGED BY THE CONTROLLING SHAREHOLDERS OR THE LARGEST
SHAREHOLDER OF THE COMPANY, TOGETHER WITH THE PARTIES
ACTING IN CONCERT WITH THEM, TO THE NUMBER OF SHARES OF
THE COMPANY HELD BY THEM AMOUNTS TO MORE THAN 80%
□ Applicable √ Not Applicable
138 Haier Smart Home Co., Ltd. Annual Report 2022
Section VII Changes in Shares and Information about Shareholders
VI. OTHER CORPORATE SHAREHOLDERS WITH A SHAREHOLDING
PERCENTAGE OVER 10%
□ Applicable √ Not Applicable
VII. EXPLANATION OF RESTRICTIONS ON SHAREHOLDING REDUCTION
□ Applicable √ Not Applicable
VIII. SPECIFIC IMPLEMENTATION OF SHARE REPURCHASE DURING THE
REPORTING PERIOD
√ Applicable □ Not Applicable
Unit and Currency: RMB
Name of share repurchase plan Haier Smart Home Co., Ltd.’s public share
proposal in relation to the partial repurchase
of A Shares
Date of disclosure of the share repurchase plan 31 March 2022
Number of shares proposed to repurchased and 42,857,143 shares to 85,714,286 shares, 0.45
its percentage to the total share capital (%) to 0.91
Proposed amount of repurchase RMB1.5 –3 billion
Proposed period of repurchase 31 March 2022–30 March 2023
Purpose of repurchase Used for employee share ownership plans
Amount repurchased (share) 59,055,239
Repurchased amount as a percentage to the Not applicable
underlying shares covered by the equity
incentive scheme (%) (if any)
Progress of the Company’s reduction of its Not applicable
holdings of repurchased shares by way of
centralised bidding
Note: During the reporting period, the Company also implemented the H-share repurchase scheme. For details, please refer to”2.
Statement on the changes in shares“under”Section VII Changes in Shares and Information about Shareholders “of this report
and the Announcement on the Changes in Shares of Overseas Listed Foreign Shares (H Shares) of Haier Smart Home Co.,
Ltd. 《海 尔 智 家 股 份 有 限 公 司 關 於 境 外 上 市 外 資 股 (H股) 股 份 变 动 情 況 的 公 告》 (No.: Lin 2022–082) disclosed by the
Company on 31 December 2022.
Haier Smart Home Co., Ltd. Annual Report 2022 139
Section VIII Relevant Information of
Preferred Shares
□ Applicable √ Not Applicable
140 Haier Smart Home Co., Ltd. Annual Report 2022
Section IX Relevant Information of Bonds
I. ENTERPRISE BOND, CORPORATE BOND, AND NON-FINANCIAL
CORPORATE DEBT FINANCING INSTRUMENTS
□ Applicable √ Not Applicable
II. CONVERTIBLE CORPORATE BOND
√ Applicable □ Not Applicable
(I) Convertible bond issue
√ Applicable □ Not Applicable
On 27 October 2020, the CSRC issued “reply to the approval for the issue of overseas listed
foreign shares and convertible corporate bonds by Haier Smart Home Co., Ltd.” 《關於核準海爾
智 家 股 份 有 限 公 司 發 行 境 外 上 市 外 資 股 及 可 轉 換 公 司 債 券 的 批 复》 (Zheng Jian Xu Ke [2020]
No. 2768) (hereafter, the “CSRC Reply”) to approve: (1) Haier Smart Home to issue not more
than 2,856,526,138 overseas listed foreign Shares (including Shares to be issued pursuant to the
exercise of conversion rights by the holders of convertible corporate bonds with an amount of not
more than HK$8 billion or equivalent in any foreign currency) with a par value of RMB1, all
registered as ordinary shares. Upon the completion of the issue, Haier Smart Home may be
listed on the main board of the Hong Kong Stock Exchange; (2) With the guarantee of Haier
Smart Home, its wholly-owned foreign subsidiary issued overseas corporate bonds with an
amount of not more than HK$8 billion or equivalent in any foreign currency, convertible into
overseas listed foreign shares of the issuer. Pursuant to this and approval from relevant parties,
2,448,279,814 H Shares and convertible bonds were issued by the Company and Harvest
International Company, a wholly-owned subsidiary of the Company in the Hong Kong Stock
Exchange on 23 December 2020, respectively (exchangeable bonds of HK$8 billion issued in
November 2017 were converted into convertible bonds, resulting in valid convertible bonds of
HK$7.993 billion, which were convertible into H Shares of the Company). Please refer to the
prospectus and other relevant documents disclosed by the Company in the Hong Kong market
during the reporting period and the Report on Implementation of Significant Asset Acquisition and
Connected Transactions 《重大資產購買暨關聯交易實施情況報告書》 disclosed by the Company
on 26 December 2020 for details.
For the above-mentioned H-share related convertible bonds, 105.11% of the remaining par value
of the bonds were repaid in a one-off repayment of principal and interest upon maturity, and
H-share convertible bonds can be converted into H-shares during the listing and trading period.
By the maturity of H-share convertible bonds in November 2022, a cumulative amount of HKD
7,988,000,000 H-share convertible bonds were converted into H-share of the Company, and
cumulative number of H-shares formed as a result of the conversion was 424,661,452 shares; at
maturity of the bonds in November, the Company has repaid the principal and interest of the
unconcerted H-share convertible bonds amounted to HKD 5,000,000, and the H-share
convertible bonds have been fully repaid and delisted.
(II) Convertible bond holders and guarantors for the reporting period
□ Applicable √ Not Applicable
Haier Smart Home Co., Ltd. Annual Report 2022 141
Section IX Relevant Information of Bonds
As of the end of the reporting period, the H-share convertible bonds have been fully repaid.
(III) Conversion of convertible bonds for the reporting period
√ Applicable □ Not Applicable
Unit and Currency: HKD
Number of convertible Before the After the
corporate bond conversion Increase/decrease for the conversion conversion
Conversion Redemption Resale
H Share Convertible
Bonds 399,000,000 394,000,000 5,000,000 0
Cumulative conversion of convertible bond for the reporting period
√ Applicable □ Not Applicable
Name of convertible corporate bond H Share
Convertible Bonds H Share Convertible Bonds
Amount of conversion for the Reporting Period ($) 394,000,000
Number of conversion for the Reporting Period (Share) 21,450,563
Cumulative number of conversion (Share) 424,661,452
Percentage of cumulative number of conversion to total
issued Shares of the Company prior to the conversion (%) 4.50
Outstanding amount ($) 0
Percentage of outstanding amount to total amount of
convertible bonds issued (%) 0
(IV) Historical adjustment of conversion price
√ Applicable □ Not Applicable
Unit and Currency: HKD
Name of convertible corporate bond H Share Convertible Bonds
Date of Explanation on
adjustment to adjustment to
conversion conversion price Date of Media for conversion
price (adjusted) disclosure disclosure price
23 August 2022 18.20 2 September Hong Kong Stock The
2022 Exchange, etc. implementation
of the
Company’s 2021
equity
distribution plan
Latest conversion price as of the end of 18.20
the reporting period
142 Haier Smart Home Co., Ltd. Annual Report 2022
Section IX Relevant Information of Bonds
(V) Liabilities, change in credit and cash arrangements of repayment in the coming
year of the Company
√ Applicable □ Not Applicable
As at the end of the reporting period, liabilities of the Company amounted to RMB141,128.7121
million, in which current liabilities amounted to RMB118,632.4233 million and non-current
liabilities amounted to RMB22,496.2888 million.
The Company remains stable in every operating condition with reasonable asset structure and
good credibility and is capable of providing stable and sufficient working capital for the interests
of convertible corporate bonds and repayment of the bonds in the coming year.
(VI) Other information on convertible bonds
√ Applicable □ Not Applicable
On 23 November 2017, the first 2017 Extraordinary General Meeting of the Company adopted
the Resolution of Qingdao Haier Co., Ltd. on the Scheme for Public Offering of Convertible
Corporate Bonds (the “A-share Convertible Bonds”) upon consideration. Pursuant to the
resolution at this general meeting and the approval documents of the China Securities Regulatory
Commission and others, the Company completed the issue of convertible corporate bonds in
December 2018, with a total issue amount of RMB3,007.49 million. The bonds were listed on 18
January 2019, which is referred to as “Haier Convertible Bonds” and its bond code is 110049.
For details, please refer to the Prospectus for the Public Offering of A-share Convertible
Corporate Bonds by Qingdao Haier Co., Ltd. as disclosed on 14 December 2018, and the
Announcement on the Listing of Convertible Corporate Bonds by Qingdao Haier Co., Ltd. as
disclosed on 16 January 2019 and other relevant documents. As the convertible bonds in 2019
met the redemption conditions and the Board of Directors of the Company decided to exercise
the redemption right after consideration and approval, the Company redeemed the balance of the
convertible bonds in full up to the registered amount on redemption registration date. After the
redemption, the convertible bonds of the Company were delisted on 17 December 2019. At
present, the A-share convertible bonds have ceased to be in existence, but the funds raised from
the issuance of the bonds have not been fully utilized. As of 31 December 2022, RMB2,823.91
million of the funds raised from A-share convertible bonds have been utilized, with a balance of
RMB235.9447 million (the account balance includes the income generated from the purchase of
wealth management products, interest on demand deposits, foreign exchange gains and losses
and the not-yet-invested capital raised). For details of the use of funds, please refer to the
Special Audit Report of Haier Smart Home Co., Ltd. on the Deposit and Actual Utilization of
Funds Raised in 2022, which was disclosed on the same date as this report.
Haier Smart Home Co., Ltd. Annual Report 2022 143
Section X Financial Report
I. AUDIT REPORT
√ Applicable □ Not Applicable
Audit Report
He Xin Shen Zi. (2023) No.000369
To all shareholders of Haier Smart Home Co., Ltd.:
I. AUDIT OPINION
We have audited the financial statements of Haier Smart Home Co., Ltd. (hereinafter referred to as the
‘Haier Smart Home Co.’), which comprise the Consolidated and the Company’s Balance Sheet as at
31 December 2022, the Consolidated and the Company’s Income Statement, the Consolidated and the
Company’s Cash Flow Statement, the Consolidated and the Company’s Statement of Changes in
Shareholders’ Equity for the year 2022, and notes related to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the
Consolidated and the Company’s financial position of the Haier Smart Home Co as at 31 December
2022, and the Consolidated and the Company’s financial performance and cash flow for the year 2022
in accordance with the requirements of Accounting Standards for Business Enterprises.
II. BASIS OF OUR AUDIT OPINION
We conducted our audit in accordance with China Standards on Auditing. Our responsibilities under
those standards are further described in Auditor’s responsibilities for the Audit of Financial Statements
section of the report. We are independent of Haier Smart Home Co in accordance with the CICPA’s
Code of Ethics for Professional Accountants (the Code), and we have fulfilled our other ethical
responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
144 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
III. KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements for the current period. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. We identify the following matters as the key audit
matters that need to be communicated in the audit report:
Key Audit Matters Audit Response
(I) Provision for impairment of goodwill and intangible assets with indefinite useful lives
Relevant disclosures are included in Note V. 28 We mainly implemented the following audit
Other significant accounting policies and procedures on the provisions for the impairment of
accounting estimates and Note V.19 Impairment goodwill and intangible assets with indefinite useful
of long-term assets to the financial statements. life:
As of 31 December 2022, the book value of (1) Compared the actual operating results of the
goodwill was RMB23.644 billion, and the book related assets group with previous year’s
value of intangible assets with indefinite useful forecasted figures, to assess the reliability of
lives was RMB2.583 billion, without any provision the management forecast on cash flow;
for asset impairment. Whether the provision for
impairment of long-term assets was sufficient had (2) Compared the input of cash flow forecast with
great influence to the financial statements. historical data, approved budget and business
plan;
Significant management judgments are involved in
calculation of asset group’s recoverable amount, (3) Tested the calculation accuracy of the
such as revenue growth rate, gross margin, discounted cash flow model;
discount rate, etc.
(4) Assessed the appropriateness of parameters
Provision for impairment of goodwill and in the cash flow conversion model, such as
intangible assets with indefinite useful lives is the discount rate and the perpetual growth
considered as the key audit matter due to the rate. The assessment is based our
significant amount and management judgement understanding of the Company’s businesses
involved in calculation. and the industry.
Haier Smart Home Co., Ltd. Annual Report 2022 145
Section X Financial Report
Key Audit Matters Audit Response
(II) Provision for impairment of inventory
Relevant disclosures are included in Note VII.8 Provision for inventories is considered as the key
Inventory to the financial statements. audit matter due to the significant amount and
management judgement involved in calculation.
The Company’s inventories are measured at the We mainly implemented the following audit
lower of cost and net realizable value. As of 31 procedures on the provision for impairment of
December 2022, the inventory balance was inventories:
RMB43.154 billion, and the provision for
impairment of inventory was RMB1.611 billion and (1) Obtained the calculation table for provision for
the book value was RMB41.543 billion. Whether impairment of inventory of the Company, and
the provision for the impairment of inventories reviewed the conditions and aging of the
was sufficient and accurate had great influence to products models stated in the table to see
the financial statements. whether they are consistent with the
information obtained through physical
The Company determines the net realizable value inventory on a sample basis;
of inventory based on the estimated selling price
minus the estimated selling expenses and related (2) Compared the major parameters estimated by
taxes. management with historical data, and
assessed the appropriateness;
Management estimates the selling price based on
the status of inventory. The estimation process (3) Assessed the selling price estimated by the
involves significant management judgments such management, and checked the inventory
as inventory status, repair rate, discount rate, etc. against the actual selling price after the
balance sheet date on a sample basis;
(4) Assessed selling expenses and related tax
estimated by management and compared with
actual amounts incurred.
146 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Key Audit Matters Audit Response
(III) Product warranty
Relevant disclosures are included in Note VII. 33 We mainly implemented the following audit
Non-current liabilities due within one year and procedures on the estimated liabilities:
Note VII. 40 Estimated liabilities to the financial
statements. (1) Obtained the calculation table on provisions of
the management;
Estimated liabilities of the Company are mainly
accrued due to current obligations arising from (2) Compared the main parameters estimated by
product warranty. As of 31 December 2022, the management with historical data;
balance of the estimated liabilities and non-current
liabilities due within one year related to product (3) Tested the accuracy of the calculation on
warranty was RMB3.502 billion, and whether the estimated liabilities;
provision for warranty was sufficient and accurate
had great influence to the financial statements. (4) Compared and analyzed the calculation results of
the estimated liabilities and the Company’s
Estimated liabilities for product warranty of the actual operation;
Company were measured in accordance with the
best estimate of the cost to fulfill the relevant
current obligations.
Calculation of the product warranty involves
management’s significant judgments based on
historical experience, such as: replacement rate,
repair rate, and loss due to disassemble product.
Estimated liabilities are considered as the key
audit matters due to the significant amount and
management judgement involved in calculation.
IV. OTHER INFORMATION
The management of Haier Smart Home Co (hereinafter referred to as the “Management”) is responsible
for other information. Other information includes the information covered in the 2022 annual report of
Haier Smart Home Co, but does not include the financial statements and our audit reports.
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Haier Smart Home Co., Ltd. Annual Report 2022 147
Section X Financial Report
V. RESPONSIBILITIES OF THE MANAGEMENT AND THOSE CHARGED
WITH GOVERNANCE FOR THE FINANCIAL STATEMENTS
The Management is responsible for the preparation of the financial statements that give a true and fair
view in accordance with the requirements as set out in the Accounting Standards for Business
Enterprises, and for such internal control as necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Management are responsible for assessing the ability of Haier
Smart Home Co to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the management either intends to
liquidate Haier Smart Home Co or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the financial reporting process of Haier
Smart Home Co.
VI. AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF FINANCIAL
STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an audit report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with auditing standards will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
As part of an audit in accordance with auditing standards, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also perform the following tasks:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsible to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
(II) Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances.
(III) Evaluate the appropriateness of accounting policies used by the Management and the
reasonableness of accounting estimates and related disclosures made by the Management.
148 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
(IV) Conclude on the appropriateness of the Management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cause significant doubt on the ability of Haier Smart
Home Co to continue as a going concern. If we conclude that a material uncertainty exists, we
are required by the auditing standards to draw attention in our audit report to the related
disclosures in the financial statements or; if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our audit
report. However, future events or conditions may cause Haier Smart Home Co to cease to
continue as a going concern.
(V) Evaluate the overall presentation, structure and content of the financial statements, and whether
the financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities
or business activities within Haier Smart Home Co to express an opinion on the financial
statements. We are responsible for the direction, supervision and performance of the group
audit, and remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
are of most significance in the audit of the financial statements of the current period and therefore
constitute the key audit matters. We describe these matters in our audit report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our audit report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
Hexin Certified Public Accountants LLP
Certified Public Accountant: Zhaobo (Engagement Partner)
Certified Public Accountant: Li Xiang Zhi
Jinan, China
30 March 2023
Haier Smart Home Co., Ltd. Annual Report 2022 149
Section X Financial Report
II. FINANCIAL STATEMENTS
Consolidated Balance Sheet
31 December 2022
Prepared by: Haier Smart Home Co., Ltd.
Unit and Currency: RMB
31 December 31 December
Items Notes 2022 2021
Current assets:
Monetary funds VII.1 54,138,815,682.51 46,097,333,903.45
Provision of settlement fund
Funds lent
Financial assets held for trading VII.2 519,812,880.91 2,786,075,529.09
Derivative financial assets VII.3 183,185,160.51 79,819,974.01
Bills receivable VII.4 9,580,191,838.15 13,354,791,068.29
Accounts receivable VII.5 15,913,691,537.11 14,625,260,856.04
Financing receivables
Prepayments VII.6 1,120,756,199.86 863,748,085.06
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserves receivable
Other receivables VII.7 2,380,929,623.19 1,957,886,257.19
Including: Interest receivables 513,320,376.79 295,017,551.76
Dividends receivables
Financial assets purchased under resale
agreements
Inventories VII.8 41,542,713,111.82 39,913,949,898.86
Contract assets VII.9 309,930,359.25 304,434,294.70
Assets held for sale
Non-current assets due in one year
Other current assets VII.10 4,692,515,577.23 3,928,788,608.23
Total current assets 130,382,541,970.54 123,912,088,474.92
Non-current assets:
Loans and advances granted
Debt investments VII.11 1,034,222,222.22
Other debt investments
Long-term receivables 305,070,001.45 308,998,755.30
Long-term equity investments VII.12 24,527,800,290.84 23,200,884,340.57
Investments in other equity instruments VII.13 5,851,882,930.20 4,851,884,944.63
Other non-current financial assets
Investment properties VII.14 25,678,492.57 24,964,888.48
Fixed assets VII.15 27,158,348,424.28 22,308,014,224.98
Construction in progress VII.16 4,094,684,500.49 4,183,263,398.79
150 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
31 December 31 December
Items Notes 2022 2021
Biological assets for production
Oil and gas assets
Right-of-use assets VII.17 3,795,225,353.89 2,734,678,906.53
Intangible assets VII.18 10,505,881,377.21 9,550,384,743.90
Development cost VII.19 154,480,515.67 227,892,229.13
Goodwill VII.20 23,643,595,643.87 21,827,103,060.76
Long-term prepaid expenses VII.21 759,883,174.20 589,143,077.89
Deferred income tax assets VII.22 1,722,223,037.71 1,857,448,518.29
Other non-current assets VII.23 1,880,736,891.63 2,164,384,013.14
Total non-current assets 105,459,712,856.23 93,829,045,102.39
Total assets 235,842,254,826.77 217,741,133,577.31
Current liabilities:
Short-term borrowings VII.24 9,643,374,732.46 11,226,212,134.39
Borrowings from central bank
Funds borrowed
Financial liabilities held for trading VII.25 6,294,014.40
Derivative financial liabilities VII.26 104,594,040.66 80,212,433.24
Bills payable VII.27 25,090,945,421.28 25,023,238,406.72
Accounts payables VII.28 41,883,694,299.24 42,363,218,840.33
Receipts in advance
Contract liabilities VII.29 9,329,554,748.34 10,027,091,593.60
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.30 4,050,464,754.37 4,119,425,287.60
Taxes payable VII.31 2,872,846,827.17 2,607,822,656.37
Other payables VII.32 17,511,771,662.70 17,570,339,925.76
Including: Interest payables
Dividends payables 1,246,573.35 10,639,313.22
Fees and commissions payable
Reinsurance Accounts payables
Liabilities held for sale
Non-current liabilities due within one year VII.33 6,294,750,667.08 9,624,339,170.46
Other current liabilities VII.34 1,850,426,115.79 2,238,767,551.40
Total current liabilities 118,632,423,269.09 124,886,962,014.27
Non-current liabilities:
Deposits for insurance contracts
Long-term borrowings VII.35 13,590,866,873.43 3,038,573,824.53
Bonds payable VII.36 334,730,048.82
Including: Preference shares
Haier Smart Home Co., Ltd. Annual Report 2022 151
Section X Financial Report
31 December 31 December
Items Notes 2022 2021
Perpetual bonds
Lease liabilities VII.37 2,824,477,670.61 1,960,894,981.47
Long-term payables VII.38 44,240,087.94 99,602,707.76
Long-term payables for staff’s
remuneration VII.39 1,010,547,202.34 1,173,151,761.64
Estimated liabilities VII.40 1,611,029,220.17 1,948,565,477.11
Deferred income VII.41 948,935,134.05 852,794,567.20
Deferred income tax liabilities VII.22 2,358,860,559.19 2,121,803,173.83
Other non-current liabilities 107,332,101.07 49,461,683.90
Total non-current liabilities 22,496,288,848.80 11,579,578,226.26
Total liabilities 141,128,712,117.89 136,466,540,240.53
Owners’ equity (or shareholders’
equity):
Paid-in capital (or share capital) VII.42 9,446,598,493.00 9,398,704,530.00
Other equity instruments VII.43 118,017,507.59
Including: Preference shares
Perpetual bonds
Capital reserve VII.44 23,852,037,324.76 22,665,374,739.46
Less: treasury stock 3,857,807,196.38 2,424,038,819.70
Other comprehensive income VII.45 1,990,683,498.45 –1,176,851,699.92
Special reserve
Surplus reserve VII.46 4,014,190,623.24 3,438,615,909.84
General risk provisions
Undistributed profits VII.47 57,976,944,921.36 47,965,270,360.79
Total equity attributable to owners (or
shareholders) of the Parent Company 93,422,647,664.43 79,985,092,528.06
Minority shareholders’ interests 1,290,895,044.45 1,289,500,808.72
Total owners’ equity (or shareholders’
equity) 94,713,542,708.88 81,274,593,336.78
Total liabilities and owners’ equity (or
shareholders’ equity) 235,842,254,826.77 217,741,133,577.31
Person in charge of the Company: Li Huagang
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
152 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Balance Sheet of the Parent Company
31 December 2022
Prepared by: Haier Smart Home Co., Ltd.
Unit and Currency: RMB
31 December 31 December
Items Notes 2022 2021
Current Assets:
Monetary funds 5,747,356,591.19 4,043,535,735.48
Financial assets held for trading
Derivative financial assets
Bills receivable
Accounts receivable XVIII.1 913,643,071.06 546,532,442.90
Financing receivables
Prepayments 3,116,793.21 275,052,864.92
Other receivables XVIII.2 14,387,031,657.57 16,245,280,168.41
Including: Interest receivables 29,783,516.95 51,632,471.99
Dividends receivables 1,015,840,000.00 3,615,840,000.00
Inventories 9,245,507.97 1,139,135.32
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 1,642,423,149.85 337,476,209.01
Total current assets 22,702,816,770.85 21,449,016,556.04
Non-current assets:
Debt investments 1,034,222,222.22
Other debt investments
Long-term receivables
Long-term equity investments XVIII.3 52,744,139,527.87 52,513,760,277.77
Investments in other equity instruments 1,618,513,056.48 1,615,450,032.92
Other non-current financial assets
Investment properties
Fixed assets 167,043,774.16 179,789,817.34
Construction in progress 2,667,680.62 17,569,516.17
Biological assets for production
Oil and gas assets
Right-of-use assets 357,996.03 1,217,186.49
Intangible assets 48,239,513.12 55,171,485.39
Development cost
Goodwill
Long-term prepaid expenses 3,910,065.39 3,781,398.54
Deferred income tax assets 159,338,211.77
Other non-current assets 1,302,773,743.02 803,323,404.28
Haier Smart Home Co., Ltd. Annual Report 2022 153
Section X Financial Report
31 December 31 December
Items Notes 2022 2021
Total non-current assets 56,921,867,578.91 55,349,401,330.67
Total assets 79,624,684,349.76 76,798,417,886.71
Current liabilities:
Short-term borrowings
Financial liabilities held for trading
Derivative financial liabilities
Bills payable
Accounts payables 521,733,555.60 183,690,889.86
Receipts in advance
Contract liabilities 13,084,442.85 12,605,139.93
Payables for staff’s remuneration 9,696,654.18 12,323,670.21
Taxes payable 7,479,878.13 1,747,023.87
Other payables 32,659,845,830.05 34,484,355,762.60
Including: Interest payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within one year 877,995.65
Other current liabilities 5,876,886.89 5,420,156.55
Total current liabilities 33,217,717,247.70 34,701,020,638.67
Non-current liabilities:
Long-term borrowings 2,195,000,000.00
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities
Long-term payable
Long-term payables for staff’s
remuneration
Estimated liabilities
Deferred income 12,355,000.00 19,270,000.00
Deferred income tax liabilities 420,805,600.57 448,965,654.25
Other non-current liabilities
Total non-current liabilities 2,628,160,600.57 468,235,654.25
Total liabilities 35,845,877,848.27 35,169,256,292.92
Owners’ equity (or Shareholders’
equity):
Paid-in capital (or share capital) 9,446,598,493.00 9,398,704,530.00
Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserve 27,300,899,019.76 25,802,279,483.13
Less: treasury stock 2,308,138,558.42 1,495,170,675.08
Other comprehensive income 602,091,349.74 621,302,944.83
154 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
31 December 31 December
Items Notes 2022 2021
Special reserve
Surplus reserve 3,409,044,397.79 2,833,469,684.39
Undistributed profits 5,328,311,799.62 4,468,575,626.52
Total owners’ equity (or shareholders’
equity) 43,778,806,501.49 41,629,161,593.79
Total liabilities and owners’ equity (or
shareholders’ equity) 79,624,684,349.76 76,798,417,886.71
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. Annual Report 2022 155
Section X Financial Report
Consolidated Profit Statement
January-December 2022
Unit and Currency: RMB
Items Notes 2022 2021
I. Total operating revenue 243,513,563,670.73 227,105,817,641.69
Including: Operating revenue VII.48 243,513,563,670.73 227,105,817,641.69
Interest income
Insurance premiums earned
Fee and commission income
II. Total cost of operations 226,725,145,620.43 212,862,720,627.22
Including: Operating cost VII.48 167,223,167,396.20 155,949,547,009.40
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.49 813,289,227.83 808,612,319.06
Selling expenses VII.50 38,597,810,391.10 36,584,438,840.05
Administrative expenses VII.51 10,837,316,878.50 10,471,531,966.20
R&D expenses VII.52 9,499,191,097.85 8,363,868,872.76
Financial expenses VII.53 –245,629,371.05 684,721,619.75
Including: Interest expenses 984,142,709.25 712,462,772.83
Interest income 855,178,860.53 566,432,900.38
Add: Other income VII.54 1,069,763,608.56 958,514,200.94
Investment income (losses are
represented by ‘-’) VII.55 1,832,656,952.60 2,404,876,121.61
Including: investment income of
associates and joint ventures 1,582,178,829.86 1,887,911,034.17
Income generated from the derecognition
of financial assets measured at
amortized cost
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.56 –122,442,933.65 119,277,623.85
Loss on credit impairment (losses are
represented by ‘-’) VII.57 –431,377,480.82 –520,299,915.42
156 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Items Notes 2022 2021
Loss on assets impairment (losses are
represented by ‘-’) VII.58 –1,499,859,761.26 –1,418,753,618.82
Gain from disposal of assets (losses are
represented by ‘-’) VII.59 206,742,815.79 110,983,720.04
III. Operating profit (losses are represented
by ‘-’) 17,843,901,251.52 15,897,695,146.67
Add: non-operating income VII.60 136,527,269.96 199,068,358.48
Less: non-operating expenses VII.61 190,706,969.79 159,250,278.25
IV. Total profit (total losses are represented
by ‘-’) 17,789,721,551.69 15,937,513,226.90
Less: income tax expense VII.62 3,057,539,933.16 2,705,253,855.89
V. Net profit (net losses are represented by
‘-’) 14,732,181,618.53 13,232,259,371.01
(1) Classification by continuous operation
1. Net profit from continuous operation
(net losses are represented by ‘-’) 14,732,181,618.53 13,232,259,371.01
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 ‘-’) 14,710,923,491.99 13,078,840,517.10
2. Profit or loss attributable to minority
shareholders (net losses are
represented by ‘-’) 21,258,126.54 153,418,853.91
VI. Other comprehensive income, net of tax VII.63 3,164,841,092.31 –148,110,004.96
(I) Other comprehensive income
attributable to owners of the Parent
Company, net of tax 3,167,199,045.79 –132,249,780.03
1. Other comprehensive income that
cannot be reclassified into the
profit or loss –103,425,450.86 1,201,363,091.13
(1) Changes arising from re-
measurement of defined benefit
plans 33,063,471.15 36,214,421.81
(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 –136,488,922.01 1,165,148,669.32
Haier Smart Home Co., Ltd. Annual Report 2022 157
Section X Financial Report
Items Notes 2022 2021
(4) Changes in fair value of credit
risks of the enterprise
2. Other comprehensive income to be
reclassified into the profit or loss 3,270,624,496.65 –1,333,612,871.16
(1) Other comprehensive income
that can be transferred into
profit or loss under equity
method 99,921,599.99 –50,414,905.68
(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 2,308,423.98 102,858,281.74
(6) Exchange differences on
translation of financial
statements denominated in
foreign currencies 3,168,394,472.68 –1,386,056,247.22
(7) Others
(II) Other comprehensive income
attributable to minority shareholders,
net of tax –2,357,953.48 –15,860,224.93
VII. Total comprehensive income 17,897,022,710.84 13,084,149,366.05
(I) Total comprehensive income
attributable to the owners of Parent
Company 17,878,122,537.78 12,946,590,737.07
(II) Total comprehensive income
attributable to the minority
shareholders 18,900,173.06 137,558,628.98
VIII. Earnings per share:
(I) Basic earnings per share (RMB/share) XVIII.1 1.58 1.41
(II) Diluted earnings per share (RMB/
share) XVIII.1 1.57 1.40
For business combination under common control occurring in the current period, the net profit of the
acquiree before the combination was RMB12,934,615.51, and the net profit of the acquiree for the
previous period was RMB10,786,626.61.
Person in charge of the Company: Li Huagang
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
158 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Profit Statement of the Parent Company
January-December 2022
Unit and Currency: RMB
Items Notes 2022 2021
I. Operating income XVIII.4 424,661,926.32 353,798,248.52
Less: operating cost XVIII.4 370,625,212.62 315,357,106.14
Taxes and surcharges 3,356,878.04 1,315,011.31
Selling expenses 2,255,208.68 8,325,070.07
Administration expenses 844,381,395.30 126,563,950.19
R&D expenses 19,067,424.89 29,294,763.78
Financial expenses –137,417,983.20 –41,920,112.37
Including: interest expenses 33,870,759.40 7,328,997.57
Interest income 158,040,013.89 56,558,735.54
Add: other income 32,862,065.58 45,491,181.80
Investment income (losses are
represented by ‘-’) XVIII.5 6,431,738,015.98 3,918,401,070.56
Including: investment income of
associates and joint
ventures 71,408,243.76 275,575,730.42
Derecognition income on
financial assets
measured at amortized
cost
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 ‘-’) –3,315,122.80 187,273.03
Loss on assets impairment (losses
are represented by ‘-’)
Gain from disposal of assets (losses
are represented by ‘-’) 102,421,078.92 40,509,776.77
II. Operating profit (losses are represented by
‘-’) 5,886,099,827.67 3,919,451,761.56
Add: non-operating income 209,515.11 855,197.78
Less: non-operating expenses 149,806.55 53,850.65
III. Total profit (total losses are represented
by ‘-’) 5,886,159,536.23 3,920,253,108.69
Less: income tax expenses 130,412,402.20 –12,560,593.69
IV. Net profit (net losses are represented by
‘-’) 5,755,747,134.03 3,932,813,702.38
Haier Smart Home Co., Ltd. Annual Report 2022 159
Section X Financial Report
Items Notes 2022 2021
(I) Net profit from continuous operations
(net losses are represented by ‘-’) 5,755,747,134.03 3,932,813,702.38
(II) Net profit from discontinued operations
(net losses are represented by ‘-’)
V. Other comprehensive income, net of tax –19,211,595.09 631,333,648.98
(I) Other comprehensive income that
cannot be reclassified into the profit or
loss 2,297,267.67 608,336,353.75
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 2,297,267.67 608,336,353.75
4. Changes in fair value of credit risks
of the enterprise
(II) Other comprehensive income to be
reclassified into the profit or loss –21,508,862.76 22,997,295.23
1. Other comprehensive income that
can be transferred into profit or loss
under equity method –21,508,862.76 22,997,295.23
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 5,736,535,538.94 4,564,147,351.36
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
160 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Consolidated Cash Flow Statement
January-December 2022
Unit and Currency: RMB
Items Notes 2022 2021
I. Cash flow from operating activities:
Cash received from the sale of goods and
rendering services 258,086,116,120.44 259,848,073,159.87
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 2,043,785,545.29 1,759,484,379.01
Cash received from other related operating
activities VII.64 1,669,717,133.90 1,883,522,634.01
Sub-total of cash inflows from operating
activities 261,799,618,799.63 263,491,080,172.89
Cash paid on purchase of goods and
services 179,333,522,197.23 180,953,963,164.86
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
Haier Smart Home Co., Ltd. Annual Report 2022 161
Section X Financial Report
Items Notes 2022 2021
Cash paid to and on behalf of employees 27,235,422,735.36 24,400,078,515.22
Cash paid for all types of taxes 10,823,009,974.50 10,090,612,020.78
Cash paid to other operation related
activities VII.65 24,254,158,109.19 24,811,045,781.08
Sub-total of cash outflows from operating
activities 241,646,113,016.28 240,255,699,481.94
Net cash flow from operating activities VII.69 20,153,505,783.35 23,235,380,690.95
II. Cash flow from investing activities:
Cash received from recovery of
investments 12,147,228,999.62 6,687,038,126.49
Cash received from return on investments 686,445,555.44 703,938,754.46
Net cash received from the disposal of fixed
assets, intangible assets and other
long-term assets 228,856,132.92 289,831,105.17
Net cash received from disposal of
subsidiaries and other operating entities 18,224,929.86
Other cash received from investment
activities
Sub-total of cash inflows from investing
activities 13,080,755,617.84 7,680,807,986.12
Cash paid on purchase of fixed assets,
intangible assets and other long-term
assets 8,204,474,537.11 7,372,428,832.38
Cash paid for investments 13,538,137,214.16 8,151,830,046.62
Net increase in secured loans
Net cash paid on acquisition of subsidiaries
and other operating entities 40,026,037.55 —
Other cash paid on investment activities VII.66 218,440,847.94 219,292,645.55
Sub-total of cash outflows from investing
activities 22,001,078,636.76 15,743,551,524.55
Net cash flow from investing activities –8,920,323,018.92 –8,062,743,538.43
III. Cash flow from financing activities:
Cash received from capital contributions 987,339,004.94 41,513,900.00
Including: cash received from capital
contributions by minority shareholders of
subsidiaries
Cash received from borrowings 18,358,512,304.41 12,051,534,836.66
Other cash received from financing
activities VII.67 1,000,000.00 1,091,077.43
Sub-total of cash inflows from financing
activities 19,346,851,309.35 12,094,139,814.09
Cash paid on repayment of loans 14,686,219,899.99 19,550,437,489.34
Cash paid on distribution of dividends,
profits or repayment of interest expenses 5,134,957,030.48 4,036,372,354.42
162 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Items Notes 2022 2021
Including: dividend and profit paid to
minority shareholders by subsidiaries
Other cash paid to financing activities VII.68 3,347,802,454.24 4,167,468,873.11
Sub-total of cash outflows from financing
activities 23,168,979,384.71 27,754,278,716.87
Net cash flow from financing activities –3,822,128,075.36 –15,660,138,902.78
IV. Effect of fluctuations in exchange
rates on cash and cash equivalents 760,094,284.39 –105,423,623.70
V. Net increase in cash and cash
equivalents 8,171,148,973.46 –592,925,373.96
Add: balance of cash and cash equivalents
at the beginning of the period VII.70 45,197,664,411.15 45,790,589,785.11
VI. Balance of cash and cash equivalents
at the end of the period VII.70 53,368,813,384.61 45,197,664,411.15
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. Annual Report 2022 163
Section X Financial Report
Cash Flow Statement of the Parent Company
January-December 2022
Unit and Currency: RMB
Items Notes 2022 2021
I. Cash flow from operating activities:
Cash received from the sale of goods
and rendering of services 72,931,789.11 5,372,947,747.51
Refunds of taxes 19,008,796.07 21,335,747.71
Other cash received from operating
activities 373,367,957.93 68,763,057.13
Sub-total of cash inflows from operating
activities 465,308,543.11 5,463,046,552.35
Cash paid on purchase of goods and
services 147,652.63 129,965,401.55
Cash paid to and on behalf of
employees 30,719,560.38 111,120,434.68
Cash paid for all types of taxes 9,583,573.15 45,674,576.87
Other cash paid to operation activities 35,896,845.76 63,480,813.55
Sub-total of cash outflows from operating
activities 76,347,631.92 350,241,226.65
Net cash flow from operating activities 388,960,911.19 5,112,805,325.70
II. Cash flow from investing activities:
Cash received from recovery of
investments 4,072,370,000.00 660,600,000.00
Cash received from return on
investments 9,114,011,850.11 251,846,511.15
Net cash received from the disposal of
fixed assets, intangible assets and
other long-term assets 35,206,354.85 40,244,472.35
Net cash received from disposal of
subsidiaries and other operating
entities
Other cash received from investment
activities 792,521,903.31
Sub-total of cash inflows from investing
activities 14,014,110,108.27 952,690,983.50
Cash paid on purchase of fixed assets,
intangible assets and other long-term
assets 29,560,476.49 39,508,054.66
Cash paid for investments 6,790,729,807.20 710,121,200.00
Net cash paid on acquisition of
subsidiaries and other operating
entities
164 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Items Notes 2022 2021
Other cash paid on investment activities 2,862,532,098.24 155,218,996.43
Sub-total of cash outflows from investing
activities 9,682,822,381.93 904,848,251.09
Net cash flow from investing activities 4,331,287,726.34 47,842,732.41
III. Cash flow from financing activities:
Cash received from capital injections 940,041,004.94
Cash received from borrowings 2,200,000,000.00
Other cash received from financing
activities 2,877,023,451.15
Sub-total of cash inflows from financing
activities 3,140,041,004.94 2,877,023,451.15
Cash paid on repayment of borrowings 5,000,000.00 5,520,000,000.00
Cash paid on distribution of dividends,
profits or repayment of interest
expenses 4,344,971,295.80 3,463,452,916.42
Other cash paid on financing activities 1,826,254,269.50 3,296,944,621.19
Sub-total of cash outflows from financing
activities 6,176,225,565.30 12,280,397,537.61
Net cash flow from financing activities –3,036,184,560.36 –9,403,374,086.46
IV. Effect of fluctuations in exchange
rates on cash and cash equivalents 19,756,778.54 –288,145.81
V. Net increase in cash and cash
equivalents 1,703,820,855.71 –4,243,014,174.16
Add: balance of cash and cash
equivalents at the beginning of the
period 4,043,535,735.48 8,286,549,909.64
VI. Balance of cash and cash equivalents
at the end of the period 5,747,356,591.19 4,043,535,735.48
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. Annual Report 2022 165
166
Consolidated Statement of Changes in Owner’s Equity
January-December 2022
Unit and Currency: RMB
2022
Equity attributable to owners of the Parent Company
Other equity instruments
Other Minority
Paid-in capital Preference Less: treasury comprehensive General risk Undistributed shareholders’ Total owners’
Items (or share capital) shares Perpetual bonds Others Capital reserve stock income Special reserve Surplus reserve provision profits Others Sub-total interests equity
I. Closing balance for the previous year 9,398,704,530.00 118,017,507.59 22,549,345,568.94 2,424,038,819.70 –1,176,851,699.92 3,438,615,909.84 47,907,134,328.80 79,810,927,325.55 1,272,034,100.17 81,082,961,425.72
Add: changes in accounting policies
Error correction for prior period
Business combination under common
Section X Financial Report
control 116,029,170.52 58,136,031.99 174,165,202.51 17,466,708.55 191,631,911.06
Haier Smart Home Co., Ltd. Annual Report 2022
Others
II. Opening balance for the current year 9,398,704,530.00 118,017,507.59 22,665,374,739.46 2,424,038,819.70 –1,176,851,699.92 3,438,615,909.84 47,965,270,360.79 79,985,092,528.06 1,289,500,808.72 81,274,593,336.78
III. Increase/decrease for the current period
(decrease is represented by ‘-’) 47,893,963.00 –118,017,507.59 1,186,662,585.30 1,433,768,376.68 3,167,535,198.37 575,574,713.40 10,011,674,560.57 13,437,555,136.37 1,394,235.73 13,438,949,372.10
(I) Total comprehensive income 3,167,199,045.79 14,710,923,491.99 17,878,122,537.78 18,900,173.06 17,897,022,710.84
(II) Capital injection and reduction by
owners 47,893,963.00 –118,017,507.59 1,353,547,865.69 1,433,768,376.68 –150,344,055.58 1,810,903.91 –148,533,151.67
1. Ordinary shares invested by owners 41,413,600.00 898,627,404.94 940,041,004.94 1,810,903.91 941,851,908.85
2. Capital contribution by holders of
other equity instruments 21,450,563.00 –118,017,507.59 457,962,768.76 361,395,824.17 361,395,824.17
3. Share-based payment included in
owners’ equity 693,835,462.71 693,835,462.71 693,835,462.71
4. Others –14,970,200.00 –696,877,770.72 1,433,768,376.68 –2,145,616,347.40 –2,145,616,347.40
(III) Profit distribution 575,574,713.40 –4,872,209,504.61 –4,296,634,791.21 –19,316,841.24 –4,315,951,632.45
1. Withdrawal of surplus reserves 575,574,713.40 –575,574,713.40
2. Withdrawal of general risk provision
3. Distribution to owners (or
shareholders) –4,296,634,791.21 –4,296,634,791.21 –19,316,841.24 –4,315,951,632.45
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 –166,885,280.39 336,152.58 172,960,573.19 6,411,445.38 6,411,445.38
IV. Closing balance for the period 9,446,598,493.00 23,852,037,324.76 3,857,807,196.38 1,990,683,498.45 4,014,190,623.24 57,976,944,921.36 93,422,647,664.43 1,290,895,044.45 94,713,542,708.88
2021
Equity attributable to owners of the Parent Company
Other equity instruments
Other Minority
Paid-in capital Preference Less: treasury comprehensive General risk Undistributed shareholders’ Total owners’
Items (or share capital) shares Perpetual bonds Others Capital reserve stock income Special reserve Surplus reserve provision profits Others Sub-total interests equity
I. Closing balance for the previous year 9,027,846,441.00 2,364,195,333.79 15,007,475,607.40 28,896,550.65 –1,046,216,729.06 3,045,334,539.60 38,467,787,059.79 66,837,525,701.87 1,294,584,557.09 68,132,110,258.96
Add: changes in accounting policies
Error correction for prior period
Business combination under common
control 116,029,170.52 65,044,545.95 181,073,716.47 14,076,761.30 195,150,477.77
Others
II. Opening balance for the current year 9,027,846,441.00 2,364,195,333.79 15,123,504,777.92 28,896,550.65 –1,046,216,729.06 3,045,334,539.60 38,532,831,605.74 67,018,599,418.34 1,308,661,318.39 68,327,260,736.73
III. Increase/decrease for the current period
(decrease is represented by ‘-’) 370,858,089.00 –2,246,177,826.20 7,541,869,961.54 2,395,142,269.05 –130,634,970.86 393,281,370.24 9,432,438,755.05 12,966,493,109.72 –19,160,509.67 12,947,332,600.05
(I) Total comprehensive income –132,249,780.03 13,078,840,517.10 12,946,590,737.07 137,558,628.98 13,084,149,366.05
(II) Capital injection and reduction by
owners 370,858,089.00 –2,246,177,826.20 7,542,034,703.88 2,395,142,269.05 3,271,572,697.63 –93,710,059.35 3,177,862,638.28
1. Ordinary shares invested by owners –136,417,222.36 –136,417,222.36 –93,710,059.35 –230,127,281.71
2. Capital contribution by holders of
other equity instruments 403,210,889.00 -2,246,177,826.20 8,211,218,327.05 6,368,251,389.85 6,368,251,389.85
3. Share-based payment included in
owners’ equity 261,635,166.10 261,635,166.10 261,635,166.10
4. Others –32,352,800.00 –794,401,566.91 2,395,142,269.05 –3,221,896,635.96 –3,221,896,635.96
(III) Profit distribution 393,281,370.24 –3,804,025,640.63 –3,410,744,270.39 –63,252,252.15 –3,473,996,522.54
1. Withdrawal of surplus reserves 393,281,370.24 –393,281,370.24
2. Withdrawal of general risk
provision –2,246,177,826.20 8,211,218,327.05
3. Distribution to owners (or
shareholders) –3,410,744,270.39 –3,410,744,270.39 –63,252,252.15 –3,473,996,522.54
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 –164,742.34 1,614,809.17 157,623,878.58 159,073,945.41 243,172.85 159,317,118.26
IV. Closing balance for the period 9,398,704,530.00 118,017,507.59 22,665,374,739.46 2,424,038,819.70 –1,176,851,699.92 3,438,615,909.84 47,965,270,360.79 79,985,092,528.06 1,289,500,808.72 81,274,593,336.78
Legal representative of the Company: Li Huagang Person in charge of accounting function: Gong Wei Person in charge of accounting department: YingKe
Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
167
Section X Financial Report
Statement of Changes in Owners’ Equity of the Parent Company
January-December 2021
Unit and Currency: RMB
2022
Other equity instruments
Paid-in capital Other
(or share Preference Perpetual Less: treasury comprehensive Undistributed Total owners’
Items capital) shares bonds Others Capital reserve stock income Special reserve Surplus reserve profits equity
I. Closing balance for the previous
year 9,398,704,530.00 25,802,279,483.13 1,495,170,675.08 621,302,944.83 2,833,469,684.39 4,468,575,626.52 41,629,161,593.79
Add: changes in accounting
policies
Error correction for prior
period
Others
II. Opening balance for the
current year 9,398,704,530.00 25,802,279,483.13 1,495,170,675.08 621,302,944.83 2,833,469,684.39 4,468,575,626.52 41,629,161,593.79
III. Increase/decrease for the
current period (decrease is
represented by ‘-’) 47,893,963.00 1,498,619,536.63 812,967,883.34 –19,211,595.09 575,574,713.40 859,736,173.10 2,149,644,907.70
(I) Total comprehensive income –19,211,595.09 5,755,747,134.03 5,736,535,538.94
(II) Capital injection and
reduction by owners 47,893,963.00 1,559,004,664.94 812,967,883.34 793,930,744.60
1. Ordinary shares invested
by owners 41,413,600.00 898,627,404.94 940,041,004.94
2. Capital contribution by
holders of other equity
instruments 21,450,563.00 339,945,261.17 361,395,824.17
3. Share-based payment
included in owners’
equity 639,163,385.88 639,163,385.88
4. Others –14,970,200.00 –318,731,387.05 812,967,883.34 –1,146,669,470.39
(III) Profit distribution 575,574,713.40 –4,896,010,960.93 –4,320,436,247.53
1. Withdrawal of surplus
reserves 575,574,713.40 –575,574,713.40
2. Distribution to owners (or
shareholders) –4,320,436,247.53 –4,320,436,247.53
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 –60,385,128.31 –60,385,128.31
IV. Closing balance for the 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
168 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
2021
Other equity instruments
Paid-in capital Other
(or share Preference Perpetual Less: treasury comprehensive Undistributed Total owners’
Items capital) shares bonds Others Capital reserve stock income Special reserve Surplus reserve profits equity
I. Closing balance for the previous
year 9,027,846,441.00 20,408,352,380.95 –10,030,704.15 2,440,188,314.15 4,349,961,964.23 36,216,318,396.18
Add: changes in accounting
policies
Error correction for prior
period
Others
II. Opening balance for the
current year 9,027,846,441.00 20,408,352,380.95 –10,030,704.15 2,440,188,314.15 4,349,961,964.23 36,216,318,396.18
III. Increase/decrease for the
current period (decrease is
represented by ‘-’) 370,858,089.00 5,393,927,102.18 1,495,170,675.08 631,333,648.98 393,281,370.24 118,613,662.29 5,412,843,197.61
(I) Total comprehensive
income 631,333,648.98 3,932,813,702.38 4,564,147,351.36
(II) Capital injection and
reduction by owners 370,858,089.00 5,393,927,102.18 1,495,170,675.08 4,269,614,516.10
1. Ordinary shares invested
by owners –17,642,864.51 –17,642,864.51
2. Capital contribution by
holders of other equity
instruments 403,210,889.00 5,965,040,500.85 6,368,251,389.85
3. Share-based payment
included in owners’
equity 245,199,533.31 245,199,533.31
4. Others –32,352,800.00 –798,670,067.47 1,495,170,675.08 –2,326,193,542.55
(III) Profit distribution 393,281,370.24 –3,814,200,040.09 –3,420,918,669.85
1. Withdrawal of surplus
reserves 393,281,370.24 –393,281,370.24
2. Distribution to owners
(or shareholders) –3,420,918,669.85 –3,420,918,669.85
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 9,398,704,530.00 25,802,279,483.13 1,495,170,675.08 621,302,944.83 2,833,469,684.39 4,468,575,626.52 41,629,161,593.79
Legal representative of the Company: Person in charge of accounting function: Person in charge of accounting
Li Huagang Gong Wei department: YingKe
Haier Smart Home Co., Ltd. Annual Report 2022 169
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
30 March 2023.
2. Scope of consolidated statements
√ Applicable □ Not Applicable
For details of changes in the scope of consolidated financial statements for the current period,
please refer to ‘VIII. Changes in Consolidation Scope’ and ‘IX. Interest in Other Entities’ of this
note.
170 Haier Smart Home Co., Ltd. Annual Report 2022
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 2014) 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.10); the measurement of inventories (Note V.11); the depreciation and
amortization of the investment properties (Note V.13); the depreciation of fixed assets (Note V.14), the
amortization of intangible assets (Note V.18), the criterion for determining of long-term assets
impairment (Note V.19); and the date of revenue recognition (Note V.25), 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 as of 31 December 2022, results of operations in 2022 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.
Haier Smart Home Co., Ltd. Annual Report 2022 171
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. 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.
172 Haier Smart Home Co., Ltd. Annual Report 2022
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. Annual Report 2022 173
Section X Financial Report
6. Preparation method of consolidated accounting statements
√ Applicable □ Not Applicable
(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.
(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.
174 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
(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.
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.
Haier Smart Home Co., Ltd. Annual Report 2022 175
Section X Financial Report
(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.
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.
176 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
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.
(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.
Haier Smart Home Co., Ltd. Annual Report 2022 177
Section X Financial Report
7. Classification of joint arrangement and accounting methods of joint operations
√ Applicable □ Not Applicable
A joint arrangement refers to an arrangement jointly controlled by two or more parties. In
accordance with the Company’s rights and obligations under a joint arrangement, the Company
classifies joint arrangements into joint operations and joint ventures.
(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: ① recognize the assets held solely by the Company, and recognize assets
held jointly by the Company in appropriation to the share of the Company; ② recognize the
obligations assumed solely by the Company, and recognize obligations assumed jointly by
the Company in appropriation to the share of the Company; ③ recognize revenue from
disposal of joint operations in appropriation to the share of the Company; ④ recognize
revenue from disposal of joint operations in appropriation to the share of the Company; ⑤
recognize fees solely occurred by the Company and recognize fees from joint operations in
appropriation to the share of the Company.
When the Company, as a joint venture, invests or sells assets to or purchase assets (the
assets do not constitute a business, the same below) from joint operations, the Company
shall only recognize the part of profit or lost from this transaction attributable to other
parties of joint operations before these assets are sold to a third party. In case of an
impairment loss incurred on these assets which meets the requirements as set out in
Accounting Standards for Business Enterprises No. 8 — Asset Impairment, the Company
shall full recognize the amount of this loss in relation to its investment in or sale of assets
to joint operations or recognize the loss according to the Company’s share of commitment
in relation to the its purchase of assets from joint operations.
(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 ‘22. Long-term equity
investment’ of Note V.
178 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
8. Recognition standard for cash and cash equivalents
Cash recognized in the cash flow statements represents the cash on hand and deposits available
for payment of the Company at any time.
Cash equivalents recognized in the cash flow statements refer to short-term, highly liquid
investments held by the Company that are readily convertible to known amounts of cash and
which are subject to an insignificant risk on change in value.
9. Foreign currency businesses and translation of foreign currency statements
√ Applicable □ Not Applicable
(1) 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. Annual Report 2022 179
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.
10. 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.
180 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
1) The debt instruments held by the Company:
① 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 (including one year) from the
balance sheet date as non-current assets matured within one year; the
creditor’s rights investments matured within one year (including one year) when
being obtained are listed as other current assets.
② 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 (including one year) from the balance
sheet date as non-current assets matured within one year; other creditor’s
rights investments matured within one year (including one year) when being
obtained are listed as other current assets.
③ 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.
Haier Smart Home Co., Ltd. Annual Report 2022 181
Section X Financial Report
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.
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 (including one year) are listed as current
liabilities: those with maturity of more than one year but are mature within one year from
the balance sheet date (including one year) are listed as non-current liabilities due within
one year; the rest are presented as non-current liabilities.
182 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
(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.
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.
Haier Smart Home Co., Ltd. Annual Report 2022 183
Section X Financial Report
(4) Recognition and measurement on transfer of financial assets
A financial asset shall be de-recognized when one of the following conditions is met: ① the
contractual right for receiving cash flows from the financial asset is terminated; ②the
financial asset is transferred, and the risk and rewards of ownership of the financial asset
have been substantially transferred to the transferee; and ③ 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.
(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.
184 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
(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.
(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.
Haier Smart Home Co., Ltd. Annual Report 2022 185
Section X Financial Report
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 contractual 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.
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.
186 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
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.
11. 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.
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.
Haier Smart Home Co., Ltd. Annual Report 2022 187
Section X Financial Report
(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.
12. 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
① 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;
② 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.
188 Haier Smart Home Co., Ltd. Annual Report 2022
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
① 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.
Haier Smart Home Co., Ltd. Annual Report 2022 189
Section X Financial Report
② 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.
③ 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.
④ 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.
190 Haier Smart Home Co., Ltd. Annual Report 2022
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:
① Representation at the board or similar authority of the investee.
② Participation in the decision-making process of the investee’s financial and operational
policies.
③ Having important transactions with the investee.
④ Posting of management personnel at the investee.
⑤ 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.
Haier Smart Home Co., Ltd. Annual Report 2022 191
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.
13. Investment properties
(1) Types and measurement models of investment properties
The Company’s investment properties include the following types: leased land-use rights,
leased buildings and land-use rights held for transfer upon appreciation.
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.
192 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
14. Fixed assets
√ Applicable □ Not Applicable
(1) Recognition criteria
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:
① Economic benefits relating to such fixed assets are likely to flow into the Company;
② 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 (ASBE No. 17).
(2) Depreciation method
√ Applicable □ Not Applicable
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.
Haier Smart Home Co., Ltd. Annual Report 2022 193
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:
Depreciation
Depreciation life Residual
Type method (years) ratio
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.
15. 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.
194 Haier Smart Home Co., Ltd. Annual Report 2022
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:
① The physical construction (including installation) of fixed assets has been completed in
full or substantially completed in full;
② 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;
③ The amount of fixed asset expenditure of the construction is minimal or almost certain
not be further incurred;
④ 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.
16. 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.
Haier Smart Home Co., Ltd. Annual Report 2022 195
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: ① 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; ② 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; ③ 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.
17. Right-of-use assets
√ Applicable □ Not Applicable
Right-of-use assets are the rights of the Company as lessee to use leased assets during the
lease period. At the inception date of the lease, the Company as lessee recognises right- of-use
assets and lease liabilities in respect of the lease, other than short-term leases and leases of
low-value assets which are subject to simplified treatment.
The Company’s right-of-use assets are initially measured at cost, which includes:
(1) The amount of lease liability under initial measurement;
(2) The lease payment made on or before the inception date of the lease term, less the relevant
amount of lease incentive received if such incentive is available;
(3) The initial direct cost of the Company as lessee;
(4) Estimated cost to be incurred for the demolishing and removal of leased assets, restoration
of venues where the leased assets are located or restoration of the leased assets to the
conditions agreed under the lease terms.
196 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
The Company charges depreciation in respect of right-of-use assets using the average service life
method. Where the acquisition of ownership of the leased asset at the end of the lease period
can be reasonably ascertained by the Company, depreciation is charged over the remaining
useful life of the leased assets. If the acquisition of ownership of the leased asset at the end of
the lease period cannot be reasonably ascertained, depreciation is charged during the lease term
or the remaining useful life of the leased assets, whichever is shorter.
The Company shall determine whether impairment of right-of-use assets has occurred and
account for impairment loss which has been identified in accordance with the provisions of
“Accounting Standards for Business Enterprises No. 8 — Asset Impairment”.
When the Company remeasures lease liabilities in accordance with the accounting standard, the
carrying value of the right-of-use assets is adjusted accordingly. If the carrying value of the right-
of-use assets is reduced to zero but the lease liabilities still require further adjustment, the
remaining amount is charged to current profit or loss.
Where lease modification results in a reduced scope of lease or shortened lease term, the
carrying value of the right-of-use assets is reduced accordingly, and the relevant gain or loss
resulting from the partial or full termination of the lease is included in current profit or loss. For
other lease modifications resulting in the remeasurement of lease liabilities, the carrying value of
the right-of-use assets is adjusted accordingly.
18. 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:
① it is probable that economic benefits attributable to the intangible assets will flow into the
Company;
② 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. Annual Report 2022 197
Section X Financial Report
Subsequent measurement of intangible assets of the Company: ①Intangible 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; ②Intangible 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: ① 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; ② 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.
198 Haier Smart Home Co., Ltd. Annual Report 2022
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: ①the technical
feasibility of completing the intangible assets so that they will be available for use or for
sale; ②the intention to complete the intangible assets for use or for sale; ③ 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; ④ the availability of adequate technical,
financial and other resources to complete the development and gain the ability to use or
sell the intangible assets; ⑤ 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.
Haier Smart Home Co., Ltd. Annual Report 2022 199
Section X Financial Report
19. Impairment of long-term assets
√ Applicable □ Not Applicable
Long-term equity investment, investment properties measured based on cost model, fixed assets,
construction in progress, intangible assets and other long-term assets are tested for impairment
if there is any 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.
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.
200 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
20. 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.
21. 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.
Short-term remunerations 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, short-term remunerations that actually incurred shall be recognized as liabilities and
credited into the current profit or loss or the cost of relevant assets on an accrual basis by the
benefit objects.
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. Defined benefit plans: the cost for providing benefits is
determined 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.
Haier Smart Home Co., Ltd. Annual Report 2022 201
Section X Financial Report
Termination benefits: 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 following conditions are met,
the Company will recognize and credit into the profit or loss the accrued liabilities arising from
the indemnity as a result of terminating labor relations with the employees: the Company has
made a formal plan for termination of labor relations or has made an offer for voluntary
redundancy which will be implemented immediately; and the Company could not unilaterally
withdraw the plan for termination of labor relations or the redundancy offer. Early retirement plans
for employees will be handled in the principle the same as the termination benefits above. The
Company will credit the salaries and social insurance premiums to be paid to the early retirees
during the period from the date of early retirement to the normal retirement date to the profit or
loss when recognition conditions for estimated liabilities are met.
22. Lease liabilities
√ Applicable □ Not Applicable
On the commencement date of the lease term, the Company as the lessee shall recognize the
right-of-use assets and lease liabilities for the lease. The Company’s lease liabilities are initially
measured at the present value of the lease payment that has not been paid on the
commencement date of the lease term.
When calculating the present value of the lease payment, the Company adopts interest rate
implicit in lease as discount rate; if it is impossible to determine the interest rate implicit in lease,
the incremental borrowing rate of the Company (i.e. lessee) shall be adopted as the discount
rate.
The interest rate implicit in lease refers to the interest rate that makes the sum of the present
value of the lessor’s lease receivable amount and the present value of the unguaranteed residual
value equal to the sum of the fair value of the leased asset and the initial direct cost of the
lessor. The lessee’s incremental borrowing rate refers to the interest rate that the lessee is
required to pay for borrowing funds under similar mortgage conditions in a similar economic
environment in order to obtain assets close to the value of the right-of-use assets during a
similar period.
The Company shall calculate the interest expenses of lease liabilities over the lease term at the
fixed periodic interest rate, and include it into current profit or loss or assets cost.
After the commencement date of the lease term, where the assessment results of the renewal of
the option, the termination of the lease option and the purchase option have changed, the
Company re-determines the lease payment and re-measures the lease liabilities in accordance
with the present value of the lease payment after changes and the revised discount rate.
After the commencement date of the lease term, in the event that the future lease payment
changes due to a change in expected payment under a guaranteed remaining value or changes
in an index or rate used in determining the lease payments, the Company shall re-measure lease
liabilities based on present value of the lease payment after changes. In such cases, the
discount rate adopted by the Company shall remain unchanged; however, if the change in lease
payment results from a change in floating interest rates, the Company shall use a revised
discount rate.
202 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
23. 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.
(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.
24. Share-based payments
√ Applicable □ Not Applicable
For equity-settled share-based payment transaction in return for services from employees, it shall
be measured at the fair value of equity instruments granted to the employees at the grant date.
For the payment of such fair value that may only be exercised if services are fulfilled during the
vesting period or the specified performance condition is achieved, the amount of such fair value
shall, based on the best estimate of the number of exercisable equity instruments during the
vesting period, be recognized in relevant costs or expenses in straight-line method with the
increase in the capital reserve accordingly.
The cash-settled share-based payment shall be measured at the fair value of liability assumed by
the Company, which is 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.
Haier Smart Home Co., Ltd. Annual Report 2022 203
Section X Financial Report
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 Company shall consider the modified vesting conditions 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, it will continue to be accounted for the services obtained in the
accounting treatment, as if the change had not occurred, unless the Company cancelled some or
all of the equity instruments granted.
During the vesting period, if the Company cancel equity instruments granted 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.
25. Revenue
√ Applicable □ Not Applicable
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.
204 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
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:
① The client simultaneously obtains and consumes economic benefits as the Company and its
subsidiaries perform the contract;
② The client is able to control goods under construction during the process of performance of
the Company and its subsidiaries;
③ 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.
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:
① The Company and its subsidiaries enjoy the right of instant collection over such goods and
services;
② The Company and its subsidiaries have transferred the material objects of such goods to
the client;
③ The Company and its subsidiaries have transferred statutory ownership right of the goods
or major risks and rewards of the ownership to the client;
④ 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 contractual asset, and contractual 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.
Haier Smart Home Co., Ltd. Annual Report 2022 205
Section X Financial Report
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.
(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.
206 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
26. 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.
(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: ①those 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; ②those 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:
① Government grant subject to a certain project shall be separated according to the
proportion of expenditure budget and capitalization budget, and the proportion shall
be reviewed and modified if necessary on each balance sheet date;
② 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.
Haier Smart Home Co., Ltd. Annual Report 2022 207
Section X Financial Report
(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.
27. Deferred tax assets/deferred tax liabilities
√ Applicable □ Not Applicable
Deferred income tax assets and deferred income tax liabilities of the Company are recognized:
(1) Based on the difference between the carrying amount and the tax base amount of an asset
or a liability (items not recognized as assets and liabilities but their tax base is ascertained
by the tax laws and regulations, the tax base is the difference), deferred income tax asset
or deferred income tax liability is calculated using the applicable tax rate prevailing at the
expected time of recovering the asset or discharging the liability.
(2) Deferred income tax asset 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) Deferred income tax liability is recognized 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. For deductible temporary differences arising
from investments in subsidiaries and associated companies, deferred income tax asset is
recognized if the temporary difference will be very probably reversed in the foreseeable
future and it is highly probable that taxable income will be available in the future to deduct
the deductible temporary difference.
(4) No deferred income tax liability is recognized for a temporary difference arising from the initial
recognition of goodwill. No deferred income tax asset or deferred income tax liability is
recognized for the temporary differences resulting from the initial recognition of assets or
liabilities due to a transaction other than a business combination, which affects neither
accounting profit nor taxable income (or deductible loss). At the balance sheet date,
deferred income tax assets and deferred income tax liabilities 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.
208 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
28. 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:
① When the Company has transferred substantially all risk and reward relating to the
ownership of a financial asset, such financial asset is derecognised;
② 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;
③ 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.
(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.
Haier Smart Home Co., Ltd. Annual Report 2022 209
Section X Financial Report
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.
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.
210 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
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.
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.
Haier Smart Home Co., Ltd. Annual Report 2022 211
Section X Financial Report
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.
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.
212 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
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.
29. Changes in significant accounting policies and accounting estimates
(1). Changes in the significant accounting policies
□ Applicable √ Not Applicable
(2). Changes in the significant accounting estimates
□ Applicable √ Not Applicable
VI. TAXATION
1. Main tax categories and rates
Main tax categories and rates
√ Applicable □ Not Applicable
Tax types Basis of taxation Tax rate
Value-added tax Taxable revenue from sales of 6%, 9%, 13%
goods and rendering services
City maintenance and construction tax Circulation tax payable 7%
(Local) education surcharge Circulation tax payable 1%, 2%, 3%
EIT Taxable income Statutory tax rate
or preferential
rates as follows
Disclosure of tax entities with different enterprise income tax rates
□ Applicable √ Not Applicable
Haier Smart Home Co., Ltd. Annual Report 2022 213
Section X Financial Report
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 Co., 15.00% entitled to the preferential taxation
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., Ltd. 15.00% entitled to the preferential taxation
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 Co., 15.00% entitled to the preferential taxation
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., Limited 15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
Zhengzhou Haier Air-conditioning Co., 15.00% entitled to the preferential taxation
Ltd. policies as a hi-tech enterprise
Shenyang Haier Refrigerator Co., Ltd. 15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
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., Ltd. 15.00% entitled to the preferential taxation
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., Ltd 15.00% entitled to the preferential taxation
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 Conditioning 15.00% entitled to the preferential taxation
Co., Ltd. policies as a hi-tech enterprise
214 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Company Tax rate Preferential tax
Haier U+smart Intelligent Technology 15.00% entitled to the preferential taxation
(Beijing) Co., Ltd. policies as a hi-tech enterprise
Beijing Zero Micro Technology Co., Ltd. 15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
Qingdao Haier Electronic Plastic Co., 15.00% entitled to the preferential taxation
Ltd. policies as a hi-tech enterprise
Qingdao Wei Xi Intelligent Technology 15.00% entitled to the preferential taxation
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 Appliance 15.00% entitled to the preferential taxation
Co., Ltd. policies as a hi-tech enterprise
Hefei Haier Air Conditioning Electronics 15.00% entitled to the preferential taxation
Co., Ltd. policies as a hi-tech enterprise
Beijing Lingli Technology Co., Ltd. 15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
Qingdao Hairuijiejing Electronics Co., 15.00% entitled to the preferential taxation
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
Qingdao Yunshang Yuyi IOT Technology 15.00% entitled to the preferential taxation
Co., Ltd. policies as a hi-tech enterprise
Haier (Shanghai) Home Appliance 15.00% entitled to the preferential taxation
Research and Development Center policies as a hi-tech enterprise
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 Appliance 15.00% entitled to the preferential taxation
Co., Ltd. policies as a hi-tech enterprise
Guangdong Heilong Intelligent 15.00% entitled to the preferential taxation
Technology Co. Ltd policies as a hi-tech enterprise
Dalian Haier Refrigerator Co., Ltd. 15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
Hefei Haier Washing Machine Co., Ltd. 15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
Qingdao Haier Washing Machine Co., 15.00% entitled to the preferential taxation
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., Ltd. 15.00% entitled to the preferential taxation
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
(天 津 海 爾 洗 滌 電 器 有 限 公 司)
Haier Smart Home Co., Ltd. Annual Report 2022 215
Section X Financial Report
Company Tax rate Preferential tax
Qingdao Economic and Technological 15.00% entitled to the preferential taxation
Development Zone Haier Water policies as a hi-tech enterprise
Heater Co., Ltd.
Wuhan Haier Water Heater Co., Ltd. 15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
Foshan Drum Washing Machine Co., 15.00% entitled to the preferential taxation
Ltd. policies as a hi-tech enterprise
Qingdao Strauss Water Equipment Co., 15.00% entitled to the preferential taxation
Ltd. policies as a hi-tech enterprise
Qingdao Haier Strauss Technology Co., 15.00% entitled to the preferential taxation
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 Co., 15.00% entitled to the preferential taxation
Ltd. policies as a hi-tech enterprise
Qingdao Haier Lexin Cloud Technology 15.00% entitled to the preferential taxation
Co., Ltd. (青 島 海 爾 樂 信 雲 科 技 有 限 policies as a hi-tech enterprise
公 司)
Hefei Haier Drum Washing Machine Co., 15.00% entitled to the preferential taxation
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 Appliance 15.00% entitled to the preferential taxation
Co. Ltd. (青島海爾智慧生活電器有限 policies as a hi-tech enterprise
公 司)
Qingdao Ririshun Lejia IOT Technology 15.00% entitled to the preferential taxation
Co., Ltd. policies as a hi-tech enterprise
Jiangxi Haier Medical Technology Co., 15.00% entitled to the preferential taxation
Ltd. policies under the Western
Development initiative of the PRC
Chongqing Haier Electrical Appliance 15.00% entitled to the preferential taxation
Sales Co., Ltd. and some Western policies under the Western
companies Development initiative of the PRC
Chongqing Haier Air-conditioning Co., 15.00% entitled to the preferential taxation
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
Guizhou Haier Electronics Co., Ltd. 15.00% entitled to the preferential taxation
policies under the Western
Development initiative of the PRC
216 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Company Tax rate Preferential tax
Chongqing Xin Ririshun Electric Sales 15.00% entitled to the preferential taxation
Co., Ltd and some Western policies under the Western
companies Development initiative of the PRC
Chongqing Haier Washing Machine Co., 15.00% entitled to the preferential taxation
Ltd policies under the Western
Development initiative of the PRC
Chongqing Haier Water Heater Co., Ltd 15.00% entitled to the preferential taxation
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 half deduction the
preferential taxation policies as a
key software enterprise
VII. EXPLANATORY NOTES FOR ITEMS IN CONSOLIDATED FINANCIAL
STATEMENTS
Unless otherwise specified, the following closing balances represent the amount as at 31 December
2022 and opening balances represent the amount as at 31 December 2021; amount for the period
represents the amount from 1 January to 31 December 2022 and amount for the previous period
represents the amount from 1 January to 31 December 2021.
1. Monetary funds
√ Applicable □ Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Cash on hand 5,312,391.11 3,085,964.28
Cash in bank 52,955,417,379.16 45,010,311,638.51
Other cash balances 1,178,085,912.24 1,083,936,300.66
Total 54,138,815,682.51 46,097,333,903.45
Include: — total amount of overseas deposits 11,963,648,575.80 8,966,246,518.74
Other monetary funds mainly included investment fund, deposit on third party payment platforms,
guarantees and other restricted fund, etc.
Haier Smart Home Co., Ltd. Annual Report 2022 217
Section X Financial Report
2. Financial assets held for trading
Items Closing balance Opening balance
Short-term wealth management products 14,638,968.26 2,168,622,090.00
Investments in other equity instruments 336,743,065.02 330,557,610.82
Investment funds 168,430,847.63 150,516,274.37
Forward foreign exchange contracts 136,379,553.90
Total 519,812,880.91 2,786,075,529.09
3. Derivative financial assets
√ Applicable □ Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Forward foreign exchange contracts 178,992,877.32 72,822,190.59
Forward commodity contracts 4,192,283.19 6,997,783.42
Total 183,185,160.51 79,819,974.01
4. Bills receivable
(1) Bills receivable presented by types
Items Closing balance Opening balance
Bank acceptance notes 9,346,227,149.92 13,053,809,505.49
Commercially acceptance notes 237,902,374.08 368,076,810.80
Balance of bills receivable 9,584,129,524.00 13,421,886,316.29
Allowance for bad debts 3,937,685.85 67,095,248.00
Bills receivable, net 9,580,191,838.15 13,354,791,068.29
Provision for bad debts on a collective basis
□ Applicable √ Not Applicable
(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 67,095,248.00 1,901,562.15 61,256,000.00 3,937,685.85
Total 67,095,248.00 1,901,562.15 61,256,000.00 3,937,685.85
218 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
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
RMB8,716,194,311.64 (amount at the beginning of the period RMB12,526,757,275.50).
5. Accounts receivable
Accounts receivable are disclosed by aging as follow:
Aging Closing balance Opening balance
Within one year 15,983,198,223.16 14,776,616,491.33
1–2 years 744,571,231.78 376,187,052.43
2–3 years 249,911,820.64 78,861,353.76
Over 3 years 129,303,240.96 135,768,657.33
Balance of accounts receivable 17,106,984,516.54 15,367,433,554.85
Allowance for bad debts 1,193,292,979.43 742,172,698.81
Accounts receivable, net 15,913,691,537.11 14,625,260,856.04
By method of provision of allowance for bad debts
Categories Closing balance
Allowance for Percentage of
Book balance bad debts provision (%) Carrying value
Account receivables
subject to provision for
bad debts on a
separate basis 669,106,556.78 658,051,988.70 98.35 11,054,568.08
Account receivables
subject to provision for
bad debts on a
collective basis 16,437,877,959.76 535,240,990.73 3.26 15,902,636,969.03
Total 17,106,984,516.54 1,193,292,979.43 6.98 15,913,691,537.11
Haier Smart Home Co., Ltd. Annual Report 2022 219
Section X Financial Report
(continued)
Categories Opening balance
Allowance for Percentage of
Book balance bad debts provision (%) Carrying value
Account receivables
subject to provision for
bad debts on a
separate basis 381,406,983.17 320,303,932.13 83.98 61,103,051.04
Account receivables
subject to provision for
bad debts on a
collective basis 14,986,026,571.68 421,868,766.68 2.82 14,564,157,805.00
Total 15,367,433,554.85 742,172,698.81 4.83 14,625,260,856.04
Account receivables subject to provision for bad debts on a collective basis
Aging Closing balance
Allowance Percentage of
Book balance for bad debts provision (%)
Within 1 year 15,670,232,732.83 340,620,524.48 2.17
1–2 years 444,886,453.80 33,709,717.14 7.58
2–3 years 204,386,489.30 78,004,660.46 38.17
Over 3 years 118,372,283.83 82,906,088.65 70.04
Total 16,437,877,959.76 535,240,990.73 3.26
(continued)
Opening balance
Allowance Percentage of
Aging Book balance for bad debts provision (%)
Within 1 year 14,549,378,136.84 312,565,470.27 2.15
1–2 years 229,160,440.39 9,396,866.15 4.10
2–3 years 76,516,782.74 23,388,497.43 30.57
Over 3 years 130,971,211.71 76,517,932.83 58.42
Total 14,986,026,571.68 421,868,766.68 2.82
220 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Changes in allowance for bad debts of accounts receivable in the current period:
Items Opening balance Increase for the current period Decrease for the current period Closing balance
Provision for the Write-off/other
current period Other movement Reversal movement
Allowance for bad debts 742,172,698.81 511,476,608.99 61,256,000.00 90,784,265.89 30,828,062.48 1,193,292,979.43
The aggregate amount of the top 5 account receivables as at the end of the period was
RMB3,981,240,561.25, accounting for 23.27% of the book balance of account receivables
(amount at the beginning of the period: RMB3,856,035,612.12, accounting for 25.09% of
the book balance of account receivables).
Actual write-off of accounts receivable in the current period
The amount of accounts receivable actually written off in the current period is
RMB35,724,496.02 (amount for the corresponding period: RMB10,143,124.34) and there is
no important bad debt write-off of accounts receivable.
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 RMB7,752,646,133.49 (amount at the beginning
of the period: RMB4,127,671,197.04) 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
RMB1,944,980,392.98 (amount at the beginning of the period: RMB1,913,582,226.30).
6. Prepayments
(1) Prepayments are presented by aging:
Aging Closing balance Opening balance
Within one year 1,097,684,518.38 823,420,072.64
1–2 years 9,392,472.99 22,367,994.84
2–3 years 7,826,299.09 9,728,842.63
Over 3 years 5,852,909.40 8,231,174.95
Total 1,120,756,199.86 863,748,085.06
(2) The total amount of the top 5 in the prepayments at the end of the period is
RMB285,279,364.51, which accounts for 25.45% of the prepayment balance (amount at the
beginning of the period: RMB174,076,576.41, accounting for 20.15%).
Haier Smart Home Co., Ltd. Annual Report 2022 221
Section X Financial Report
7. Other receivables
√ Applicable □ Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Interest receivable 513,320,376.79 295,017,551.76
Other receivables 1,867,609,246.40 1,662,868,705.43
Total 2,380,929,623.19 1,957,886,257.19
(1) Interest receivable
√ Applicable □ Not Applicable
Unit and Currency: RMB
Aging Closing balance Opening balance
Within one year 365,716,532.95 231,649,800.22
1–2 years 117,786,419.18 47,983,727.86
2–3 years 19,790,000.00 15,384,023.68
Over 3 years 10,027,424.66
Total 513,320,376.79 295,017,551.76
(2) Other receivables
Aging Closing balance Opening balance
Within one year 1,395,900,684.43 1,275,398,749.49
1–2 years 216,523,682.62 109,677,138.52
2–3 years 23,617,332.57 355,219,038.13
Over 3 years 387,087,496.32 113,213,998.61
Balance of other receivables 2,023,129,195.94 1,853,508,924.75
Allowance for bad debts 155,519,949.54 190,640,219.32
Other receivables, net 1,867,609,246.40 1,662,868,705.43
① The total amount of the top 5 other receivables at the end of the period is
RMB913,820,290.12, accounting for 45.17% of the book balance of other receivables
(amount at the beginning of the period: RMB588,207,363.50, accounting for 31.73%
of the book balance of other receivables).
222 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Provision of allowance for bad debts
Allowance for bad debts Stage 1 Stage 2 Stage 3 Total
Expected credit Lifetime Lifetime
losses for the expected credit expected credit
coming 12 losses (not losses (credit-
months credit-impaired) impaired)
Opening balance 112,022,673.37 78,617,545.95 190,640,219.32
Provision for the current period 17,263,203.57 17,263,203.57
Reversal for the current period 4,676,503.70 4,676,503.70
Write-off and others
for the current period –9,007,063.30 56,714,032.95 47,706,969.65
Closing balance 133,616,436.54 21,903,513.00 155,519,949.54
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 190,640,219.32 17,263,203.57 4,676,503.70 47,706,969.65 155,519,949.54
Other receivables written off during the period
The amount of other receivables actually written off in the current period is
RMB56,385,567.52 (amount for the corresponding period: RMB4,293,611.04) and no
significant other receivables are written off for bad debts.
Other receivables mainly include deposits, quality guarantees, employee loans, tax
refunds, and advance payments, etc.
8. Inventories
(1) Category of inventories
Items Closing Balance Opening Balance
Book value Impairment Book value Impairment
balance Provision balance Provision
Raw materials 6,220,344,034.47 171,673,251.23 5,173,523,964.42 117,428,681.85
Work in progress 74,028,876.21 115,676,026.77
Finished goods 36,858,876,539.39 1,438,863,087.02 35,990,645,130.23 1,248,466,540.71
Total 43,153,249,450.07 1,610,536,338.25 41,279,845,121.42 1,365,895,222.56
Haier Smart Home Co., Ltd. Annual Report 2022 223
Section X Financial Report
(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 117,428,681.85 96,267,946.53 42,023,377.15 171,673,251.23
Work in progress
Finished goods 1,248,466,540.71 1,124,401,331.26 75,747,450.78 858,257,334.17 1,438,863,087.02
Total 1,365,895,222.56 1,220,669,277.79 75,747,450.78 900,280,711.32 1,610,536,338.25
9. Contractual assets
(1) Details
Items Closing Balance Opening Balance
Book value Impairment Book value Impairment
balance Provision balance Provision
Relating to construction
service contract 379,905,624.96 69,975,265.71 304,434,294.70
Total 379,905,624.96 69,975,265.71 304,434,294.70
(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
Relating to construction
service contract 69,975,265.71 69,975,265.71
Total 69,975,265.71 69,975,265.71
224 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
10. Other current assets
(1) Details
Items Closing Balance Opening Balance
Book value Impairment Book value Impairment
balance Provision balance Provision
Bank deposit for wealth
management products 1,642,421,944.45 316,590,333.42
Deductible taxes 2,710,135,299.65 3,275,762,776.66
Returns cost receivables 563,233,565.88 280,818,239.06 585,140,752.69 328,552,987.70
Others 57,543,006.31 79,847,733.16
Total 4,973,333,816.29 280,818,239.06 4,257,341,595.93 328,552,987.70
(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 328,552,987.70 280,818,239.06 328,552,987.70 280,818,239.06
Total 328,552,987.70 280,818,239.06 328,552,987.70 280,818,239.06
11. Debt investments
Items Closing balance Opening balance
principal Interest Principal Interest
Time deposit — 3 years 1,000,000,000.00 34,222,222.22
Total 1,000,000,000.00 34,222,222.22
Haier Smart Home Co., Ltd. Annual Report 2022 225
Section X Financial Report
12. Long-term equity investments
√ Applicable □ Not Applicable
Investees Opening balance Increase/decrease for the current period
Adjustment in
Investment profit other Declaration of
Investment recognized under comprehensive Other changes cash dividends
increase equity method income in equity or profits
Associate：
Haier Group Finance Co., Ltd. 7,108,709,375.38 665,707,466.58 4,170,482.08 –218,400,000.00
Bank of Qingdao Co., Ltd. 2,654,248,436.12 352,102,643.20 210,748,314.67 –54,294,726.05 –152,429,907.54 –76,288,906.40
Wolong Electric (Jinan) Motor
Co., Ltd. 151,837,378.99 22,860,428.75
Qingdao Hegang New Material
Technology Co., Ltd. 312,493,256.21 9,482,737.24 –7,173,662.00
Qingdao Haier SAIF Smart
Home Industry Investment
Center (Limited Partnership) 393,598,372.59 –57,153,662.41 –17,199,060.82
Mitsubishi Heavy Industries
Haier (Qingdao)
Air-conditioners Co., Ltd. 682,901,976.73 113,559,283.53 –81,000,000.00
Qingdao Haier Carrier
Refrigeration Equipment
Co., Ltd. 409,053,808.05 22,213,959.56 –17,900,226.81
Qingdao Haier Multimedia Co.,
Ltd 277,102,563.88 –123,552,329.38
Qingdao Haier Moulds Co., Ltd. 269,158,534.54 3,419,373.38
Hefei Feier Smart Technology
Co., Ltd. 265,106.27 –265,106.27
Anhui Kunhe Smart Technology
Co., Ltd. 1,877,574.14 120,208.47
Zhejiang Futeng Fluid
Technology Co., Ltd. 82,098,847.75 –4,291,438.91
Beijing Mr. Hi Network
Technology Company
Limited 7,507,759.75
Beijing Xiaobei Technology Co.,
Ltd. 2,687,341.82
Beijing ASU Tech Co., Ltd. 15,529,700.01 –17,876,874.22 15,176,607.99
Shenzhen Genyuan
Environmental Protection
Technology Co., Ltd. 6,914,487.73
Qingdao Haimu Investment
Management Co., Ltd. 2,465,299.70 56,466.72
Qingdao Haimu Smart Home
Investment Partnership
(Limited Partnership) 59,424,662.44 –518,749.56
Hainengwanjia (Shanghai)
Technology Development
Co., Ltd. (海能萬嘉（上海）
科技發展有限公司) 772,938.88
Qingdao Guochuang Intelligent
Household Appliance
Research Institute Co., Ltd. 52,835,228.01 –7,863,687.63 44,793.82
Guangzhou Heying Investment
Partnership (Limited
Partnership) 285,793,577.87
226 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Investees Opening balance Increase/decrease for the current period
Adjustment in
Investment profit other Declaration of
Investment recognized under comprehensive Other changes cash dividends
increase equity method income in equity or profits
Qingdao Home Wow Cloud
Network Technology Co.,
Ltd. 2,600,050.50 –52,833.50
Bingji (Shanghai) Corporate
Management Co., Ltd. 972,200,487.88 42,224,805.16
Youjin (Shanghai) Corporate
Management Co., Ltd. 1,766,819,068.86 76,772,373.02
RRS (Shanghai) Investment Co.,
Ltd. 3,211,580,125.21 139,586,132.77
Haier Best Water Technology
Co., Ltd. 79,785,557.39 67,661,160.00 922,921.01
Huizhixiangshun Equity
Investment Fund (Qingdao)
Partnership (Limited
Partnership) 119,008,967.03 119,797,980.61
Qingdao Ririshun Huizhi
Investment Co., Ltd. 2,083,482.78 2,000,000.00
Qingdao Xinshenghui
Technology Co., Ltd. 9,964,773.52 –1,366,770.63
Meiling Candy Washing Machine
Co., Ltd. 22,752,232.07 1,389,264.77 –124,866.83
EuropaltersItaliaS.r.l. 9,361,965.48 6,398,539.80
OryginLLC 13,918,442.26
Konan Electronic Co., Ltd. 69,273,712.61 2,472,773.58 –3,739,243.20 –237,150.00
HNR Company (Private) Limited 114,055,318.97 –31,378,609.43 –8,309,799.99
HPZ LIMITED 71,269,048.97 17,668,356.54 –186,357.53
HaierRayaElectricS.A.E 10,568,507.40 –689,346.51
CONTROLADORAMABES.
A.deC.V. 4,131,983,673.10 501,663,292.98 161,545,695.15 –10,972,791.00 –98,292,483.70
MiddleEast Air conditioning
Company,Limited 10,318,898.13 –2,359,212.96 860,416.38
Total 23,327,293,929.87 615,486,932.76 1,583,499,537.32 99,921,600.01 –148,181,296.73 –516,491,489.73
Haier Smart Home Co., Ltd. Annual Report 2022 227
Section X Financial Report
(Continued)
Impairment
Increase/decrease Provision
Investees for the current period Closing balance Closing Balance
Other The disposal of
movement the investment
Associate：
Haier Group Finance Co.,
Ltd. 7,560,187,324.04
Bank of Qingdao Co., Ltd. 2,934,085,854.00
Wolong Electric (Jinan)
Motor Co., Ltd. 174,697,807.74
Qingdao Hegang New
Material Technology Co.,
Ltd. 314,802,331.45
Qingdao Haier SAIF Smart
Home Industry
Investment Center
(Limited Partnership) 319,245,649.36
Mitsubishi Heavy Industries
Haier (Qingdao) Air-
conditioners Co., Ltd. 715,461,260.26
Qingdao Haier Carrier
Refrigeration Equipment
Co., Ltd. 413,367,540.80 –21,000,000.00
Qingdao Haier Multimedia
Co., Ltd 153,550,234.50 –88,300,000.00
Qingdao Haier Moulds Co.,
Ltd. –272,577,907.92
Hefei Feier Smart
Technology Co., Ltd.
Anhui Kunhe Smart
Technology Co., Ltd. 1,997,782.61
Zhejiang Futeng Fluid
Technology Co., Ltd. 77,807,408.84
Beijing Mr. Hi Network
Technology Company
Limited 7,507,759.75 –7,507,759.75
Beijing Xiaobei Technology
Co., Ltd. –2,687,341.82
Beijing ASU Tech Co., Ltd. 12,829,433.78
Shenzhen Genyuan
Environmental Protection
Technology Co., Ltd. 6,914,487.73 –6,914,487.73
Qingdao Haimu Investment
Management Co., Ltd. 2,521,766.42
Qingdao Haimu Smart
Home Investment
Partnership (Limited
Partnership) 58,905,912.88
228 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Impairment
Increase/decrease Provision
Investees for the current period Closing balance Closing Balance
Other The disposal of
movement the investment
Hainengwanjia (Shanghai)
Technology Development
Co., Ltd. (海 能 萬 嘉
（上 海）科 技 發 展 有 限
公 司) 772,938.88
Qingdao Guochuang
Intelligent Household
Appliance Research
Institute Co., Ltd. 45,016,334.20
Guangzhou Heying
Investment Partnership
(Limited Partnership) 285,793,577.87
Qingdao Home Wow Cloud
Network Technology Co.,
Ltd. 2,547,217.00
Bingji (Shanghai) Corporate
Management Co., Ltd. 1,014,425,293.04
Youjin (Shanghai) Corporate
Management Co., Ltd. 1,843,591,441.88
RRS (Shanghai) Investment
Co., Ltd. 3,351,166,257.98
Haier Best Water
Technology Co., Ltd. 148,369,638.40
Huizhixiangshun Equity
Investment Fund
(Qingdao) Partnership
(Limited Partnership) 238,806,947.64
Qingdao Ririshun Huizhi
Investment Co., Ltd. 4,083,482.78
Qingdao Xinshenghui
Technology Co., Ltd. 8,598,002.89
Meiling Candy Washing
Machine Co., Ltd. –24,016,630.01
EuropaltersItaliaS.r.l. 15,760,505.28
OryginLLC 13,918,442.26
Konan Electronic Co., Ltd. 67,770,092.99
HNR Company (Private)
Limited 74,366,909.55
HPZ LIMITED 88,751,047.98
HaierRayaElectricS.A.E –9,879,160.89
CONTROLADORAMABES.
A.deC.V. 4,685,927,386.53
MiddleEast Air conditioning
Company,Limited 8,820,101.55 –845,634.54
Total — –309,161,040.64 24,652,368,172.86 –124,567,882.02
Haier Smart Home Co., Ltd. Annual Report 2022 229
Section X Financial Report
13. Investments in other equity instruments
(1) Details of investments in other equity instruments
√ Applicable □ Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
SINOPEC Fuel Oil Sales Corporation Limited 1,234,500,000.00 1,290,487,901.40
COSMO IOT Ecosystem Technology
Co., Ltd. 2,817,408,000.00 2,812,000,000.00
Other 1,799,974,930.20 749,397,043.23
Total 5,851,882,930.20 4,851,884,944.63
(2) Dividends from investment in other equity instruments during the current period:
Items Amount for the current period
SINOPEC Fuel Oil Sales Corporation Limited 21,597,813.60
Other 10,009,543.62
Total 31,607,357.22
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 34,022,711.50 2,128,550.51 36,151,262.01
2. Increase for the period
(1) External acquisition
(2) Inventories/fixed
assets/construction in
progress transferred in
(3) Increase in business
combinations
3. Decrease for the period
(1) Disposal
(2) Disposal of
subsidiaries
(3) Other transferring out
4. Change in foreign
exchange rate and others 2,629,072.85 2,629,072.85
5. Closing balance 36,651,784.35 2,128,550.51 38,780,334.86
230 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Houses and
Items buildings Land use rights Total
II. Accumulated depreciation
and accumulated
amortization
1. Opening balance 10,555,753.15 630,620.38 11,186,373.53
2. Increase for the period
(1) Provision or
amortization 1,331,401.97 40,236.22 1,371,638.19
3. Decrease for the period
(1) Disposal
(2) Disposal of
subsidiaries
(3) Other transferring out
4. Change in foreign
exchange rate and others 543,830.57 543,830.57
5. Closing balance 12,430,985.69 670,856.60 13,101,842.29
III. Provision for impairment
1. Opening balance
2. Increase for the period
(1) Provision
3. Decrease for the 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 24,220,798.66 1,457,693.91 25,678,492.57
2. Opening book value 23,466,958.35 1,497,930.13 24,964,888.48
(2) The depreciation and amortization amount charge for the period is RMB1,371,638.19 (amount
for the corresponding period: RMB1,337,191.36).
(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. Annual Report 2022 231
Section X Financial Report
15. Fixed assets
Presented by item
√ Applicable □ Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Fixed assets 27,158,348,424.28 22,303,470,855.46
Disposals of fixed assets 4,543,369.52
Total 27,158,348,424.28 22,308,014,224.98
Fixed assets
(1) Fixed assets:
Houses and Production Transportation
Items buildings equipment equipment
I. Original book value:
1. Opening balance 11,353,869,023.33 26,574,628,944.96 179,083,687.93
2. Increase for the period
(1) Acquisition 101,657,525.97 1,188,385,651.07 2,167,409.42
(2) Construction in progress
transferred in 2,891,101,753.55 2,743,020,391.66 21,453,507.31
(3) Increase in business combinations 590,522.62 710,633.26
3. Decrease for the period
(1) Disposal or write-off 46,129,650.12 628,913,476.22 9,351,808.74
(2) Disposal of subsidiaries 754,649.79
(3) Transfer to hold for sale
4. Change in foreign exchange rate and
others 336,041,830.45 1,446,702,112.84 545,067.44
5. Closing balance 14,637,131,005.80 31,324,534,257.57 193,143,213.57
II. Accumulated depreciation
1. Opening balance 3,922,452,407.13 13,228,502,231.17 107,950,259.30
2. Increase for the period
(1) Provision 543,265,392.34 2,588,160,230.25 19,634,196.19
(2) Increase in business
combinations
3. Decrease for the period
(1) Disposal or write-off 23,016,988.16 487,050,458.86 8,638,193.13
(2) Disposal of subsidiaries 645,746.91
(3) Transfer to hold for sale
4. Change in foreign exchange rate and
others 95,722,496.92 705,541,332.74 770,125.42
5. Closing balance 4,538,423,308.23 16,035,153,335.30 119,070,640.87
232 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Houses and Production Transportation
Items buildings equipment equipment
III. Provision for impairment
1. Opening balance 29,499,438.21 21,647,562.09 173,485.13
2. Increase for the period
(1) Provision 109,381.58 2,384,431.73
(2) Increase in business combinations
3. Decrease for the period
(1) Disposal or write-off 5,463,734.01 58,084.82
(2) Disposal of subsidiaries
(3) Transfer to hold for sale
4. Change in foreign exchange rate and
others –1,022,795.89 –2,365,489.53 –5,371.31
5. Closing balance 28,586,023.90 16,202,770.28 110,029.00
IV. Book value
1. Closing book value 10,070,121,673.67 15,273,178,151.99 73,962,543.70
2. Opening book value 7,401,917,177.99 13,324,479,151.70 70,959,943.50
Fixed assets (continued)
Items Office furniture Other Total
I. Original book value:
1. Opening balance 1,031,464,831.77 2,464,395,005.90 41,603,441,493.89
2. Increase for the period
(1) Acquisition 94,436,679.81 51,377,212.28 1,438,024,478.55
(2) Construction in progress
transferred in 229,928,105.43 358,718,424.14 6,244,222,182.09
(3) Increase in business combinations 1,148,899.85 2,450,055.73
3. Decrease for the period
(1) Disposal or write-off 51,864,855.66 117,788,696.08 854,048,486.82
(2) Disposal of subsidiary 434,468.68 37,980.00 1,227,098.47
(3) Transfer to hold for sale
4. Change in foreign exchange rate and
others 21,106,516.36 158,930,592.75 1,963,326,119.84
5. Closing balance 1,324,636,809.03 2,916,743,458.84 50,396,188,744.81
II. Accumulated depreciation
1. Opening Balance 565,874,594.66 1,418,493,692.20 19,243,273,184.46
2. Increase for the period
(1) Provision 243,101,288.42 268,425,659.27 3,662,586,766.47
(2) Increase in business combinations
3. Decrease for the period
(1) Disposal or write-off 32,221,331.47 51,780,228.89 602,707,200.51
(2) Disposal of subsidiary 414,487.19 36,090.25 1,096,324.35
Haier Smart Home Co., Ltd. Annual Report 2022 233
Section X Financial Report
Items Office furniture Other Total
(3) Transfer to hold for sale
4. Change in foreign exchange rate and
others 12,524,084.75 73,571,430.33 888,129,470.16
5. Closing Balance 788,864,149.17 1,708,674,462.66 23,190,185,896.23
III. Provision for impairment
1. Opening balance 258,528.08 5,118,440.46 56,697,453.97
2. Increase for the period
(1) Provision 697,457.73 3,191,271.04
(2) Increase in business combinations
3. Decrease for the period
(1) Disposal or write-off 6,270.95 2,936,006.73 8,464,096.51
(2) Disposal of subsidiary
(3) Transfer to hold for sale
4. Change in foreign exchange rate and
others –8,869.75 –367,677.72 –3,770,204.20
5. Closing balance 243,387.38 2,512,213.74 47,654,424.30
IV. Book value
1. Closing book value 535,529,272.48 1,205,556,782.44 27,158,348,424.28
2. Opening book value 465,331,709.03 1,040,782,873.24 22,303,470,855.46
(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 RMB6,244,222,182.09 (amount for the corresponding
period: RMB4,269,007,467.86).
(3) As at 31 December 2022, the net book value of the buildings for which the Company has
not yet obtained certificates of title was RMB2.037 billion (opening amount of RMB274
million), of which RMB1.884 billion was put into use at the end of 2022 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
at the beginning of the period.
(5) Disposals of fixed assets
Reason for
Closing Opening transferring to
Items Balance Balance disposal
Relocation of Qingdao
Industrial Park 4,543,369.52 Demolition
Total 4,543,369.52
234 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
16. Construction in progress
Presented by item
√ Applicable □ Not Applicable
Unit and Currency: RMB
Closing Opening
Items Balance Balance
Construction in progress 4,094,684,500.49 4,183,263,398.79
Construction materials
Total 4,094,684,500.49 4,183,263,398.79
Construction in progress
(1) Balance of 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
Europe Candy Project 467,370,049.46 467,370,049.46 153,117,404.68 153,117,404.68
Eastern European Project 392,579,594.60 392,579,594.60 183,534,295.62 183,534,295.62
America GEA Project 338,096,215.95 338,096,215.95 722,008,600.99 722,008,600.99
Shanghai Washing
Appliances Project 315,004,188.48 315,004,188.48 4,756,839.22 4,756,839.22
Qingdao Air Conditioning
Electronics Project 313,855,913.14 313,855,913.14 57,933,662.48 57,933,662.48
Zhengzhou New Energy
Project 197,524,472.64 197,524,472.64 125,734,579.67 125,734,579.67
New Zealand FPA Project 176,619,361.43 176,619,361.43 111,516,266.46 111,516,266.46
Hefei Drum Washing
Machine Project 98,411,863.30 98,411,863.30 54,949,612.93 54,949,612.93
Foshan Freezer Project 97,616,741.69 97,616,741.69 199,726,996.70 199,726,996.70
Qingdao Jiaozhou
Washing Appliances
Project 93,825,106.07 93,825,106.07 167,168.14 167,168.14
Qingdao Water Ecology
Technology Project 92,905,882.13 92,905,882.13
Hailvyuan Recycling
Technology Project 75,470,633.24 75,470,633.24 58,589,285.46 58,589,285.46
Qingdao Smart
Appliances Project 67,092,916.99 67,092,916.99 39,116,050.61 39,116,050.61
Special Refrigerator
Project 66,136,656.59 66,136,656.59 220,203,225.72 220,203,225.72
Haier Dishwasher Project 64,842,812.91 64,842,812.91 91,964,708.57 91,964,708.57
Wuhan Haier freezer
Project 64,045,346.34 64,045,346.34 103,052,450.36 103,052,450.36
Chongqing Water Heater
Project 61,350,349.63 61,350,349.63 17,708,337.38 17,708,337.38
Chongqing Washing
Appliances Project 59,889,999.86 59,889,999.86
Tianjin Washing Appliance
Project 59,146,925.20 59,146,925.20 59,409,379.45 59,409,379.45
Haier Smart Home Co., Ltd. Annual Report 2022 235
Section X Financial Report
Projects Closing Balance Opening Balance
Impairment Impairment
Book balance Provision Book Value Book balance provision Book Value
Qingdao Development
Zone Water Heater
Project 59,124,223.22 59,124,223.22 28,850,846.94 28,850,846.94
Hefei Refrigerator Project 57,694,281.98 57,694,281.98 208,080,465.14 208,080,465.14
Others 877,291,584.56 1,210,618.92 876,080,965.64 1,744,048,203.99 1,204,981.72 1,742,843,222.27
Total 4,095,895,119.41 1,210,618.92 4,094,684,500.49 4,184,468,380.51 1,204,981.72 4,183,263,398.79
(2) Details of significant changes of construction in progress for the period
Change
in foreign
Opening Increase for the Transfer to exchange rate
Project name balance current period fixed assets Other decrease and others Closing balance Source of fund
Europe Candy Project 153,117,404.68 558,282,924.59 308,622,314.33 64,592,034.52 467,370,049.46 Self-funding
Eastern European Project 183,534,295.62 579,942,619.46 374,945,381.00 4,048,060.52 392,579,594.60 Self-funding
America GEA Project 722,008,600.99 561,061,906.71 996,350,326.02 51,376,034.27 338,096,215.95 Self-funding
Shanghai Washing
Appliances Project 4,756,839.22 744,624,823.61 434,377,474.35 315,004,188.48 Self-funding
Qingdao Air Conditioning
Electronics Project 57,933,662.48 344,820,217.35 88,897,966.69 313,855,913.14 Self-funding
Zhengzhou New Energy
Project 125,734,579.67 189,899,480.45 118,109,587.48 197,524,472.64 Self-funding
New Zealand FPA Project 111,516,266.46 213,046,224.99 153,925,175.85 5,982,045.83 176,619,361.43 Self-funding
Hefei Drum Washing
Machine Project 54,949,612.93 83,357,570.79 39,895,320.42 98,411,863.30 Self-funding
Foshan Freezer Project 199,726,996.70 39,362,551.12 141,472,806.13 97,616,741.69 Self-funding
Qingdao Jiaozhou
Washing Appliances
Project 167,168.14 169,026,880.93 75,368,943.00 93,825,106.07 Self-funding
Qingdao Water Ecology
Technology Project 92,905,882.13 92,905,882.13 Self-funding
Hailvyuan Recycling
Technology Project 58,589,285.46 174,296,964.23 157,415,616.45 75,470,633.24 Self-funding
Qingdao Smart
Appliances Project 39,116,050.61 47,146,371.58 19,169,505.20 67,092,916.99 Self-funding
Special Refrigerator
Project 220,203,225.72 20,007,471.04 174,074,040.17 66,136,656.59 Self-funding
Haier Dishwasher Project 91,964,708.57 80,495,751.96 107,617,647.62 64,842,812.91 Self-funding
Wuhan Haier freezer
Project 103,052,450.36 30,197,051.77 69,204,155.79 64,045,346.34 Self-funding
Chongqing Water Heater
Project 17,708,337.38 63,724,952.10 20,082,939.85 61,350,349.63 Self-funding
Chongqing Washing
Appliances Project 80,594,688.42 20,704,688.56 59,889,999.86 Self-funding
Tianjin Washing Appliance
Project 59,409,379.45 31,743,637.58 32,006,091.83 59,146,925.20 Self-funding
Qingdao Development
Zone Water Heater
Project 28,850,846.94 74,138,742.78 43,865,366.50 59,124,223.22 Self-funding
Hefei Refrigerator Project 208,080,465.14 45,961,497.56 196,347,680.72 57,694,281.98 Self-funding
Self-funding/fund
Others 1,744,048,203.99 1,801,838,916.53 2,671,879,554.13 3,284,018.17 877,291,584.56 raising
Total 4,184,468,380.51 6,026,477,127.68 6,244,332,582.09 129,282,193.31 4,095,895,119.41
236 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
(3) Impairment provision of construction in progress
Change in
foreign
Increase for exchange
Opening the current Transfer to Other rate and Closing
Project name balance period fixed assets decrease others balance
Lejia IOT Project 837,735.85 837,735.85
Others 367,245.87 107,523.90 110,400.00 8,513.30 372,883.07
Total 1,204,981.72 107,523.90 110,400.00 8,513.30 1,210,618.92
17. Right-of-use assets
Houses and Production Transportation
Items buildings equipment equipment
I. Original book value:
1. Opening balance 3,565,296,279.05 43,142,180.40 205,005,241.06
2. Increase for the current period
(1) Increase 1,643,558,415.83 7,023,796.16 44,625,189.74
3. Decrease for the current period
(1) Disposal 721,830,499.56 4,821,027.13 39,758,835.98
(2) Disposal of subsidiary 686,878.07
4. Change in foreign exchange rate
and others 187,362,591.58 –7,970,760.99 3,339,682.93
5. Closing balance 4,673,699,908.83 37,374,188.44 213,211,277.75
II. Accumulated depreciation
1. Opening balance 1,186,766,506.57 18,538,537.80 104,827,622.22
2. Increase for the current period
(1) Provision 723,469,841.56 7,352,846.54 63,260,043.73
3. Decrease for the current period
(1) Disposal 678,927,696.64 4,821,027.13 37,747,434.96
(2) Disposal of subsidiary 410,841.82
4. Change in foreign exchange rate
and others 53,185,390.50 –2,098,028.65 –4,840,901.53
5. Closing balance 1,284,083,200.17 18,972,328.56 125,499,329.46
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 subsidiary
4. Change in foreign exchange
rate and others
5. Closing balance
IV. Book Value
1. Closing book balance 3,389,616,708.66 18,401,859.88 87,711,948.29
2. Opening book balance 2,378,529,772.48 24,603,642.60 100,177,618.84
Haier Smart Home Co., Ltd. Annual Report 2022 237
Section X Financial Report
Right-of-use assets (continued)
Items Office furniture Other Total
I. Original book value:
1. Opening balance 56,885,631.59 392,228,761.08 4,262,558,093.18
2. Increase for the current period
(1) Increase 9,351,245.42 148,918,518.62 1,853,477,165.77
3. Decrease for the current period
(1) Disposal 2,174,726.79 210,488,135.97 979,073,225.43
(2) Disposal of subsidiary 686,878.07
4. Change in foreign exchange rate
and others –10,926,649.16 33,871,179.06 205,676,043.42
5. Closing balance 53,135,501.06 364,530,322.79 5,341,951,198.87
II. Accumulated depreciation
1. Opening balance 17,981,428.91 199,765,091.15 1,527,879,186.65
2. Increase for the current period
(1) Provision 10,217,962.96 91,808,692.08 896,109,386.87
3. Decrease for the current period
(1) Disposal 2,174,726.79 210,488,135.97 934,159,021.49
(2) Disposal of subsidiary 410,841.82
4. Change in foreign exchange rate
and others –3,173,259.18 14,233,933.63 57,307,134.77
5. Closing balance 22,851,405.90 95,319,580.89 1,546,725,844.98
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 subsidiary
4. Change in foreign exchange rate
and others
5. Closing balance
IV. Book Value
1. Closing book balance 30,284,095.16 269,210,741.90 3,795,225,353.89
2. Opening book balance 38,904,202.68 192,463,669.93 2,734,678,906.53
238 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
18. Intangible assets
Proprietary Licenses and
Items technology franchises Land use rights
I. Original book value
1. Opening balance 1,852,677,632.57 4,242,396,745.16 1,266,446,332.10
2. Increase for the current period
(1) Purchase 1,037,735.83 36,954,158.55 350,861,991.46
(2) Internal research and
development 124,845,373.37
(3) Increase in business
combination
3. Decrease for the current period
(1) Disposal 21,150,987.85 20,244,270.89
(2) Disposal of subsidiary
(3) Transfer to hold for sale
4. Change in foreign exchange rate
and others 88,335,587.32 382,545,587.95 469,714.81
5. Closing balance 2,045,745,341.24 4,641,652,220.77 1,617,778,038.37
II. Accumulated amortization
1. Opening balance 946,309,396.14 822,985,645.24 215,300,271.80
2. Increase for the current period
(1) Provision 200,049,471.79 146,606,413.97 31,360,014.54
(2) Increase in business
combination
3. Decrease for the current period
(1) Disposal 21,150,987.80 17,118,801.38
(2) Disposal of subsidiary
(3) Transfer to hold for sale
4. Change in foreign exchange rate
and others 52,518,817.42 60,519,964.34 –66,681.10
5. Closing balance 1,177,726,697.55 1,012,993,222.17 246,593,605.24
III. Impairment provision
1. Opening balance
2. Increase for the current period
(1) Provision
(2) Increase in business
combination
3. Decrease for the current period
(1) Disposal
(2) Disposal of subsidiary
(3) Transfer to hold for sale
4. Change in foreign exchange rate
and others
5. Closing balance
IV. Book Value
1. Closing book balance 868,018,643.69 3,628,658,998.60 1,371,184,433.13
2. Opening book balance 906,368,236.43 3,419,411,099.92 1,051,146,060.30
Haier Smart Home Co., Ltd. Annual Report 2022 239
Section X Financial Report
Intangible assets (continued)
Application
management
software and
Items Trademark rights others Total
I. Original book value
1. Opening balance 2,475,717,142.63 4,195,088,908.80 14,032,326,761.26
2. Increase for the current period
(1) Purchase 261,891,814.26 650,745,700.10
(2) Internal research and
development 703,363,975.05 828,209,348.42
(3) Increase in business
combination 10,091,872.50 10,091,872.50
3. Decrease for the current period
(1) Disposal 39,931.49 62,882,800.64 104,317,990.87
(2) Disposal of subsidiary
(3) Transfer to hold for sale
4. Change in foreign exchange rate
and others 107,299,533.43 236,804,464.65 815,454,888.16
5. Closing balance 2,582,976,744.57 5,344,358,234.62 16,232,510,579.57
II. Accumulated amortization
1. Opening balance 2,441,416,170.95 4,426,011,484.13
2. Increase for the current period
(1) Provision 696,925,839.98 1,074,941,740.28
(2) Increase in business
combination
3. Decrease for the current period
(1) Disposal 26,462,001.31 64,731,790.49
(2) Disposal of subsidiary
(3) Transfer to hold for sale
4. Change in foreign exchange rate
and others 153,850,762.12 266,822,862.78
5. Closing balance 3,265,730,771.74 5,703,044,296.70
III. Impairment provision
1. Opening balance 55,930,533.23 55,930,533.23
2. Increase for the current period
(1) Provision
(2) Increase in business
combination
3. Decrease for the current period
(1) Disposal 32,345,627.57 32,345,627.57
(2) Disposal of subsidiary
(3) Transfer to hold for sale
4. Change in foreign exchange rate
and others
5. Closing balance 23,584,905.66 23,584,905.66
IV. Book Value
1. Closing book balance 2,582,976,744.57 2,055,042,557.22 10,505,881,377.21
2. Opening book balance 2,475,717,142.63 1,697,742,204.62 9,550,384,743.90
240 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
At the end of the period, the intangible assets developed through the Company accounted for
the 20.47% of the original value at the end of the period (accounting for 17.06% at the
beginning of the period).
19. Development cost
Change in
Increase for foreign
Opening the current exchange rate Closing
Items balance period Decrease for the current period and others balance
Recognized as Included in
intangible current profit Disposal of
asset and loss subsidiary
91ABD. ERP IT
Program 41,946,252.47 91,741,744.72 128,722,339.21 2,573,460.44 7,539,118.42
IOT Project 110,027,251.84 75,735,477.82 185,762,729.66
Others 75,918,724.82 739,267,880.70 513,724,279.55 165,680,958.99 11,160,030.27 146,941,397.25
Total 227,892,229.13 906,745,103.24 828,209,348.42 165,680,958.99 13,733,490.71 154,480,515.67
20. Goodwill
Change in foreign
Increase for the Decrease for the exchange rate and
Items Opening balance current period current period others Closing balance
GEA 18,938,463,729.43 1,743,253,534.79 20,681,717,264.22
Candy 1,877,121,985.56 52,831,999.59 1,929,953,985.15
Others 1,011,517,345.77 13,817,128.58 6,589,920.15 1,031,924,394.50
Total 21,827,103,060.76 13,817,128.58 1,802,675,454.53 23,643,595,643.87
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 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 2.29%–6.68%)
and the EBITDA profit margin (mainly 4.29%–12.43%) 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 10.2%–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. Annual Report 2022 241
Section X Financial Report
21. Long-term amortized expenses
Change in
Amortization for foreign
Increase for the the current exchange rate
Items Opening balance current period period Other decrease and others Closing balance
Renovation 341,401,034.69 451,003,919.97 334,678,428.86 79,964.56 457,806,490.36
Improvement on leased
property 154,175,600.78 17,739,906.50 28,204,841.03 2,747,442.97 146,458,109.22
Others 93,566,442.42 111,560,990.57 48,454,979.49 –1,053,878.88 155,618,574.62
Total 589,143,077.89 580,304,817.04 411,338,249.38 1,773,528.65 759,883,174.20
22. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets before elimination
Items Closing balance Opening balance
Provision for assets impairment 484,686,533.08 354,806,051.43
Liabilities 1,524,046,160.33 1,405,119,092.59
Internal unrealized earnings eliminated
due to combination 848,773,608.23 619,291,715.60
Uncovered losses 217,344,490.61 817,306,157.01
R&D expenses 615,110,766.72 56,914,918.90
Others 347,135,709.18 393,477,903.16
Total 4,037,097,268.15 3,646,915,838.69
(2) Deferred income tax liabilities before elimination
Items Closing balance Opening balance
Asset amortisation 3,006,598,088.30 2,318,829,386.48
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 293,662,487.81 292,476,080.49
Others 494,850,409.06 421,341,222.80
Total 4,673,734,789.63 3,911,270,494.23
(3) The deferred income tax assets and the deferred income tax liabilities eliminated at the end
of the period was RMB2,314,874,230.44 (amount at the beginning of the period
RMB1,789,467,320.40).
Other explanation:
□ Applicable √ Not Applicable
242 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
23. Other non-current assets
Items Closing balance Opening balance
Prepayments for equipment and land 1,671,590,606.02 1,859,693,694.07
Others 209,146,285.61 304,690,319.07
Total 1,880,736,891.63 2,164,384,013.14
24. Short-term borrowings
√ Applicable □ Not Applicable
Unit and Currency: RMB
Item Closing balance Opening balance
Borrowings — secured by pledge 70,878,338.07 255,103,925.36
Borrowings — secured by guarantee 84,506,733.93 304,896,830.40
Borrowings — secured by credit 9,479,489,787.33 10,661,927,352.96
Interest payable for short-term borrowings 8,499,873.13 4,284,025.67
Total 9,643,374,732.46 11,226,212,134.39
25. Financial liabilities held for trading
Items Closing balance Opening balance
Forward foreign exchange contracts 6,294,014.40
Total 6,294,014.40
26. Derivative financial liabilities
√ Applicable □ Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Forward foreign exchange contracts 92,580,419.48 60,527,532.76
Forward commodity contracts 12,013,621.18
Interest rate swap agreement 19,684,900.48
Total 104,594,040.66 80,212,433.24
Haier Smart Home Co., Ltd. Annual Report 2022 243
Section X Financial Report
27. Bills payable
√ Applicable □ Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Commercial acceptance notes 2,212,721,304.36 3,022,602,833.31
Bank acceptance notes 22,878,224,116.92 22,000,635,573.41
Total 25,090,945,421.28 25,023,238,406.72
28. Accounts payables
√ Applicable □ Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Accounts payables 41,883,694,299.24 42,363,218,840.33
Total 41,883,694,299.24 42,363,218,840.33
The book balance at the end of the period was mainly the unpaid expenditures on material and
labour.
29. Contractual liabilities
√ Applicable □ Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Contractual liabilities 9,329,554,748.34 10,027,091,593.60
Total 9,329,554,748.34 10,027,091,593.60
The book balance at the end of the period is mainly due to the advance payment that has been
collected and has not yet performed the contractual obligations.
244 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
30. Payables for staff remuneration
√ Applicable □ Not Applicable
(1) Payables for staff remuneration
Unit and Currency: RMB
Increase for the Decrease for the
Items Opening balance current period current period Closing balance
I. Short-term remuneration 3,988,907,110.68 25,946,782,966.68 26,119,959,546.22 3,815,730,531.14
II. Post-employment
benefits defined
contribution plan 19,100,855.17 1,370,126,936.35 1,323,781,624.17 65,446,167.35
III. Termination benefits 9,818,188.41 67,018,092.95 41,669,406.96 35,166,874.40
IV. Other benefits due
within one year 101,599,133.34 58,929,753.80 26,407,705.66 134,121,181.48
Total 4,119,425,287.60 27,442,857,749.78 27,511,818,283.01 4,050,464,754.37
(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 2,848,692,628.83 19,241,002,573.90 19,430,129,697.82 2,659,565,504.91
II. Employee welfare 321,996,794.22 972,603,845.99 961,551,256.01 333,049,384.20
III. Social benefit 171,645,833.66 1,746,401,940.66 1,693,687,072.96 224,360,701.36
IV. Housing fund 11,137,621.51 507,873,900.28 513,974,914.65 5,036,607.14
V. Labor union fee and
education fund 3,790,540.75 121,507,187.96 116,272,286.45 9,025,442.26
VI. Short-term
compensated leave 268,213,164.85 491,622,903.29 499,213,550.01 260,622,518.13
VII. Others 363,430,526.86 2,865,770,614.60 2,905,130,768.32 324,070,373.14
Total 3,988,907,110.68 25,946,782,966.68 26,119,959,546.22 3,815,730,531.14
Haier Smart Home Co., Ltd. Annual Report 2022 245
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 18,396,477.11 1,280,918,422.91 1,235,152,520.94 64,162,379.08
2. Unemployment insurance 132,417.35 35,062,369.94 34,847,957.35 346,829.94
3. Enterprise annuity
payment 571,960.71 54,146,143.50 53,781,145.88 936,958.33
Total 19,100,855.17 1,370,126,936.35 1,323,781,624.17 65,446,167.35
(4) Termination benefits
Opening
Items Closing balance balance
Termination compensation 35,166,874.40 9,818,188.41
Total 35,166,874.40 9,818,188.41
31. Taxes payable
√ Applicable □ Not Applicable
Unit and Currency: RMB
Opening
Items Closing balance balance
Value-added tax 860,587,585.73 961,934,808.61
Corporate income tax 1,702,692,154.06 1,308,563,619.70
Individual income tax 100,168,757.87 94,885,149.39
City maintenance and construction tax 28,202,062.65 40,423,487.04
Education surcharge 14,512,234.06 16,193,890.94
The electrical and electronic products waste
treatment fund 97,068,373.00 95,522,090.50
Other taxes 69,615,659.80 90,299,610.19
Total 2,872,846,827.17 2,607,822,656.37
246 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
32. Other payables
√ Applicable □ Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Dividends payable 1,246,573.35 10,639,313.22
Other payables 17,510,525,089.35 17,559,700,612.54
Total 17,511,771,662.70 17,570,339,925.76
(1) Dividends payable
Name of unit Closing balance Opening balance
Other public shareholders 1,246,573.35 10,639,313.22
Total 1,246,573.35 10,639,313.22
(2) Other payables
Items Closing balance Opening balance
Other payables 17,510,525,089.35 17,559,700,612.54
Total 17,510,525,089.35 17,559,700,612.54
The closing balance mainly included the incurred but unpaid costs.
33. Non-current liabilities due within one year
√ Applicable □ Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Long-term borrowings due within one year 2,854,446,929.32 6,745,950,334.20
Lease liabilities due within one year 903,249,632.59 687,991,183.42
Anticipated liabilities due within one year 2,537,054,105.17 2,190,397,652.84
Total 6,294,750,667.08 9,624,339,170.46
Haier Smart Home Co., Ltd. Annual Report 2022 247
Section X Financial Report
34. Other current liabilities
√ Applicable □ Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Payable refund 624,887,787.38 655,801,519.33
Tax amount to be transferred to output tax 1,198,555,405.78 1,568,670,492.94
Others 26,982,922.63 14,295,539.13
Total 1,850,426,115.79 2,238,767,551.40
35. Long-term borrowings
√ Applicable □ Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Borrowings — unsecured by credit 13,567,316,873.43 3,038,573,824.53
Borrowings — secured by guarantee 23,550,000.00
Total 13,590,866,873.43 3,038,573,824.53
The interest rates of the Company’s long-term borrowings: 1.19%–5.31%.
36. Bonds payable
In November 2017, Harvest International Company, the Company’s wholly-owned subsidiary,
issued HK$8 billion five-year exchangeable corporate bonds, with a coupon rate of zero and a
rate on investment of 1%. In September 2020, the Company considered and approved the
scheme to convert the exchangeable bonds into convertible bonds. The underlying shares of the
original exchangeable bonds were changed from the shares of Haier Electronic to newly issued
H-shares of Haier Smart Home (referred to as EB to CB Scheme). On 23 December 2020,
H-shares of Haier Smart Home were listed and traded, and the EB-to-CB Scheme took effect.
The outstanding principle amount of the original exchangeable bonds was HK$7.993 billion. The
maturity date, coupon rate and yield rate of the bond remain unchanged. The liability component
and equity component of convertible bonds at the initial recognition:
Convertible corporate bonds on
Items 23 December 2020
Initial recognition: 9,105,660,619.93
Including：
Equities of the convertible bond 2,364,195,333.79
Liabilities of the convertible bond 6,741,465,286.14
248 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Changes in the liability portion of corporate bonds in the current period:
Less: bond
Accrued bond interest paid for Redemption in Shares
Increase for the Interest for the the current the current converted in the Exchange rate
Items Opening balance current period current period period period current period impact Closing balance
Convertible corporate bonds (CB) 334,730,048.82 5,847,637.75 4,848,724.30 361,395,824.17 25,666,861.90
Total 334,730,048.82 5,847,637.75 4,848,724.30 361,395,824.17 25,666,861.90
37. Lease liabilities
Items Closing balance Opening balance
Lease liabilities 3,727,727,303.21 2,648,886,164.89
Less: lease liabilities due within one year 903,249,632.60 687,991,183.42
Total 2,824,477,670.61 1,960,894,981.47
38. Long-term payables
Items Closing balance Opening balance
Investment from CDB development fund 36,500,000.00 36,500,000.00
Others 7,740,087.94 63,102,707.76
Less: long-term payables due within one year
Total 44,240,087.94 99,602,707.76
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.
Haier Smart Home Co., Ltd. Annual Report 2022 249
Section X Financial Report
39. 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 plan 417,072,669.76 517,077,143.43
II. Termination benefits 386,522,704.17 453,425,129.57
III. Provision for work-related injury
compensation 206,951,828.41 202,649,488.64
Total 1,010,547,202.34 1,173,151,761.64
(2) Defined benefits plan
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 to defined benefit plans
Items Rate
Discount rate 0.50%
Expected rate of return 2.00%
250 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Present value of defined benefit obligations
Items Amount
I. Opening balance 279,152,422.12
II. Defined benefit cost recognized in current profit or loss 8,755,696.92
1. Current service cost 7,455,244.10
2. Past service cost
3. Settlement gains (loss indicated in ‘ — ’)
4. Interest cost 1,300,452.82
III. Defined benefit cost recognized in other comprehensive
income –2,115,953.62
1. Actuarial loss (gain indicated in ‘ — ’) –2,115,953.62
IV. Other changes –32,490,184.11
1. The consideration paid at the time of settlement
2. Benefit paid –16,945,470.21
3. Exchange differences –15,544,713.90
V. Closing balance 253,301,981.31
Fair value of plan assets
Items Amount
I. Opening balance 337,081,685.24
II. Defined benefit cost recognized in current profit and loss 6,137,579.93
1. Interest income 6,137,579.93
III. Defined benefit cost recognized in other comprehensive
income –23,745,622.09
1. Return on plan assets (except those included in net
interests) –23,745,622.09
2. Changes in impact of asset cap (except those included
in net interests)
IV. Other changes –25,728,500.35
1. Employer contributions 2,351,112.64
2. Benefit paid –9,140,773.62
3. Exchange differences –18,938,839.37
V. Closing balance 293,745,142.73
Neither the Company’s ordinary shares or bonds, nor the properties occupied by the
Company are included in the plan assets.
Haier Smart Home Co., Ltd. Annual Report 2022 251
Section X Financial Report
Net liability (net asset) of defined benefit plan
Items Amount
I. Opening balance –57,929,263.12
II. Defined benefit cost recognized in current profit or loss 2,618,116.99
III. Defined benefit cost recognized in other comprehensive
income 21,629,668.47
IV. Other changes –6,761,683.76
V. Closing balance –40,443,161.42
The average term for the defined benefit obligation is 11.73 years at the balance
sheet date.
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 defined benefit plans
Items Rate
Discount rate 5.59%
Present value of defined benefit obligations
Items Amount
I. Opening balance 128,979,684.17
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 11,160,460.51
1. Current service cost 7,310,935.93
2. Past service cost
3. Settlement gains (loss indicated in ‘ — ’)
4. Interest cost 3,849,524.58
IV. Defined benefit cost recognized in other comprehensive
incomes –29,716,130.82
1. Actuarial loss (gain indicated in ‘ — ’) –29,716,130.82
V. Other changes 13,353,406.38
1. The consideration paid at the time of settlement
2. Benefit paid –7,637,603.12
3. Plan amendments 9,659,287.75
4. Exchange differences 11,331,721.75
VI. Closing balance 123,777,420.24
252 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Net liability (net asset) of defined benefit plan
Items Amount
I. Opening balance 128,979,684.17
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 11,160,460.51
IV. Defined benefit cost recognized in other comprehensive
incomes –29,716,130.82
V. Other changes 13,353,406.38
VI. Closing balance 123,777,420.24
The average term for the defined benefit obligation is 11.22 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 defined benefit plans
Items Rate
Discount rate 5.51%
Haier Smart Home Co., Ltd. Annual Report 2022 253
Section X Financial Report
Present value of defined benefit obligations
Items Amount
I. Opening balance 221,602,455.52
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 5,965,648.96
1. Current service cost
2. Past service cost
3. Settlement gains (loss indicated in ‘ — ’)
4. Interest cost 5,965,648.96
IV. Defined benefit cost recognized in other comprehensive
incomes –24,365,460.38
1. Actuarial loss (gain indicated in ‘ — ’) –24,365,460.38
V. Other changes –8,098,449.97
1. The consideration paid at the time of settlement
2. Benefit paid –26,970,932.93
3. Exchange differences 18,872,482.96
VI. Closing balance 195,104,194.13
Net liability (net asset) of defined benefit plan
Items Amount
I. Opening balance 221,602,455.52
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 5,965,648.96
IV. Defined benefit cost recognized in other comprehensive
incomes –24,365,460.38
V. Other changes –8,098,449.97
VI. Closing balance 195,104,194.13
254 Haier Smart Home Co., Ltd. Annual Report 2022
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 defined benefit plans
Items Rate
Discount rate 5.51%
Present value of defined benefit obligations
Items Amount
I. Opening balance 166,510,439.87
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 4,081,765.48
1. Current service cost
2. Past service cost
3. Settlement gains (loss indicated in ‘ — ’)
4. Interest cost 4,081,765.48
IV. Defined benefit cost recognized in other comprehensive
incomes –23,095,869.18
1. Actuarial loss (gain indicated in ‘ — ’) –23,095,869.18
V. Other changes –20,629,461.15
1. The consideration paid at the time of settlement
2. Benefit paid –34,139,499.45
3. Exchange differences 13,510,038.30
VI. Closing balance 126,866,875.02
Haier Smart Home Co., Ltd. Annual Report 2022 255
Section X Financial Report
Fair value of plan assets
Items Amount
I. Opening balance 126,020,077.85
II. Defined benefit cost recognized in current profit or loss
1. Interest income
III. Defined benefit cost recognized in other comprehensive
incomes –10,974,063.63
1. Return on plan assets (except those included in net
interests) –10,974,063.63
2. Changes in impact of asset cap (except those included
in net interests)
IV. Other changes –23,006,241.35
1. Employer contributions 2,502,057.77
2. Benefits paid out –35,597,949.95
3. Exchange differences 10,089,650.83
V. Closing balance 92,039,772.87
Net liability (net asset) of defined benefit plan
Items Amount
I. Opening balance 40,490,362.02
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 4,081,765.48
IV. Defined benefit cost recognized in other comprehensive
income –12,121,805.55
V. Other changes 2,376,780.20
VI. Closing balance 34,827,102.15
256 Haier Smart Home Co., Ltd. Annual Report 2022
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 202,649,488.64
II. Business combination not under common control
III. Compensation recognized in current profit and loss 96,295,893.87
IV. Actual compensation paid –64,397,610.92
V. Other changes –27,595,943.18
VI. Closing balance 206,951,828.41
Classification of the balance of defined benefit plan
Items Closing balance Opening balance
Short-term Benefit 36,444,790.69 32,502,729.33
Long-term Benefit 417,072,669.76 517,077,143.43
Total 453,517,460.45 549,579,872.76
40. Estimated liabilities
√ Applicable □ Not Applicable
Unit and Currency: RMB
Items Opening balance Closing balance
Active litigation 29,259,869.48 18,469,174.18
Others 252,996,489.56 262,077,808.56
Projection of warranty expenses and
installation fees 1,666,309,118.07 1,330,482,237.43
Total 1,948,565,477.11 1,611,029,220.17
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. Annual Report 2022 257
Section X Financial Report
41. 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 852,794,567.20 262,630,986.65 166,490,419.80 948,935,134.05
Total 852,794,567.20 262,630,986.65 166,490,419.80 948,935,134.05
42. Share capital
Increase for Decrease for
Opening the current the current Closing
Share category balance period period 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 9,398,704,530 62,864,163 14,970,200 9,446,598,493
1. Ordinary shares in
RMB 6,308,552,654 6,308,552,654
2. Domestic listed
foreign Shares
3. Offshore listed foreign
Shares 3,090,151,876 62,864,163 14,970,200 3,138,045,839
4. Others
III. Total shares 9,398,704,530 62,864,163 14,970,200 9,446,598,493
258 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
43. Other equity instruments
Increase for the Decrease for the
Items Opening balance current period current period Closing balance
Equity portion of
convertible bond 118,017,507.59 118,017,507.59
Total 118,017,507.59 118,017,507.59
44. Capital reserve
√ Applicable □ Not Applicable
Unit and Currency: RMB
Increase for the Decrease for the
Items Opening balance current period current period Closing balance
Share premium (share capital
premium) 21,590,525,556.91 1,445,824,970.89 786,112,567.91 22,250,237,959.89
Others capital reserve 1,074,849,182.55 912,283,606.31 385,333,423.99 1,601,799,364.87
Total 22,665,374,739.46 2,358,108,577.20 1,171,445,991.90 23,852,037,324.76
The main reasons for the change in capital premium: The non-public issue of H shares for the
current period resulted in the increase in capital premium of RMB898,627,404.94; the conversion
of CB for the current period resulted in the increase in capital premium of RMB457,962,768.76;
the cancellation of treasury stock for the current period resulted in the decrease in capital
premium of RMB315,351,869.05; a business combination under the same control occurred for
the current period resulted in the decrease in capital premium of RMB304,818,769.28.
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 RMB912,283,606.31; the exercise of
stock ownership plan for the current period resulted in the decrease in other capital reserves of
RMB218,448,143.60.
Haier Smart Home Co., Ltd. Annual Report 2022 259
Section X Financial Report
45. Other comprehensive income
Items Amounts for the current period
Attributable
Deduction Attributable to to minority
Amount before of Impact on the parent shareholders
Opening balance current income tax income tax company after tax after tax Others Closing balance
a –341,470,688.45 99,921,599.99 — 99,921,599.99 –0.00 –241,549,088.46
b 1,618,386.47 816,720.90 9,010,066.04 2,308,423.98 7,518,362.96 3,926,810.45
c –1,916,614,455.79 3,158,845,054.75 3,168,394,472.68 –9,549,417.93 1,251,780,016.89
d 1,005,776,349.60 –150,689,650.82 13,862,982.16 –136,488,922.01 –337,746.65 336,152.58 869,623,580.17
e 73,838,708.25 38,812,373.94 –5,738,054.65 33,063,471.15 10,848.14 106,902,179.40
Total –1,176,851,699.92 3,147,706,098.76 17,134,993.55 3,167,199,045.79 –2,357,953.48 336,152.58 1,990,683,498.45
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.
46. 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 3,390,959,108.25 575,574,713.40 3,966,533,821.65
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 3,438,615,909.84 575,574,713.40 4,014,190,623.24
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.
260 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
47. Undistributed profits
√ Applicable □ Not Applicable
Items Amounts
Undistributed profits at the end of previous year 47,907,134,328.80
Change in accounting policy
Combination under common control 58,136,031.99
Undistributed profits at the beginning of the year 47,965,270,360.79
Add: net profit attributable to owners of the parent company 14,710,923,491.99
Other transfer in 172,960,573.19
Adjustment due to implementation of enterprise accounting standard
Profit available for appropriation for the year 62,849,154,425.97
Less: appropriation of statutory surplus reserve 575,574,713.40
Appropriation of staff incentive and welfare fund
Dividend payable for ordinary shares 4,296,634,791.21
Undistributed profits at the end of period 57,976,944,921.36
48. Operating income and operating cost
(1) Operating income
Amount for the Amount for the
Items current period previous period
Primary business 242,431,313,231.23 226,120,377,524.14
Other Business 1,082,250,439.50 985,440,117.55
Total 243,513,563,670.73 227,105,817,641.69
(2) Primary business income and primary business cost by product category
Amount for the current period Amount for the previous period
Primary business Primary business Primary business Primary business
Categories income cost income cost
Air conditioner 40,059,458,698.75 28,599,397,831.67 37,531,431,456.40 27,048,946,901.15
Refrigerator 77,637,761,907.85 52,883,745,098.80 71,569,789,213.81 48,835,867,469.21
Kitchen appliance 38,740,706,547.12 26,213,735,106.82 35,244,040,315.09 23,735,209,066.45
Water appliance 13,786,852,209.99 7,443,373,512.28 12,470,593,776.21 6,760,377,744.75
Washing machine 57,721,991,613.33 38,583,555,563.97 54,758,839,273.57 36,334,162,716.43
Equipment product and
integrated channel
services 14,484,542,254.19 13,065,622,141.68 14,545,683,489.06 12,989,119,690.80
Total 242,431,313,231.23 166,789,429,255.22 226,120,377,524.14 155,703,683,588.79
Haier Smart Home Co., Ltd. Annual Report 2022 261
Section X Financial Report
49. Taxes and surcharge
√ Applicable □ Not Applicable
Unit and Currency: RMB
Amount for the Amount for the
Items current period previous period
City maintenance and construction tax 290,126,011.45 302,871,487.15
Education surcharge 190,906,821.86 217,297,845.37
Property tax 61,713,388.92 58,844,071.60
Land use tax 21,637,047.83 16,126,888.33
Stamp duty 206,692,727.74 176,355,444.58
Others 42,213,230.03 37,116,582.03
Total 813,289,227.83 808,612,319.06
50. Selling expenses
√ Applicable □ Not Applicable
Unit and Currency: RMB
Amount for the Amount for the
Items current period previous period
Selling expenses 38,597,810,391.10 36,584,438,840.05
Total 38,597,810,391.10 36,584,438,840.05
The Company’s selling expenses are mainly salary expenses, logistic and storage fees,
advertising and promotion fees, and after-sales expenses.
51. Administrative expenses
√ Applicable □ Not Applicable
Unit and Currency: RMB
Amount for the Amount for the
Items current period previous period
Administrative expenses 10,837,316,878.50 10,471,531,966.20
Total 10,837,316,878.50 10,471,531,966.20
The Company’s administrative expenses are mainly salary expenses, office fees, depreciation and
amortization of assets fees, etc.
262 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
52. R&D expenses
√ Applicable □ Not Applicable
Unit and Currency: RMB
Amount for the Amount for the
Items current period previous period
R&D expenses 9,499,191,097.85 8,363,868,872.76
Total 9,499,191,097.85 8,363,868,872.76
The Company’s R&D expenses are mainly salary expenses, R&D equipment expenses, design
and R&D expenses.
53. Financial expenses
√ Applicable □ Not Applicable
Amount for the Amount for the
Items current period previous period
Interest expense 984,142,709.25 712,462,772.83
Less: interest income 855,178,860.53 566,432,900.38
Less: cash discount 142,905,868.01 163,118,260.27
Exchange gains and losses
(gains are represented by ‘-’) –371,894,224.02 577,463,512.90
Others 140,206,872.26 124,346,494.67
Total –245,629,371.05 684,721,619.75
Interest expenditure in lease liabilities in the current period is RMB96,997,943.85 (amount for the
corresponding period: RMB113,104,014.07).
54. Other income
√ Applicable □ Not Applicable
Unit and Currency: RMB
Amount for the Amount for the
Items current period previous period
Government grants related to revenue 966,389,191.58 875,988,212.18
Government grants related to assets 103,374,416.98 82,525,988.76
Total 1,069,763,608.56 958,514,200.94
Haier Smart Home Co., Ltd. Annual Report 2022 263
Section X Financial Report
55. Investment income (losses are represented by ‘-’)
Amount for the Amount for the
Items current period previous period
Long-term equity investments income calculated
by the equity method 1,582,178,829.86 1,887,911,034.17
Investment income from disposal of long-term
equity investments 27,123,485.74 5,189,653.78
Investment income from other equity instrument
investments during holding period 31,607,357.22 58,638,795.05
Income from wealth management products 92,625,406.55 60,011,933.94
Investment income from disposal of financial
assets measured at fair value with changes
included in current profit and loss 99,121,873.23 393,124,704.67
Total 1,832,656,952.60 2,404,876,121.61
56. Gains on changes in fair value (losses are represented by ‘-’)
Amount for the Amount for the
Items current period previous period
Change in fair value of forward foreign
exchange contracts –134,151,416.10 53,963,469.20
Change in fair value of equity investments 59,522,888.36 46,729,587.36
Change in fair value of fund investments –37,211,579.82 18,097,485.77
Others –10,602,826.09 487,081.52
Total –122,442,933.65 119,277,623.85
57. Credit impairment loss (losses are represented by ‘-’)
√ Applicable □ Not Applicable
Unit and Currency: RMB
Amount for the Amount for the
Items current period previous period
Bad debts losses on bills receivable 1,901,562.15 –55,738,551.40
Bad debts losses on accounts receivable –420,692,343.10 –362,209,683.09
Bad debts losses on other receivable –12,586,699.87 –102,351,680.93
Total –431,377,480.82 –520,299,915.42
264 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
58. Impairment loss on assets (losses are represented by ‘-’)
Amount for the Amount for the
Items current period previous period
Impairment losses on inventory –1,144,921,827.01 –1,057,658,740.03
Impairment losses on other current assets –280,818,239.06 –325,647,466.98
Impairment losses on fixed assets –3,191,271.04 –4,624,930.91
Impairment losses on construction in progress –107,523.90 –372,747.55
Impairment losses on intangible assets –29,631,196.82
Impairment losses on long-term equity investment –845,634.54 –818,536.53
Impairment losses on contract assets –69,975,265.71
Total –1,499,859,761.26 –1,418,753,618.82
59. Gains on disposal of assets (losses are represented by ‘-’)
Amount for the Amount for the
Items current period previous period
Gains on disposal of non-current assets 257,217,030.01 127,741,157.10
Losses on disposal of non-current assets –50,474,214.22 –16,757,437.06
Total 206,742,815.79 110,983,720.04
60. Non-operating income
√ Applicable □ Not Applicable
Unit and Currency: RMB
Amount for the Amount for the
Items current period previous period
Total gains on disposal of non-current assets 2,647,656.16 1,546,396.81
Quality claims and fines 46,841,255.42 37,390,034.91
Others 87,038,358.38 160,131,926.76
Total 136,527,269.96 199,068,358.48
Haier Smart Home Co., Ltd. Annual Report 2022 265
Section X Financial Report
61. Non-operating expenses
√ Applicable □ Not Applicable
Unit and Currency: RMB
Amount for the Amount for the
Items current period previous period
Total losses on disposal of non-current assets 27,077,182.74 22,285,702.85
Others 163,629,787.05 136,964,575.40
Total 190,706,969.79 159,250,278.25
62. Income tax expenses
(1) Statement of income tax expenses
Amount for the Amount for the
Items current period previous period
Current income tax expense 2,751,728,843.58 2,507,855,951.35
Deferred income tax expense 305,811,089.58 197,397,904.54
Total 3,057,539,933.16 2,705,253,855.89
(2) Reconciliation between accounting profit and income tax expenses for the current
period
Items Amounts
Total accounting profit 17,789,721,551.69
Income tax expense calculated pursuant to statutory tax rate 4,447,430,387.92
Impact from different tax rates applicable to subsidiaries –832,397,707.79
Impact from adjustment to income tax in prior periods –215,282,210.40
Impact from non-taxable income –493,234,020.50
Impact from non-deductible cost, expense and loss 199,136,849.33
Impact from deductible provisional differences or deductible losses
of unrecognized deferred tax 226,227,840.39
Others –274,341,205.79
Total income tax expense 3,057,539,933.16
266 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
63. Other comprehensive income
√ Applicable □ Not Applicable
Please refer to notes VII.45 for details.
64. Other cash received from operating activities
√ Applicable □ Not Applicable
Unit and Currency: RMB
Amount for the
Items current period
Deposits and securities 146,194,549.40
Government grants 856,331,974.78
Non-operating income excluding government grants 49,872,811.00
Interest income 554,921,958.03
Others 62,395,840.69
Total 1,669,717,133.90
65. Other cash paid to operating activities
√ Applicable □ Not Applicable
Unit and Currency: RMB
Amount for the
Items current period
Cash paid on selling expenses 17,494,555,343.05
Cash paid on administrative and R&D expenses 6,533,466,704.27
Cash paid on financial expenses 133,646,664.77
Non-operating expenses 21,293,448.35
Others 71,195,948.75
Total 24,254,158,109.19
Haier Smart Home Co., Ltd. Annual Report 2022 267
Section X Financial Report
66. Other cash paid to investing activities
√ Applicable □ Not Applicable
Unit and Currency: RMB
Amount for the
Items current period
Disposal of subsidiary 218,440,847.94
Total 218,440,847.94
67. Other cash received from financing activities
√ Applicable □ Not Applicable
Unit and Currency: RMB
Amount for the
Items current period
Others 1,000,000.00
Total 1,000,000.00
68. Other cash paid to financing activities
√ Applicable □ Not Applicable
Unit and Currency: RMB
Amount for the
Items current period
Repurchase of shares 2,012,393,016.13
Cash paid to lease 956,996,323.37
Cash paid for acquisition of subsidiaries through business combination
under common control 312,957,760.00
Purchase of minority interests in subsidiaries 56,960,660.00
Others 8,494,694.74
Total 3,347,802,454.24
268 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
69. Net profit adjusted to cash flow of operating activities
Net profit adjusted to cash flow of operating Amount for the Amount for the
activities current period previous period
1. Net profit 14,732,181,618.53 13,232,259,371.01
Add: impairment provision for assets 1,931,237,242.08 1,939,053,534.24
Depreciation of fixed assets 4,560,067,791.53 3,899,373,994.04
Amortization of intangible assets 1,074,941,740.28 905,996,786.57
Amortization of long-term prepaid expenses 411,338,249.38 257,802,793.09
Losses on disposal of fixed assets, intangible
assets and other long-term assets (‘-’
represents ‘gains’) –182,313,289.21 –90,244,414.00
Loss and gains on change of fair value (‘-’
represents ‘gains’) 122,442,933.65 –119,277,623.85
Financial expenses (‘-’ represents ‘gains’) 612,248,485.23 1,289,922,731.05
Loss on investments (‘-’ represents ‘gains’) –1,832,656,952.60 –2,404,876,121.61
Decrease in deferred income tax assets (‘-’
represents ‘increase’) –452,670,928.44 115,139,652.25
Increase of deferred income tax liabilities (‘-’
represents ‘decrease’) 758,482,018.03 82,258,252.29
Decrease in inventories (‘-’ represents ‘increase’) –2,773,685,039.99 –11,480,423,018.54
Decrease of operational account receivables (‘-’
represents ‘increase’) 1,781,282,453.76 5,372,841,776.18
Increase of operational account payables (‘-’
represents ‘decrease’) –1,597,814,712.03 9,875,284,130.88
Others 1,008,424,173.16 360,268,847.35
Net cash flow generated from operational activities 20,153,505,783.35 23,235,380,690.95
2. Significant investment and financing
activities not involving cash inflows and
outflows:
Capital transferred from debts 361,395,824.17 6,368,251,389.85
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 53,368,813,384.61 45,197,664,411.15
Less: cash balance at the beginning of the period 45,197,664,411.15 45,790,589,785.11
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 8,171,148,973.46 –592,925,373.96
Haier Smart Home Co., Ltd. Annual Report 2022 269
Section X Financial Report
70. Cash and cash equivalents
Items Closing balance Opening balance
I. Cash 53,368,813,384.61 45,197,664,411.15
Including: Cash on hand 5,312,391.11 3,085,964.28
Bank deposits always available for payment 52,955,417,379.16 45,010,311,638.51
Other monetary funds always available for
payment 408,083,614.34 184,266,808.36
II. Cash equivalents
Including: bond investments due within three
months
III. Closing balance of cash and cash equivalents 53,368,813,384.61 45,197,664,411.15
71. Monetary items in foreign currency
Items Closing balance Opening balance
Balance in Balance in
foreign currency Exchange rate Balance in RMB foreign currency Exchange rate Balance in RMB
Monetary funds
USD 1,290,843,958.56 6.9646 8,990,211,833.81 850,630,647.69 6.3757 5,423,365,820.48
EUR 47,915,506.82 7.4229 355,672,015.56 149,225,110.60 7.2197 1,077,360,530.99
JPY 2,642,036,348.79 0.052358 138,331,739.15 10,520,503,841.74 0.055415 582,993,720.39
HKD 647,479,463.24 0.8933 578,393,404.51 483,444,582.35 0.8176 395,264,290.53
Others 2,630,279,781.27 2,955,290,563.22
Subtotal 12,692,888,774.30 10,434,274,925.61
Accounts receivables
USD 770,735,456.70 6.9649 5,368,095,382.34 721,343,093.77 6.3757 4,599,067,162.94
EUR 480,679,854.02 7.4229 3,568,038,488.40 413,528,990.85 7.2197 2,985,555,255.25
JPY 4,448,523,930.25 0.052358 232,915,815.94 4,064,574,659.93 0.055415 225,238,404.78
Others 3,648,407,445.01 3,668,237,038.46
Subtotal 12,817,457,131.69 11,478,097,861.43
Short-term borrowings
USD 337,460,553.02 6.9646 2,350,277,767.57 347,844,969.69 6.3757 2,217,755,173.25
EUR 551,092,544.77 7.4229 4,090,704,850.58 883,863,602.21 7.2197 6,381,230,048.85
JPY 0.052358 623,360,869.80 0.055415 34,543,542.60
HKD 2,600,000,000.00 0.8933 2,322,580,000.00 2,600,000,000.00 0.8176 2,125,760,000.00
Others 518,039,984.83 328,850,057.11
Subtotal 9,281,602,602.98 11,088,138,821.81
Accounts payables
USD 1,941,535,383.62 6.9646 13,522,017,332.77 2,033,952,669.54 6.3757 12,967,872,035.21
EUR 626,564,863.63 7.4229 4,650,928,326.21 640,851,532.98 7.2197 4,626,755,812.65
270 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Items Closing balance Opening balance
Balance in Balance in
foreign currency Exchange rate Balance in RMB foreign currency Exchange rate Balance in RMB
JPY 7,649,104,013.60 0.052358 400,491,787.94 8,161,874,338.90 0.055415 452,290,266.49
NZD 150,709,317.71 4.4162 665,562,488.87 151,371,298.46 4.3553 659,267,416.20
Others 3,276,292,812.40 3,268,885,987.84
Subtotal 22,515,292,748.19 21,975,071,518.39
Non-current liabilities due in one year
USD 501,395,115.52 6.9646 3,492,016,421.53 757,148,488.12 6.3757 4,827,351,615.72
EUR 82,207,419.42 7.4229 610,217,453.64 214,053,730.55 7.2197 1,545,403,718.47
JPY 2,057,044,588.88 0.052358 107,702,740.58 3,705,244,389.61 0.055415 205,326,117.85
RUB 471,424,350.04 0.0942 44,408,173.77 651,073,870.06 0.0855 55,666,815.89
Others 86,526,344.63 1,589,397,292.33
Subtotal 4,340,871,134.16 8,223,145,560.26
Long-term borrowings
USD 742,230,000.00 6.9646 5,169,335,058.00 403,838,717.50 6.3757 2,574,754,511.17
EUR 698,254,017.68 7.4229 5,183,069,747.86 37,498,911.17 7.2197 270,730,888.98
RUB 250,000,000.00 0.0942 23,550,000.00 186,061,000.00 0.0855 15,908,215.50
JPY 0.052358 3,197,333,012.36 0.055415 177,180,208.88
Others 1,014,924,067.59
Subtotal 11,390,878,873.45 3,038,573,824.53
Haier Smart Home Co., Ltd. Annual Report 2022 271
Section X Financial Report
VIII. CHANGES OF CONSOLIDATION SCOPE
1. Business combination not under common control
√ Applicable □ Not Applicable
(1) Business combination not under common control occurring in the current period
√ Applicable □ Not Applicable
Unit and Currency: RMB
Revenue of Net profit of
the acquiree the acquiree
from from
The combination combination
Point of time of Cost for proportion Method of Basis for date to the date to the
acquisition of acquisition of of equity acquisition of Combination determining the end of the end of the
Name of the acquiree equity equity acquired equity date combination period period
Midwest Sales & Service Inc. July 2022 5,949,248.00 100 Acquisition of asset July 2022 Asset delivery 26,121,516.00 –191,464.04
(2) Combination cost and goodwill
Midwest Sales
Items & Service Inc.
— Cash 5,949,248.00
— Contingent consideration
Total combination cost 5,949,248.00
Less: acquired identifiable
Share of fair value of net assets 3,965,339.58
Amount of goodwill 1,983,908.42
(3) Identifiable assets and liabilities of the acquiree on the combination date
Items Midwest Sales & Service Inc.
Fair value Book value
Accounts receivables 2,706,845.21 2,706,845.21
Prepayments 166,538.44 166,538.44
Inventories 1,112,129.27 1,266,800.74
Fixed assets 364,162.70 336,708.75
Intangible assets 1,500,000.00
Accounts payables –1,715,934.54 –1,715,934.54
Other payables –168,401.50 –168,401.50
Net assets 3,965,339.58 2,592,557.10
Less: minority interests
Net assets acquired 3,965,339.58 2,592,557.10
272 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
2. Business combination under common control
√ Applicable □ Not Applicable
(1) Business combination under common control occurring in the current period
The basis for the
The proportion of transaction of
equity acquired in constituting business
the business combination under Recognition basis of
Name of the acquiree combination common control Combination date combination date
Qingdao Ririshun Service Co., Ltd. 100.00% Controlled by Haier Group 2022.6 Subject equity-related right and
Corporation before and obligation transferred to the
after combination Company
Haier Robot Technology (Qingdao) 100.00% Controlled by Haier Group 2022.6 Subject equity-related right and
Co., Ltd. (海爾機器人科技（青島） Corporation before and obligation transferred to the
有限公司) after combination Company
Qingdao Haier Special Plastic R&D 100.00% Controlled by Haier Group 2022.9 Subject equity-related right and
Co., Ltd. Corporation before and obligation transferred to the
after combination Company
(Continued)
Net profit of
The income the acquiree
of the from the
acquiree from beginning The income
the beginning of the of the Net profit of
of the current current acquiree the acquiree
period to period to during the during the
Name of the combination combination comparison comparison
acquiree date date period period
Qingdao Ririshun
Service Co., Ltd. 37,211.90 1,421,013.21 94,116,731.27 –4,254,036.49
Haier Robot
Technology
(Qingdao) Co., Ltd.
(海 爾 機 器 人 科 技
（青 島）有 限 公 司) 205,120,142.19 3,052,468.49 243,526,079.57 7,385,686.65
Qingdao Haier
Special Plastic
R&D Co., Ltd. 476,266,547.25 8,461,133.81 753,473,339.41 10,367,061.02
Haier Smart Home Co., Ltd. Annual Report 2022 273
Section X Financial Report
(2) Combination cost
Combination cost Cash Equity
Qingdao Ririshun Service Co.,
Ltd. 50,957,800 32,169,100
Haier Robot Technology
(Qingdao) Co., Ltd. (海 爾 機
器 人 科 技（青 島）有 限 公 司) 125,000,000 N/A
Qingdao Haier Special Plastic
R&D Co., Ltd. 152,000,000 N/A
(3) Book value of acquiree’s assets and liabilities as at the combination date
Items Qingdao Ririshun Service Co., Ltd.
End of the
Combination date previous period
Monetary funds 46,604,249.71 59,493,989.32
Accounts receivables 1,041,138.30 1,144,058.93
Inventory 1,837,248.48 1,879,270.49
Other current assets 4,840.17 778,605.93
Less: Accounts payables 12,023,461.45 26,719,700.69
Payables for staff’s remuneration 65,143.90 988,310.00
Taxes payable 383,755.86 337.90
Other current liabilities 118,797.58 112,271.42
Net assets 36,896,317.87 35,475,304.66
Haier Robot Technology (Qingdao) Co.,
Items Ltd. ( )
End of the
Combination date previous period
Monetary funds 70,965,249.26 54,371,498.79
Accounts receivables 35,633,561.58 32,228,299.73
Inventory 64,895,694.34 36,212,378.79
Other current assets 990,753.45
Long-term asset 742,124.92 1,559,671.95
Deferred income tax assets 2,638,785.39 2,638,785.39
Less: Accounts payables 108,357,839.93 64,054,579.25
Payables for staff’s remuneration 997,688.00 1,069,738.28
Taxes payable 2,702,903.89 1,824,903.82
Non-current liabilities due within
one year 647,508.67 1,324,322.70
Other current liabilities 3,514,317.62 4,125,155.16
Net assets 58,655,157.38 55,602,688.89
274 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Qingdao Haier Special Plastic R&D
Items Co., Ltd.
End of the
Combination date previous period
Monetary funds 115,521,114.49 126,298,139.94
Accounts receivables 92,983,452.02 102,437,201.57
Inventory 28,093,776.31 12,687,209.27
Other current assets 1,692,415.37
Long-term asset 17,888,167.23 9,245,933.66
Deferred income tax assets
Less: Accounts payables 104,855,934.97 108,198,443.08
Payables for staff’s remuneration 3,109,652.36 3,485,652.36
Taxes payable 859,443.39 2,313,952.81
Other current liabilities 11,552,679.62
Net assets 135,801,215.08 136,670,436.19
3. Disposal of subsidiary
Whether single disposal of investment in subsidiary will result in losing control power:
Hainengwanjia Shanghai
(Shanghai) Youyue
Technology Information
Development Technology Co.,
Yantai Ririshun Co., Ltd. ( Ltd. (
Electronics
Items Co., Ltd. ) )
Equity disposal price 26,139,242.23 1,045,500.00
Proportion of equity disposal 81.00% 51% 62.50%
Method of equity disposal Disposal Disposal Disposal
Time of loss-of-control 2022.1 2022.9 2022.12
Basis for determination the time of
loss-of- control Cancellation Transfer Transfer
Difference between consideration
and its share of net assets of the
subsidiary as respect to the
disposal in the consolidated level –4,432,192.08 8,171,950.75
Haier Smart Home Co., Ltd. Annual Report 2022 275
Section X Financial Report
(Continued)
Tianjin Internet Qingdao Haier
Hangzhou of clothes Strauss Smart
Gandao Ecological Chip
Intelligent Technology Technology Co.,
Technology Co., Co., Ltd. Ltd. (
Ltd. ( (
Items ) ) )
Equity disposal price 1,000,000.00 33,000.00
Proportion of equity disposal 51.00% 100% 67.90%
Method of equity disposal Disposal Disposal Cancellation
Time of loss-of-control 2022.11 2022.11 2022.2
Basis for determination the time of
loss-of- control Transfer Transfer Cancellation
Difference between consideration
and its share of net assets of the
subsidiary as respect to the
disposal in the consolidated level 293,204.50 135,796.59 2,226.81
4. Changes of consolidation scope due to other reasons
√ Applicable □ Not Applicable
(1) Chongqing Yunshang Yilian Technology Co., Ltd., a subsidiary of the Company, established
a subsidiary, Chengdu Yunshang Meier Yilian Technology Co., Ltd. (成都云裳美尔衣聯科技
有 限 公 司) for the period.
(2) Chongqing Yunshang Yilian Technology Co., Ltd., a subsidiary of the Company, established
a subsidiary, Beijing Yunshang Yilian Technology Co., Ltd. (北京云裳衣聯科技有限公司) for
the period.
(3) Chongqing Yunshang Yilian Technology Co., Ltd., a subsidiary of the Company, established
a wholly-owned subsidiary, Chengdu Yunshang Yilian Technology Co., Ltd. (成 都 云 裳 衣 聯
科 技 有 限 公 司) for the period.
(4) Chongqing Haier Water Heater Co., Ltd., a subsidiary of the Company, established a wholly-
owned subsidiary, Qingdao Haier Water Ecology Technology Co., Ltd. (青 島 海 爾 水 生 態 科
技 有 限 公 司) for the period.
(5) Qingdao Haier Air-Conditioner Electronics Co., Ltd., a subsidiary of the Company, established
a wholly-owned subsidiary Qingdao Haixiangzhi Technology Co., Ltd. (青島海享智科技有限
公 司) for the period.
276 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
(6) Hefei Haier Refrigerator Co., Ltd., a subsidiary of the Company, established a wholly-owned
subsidiary, Qingdao Haier Refrigeration Appliance Co., Ltd. (青 島 海 爾 製 冷 電 器 有 限 公 司)
for the period.
(7) Qingdao Haier Dishwasher Co., Ltd., a subsidiary of the Company, established a
wholly-owned subsidiary, Chongqing Haier Washing Appliance Co., Ltd. (重庆海尔洗涤电器
有 限 公 司) for the period.
IX. INTERESTS IN OTHER ENTITIES
1. Interests in subsidiaries
(1) Composition of the Group
% of
Principal place of Place of voting
Name of subsidiary business registration Nature of business Shareholding right Method
Direct Indirect
Flourishing Reach Mainland of China Bermuda Group company, which 100.00% 100.00% Establishment
Limited mainly engage in
investment holding, the
production and sale of
washing machines and
water heaters,
distribution service
Haier Electronics Mainland of China Bermuda Group company, which 100.00% 100.00% Establishment
Group 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 Group company, which 100.00% 100.00% Establishment
Solutions, Inc. States mainly engage in home
appliances production
and distribution
business
Haier Singapore Singapore and Singapore Group company, which 100.00% 100.00% Business
Investment Holding other overseas mainly engage in home combination
Co., Ltd. areas appliances production under common
and distribution control
business
Haier New Zealand New Zealand New Zealand Group company, which 100.00% 100.00% Business
Investment Holding mainly engage in home combination
Company Limited appliances production under common
and distribution control
business
Candy S.p.A Europe Italy Group company, which 100.00% 100.00% Business
mainly engage in home combination not
appliances production under common
and distribution control
business
Qingdao Haier Air Qingdao High-tech Qingdao Manufacture and sale of 100.00% 100.00% Business
Conditioner Gen Zone High-tech household air- combination
Corp., Ltd. Zone conditioners under common
control
Haier Smart Home Co., Ltd. Annual Report 2022 277
Section X Financial Report
% of
Principal place of Place of voting
Name of subsidiary business registration Nature of business Shareholding right Method
Direct Indirect
Guizhou Haier Huichuan District, Huichuan Manufacture and sale of 59.00% 59.00% Business
Electronics Co., Ltd. Zunyi City, District, Zunyi refrigerator combination
Guizhou Province City, Guizhou under common
Province control
Hefei Haier Air- Hefei Haier Hefei Haier Manufacture and sale of 100.00% 100.00% Business
conditioning Co., Industrial Park Industrial Park air-conditioners combination
Limited under common
control
Wuhan Haier Wuhan Haier Wuhan Haier Manufacture and sale of 60.00% 60.00% Business
Electronics Holding Industrial Park Industrial Park air-conditioners combination
Co., Ltd. under common
control
Qingdao Haier Qingdao Qingdao Manufacture and sale of 100.00% 100.00% Business
Air- Conditioner Development Development air-conditioners combination
Electronics Co., Ltd. Zone Zone under common
control
Qingdao Haier Qingdao High-tech Qingdao Manufacturing of plastic 100.00% 100.00% Business
Information Plastic Zone High-tech products combination
Development Co., Zone under common
Ltd. control
Dalian Haier Precision Dalian Export Dalian Export Manufacture and sale of 90.00% 90.00% Business
Products Co., Ltd. Expressing Zone Expressing precise plastics combination
Zone under common
control
Hefei Haier Plastic Hefei Economic & Hefei Economic Manufacture and sale of 95.17% 4.83% 100.00% Business
Co., Ltd. Technological & plastic parts combination
Development Technological under common
Area Development control
Area
Qingdao Meier Plastic Qingdao Qingdao Manufacture of plastic 40.00% 60.00% 100.00% Business
Powder Co., Ltd. Development Development powder, plastic sheet combination
Zone Zone and high-performance under common
coatings control
Chongqing Haier Jiangbei District, Jiangbei District, Plastic products, sheet 90.00% 10.00% 100.00% Business
Precision Plastic Chongqing City Chongqing metal work, electronics combination
Co., Ltd. City and hardware under common
control
Qingdao Haier Qingdao High-tech Qingdao Manufacture and 100.00% 100.00% Establishment
Refrigerator Co., Zone High-tech production of
Ltd. Zone fluorine-free
refrigerators
Qingdao Haier Pingdu Pingdu Manufacture of 100.00% 100.00% Establishment
Refrigerator Development Development refrigerators
(International) Co., Zone, Qingdao Zone, Qingdao
Ltd.
Qingdao Household Qingdao High-tech Qingdao Research and 100.00% 100.00% Establishment
Appliance Zone High-tech development of home
Technology and Zone appliances mold and
Equipment Research technological equipment
Institute
Qingdao Haier Whole Qingdao High-tech Qingdao Research, development 98.33% 98.33% Establishment
Set Home Appliance Zone High-tech and sales of
Service Co., Ltd. Zone health- related small
home appliance
278 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
% of
Principal place of Place of voting
Name of subsidiary business registration Nature of business Shareholding right Method
Direct Indirect
Qingdao Haier Special Qingdao Qingdao Manufacture and sales of 100.00% 100.00% Establishment
Refrigerator Co., Development Development fluorine-free
Ltd. Zone Zone refrigerators
Qingdao Haier Qingdao Qingdao Manufacture of dish 100.00% 100.00% Establishment
Dishwasher Co., Development Development washing machine and
Ltd. Zone Zone gas stove
Qingdao Haier Special Qingdao Qingdao Research, manufacture 100.00% 100.00% Establishment
Freezer Co., Ltd. Development Development and sales of freezer and
Zone Zone other refrigeration
products
Dalian Haier Dalian Export Dalian Export Air conditioner processing 90.00% 90.00% Establishment
Air- conditioning Expressing Zone Expressing and manufacturing
Co., Ltd. Zone
Dalian Haier Dalian Export Dalian Export Refrigerator processing 100.00% 100.00% Establishment
Refrigerator Co., Expressing Zone Expressing and manufacturing
Ltd. Zone
Qingdao Haier Qingdao Qingdao Development, assembling 100.00% 100.00% Establishment
Electronic Plastic Development Development and sales of plastics,
Co., Ltd. Zone Zone electronics and
products
Wuhan Haier Freezer Wuhan Economic & Wuhan Economic Research, manufacture 95.00% 5.00% 100.00% Establishment
Co., Ltd Technological & and sales of freezer and
Development Technological other refrigeration
Zone High-tech Development products
Industrial Park Zone High-tech
Industrial Park
Qingdao Haidarui Qingdao High-tech Qingdao Develop, purchase and 98.00% 2.00% 100.00% Establishment
Procurement Service Zone High-tech sell electrical products
Co., Ltd. Zone and components
Qingdao Haier Qingdao High-tech Qingdao Development and 91.46% 1.01% 92.47% Establishment
Intelligent Home Zone High-tech application of home
Appliance Zone appliances,
Technology Co., communication,
Ltd. electronics and network
engineering technology
Chongqing Haier Jiangbei District, Jiangbei District, Manufacture and sales of 76.92% 23.08% 100.00% Establishment
Air-conditioning Co., Chongqing City Chongqing air conditioners
Ltd. City
Qingdao Haier Qianwang ang Qianwang ang Development and 70.00% 70.00% Establishment
Precision Products Road, Jiaonan Road, Jiaonan manufacture of precise
Co., Ltd. City City plastic, metal plate,
mold and electronic
products for home
appliances
Qingdao Haier Air Jiaonan City, Jiaonan City, Manufacture of home 100.00% 100.00% Establishment
Conditioning Qingdao Qingdao appliances and
Equipment Co., Ltd. electronics
Dalian Free Trade Dalian Export Dalian Export Domestic trade 100.00% 100.00% Establishment
Zone Haier Expressing Zone Expressing
Air-conditioning Zone
Trading Co., Ltd.
Dalian Free Trade Dalian Export Dalian Export Domestic trade 100.00% 100.00% Establishment
Zone Haier Expressing Zone Expressing
Refrigerator Trading Zone
Co., Ltd.
Haier Smart Home Co., Ltd. Annual Report 2022 279
Section X Financial Report
% of
Principal place of Place of voting
Name of subsidiary business registration Nature of business Shareholding right Method
Direct Indirect
Chongqing Haier Jiangbei District, Jiangbei District, Sales of home appliances 95.00% 5.00% 100.00% Establishment
Electronics Sales Chongqing City Chongqing
Co., Ltd. City
Chongqing Haier Jiangbei District, Jiangbei District, Processing and 84.95% 15.05% 100.00% Establishment
Refrigeration Chongqing City Chongqing manufacturing of
Appliance Co., Ltd. City refrigerator
Haier Refrigerator Co., Hefei Haier Hefei Haier Processing and 100.00% 100.00% Establishment
Ltd. Industrial Park Industrial Park manufacturing of
refrigerator
Qingdao Haier Qingdao Qingdao Air-conditioning engineer 100.00% 100.00% Establishment
Intelligent Building Development Development
Technology Co., Zone Zone
Ltd. (青島海爾智慧
樓宇科技有限公司)
Chongqing Jiangbei District, Jiangbei District, Sales of home appliances 51.00% 51.00% Establishment
Goodaymart Electric Chongqing City Chongqing and electronics
Appliance Sale Co., City
Ltd.
Qingdao Haier Jiaozhou City, Jiaozhou City, Manufacture and sale of 100.00% 100.00% Establishment
(Jiaozhou) Qingdao Qingdao air-conditioners
Air-conditioning Co.,
Limited
Qingdao Haier Jiaozhou City, Jiaozhou City, Manufacture and sales of 100.00% 100.00% Establishment
Component Co., Qingdao Qingdao plastic and precise
Ltd. sheet metal products
Haier Shareholdings Hong Kong Hong Kong Investment 100.00% 100.00% Establishment
(Hong Kong) Limited
Harvest International Cayman Islands Cayman Islands Investment 100.00% 100.00% Establishment
Company
Shenyang Haier Shenbei New Area, Shenbei New Manufacture and sales of 100.00% 100.00% Establishment
Refrigerator Co., Shenyang City Area, refrigerator
Ltd. Shenyang City
S
Foshan Haier Freezer Sanshui District, Sanshui District, Manufacture and sales of 100.00% 100.00% Establishment
Co., Ltd. Foshan City Foshan City refrigerator
Zhengzhou Haier Zhengzhou Zhengzhou Manufacture and sales of 100.00% 100.00% Establishment
Air-conditioning Co., Economic and Economic and freezer
Ltd. Technological Technological
Development Development
Zone Zone
Qingdao Haidayuan Qingdao Qingdao Develop, purchase and 100.00% 100.00% Establishment
Procurement Service Development Development sell electrical products
Co., Ltd. Zone Zone and components
Qingdao Haier Qingdao High-tech Qingdao Development and 100.00% 100.00% Establishment
Intelligent Zone High-tech research of home
Technology Zone appliance products
Development Co.,
Ltd.
Qingdao Hairi High Qingdao High-tech Qingdao Design, manufacture and 100.00% 100.00% Business
Technology Co., Zone High-tech sales of product model combination
Ltd. Zone and mould under common
control
Qingdao Hai Gao Qingdao High-tech Qingdao Industrial design and 75.00% 75.00% Business
Design and Zone High-tech prototype production combination
Manufacture Co., Zone under common
Ltd. control
280 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
% of
Principal place of Place of voting
Name of subsidiary business registration Nature of business Shareholding right Method
Direct Indirect
Beijing Haier Guangke Beijing Beijing Development, promotion 55.00% 55.00% Business
Digital Technology and transfer of combination
Co., Ltd. technology under common
control
Shanghai Haier Shanghai Shanghai Wholesale and retail of 66.87% 66.87% Establishment
Medical Technology medical facility
Co., Ltd.
Qingdao Haier Qingdao Qingdao Development and sales of 100.00% 100.00% Business
Technology Co., software and information combination
Ltd. product under common
control
Qingdao Haier Qingdao Qingdao Entrepreneurship 100.00% 100.00% Establishment
Technology investment and
Investment Co., Ltd. consulting
Qingdao Casarte Qingdao Qingdao Development, production 100.00% 100.00% Establishment
Smart Living and sales of appliances
Appliances Co., Ltd.
Qingdao Qingdao Qingdao Sales of home appliances 100.00% 100.00% Establishment
Haichuangyuan and digital products
Appliances Sales
Co., Ltd.
Haier Overseas Qingdao Qingdao Sales of home appliances, 100.00% 100.00% Establishment
Electric Appliance international freight
Co., Ltd. forwarding
Haier Group (Dalian) Dalian Dalian Sales of home appliances, 100.00% 100.00% Business
Electrical Appliances international freight combination
Industry Co., Ltd. forwarding under common
control
Qingdao Haier Central Qingdao Qingdao Production and sales of 100.00% 100.00% Establishment
Air Conditioning Co., air and refrigeration
Ltd. equipment
Chongqing Haier Hefei Hefei Sales of home appliances 100.00% 100.00% Establishment
Home Appliance
Sale Hefei Co., Ltd.
Qingdao Weixi Smart Qingdao Qingdao Intelligent sanitary ware 71.43% 71.43% Establishment
Technology Co.,
Ltd.
Haier U+smart Beijing Beijing Software development 100.00% 100.00% Establishment
Intelligent
Technology (Beijing)
Co., Ltd.
Haier (Shanghai) Shanghai Shanghai Sales, research and 100.00% 100.00% Establishment
Electronics Co., Ltd. development of home
appliances
Shanghai Haier Shanghai Shanghai Business management 100.00% 100.00% Establishment
Zhongzhi Fang consulting, chuangke
Chuang Ke management
Management Co.,
Ltd.
Qingdao Haier Smart Qingdao Qingdao Production and sales of 100.00% 100.00% Establishment
Kitchen Appliance kitchen smart home
Co., Ltd. appliances
GE Appliance Shanghai Shanghai Sales of home appliances 100.00% 100.00% Establishment
(Shanghai) Co., Ltd.
Haier Smart Home Co., Ltd. Annual Report 2022 281
Section X Financial Report
% of
Principal place of Place of voting
Name of subsidiary business registration Nature of business Shareholding right Method
Direct Indirect
Qingdao Haier Special Qingdao Qingdao Production and sales of 100.00% 100.00% Establishment
Refrigerating home appliances
Appliance Co., Ltd.
Beijing Zero Micro Beijing Beijing Promotion of 55.00% 55.00% Establishment
Technology Co., technological
Ltd. development
Laiyang Haier Smart Laiyang Laiyang Production and sales of 100.00% 100.00% Establishment
Kitchen Appliance home appliances
Co., Ltd.
Hefei Haier Air Hefei Hefei Production and sales of 100.00% 100.00% Establishment
Conditioning home appliances
Electronics Co., Ltd.
Haier (Shanghai) Shanghai Shanghai Research and 100.00% 100.00% Establishment
Home Appliance development of home
Research and appliances
Development Center
Co., Ltd.
Haier (Shenzhen) R&D Shenzhen Shenzhen Development, research 100.00% 100.00% Establishment
Co., Ltd. and technical services of
household and
commercial electrical
Guangzhou Haier Air Guangdong Guangdong Manufacturing of 100.00% 100.00% Establishment
Conditioner Co., refrigeration and air
Ltd. conditioning equipment
Qingdao Yunshang Qingdao Qingdao IoT technology research 60.00% 60.00% Establishment
Yuyi IOT Technology and development
Co., Ltd.
Qingdao Haizhi Qingdao Qingdao Asset management, 100.00% 100.00% Establishment
Robotics Co., Ltd. equity investment
(青島海知機器人
科技有限公司)
Qingdao Jijia Cloud Qingdao Qingdao R&D and sales of lighting 80.00% 80.00% Establishment
Intelligent appliances
Technology Co.,
Ltd.
Qingdao Haimeihui Qingdao Qingdao Leasing and business 100.00% 100.00% Establishment
Management services
Consulting Co., Ltd.
(青島海美匯管理諮
詢有限公司)
Wuxi Yunshang Wuxi Wuxi Internet of Things 100.00% 100.00% Establishment
Internet of Clothing technology R & D
Technology Co.,
Ltd.(無錫雲裳衣聯
網科技有限公司)
Qingdao Haidacheng Qingdao Qingdao Develop, purchase and 100.00% 100.00% Establishment
Procurement Service sell electrical products
Co., Ltd. and components
Guangdong Heilong Guangzhou Guangzhou Scientific research and 76.72% 76.72% Business
Intelligent technology service combination not
Technology Co. Ltd sector under common
(廣東黑龍智能科技 control
有限公司)
282 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
% of
Principal place of Place of voting
Name of subsidiary business registration Nature of business Shareholding right Method
Direct Indirect
Beijing Haixianghui Beijing Beijing Scientific research and 100.00% 100.00% Establishment
Technology Co., technology service
Ltd. (北京海享匯科 sector
技有限公司)
Qingdao Hairuijiejing Qingdao Qingdao Electronic equipment 51.00% 51.00% Business
Electronics Co., Ltd. technology research, combination not
(青島海瑞潔凈電子 development, transfer, under common
有限公司) consulting and services control
Haier Smart Home Qingdao Qingdao Technology development 100.00% 100.00% Establishment
Experience Cloud of smart home
Ecological products, whole
Technology Co., furniture customization,
Ltd. (海爾智家體驗 etc.
雲生態科技有限公
司)
Haier Smart Home Qingdao Qingdao Technical services, 100.00% 100.00% Establishment
(Qingdao) Network development,
Co., Ltd. (海爾智家 consulting, transfer, etc.
（青島）網絡有限公
司)
Haier Smart Home Qingdao Qingdao Residential interior 100.00% 100.00% Establishment
(Qingdao) Network decoration, professional
Operation Co., Ltd. construction operation,
(海爾智家（青島）網 special equipment
絡運營有限公司) installation, upgrading
and repair, etc.
Qingdao Internet of Qingdao Qingdao Urban distribution and 100.00% 100.00% Establishment
Wine Technology transportation services,
Co., Ltd. (青島酒聯 import and export of
網物聯科技有限公 goods, technology
司) import and export and
food business, etc.
Qingdao Linghai Air Qingdao Qingdao Manufacture and 100.00% 100.00% Establishment
Conditioning production of air
Equipment Co., Ltd. conditioner and
(青島菱海空調設備 refrigeration equipment
有限公司)
Shenzhen Yunshang Shenzhen Shenzhen Import and export 100.00% 100.00% Establishment
Internet of Clothes business, Internet,
Technology Co., Internet of things, big
Ltd. (深圳雲裳衣 data, AI, AR and
聯網科技有限公司) technical services
operation
Qingdao Haixiangxue Qingdao Qingdao Professional intermediary 100.00% 100.00% Establishment
Human Resources activities
Co., Ltd. (青島海享
學人力資源有限公
司)
Jiangxi Haier Medical Jiangxi Jiangxi Wholesale and retail of 100.00% 100.00% Establishment
Technology Co., medical equipment
Ltd.
Qingdao Haizhi Qingdao Qingdao Technical service 100.00% 100.00% Establishment
Yunlan Technology development
Co., Ltd. (青島海智
雲嵐科技有限公司)
Haier Smart Home Co., Ltd. Annual Report 2022 283
Section X Financial Report
% of
Principal place of Place of voting
Name of subsidiary business registration Nature of business Shareholding right Method
Direct Indirect
Qingdao Haishengze Qingdao Qingdao Air conditioning 100.00% 100.00% Establishment
Technology Co., equipment technical
Ltd. services
Qingdao Hailvyuan Qingdao Qingdao Electrical and electronic 100.00% 100.00% Establishment
Recycling products waste
Technology Co., treatment
Ltd.
Qingdao Haier HVAC Qingdao Qingdao Manufacture and sale of 75.00% 25.00% 100.00% Establishment
Equipment Co., Ltd. air-conditioners
(青島海爾暖通空調
設備有限公司)
Qingdao Haier Home Qingdao Qingdao Integrated service of AI 100.00% 100.00% Establishment
AI Industry industry application
Innovation Center system
Co., Ltd. (青島海爾
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% 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 of 100.00% 100.00% Business
Inspection Co., Ltd. home appliance combination
(青島海爾質量檢測 under common
有限公司) control
Qingdao Qingdao Qingdao Product certification 100.00% 100.00% Business
Haiyongcheng service combination
Certification Service under common
Co., Ltd. (青島海永 control
成認證服務有限公
司)
Qingdao Zhonghai Qingdao Qingdao Home appliance testing 100.00% 100.00% Business
Borui Testing and technology combination
Technology Service consulting under common
Co., Ltd. (青島中海 controls
博睿檢測技術服務
有限公司)
Qingdao Haier Special Qingdao Qingdao Manufacture and sale of 100.00% 100.00% Business
Plastic Development refrigerator doors combination
Co., Ltd. under common
controls
Haier Robot Qingdao Qingdao Manufacture and sale of 100.00% 100.00% Business
Technology service robots combination
(Qingdao) Co., Ltd. under common
(海爾機器人科技 controls
（青島）有限公司)
Qingdao Ririshun Qingdao Qingdao After-sale service of home 100.00% 100.00% Business
Service Co., Ltd. appliances combination
under common
controls
Qingdao Haizhiling Qingdao Qingdao Software development 100.00% 100.00% Establishment
Air Conditioning and sale of daily
Engineering Co., necessities
Ltd. (青島海智菱
空調工程有限公司)
284 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
% of
Principal place of Place of voting
Name of subsidiary business registration Nature of business Shareholding right Method
Direct Indirect
Haier Smart Home Qingdao Qingdao Promotion of energy- 100.00% 100.00% Establishment
(Xiongan, Hebei) saving technology
Technology Co.,
Ltd. (海爾智家科技
（河北雄安）有限公
司)
Qingdao Ruibo Qingdao Qingdao Environmental and AI 100.00% 100.00% Establishment
Ecological technology consulting
Environmental
Technology Co.,
Ltd. (青島瑞博生態
環保科技有限公司)
Qingdao Sanyiniao Qingdao Qingdao Technology service and 100.00% 100.00% Establishment
Technology Co., advertisement design
Ltd. (青島三翼鳥科
技有限公司)
Qingdao Jingzhi Qingdao Qingdao Operation of dangerous 100.00% 100.00% Establishment
Recycle waste
Environmental
Technology Co.,
Ltd. (青島鯨智再生
環保科技有限公司)
Qingdao Yunshang Qingdao Qingdao Professional cleaning and 51.00% 51.00% Establishment
Jieshen Yilian sale of daily necessities
Technology Co.,
Ltd. (青島雲裳潔神
衣聯科技有限公司)
Shanghai Yunshang Shanghai Shanghai Professional cleaning and 100.00% 100.00% Establishment
Yuyi IoT Technology sale of daily necessities
Co., Ltd. (上海雲裳
羽衣物聯科技有限
公司)
Shijiazhuang Shijiazhuang Shijiazhuang Professional cleaning and 51.00% 51.00% Establishment
Yunshang Yilian sale of daily necessities
Technology Co.,
Ltd. (石家莊雲裳衣
聯科技有限公司)
Nanjing Yunshang Nanjing Nanjing Professional cleaning and 80.00% 80.00% Establishment
Yilian Technology sale of daily necessities
Co., Ltd. (南京雲裳
衣聯科技有限公司)
Shanxi Yunshang Shanxi Shanxi Professional cleaning and 51.00% 51.00% Establishment
Yilian Technology sale of daily necessities
Co., Ltd. (山西雲裳
衣聯科技有限公司)
Tianjin Yunshang Tianjin Tianjin Professional cleaning and 51.00% 51.00% Establishment
Yilian Technology sale of daily necessities
Co., Ltd. (天津雲裳
衣聯網科技有限公
司)
Chongqing Yunshang Chongqing Chongqing Professional cleaning and 51.00% 51.00% Establishment
Haihong Yilian sale of daily necessities
Technology Co.,
Ltd. (重慶雲裳海宏
衣聯科技有限公司)
Haier Smart Home Co., Ltd. Annual Report 2022 285
Section X Financial Report
% of
Principal place of Place of voting
Name of subsidiary business registration Nature of business Shareholding right Method
Direct Indirect
Chengdu Yunshang Chengdu Chengdu Professional cleaning and 51.00% 51.00% Establishment
Meier Yilian sale of daily necessities
Technology Co.,
Ltd. (成都雲裳美爾
衣聯科技有限公司)
Beijing Yunshang Beijing Beijing Professional cleaning and 51.00% 51.00% Establishment
Yilian Technology sale of daily necessities
Co., Ltd. (北京雲裳
衣聯科技有限公司)
Chengdu Yunshang Chengdu Chengdu Professional cleaning and 100.00% 100.00% Establishment
Yilian Technology sale of daily necessities
Co., Ltd. (成都雲裳
衣聯科技有限公司)
Qingdao Haier Water Qingdao Qingdao Technology service, 100.00% 100.00% Establishment
Ecology Technology development and
Co., Ltd. (青島海爾 consultation
水生態科技有限公
司)
Qingdao Haixiangmian Qingdao Qingdao Sale of food and daily 100.00% 100.00% Establishment
Technology Co., necessities
Ltd. (青島海享眠科
技有限公司)
Qingdao Haier Kitchen Qingdao Qingdao Technology service and 100.00% 100.00% Establishment
IoT Technology Co., sale of daily necessities
Ltd. (青島海爾廚聯
網物聯科技有限公
司)
Tibet Haifeng Tibet Tibet Development of software 100.00% 100.00% Establishment
Intelligent Innovation and medical equipment
Technology Co.,
Ltd. (西藏海峰智能
創新科技有限公司)
Qingdao Haixiangzhi Qingdao Qingdao Manufacturing of home 100.00% 100.00% Establishment
Technology Co., appliances
Ltd. (青島海享智科
技有限公司)
Qingdao Haier Qingdao Qingdao Manufacturing of home 100.00% 100.00% Establishment
Refrigeration appliances
Appliance Co., Ltd.
(青島海爾製冷電器
有限公司)
Chongqing Haier Chongqing Chongqing Manufacturing of home 100.00% 100.00% Establishment
Washing Appliance appliances
Co., Ltd. (重慶海爾
洗滌電器有限公司)
Microenterprises such All over the All over the Sales of home appliances Establishment
as Qingdao Hai country country
Heng Feng Electrical
Appliances Sale &
Service Co., Ltd.
286 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Reasons for including subsidiaries which the Company has 50% or less of the equity into
the scope of consolidated financial statements:
At the end of the reporting period, the Company had substantial control over the finance
and operation of companies like Qingdao Hai Heng Feng Electrical Appliances Sale &
Service Co., Ltd, which were included into the scope of consolidated financial statements.
(2) Material non-wholly owned subsidiaries
Profit or loss
attributable Distribute Balance of
to minority dividends to minority
shareholders minority shareholders’
Shareholding for the shareholders equity at the
Name of of minority current in the current end of the
subsidiaries shareholders period period period
Guizhou Haier
Electronics Co.,
Ltd. 41.00% 18,163,882.93 –13,120,000.00 113,721,893.53
Wuhan Haier
Electronics
Holding Co., Ltd. 40.00% 9,406,875.12 258,330,069.24
(3) Summarized financial information in respect of material non-wholly owned
subsidiaries
Name of
subsidiary Closing balance
Non-current Current Non-current
Current assets assets Total assets liabilities liabilities Total liabilities
Guizhou Haier
Electronics
Co., Ltd. 470,967,911.51 74,062,299.71 545,030,211.22 261,666,739.20 5,993,000.00 267,659,739.20
Wuhan Haier
Electronics
Holding Co.,
Ltd. 924,844,806.17 133,143,608.30 1,057,988,414.47 412,163,241.37 412,163,241.37
Haier Smart Home Co., Ltd. Annual Report 2022 287
Section X Financial Report
(continued)
Name of
subsidiary Opening balance
Non-current Current Non-current
Current assets assets Total assets liabilities liabilities Total liabilities
Guizhou Haier
Electronics
Co., Ltd. 548,369,499.75 90,003,558.19 638,373,057.94 368,134,127.34 5,170,612.06 373,304,739.40
Wuhan Haier
Electronics
Holding Co.,
Ltd. 795,204,982.68 144,368,337.05 939,573,319.73 317,265,334.43 317,265,334.43
Name of subsidiary Amount for the current period
Total Cash flow of
comprehensive operating
Operating income Net profit income activities
Guizhou Haier Electronics Co., Ltd. 1,600,827,796.63 44,302,153.48 44,302,153.48 –15,368,670.01
Wuhan Haier Electronics Holding
Co., Ltd. 1,742,719,032.53 23,517,187.80 23,517,187.80 –71,319,433.90
(continued)
Name of subsidiary Amount for the previous period
Total Cash flow of
comprehensive operating
Operating income Net profit income activities
Guizhou Haier Electronics Co., Ltd. 1,434,916,082.22 34,970,709.04 34,970,709.04 428,271,861.58
Wuhan Haier Electronics Holding
Co., Ltd. 1,658,928,537.91 15,000,470.71 15,000,470.71 124,310,705.76
288 Haier Smart Home Co., Ltd. Annual Report 2022
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 54,639,935.57
Less: share of net assets of subsidiaries in respect to
the shareholding proportion acquired/disposed 5,258,549.54
Difference –49,381,386.03
Including: adjustment to increase capital reserve –49,381,386.03
3. Interests in joint ventures and associates
√ Applicable □ Not Applicable
(1) Joint ventures and associates
Principal place of Place of Nature of Accounting treatment
Name of joint venture and associates business registration Nature of business business 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
Hefei Feier Smart Technology Co., Ltd. Hefei Hefei Technology development 40.00% Equity method
Anhui Kunhe Intelligent Technology Co., Ltd. Hefei Hefei Electrical equipment R&D 30.00% Equity method
Haier Smart Home Co., Ltd. Annual Report 2022 289
Section X Financial Report
Principal place of Place of Nature of Accounting treatment
Name of joint venture and associates business registration Nature of business business of investment
Zhejiang Futeng Fluid Technology Co., Ltd. Huzhou Huzhou Gas compression 48.00% Equity method
machinery
development and
manufacturing
Beijing Mr. Hi Network Technology Beijing Beijing Technology development 36.29% Equity method
Company Limited
Beijing ASU Tech Co., Ltd. Beijing Beijing Technical service import 36.45% Equity method
and export business
Shenzhen Genyuan Environmental Protection Shenzhen Shenzhen Technical advisory 14.70% Equity method
Technology Co., Ltd. services
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)
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)
Hainengwanjia (Shanghai) Technology Shanghai Shanghai Construction work 20.00% Equity method
Development Co., Ltd. (海能萬嘉（上海）
科技發展有限公司)
Guangzhou Heying Investment Partnership Guangzhou Guangzhou Investment 49.00% Equity method
(Limited Partnership)
Qingdao Home Wow Cloud Network Qingdao Qingdao Home online service 24.93% 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
Europalters Italia S.r.l. Europe Europe Sales of home appliances 40.00% Equity method
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 Company (Private) Limited Pakistan Pakistan Manufacturing of home 31.72% Equity method
appliance
ControladoraMabeS.A.deC.V. Mexico Mexico Manufacturing of home 48.41% Equity method
appliance
Middle East Air conditioning Saudi Arabia Saudi Arabia Sales of home appliances 49.00% Equity method
Company,Limited
290 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
(2) Major financial information of important associates
√ Applicable □ Not Applicable
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:
Unit and Currency: RMB
Items Finance company
Closing balance/ Opening balance/
Amount for the Amount for the
current period previous period
Current assets 62,367,859,305.44 61,294,606,916.47
Non-current assets 12,622,422,390.73 9,404,030,263.35
Total assets 74,990,281,696.17 70,698,637,179.82
Current liabilities 56,509,751,262.74 53,403,515,414.15
Non-current liabilities 480,084,424.03 369,623,253.07
Total liabilities 56,989,835,686.77 53,773,138,667.22
Minority equity interests
Equity attributable to shareholders of
the parent company 18,000,446,009.40 16,925,498,512.60
Including: share of net assets calculated
per shareholding percentage 7,560,187,323.95 7,108,709,375.29
Operating income 2,037,253,129.20 2,039,657,544.66
Net profit 1,585,017,777.56 1,503,077,521.32
Other comprehensive income 9,929,719.24 –38,457,038.17
Total comprehensive income 1,594,947,496.80 1,464,620,483.15
Dividend received from associates for the year 218,400,000.00 218,400,000.00
Haier Smart Home Co., Ltd. Annual Report 2022 291
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. 2,934,085,854.00 2,654,248,436.12
Wolong Electric (Jinan) Motor Co., Ltd. 174,697,807.74 151,837,378.99
Qingdao Hegang New Material Technology Co., Ltd.
(青 島 河 鋼 新 材 料 科 技 股 份 有 限 公 司) 314,802,331.45 312,493,256.21
Qingdao Haier SAIF Smart Home Industry Investment
Center (Limited Partnership) 319,245,649.36 393,598,372.59
Mitsubishi Heavy Industries Haier (Qingdao)
Airconditioners Co., Ltd. 715,461,260.26 682,901,976.73
Qingdao Haier Carrier Refrigeration Equipment Co.,
Ltd. 413,367,540.80 409,053,808.05
Qingdao Haier Multimedia Co., Ltd 153,550,234.50 277,102,563.88
Qingdao Haier Moulds Co., Ltd. 269,158,534.54
Hefei Feier Smart Technology Co., Ltd. 265,106.27
Anhui Kunhe Intelligent Technology Co., Ltd. 1,997,782.61 1,877,574.14
Zhejiang Futeng Fluid Technology Co., Ltd. 77,807,408.84 82,098,847.75
Beijing Mr. Hi Network Technology Company Limited 7,507,759.75 7,507,759.75
Beijing Xiaobei Technology Co., Ltd. 2,687,341.82
Beijing ASU Tech Co., Ltd. 12,829,433.78 15,529,700.01
Shenzhen Genyuan Environmental Protection
Technology Co., Ltd. 6,914,487.73 6,914,487.73
Qingdao Haimu Investment Management Co., Ltd. 2,521,766.42 2,465,299.70
Qingdao Haimu Smart Home Investment Partnership
(Limited Partnership) 58,905,912.88 59,424,662.44
Hainengwanjia (Shanghai) Technology Development
Co., Ltd. (海 能 萬 嘉（上 海）科 技 發 展 有 限 公 司) 772,938.88
Qingdao Guochuang Intelligent Household Appliance
Research Institute Co., Ltd.
(青 島 國 創 智 能 家 電 研 究 院 有 限 公 司) 45,016,334.20
Guangzhou Heying Investment Partnership (Limited
Partnership) 285,793,577.87 285,793,577.87
Qingdao Home Wow Cloud Network Technology Co.,
Ltd 2,547,217.00 2,600,050.50
Bingji (Shanghai) Corporate Management Co., Ltd. 1,014,425,293.04 972,200,487.88
Youjin (Shanghai) Corporate Management Co., Ltd 1,843,591,441.88 1,766,819,068.86
RRS (Shanghai) Investment Co., Ltd.
(日 日 順（上 海）Investment有 限 公 司) 3,351,166,257.98 3,211,580,125.21
Haier Best Water Technology Co., Ltd.
(倍 世 海 爾 飲 水 科 技 有 限 公 司) 148,369,638.40 79,785,557.39
292 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Closing balance/ Opening balance/
Amount for the Amount for the
Investment in associates current period previous period
HuizhiXiangshun Equity Investment Fund (Qingdao)
Partnership (Limited Partnership) 238,806,947.64 119,008,967.03
Qingdao RRS Huizhi Investment Co., Ltd. 4,083,482.78 2,083,482.78
Qingdao Xinshenghui Technology Co., Ltd.
(青 島 鑫 晟 匯 科 技 有 限 公 司) 8,598,002.89 9,964,773.52
Meiling Candy Washing Machine Co., Ltd.
(美 菱 卡 迪 洗 衣 機 有 限 公 司) 22,752,232.07
EuropaltersItaliaS.r.l. 15,760,505.28 9,361,965.48
Orygin LLC 13,918,442.26
Konan Electronic Co., Ltd 67,770,092.99 69,273,712.61
HNR Company (Private) Limited 74,366,909.55 114,055,318.97
HPZ LIMITED 88,751,047.98 71,269,048.97
Haier Raya Electric S.A.E 10,568,507.40
ControladoraMabeS.A.deC.V. 4,685,927,386.53 4,131,983,673.10
Middle East Air conditioning Company,Limited 8,820,101.55 10,318,898.13
Total book value of investment 17,092,180,848.82 16,218,584,554.49
Total amount of the following financial data of
associates calculated based on shareholding
percentage
Net profit 917,792,070.74 1,276,185,381.16
Other comprehensive income 95,751,117.93 –34,119,700.06
Total comprehensive income 1,013,543,188.67 1,242,065,681.10
Haier Smart Home Co., Ltd. Annual Report 2022 293
Section X Financial Report
X. 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 three business segments: (1) China smart
home business segment; (2) Overseas home appliance and smart home business segment; (3) Other
business segments. 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.
(1) China smart home business segment consists of:
① Internet of Food solutions: mainly engages in production and sales of refrigerator/freezers
and kitchen appliances.
② Internet of Clothing solutions: mainly engages in production and sales of washing machine
products.
③ Air energy solutions: mainly engages in production and sales of air conditioners.
④ Whole house water solutions: mainly engages in production and sales of water home
appliances such as water heaters and water purification products.
(2) Overseas home appliance and smart home business segment mainly includes overseas business
segments such as GEA, FPA, Candy and so on.
(3) Other business segments: mainly include channel, equipment components, small home appliance
business and others.
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.
294 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
(1) Information of reportable segments
Segment information for the period
Segment information China smart home business
Internet of
Air energy clothing Whole house
Internet of Food solutions solutions solutions W water solutions
Refrigerator/ Kitchen Water home
freezers appliances Air conditioners Washing machine appliances
Segment revenue 43,199,470,772.09 3,763,429,363.37 33,946,969,623.71 31,613,988,663.17 13,854,726,199.27
Including: external revenue 39,027,034,631.31 3,113,540,694.76 28,386,620,301.46 27,076,387,016.95 13,542,203,958.47
Inter-segment revenue 4,172,436,140.78 649,888,668.61 5,560,349,322.25 4,537,601,646.22 312,522,240.80
Total segment operating cost 39,396,647,949.90 3,695,684,203.26 33,076,503,084.49 28,544,566,501.17 12,141,922,308.40
Segment operating profit 3,802,822,822.19 67,745,160.11 870,466,539.22 3,069,422,162.00 1,712,803,890.87
Total segment assets 14,577,249,272.86 2,326,675,305.96 15,101,978,985.73 14,156,800,879.35 6,504,143,011.57
Total segment liabilities 34,825,770,806.25 1,674,425,538.49 11,709,730,530.33 8,711,401,637.34 5,287,383,764.72
(continued)
Overseas home
appliance and smart Inter-segment
Segment information home business Other business eliminations Total
Segment revenue 125,423,825,543.85 84,251,398,520.89 –92,540,245,015.62 243,513,563,670.73
Including: external revenue 124,703,758,491.87 7,664,018,575.91 243,513,563,670.73
Inter-segment revenue 720,067,051.98 76,587,379,944.98 –92,540,245,015.62
Total segment operating cost 119,174,719,653.59 85,153,874,973.61 –92,585,243,582.25 228,598,675,092.17
Segment operating profit 6,249,105,890.26 –902,476,452.72 44,998,566.63 14,914,888,578.56
Total segment assets 64,106,295,908.67 46,119,831,030.71 –43,669,842,995.53 119,223,131,399.32
Total segment liabilities 34,773,662,612.50 56,005,860,058.46 –43,436,908,965.22 109,551,325,982.87
Haier Smart Home Co., Ltd. Annual Report 2022 295
Section X Financial Report
Segment information for the corresponding period of last year
Segment information China smart home business
Air energy Internet of Internet of
Internet of Food solutions solutions clothing solutions clothing solutions
Refrigerator/ Kitchen Water home
freezers appliances Air conditioners Air conditioners appliances
Segment revenue 41,743,157,017.74 3,495,589,873.43 32,192,834,146.73 30,658,121,874.87 12,701,189,534.01
Including: external revenue 36,854,876,837.94 3,013,351,768.25 27,412,948,533.30 25,916,495,249.83 12,478,797,708.26
Inter-segment revenue 4,888,280,179.80 482,238,105.18 4,779,885,613.43 4,741,626,625.04 222,391,825.75
Total segment operating cost 38,754,084,806.60 3,442,698,782.42 31,944,204,039.40 27,951,528,749.31 11,242,746,656.47
Segment operating profit 2,989,072,211.14 52,891,091.01 248,630,107.33 2,706,593,125.56 1,458,442,877.54
Total segment assets 17,849,098,835.46 2,547,615,110.79 17,958,004,697.79 20,919,506,189.82 8,406,963,618.39
Total segment liabilities 42,593,142,081.38 2,371,416,306.28 15,600,383,361.76 11,249,225,999.71 7,865,505,122.98
(continued)
Overseas home
appliance and smart Inter-segment
Segment information home business Other business eliminations Total
Segment revenue 113,725,197,263.88 91,716,273,350.33 –99,126,545,419.30 227,105,817,641.69
Including: external revenue 113,090,283,595.32 8,339,063,948.79 227,105,817,641.69
Inter-segment revenue 634,913,668.56 83,377,209,401.54 –99,126,545,419.30
Total segment operating cost 107,799,170,859.34 91,912,861,706.02 –99,170,658,940.10 213,876,636,659.46
Segment operating profit 5,926,026,404.54 –196,588,355.69 44,113,520.80 13,229,180,982.23
Total segment assets 57,368,272,498.73 51,126,662,397.31 –63,373,327,405.31 112,802,795,942.98
Total segment liabilities 33,874,070,274.78 59,750,131,702.98 –63,106,428,270.31 110,197,446,579.56
296 Haier Smart Home Co., Ltd. Annual Report 2022
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
External transaction revenue
Amount for the Amount for the
Items current period previous period
Mainland China 116,754,660,544.84 111,866,568,165.67
Other countries/regions 126,758,903,125.89 115,239,249,476.02
Among which:
America 76,629,831,084.82 70,277,292,639.70
Australia 6,962,360,306.70 7,011,702,914.33
South Asia 8,283,959,988.29 7,138,132,421.70
Europe 23,031,521,394.12 19,736,797,708.72
Southeast Asia 5,179,557,555.83 4,740,118,325.43
Middle East and Africa 1,970,513,900.11 1,478,785,406.72
Japan 3,568,558,534.13 3,491,226,268.28
Others 1,132,600,361.89 1,365,193,791.14
Total 243,513,563,670.73 227,105,817,641.69
Total non-current assets
Items Closing balance Opening balance
Mainland China 19,355,615,775.70 16,573,428,753.11
Other countries/regions 29,019,302,954.24 25,209,296,729.73
Total 48,374,918,729.94 41,782,725,482.84
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. Annual Report 2022 297
Section X Financial Report
XI. DISCLOSURE OF FAIR VALUE
1. Fair value of 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
Important Important
Quotes in an observable unobservable
active market input input
(Level 1) (Level 2) (Level 3) Total
Continuously measured
at fair value
Financial assets held for trading 395,687,084.83 14,638,968.26 109,486,827.82 519,812,880.91
Including: Bank wealth management
products 14,638,968.26 14,638,968.26
Investment fund 168,430,847.63 168,430,847.63
Investment in equity instruments 227,256,237.20 109,486,827.82 336,743,065.02
Derivative financial assets 183,185,160.51 183,185,160.51
Including: Forward foreign exchange
contract 178,992,877.32 178,992,877.32
Forward commodity contract 4,192,283.19 4,192,283.19
Other equity instruments 16,353,773.34 1,027,550,923.67 4,807,978,233.19 5,851,882,930.20
Including: Equity instruments measured
at fair value and changes of which
included in other comprehensive
income 16,353,773.34 1,027,550,923.67 4,807,978,233.19 5,851,882,930.20
Derivative financial liabilities 104,594,040.66 104,594,040.66
Including: Forward foreign exchange
contract 92,580,419.48 92,580,419.48
Forward commodity contracts 12,013,621.18 12,013,621.18
Other non-current liabilities 16,916,789.10 16,916,789.10
Including: put option liability 16,916,789.10 16,916,789.10
298 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
At the beginning of the period
Items Input used for fair value measurement
Important
Quotes in an Important unobservable
active market observable input input
(Level 1)) (Level 2) (Level 3) Total
Continuously measured at fair value
Financial assets held for trading 374,782,417.76 2,305,001,643.90 106,291,467.43 2,786,075,529.09
Including: Bank wealth management
products 2,168,622,090.00 2,168,622,090.00
Forward foreign exchange contract 136,379,553.90 136,379,553.90
Investment fund 150,516,274.37 150,516,274.37
Investment in equity instruments 224,266,143.39 106,291,467.43 330,557,610.82
Derivative financial assets 79,819,974.01 79,819,974.01
Including: Forward foreign exchange
contract 72,822,190.59 72,822,190.59
Interest rate swap agreement 6,997,783.42 6,997,783.42
Other equity instruments 21,055,159.54 2,812,000,000.00 2,018,829,785.09 4,851,884,944.63
Including: Equity instruments measured
at fair value and changes of which
included in other comprehensive
income 21,055,159.54 2,812,000,000.00 2,018,829,785.09 4,851,884,944.63
Other non-current assets 46,832,494.61 46,832,494.61
Including: Other non-current financial
assets 46,832,494.61 46,832,494.61
Financial liabilities held for trading 6,294,014.40 6,294,014.40
Including: Forward foreign exchange
contract 6,294,014.40 6,294,014.40
Derivative financial liabilities 80,212,433.24 80,212,433.24
Including: Forward foreign exchange
contract 60,527,532.76 60,527,532.76
Interest rate swap agreement 19,684,900.48 19,684,900.48
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. Annual Report 2022 299
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 14,638,968.26 Discounted cash flow
products
Derivative financial assets
Including: Forward foreign exchange 178,992,877.32 Discounted cash flow
contract
Forward commodity contract 4,192,283.19 Discounted cash flow
Other equity instruments investment —
Including: equity instruments measured at 1,027,550,923.67 Recent transaction
fair value through other comprehensive methods
income
Derivative financial liabilities
Including: Forward foreign exchange 92,580,419.48 Discounted cash flow
contract
Forward commodity contracts 12,013,621.18 Discounted cash flow
300 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
3. Continual Level 3 fair value measurement major items, the valuation techniques
adopted and information of important parameters
Fair value at the Valuation Significant Sensitivity of fair value
Items end of the period technique unobservable input Range to the input
Other equity instruments
Including:
1. COSMO IoT 2,817,408,000.00 Market approach 1. Average EV/ 1. 1.46 to 1.48 1. 1% increase
Technology Sales multiple 2. 19% to 21% (decrease) in average
Co., LTD. (卡奥 of peers EV/Sales multiple of
斯物聯科技股 2. Discount for the Comparable
份有限公司) lack of Companies would
marketability result in increase
(decrease) in fair
value by RMB116
million.
2. 1% increase
(decrease) in the
lack of marketability
would result in
decrease (increase)
in fair value by
RMB146 million.
2. SINOPEC Fuel 1,234,500,000.00 Market approach 1. Average P/E 1. 32.38 to 1. 1% increase
Oil Sales multiple of 33.04 (decrease) in average
Corporation peers 2. 28.2% to P/E multiple of the
Limited (中國石 2. Discount for 30.2% Comparable
化銷售股份有 lack of Companies would
限公司) marketability result in increase
(decrease) in fair
value by RMB12.3
million.
2. 1% increase
(decrease) in the
lack of marketability
would result in
decrease (increase)
in fair value by
RMB17.4 million.
Haier Smart Home Co., Ltd. Annual Report 2022 301
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.
XII. RELATED PARTIES AND RELATED PARTY TRANSACTIONS
(I) Explanation for basis of identifying related party
According to Accounting Standards for Business Enterprises No. 36 — Related Party
Disclosures, parties are considered to be related if one party has the ability to control or jointly
control the other party or exercise significant influence over the other party. Parties (two or more
than two) are also considered to be related if they are subject to common control, joint control
or significant influence 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.
302 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
(II) Relationships between related parties
1. Information about the parent company and other companies holding shares of the
Company
Interest Voting rights
Type of Registered Legal Relationships with in the to the
Name enterprise Registered place capital representative the Company Company Company
Haier Group Collective Qingdao High-tech 311,180,000 Zhou Yunjie Parent Company 11.35% 11.35%
Corporation ownership Zone Haier Park
company
Haier COSMO Co., Joint-stock Qingdao High-tech 631,930,000 Zhou Yunjie Subsidiary of 13.32% 13.32%
Ltd. (海尔卡奥斯 company Zone Haier Park Parent
股份有限公司) Company
HCH (HK) Investment Private Hong Kong HKD 10,000 / Parties acting in 5.70% 5.70%
Management Co., company concert of
Limited Parent
Company
Qingdao Haier Venture Company with Qingdao Free Trade 923,000,000 Zhou Yunjie Parties acting in 1.82% 1.82%
& Investment limited Zone concert of
Information Co., liability Parent
Ltd. Company
Qingdao Haichuangzhi Limited Qingdao High-tech 118,924,416 / Parties acting in 1.28% 1.28%
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
2. Subsidiaries
The details of the subsidiaries of the Company are detailed in Note IX.1.
3. Joint ventures and associates
The details of associates and joint ventures of the Company are detailed in Note VII.11 and
IX.3.
Haier Smart Home Co., Ltd. Annual Report 2022 303
Section X Financial Report
4. Connected companies with no relationship of control
Name Relationship with the Company
Qingdao Haier Parts Procurement Co., Ltd. Subsidiary of Haier Group
Gooday Supply Chain Technologies Co., Ltd. Subsidiary of Haier Group
Chongqing Haier Electrical Appliances Sales Subsidiary of Haier Group
Co., Ltd.
Shanghai Cotai Supply Chain Management Subsidiary of Haier Group
Co., Ltd.
Dalian Haier International Trade Co., Ltd. Subsidiary of Haier Group
Qingdao Goodaymart Supply Chains Co., Subsidiary of Haier Group
Ltd.
Qingdao Haier Moulds Co., Ltd. Subsidiary of Haier Group
Qingdao Haier International Trading Co., Ltd. Subsidiary of Haier Group
Cosmoplat Chuangzhi IOT Technology Co., Subsidiary of Haier Group
Ltd.
Qingdao Dingxin Electronic Technology Co., Subsidiary of Haier Group
Ltd.
Qingdao Haier International Travel Agency Subsidiary of Haier Group
Co., Ltd.
Shanghai Zhiyu Technology Co., Ltd. Subsidiary of Haier Group
Cosmoplat Chuangzhi IOT Technology Subsidiary of Haier Group
(Chongqing) Co., Ltd.
Qingdao Haina Cloud Intelligent System Co., Subsidiary of Haier Group
Ltd.
Chongqing Zhonglian Energy Technology Subsidiary of Haier Group
Co., Ltd.
Qingdao Blue Whale Technology Co., Ltd. Subsidiary of Haier Group
Qingdao Xiaoshuai Intelligent Technology Subsidiary of Haier Group
Co., Ltd.
Haier International Co., Ltd. Subsidiary of Haier Group
Hongkong Gooday Supply Chain Subsidiary of Haier Group
Management Limited
Gooday (Qingdao) International Supply Chain Subsidiary of Haier Group
Service Co., Ltd.
Qingdao Manniq Intelligent Technology Co., Subsidiary of Haier Group
Ltd.
Thunderobot International (HK) Limited Subsidiary of Haier Group
Chongqing Zhonglian Energy Technology Subsidiary of Haier Group
Co., Ltd
Qingdao Haier New Materials R & D Co., Subsidiary and associate of Haier
Ltd. Group
HNR Company (Private) Limited Associate
Wolong Electric (Jinan) Motor Co., Ltd. Associate
HPZ Limited Associate
Mitsubishi Heavy Industry Haier (Qingdao) Air Associate
Conditioner Co., Ltd.
Controladora Mabe S.A.deC.V. Associate
Qingdao Haier Multi-media Co., Ltd. Associate
304 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Name Relationship with the Company
Qingdao HBIS Composite New Material Co., Subsidiary of associate
Ltd.
Hefei Hegang New Material Technology Co., Subsidiary of associate
Ltd.
(III) Related 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.deC.V. 13,123,708,450.38 12,314,855,657.89
Qingdao Haier Parts Procurement Co., Ltd. 7,059,896,523.58 538,564,747.23
Gooday Supply Chain Technologies Co., Ltd. 4,444,169,934.17 3,848,406,918.04
HNR Company (Private) Limited 3,073,674,460.32 2,733,833,669.59
Chongqing Haier Electrical Appliances Sales
Co., Ltd. 3,054,825,152.17 5,274,865,476.66
Shanghai Cotai Supply Chain Management
Co., Ltd. 1,471,945,927.42 1,624,701,243.17
Dalian Haier International Trade Co., Ltd. 529,797,174.58 507,660,692.05
Qingdao Goodaymart Supply Chains Co.,
Ltd. 421,203,765.86 690,524,339.94
Qingdao Haier Moulds Co., Ltd. 413,503,657.29 654,961,221.67
Qingdao Haier International Trading Co., Ltd. 397,359,401.03 570,588,757.78
Cosmoplat Chuangzhi IOT Technology Co.,
Ltd. 322,583,108.75 2,121,388,092.90
Wolong Electric (Jinan) Motor Co., Ltd. 233,769,115.21 1,013,817,589.80
Qingdao HBIS Composite New Material Co.,
Ltd. 156,388,498.04 923,986,491.86
Qingdao Ding Xin Electronics Technology
Co., Ltd. 101,558,830.18 885,837,757.21
Cosmoplat Chuangzhi IOT Technology
(Chongqing) Co., Ltd. (卡 奧 斯 創 智 物 聯
科 技（重 慶）有 限 公 司) 119,852,149.42 1,031,357,405.38
Hefei Hegang New Material Technology Co.,
Ltd. 117,415,909.49 1,190,287,247.15
Other related parties 2,848,081,174.13 4,051,040,692.74
Total 37,889,733,232.02 39,976,678,001.06
Haier Smart Home Co., Ltd. Annual Report 2022 305
Section X Financial Report
2. Details of the Company’s sales of goods to related parties are as follows:
Amount for the Amount for the
Related parties current period previous period
Controladora Mabe S.A.deC.V. 1,023,743,811.97 730,275,993.98
Qingdao Haier International Trading Co., Ltd. 672,339,983.04 613,142,450.61
HNR Company (Private) Limited 602,998,664.66 681,960,950.97
Qingdao Haier Multi-media Co., Ltd. 136,786,578.47 88,327,957.96
Qingdao Haier International Travel Agency
Co., Ltd. 119,166,052.08 215,683,256.42
HPZ Limited 118,748,741.50 90,831,902.38
Other related parties 829,514,949.57 917,809,275.26
Total 3,503,298,781.29 3,338,031,787.58
306 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
3. Amount of unsettled items of related parties
Closing Opening
Items and name of customers Balance Balance
Bills receivable:
Qingdao Ding Xin Electronics Technology Co.,
Ltd. 45,947,984.43 622,590.67
Cosmoplat Chuangzhi IOT Technology
(Chongqing) Co., Ltd. 28,764,679.42 2,528,394.74
Cosmoplat Chuangzhi IOT Technology Co., Ltd. 23,908,824.49 13,520,000.00
Qingdao Haina Cloud Intelligent System Co., Ltd. 9,196,905.30 21,511,057.07
Other related parties 13,863,643.73 20,304,074.20
Accounts receivable:
HNR Company (Private) Limited 887,316,060.44 588,605,242.72
Controladora Mabe S.A.deC.V. 155,980,651.90 123,524,843.42
Qingdao Haier Parts Procurement Co., Ltd. 155,500,553.65
Qingdao Haier International Trading Co., Ltd. 147,208,453.41 34,284,071.61
HPZ Limited 117,899,486.73
Shanghai Zhiyu Technology Co., Ltd. 116,549,809.14 43,349,588.61
Chongqing Zhonglian Energy Technology Co.,
Ltd. 48,870,443.21 45,403,951.21
Qingdao Haina Cloud Intelligent System Co., Ltd. 24,917,701.10 31,824,063.09
Other related parties 126,236,118.64 352,919,464.97
Prepayments:
HNR Company (Private) Limited 110,370,091.99 82,148,476.31
Shanghai Zhiyu Technology Co., Ltd. 40,934,511.12
Qingdao Haier New Materials R & D Co., Ltd. 8,445,024.12
Qingdao Haier International Travel Agency Co.,
Ltd. 6,253,573.56 23,936,807.36
Other related parties 27,781,442.20 95,176,038.89
Other receivables:
Qingdao Blue Whale Technology Co., Ltd. 12,392,334.21 12,392,334.21
Controladora Mabe S.A.deC.V. 12,158,833.50 16,260,655.41
Dalian Haier International Trade Co., Ltd. 9,440,616.07 4,372,124.84
Qingdao Haier International Travel Agency Co.,
Ltd. 5,553,777.66 5,908,061.04
Haier International Co., Ltd. 4,272,144.02 8,497,154.27
Other related parties 26,691,391.51 99,783,350.46
Bills payable:
Qingdao Haier New Materials R & D Co., Ltd. 386,075,771.04 90,348,253.59
Qingdao Haier Parts Procurement Co., Ltd. 180,719,158.83
Wolong Electric (Jinan) Motor Co., Ltd. 37,773,640.00 4,127,872.00
Other related parties 37,227,346.97 50,019,985.82
Accounts payable:
Qingdao Haier Parts Procurement Co., Ltd. 1,860,747,884.39 1,986,376,315.99
Controladora Mabe S.A.deC.V. 1,299,452,149.83 941,545,815.41
Qingdao Haier International Trading Co., Ltd. 257,531,848.99 106,344,044.12
Hongkong Gooday Supply Chain Management
Limited 250,478,107.49
Haier Smart Home Co., Ltd. Annual Report 2022 307
Section X Financial Report
Closing Opening
Items and name of customers Balance Balance
Thunderobot International (HK) Limited 155,527,162.34
Dalian Haier International Trade Co., Ltd. 150,178,673.56 175,739,251.85
Qingdao Haier New Materials R & D Co., Ltd. 101,958,410.60 21,654,400.63
Gooday Supply Chain Technologies Co., Ltd. 79,442,717.42 1,461,094.92
Cosmoplat Chuangzhi IOT Technology Co., Ltd. 53,275,591.30 268,605,818.56
Other related parties 212,314,885.05 1,978,773,614.10
Contract liabilities:
Wolong Electric (Jinan) Motor Co., Ltd. 51,422,207.69 21,373,101.27
Chongqing Zhonglian Energy Technology Co.,
Ltd. 17,215,206.92 17,210,554.92
Mitsubishi Heavy Industry Haier (Qingdao) Air
Conditioner Co., Ltd. 4,208,374.00 49,594.69
HPZ Limited 3,353,144.42 4,696,178.43
Other related parties 6,008,371.78 111,264,927.65
Other payables:
Gooday Supply Chain Technologies Co., Ltd. 485,473,357.04 687,378,382.22
Gooday (Qingdao) International Supply Chain
Service Co., Ltd. 140,136,176.89
Shanghai Cotai Supply Chain Management Co.,
Ltd. 113,720,815.14 154,351,301.35
Qingdao Haier Moulds Co., Ltd. 69,423,409.16 21,298,170.87
Qingdao Manniq Intelligent Technology Co., Ltd. 67,521,909.37 28,372,133.16
Qingdao Goodaymart Supply Chains Co., Ltd. 30,669,122.96 72,545,343.35
Dalian Haier International Trade Co., Ltd. 21,899,297.26 21,800,000.00
Qingdao Haier International Travel Agency Co.,
Ltd. 17,736,906.10 16,372,400.80
Qingdao Blue Whale Technology Co., Ltd. 15,865,657.94 27,367,393.54
Other related parties 123,426,526.98 168,093,852.85
308 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
4. Other related party transactions
(1) On 29 April 2021, 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
2020 Annual General Meeting held on 25 June 2021. The Financial Services
Framework Agreement became effective from the passing of the resolution at the
general meeting.
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 31,424,418,720.13 28,870,880,571.84
Interest receivable from the Finance Company 468,636,097.70 260,900,663.40
Loans of the Finance Company 60,000,000.00 336,507,659.12
Interest payable to the Finance Company 46,158.00 1,813,534.66
Acceptance note issued 21,621,825,652.96 21,697,666,574.19
Foreign exchange derivatives
of the Finance Company –2,293,511.73 1,577,848.15
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 570,162,386.04 339,728,297.25
Interest expense of the Finance Company 4,933,548.81 8,137,583.63
Service fee of the Finance Company 29,446,933.09 23,493,333.12
Spot foreign exchange business (foreign
exchange settlement and sale) 6,337,945,933.79 9,856,440,483.71
(2) The lease expense of the Company and its subsidiaries for production and operation
leased from related parties for the current period was RMB97 million (amount for the
corresponding period: RMB113 million).
Haier Smart Home Co., Ltd. Annual Report 2022 309
Section X Financial Report
(3) Related information on the guarantor of the Company’s guaranteed borrowings as a
related party at the end of period:
Lender Closing Balance Opening Balance Guarantor
Haier Russian Electric Co., 304,896,830.40 Haier Group
Ltd. Corporation
Haier Russian Industries 60,000,000.00 Haier Group
Ltd. Corporation
Total 60,000,000.00 304,896,830.40
(4) Haier Group Corporation provided joint liability guarantee for certain bills payable of
the subsidiaries of the Company with the guaranteed amount of RMB2,311 million at
the end of the period (amount for the corresponding period: RMB1,805 million).
(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 November 2020, 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 the listing date to 31 December 2022, which can be renewed for another three years
upon expire.
310 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
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 November 2020, 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 the listing date to 31 December 2022, which can be renewed
for another three years upon expire.
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 June 2021, 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 2023, which can be renewed for
another three years upon expire.
Haier Smart Home Co., Ltd. Annual Report 2022 311
Section X Financial Report
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.
XIII. SHARE-BASED PAYMENTS
√ Applicable □ Not Applicable
(1) Employee Stock Ownership Plan
The resolutions on the 2022 A Share Core Employee Stock Ownership Plan of Haier Smart
Home Co., Ltd. (Draft) And Its Summary (the “2022 A Share ESOP”) and the 2022 H Share Core
Employee Stock Ownership Plan of Haier Smart Home Co., Ltd. (Draft) And Its Summary (the
“2022 H Share ESOP”) were considered and passed at the 28th meeting of the 10th session of
the Board of Directors and the 25th meeting of the 10th session of the Board of Supervisors
held by the Company on 28 April 2022, and it was agreed to implement the 2022 A Share
ESOP and the 2022 H Share ESOP.
(a) 2022 A Share ESOP
The shares of the 2022 A Share ESOP were sourced from the repurchased shares of
26,814,055 Shares transferred from the “securities account for repurchase of Haier Smart
Home Co., Ltd.” to the specific account of the 2022 A Share ESOP at a transfer price of
RMB25.33 per share.
(b) 2022 H Share ESOP
The management of the 2022 H Share ESOP has been entrusted to Industrial Securities
Asset Management Co., Ltd. with the establishment of Industrial Securities Asset
Management Xinzhong Haier Smart Home No. 8 Employee Stock Ownership Single Asset
Management Plan (the “Asset Management Plan”). The Asset Management Plan purchased
2,653,200 H Shares in aggregate in the secondary market through the Hong Kong Stock
Connect, with an average transaction price of HK$25.6630 per share and a transaction
amount of approximately HK$68,089,020.00.
312 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
(2) Share Options
According to the Resolution on Adjustment to the 2022 A Share Option Incentive Scheme of
Haier Smart Home Co., Ltd. and the Resolution on Grant of 2022 A Share Option to Incentive
Recipients of Haier Smart Home Co., Ltd. passed on the 1st meeting of the 11th session of the
Board of Directors of the Company on 28 June 2022, it was agreed that on the date of the
grant on 28 June 2022, 104,756,896 share options would be granted to 1,834 qualifying
incentive recipients at the exercise price of RMB23.86 per Share.
Number for the Number for the
Number of Share Options current period previous period
At the beginning of the period 50,525,214.00
Granted during the period 104,756,896.00 50,525,214.00
Vested during the period
Lapsed during the period
At the end of the period 155,282,110.00 50,525,214.00
(3) Restricted Shares
Number for the Number for the
Number of restricted shares current period previous period
At the beginning of the period 4,438,027.00
Granted during the period 5,636,959.00 4,438,027.00
Vested during the period 309,451.00
Lapsed during the period 999,660.00
At the end of the period 8,765,875.00 4,438,027.00
(4) Method of determining the fair value of equity instrument on the date of grant:
(a) The Company has adopted the B-S model to determine the fair value of the share options.
The B-S model is subject to six variables: current price of the target share (S), exercise
price of the option (K), risk-free rate (r), valid term of the option (t), expected volatility of the
share price (σ), and the dividend rate of the target share (i).
Parameters selected for the calculation of the value of the option of the Company are as
follows:
① share price (S): RMB27.01 per share (closing price on the date of grant on 28 June
2022).
② exercise price (K): RMB23.86 per share.
Haier Smart Home Co., Ltd. Annual Report 2022 313
Section X Financial Report
③ risk-free rate (r): according to the maturity yield rate of the China Government Bonds
from Bloomberg’s system, the risk-free rate for one year was 1.997%; 2.358% for
two years; 2.452% for three years; 2.561% for four years; and 2.67% for five years,
where the risk-free rate for the fourth year was calculated as the arithmetic average of
the risk-free rate of the third and fifth year.
④ lifetime of the option (t): 1 year, 2 years, 3 years, 4 years, respectively (from the date
of grant to the deadline of the first exercisable date of each tranche).
⑤ historical volatility rate (σ): 0.3677 (1 year); 0.4016 (2 years); 0.3783 (3 years); 0.3795
(4 years). The interval adopted for the calculation of historical volatility was the
continuous closing price of the Company in the preceding four years. At the same
time, the historical volatility for the preceding 1, 2, 3, 4, and 5 years was calculated,
respectively, based on the differences in waiting period.
⑥ yield rate (i) 1.7031% based on the yield rate shown in Bloomberg’s system on the
valuation date (28 June 2022), dividing the dividend per share by the closing price on
the date of grant. According to the calculation under the above pricing model, the
theoretical aggregate value of the 104,756,896 share options granted under this
incentive plan of the Company amounted to RMB777,000,000.
(b) The fair value on the date of grant was arrived at on the basis of the share price of the
Company on the date of grant, taking into account the current value of cash dividend.
(5) Based on the latest available subsequent information, such as change in number of vesting
employee, result condition of the Company and evaluation of personal performance appraisal of
incentive targets, the Company makes the best estimation of the number of vesting equity
instruments, based on which, the Company includes services received for the current period in
relevant costs of expenses in accordance with the fair value of the equity instrument on the date
of grant, and accordingly included in the capital reserve.
Expense recognized in respect of the share-based payment incentive plan for the period:
RMB567,000,000 for the stock ownership plan; RMB315,000,000 for the share options; and
RMB47,000,000 for the restricted shares.
As at the end of the period, balance associated with the above share-based payment incentive
plans provided in the capital reserve amounted to RMB955,000,000.
XIV. CONTINGENCIES
√ Applicable □ Not Applicable
As of 30 March 2023, the Company has no significant contingencies that need to be disclosed.
314 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
XV. EVENTS AFTER THE BALANCE SHEET DATE
According to the resolution of the 4th meeting of the 11th session of the Board of Directors of the
Company held on 30 March 2023, the profit for the year is proposed to be distributed on the basis of
the total number of shares on the record date after deducting the repurchased shares from the
repurchased account when the plan is implemented in the future, the Company will declare cash
dividend of RMB5.66 (including taxes) for every 10 shares to all shareholders.
XVI. 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 54,138,815,682.51 54,138,815,682.51
Financial assets held for trading 519,812,880.91 519,812,880.91
Derivative financial assets 183,185,160.51 183,185,160.51
Receivable 9,580,191,838.15 9,580,191,838.15
Accounts receivable 15,913,691,537.11 15,913,691,537.11
Other receivables 2,380,929,623.19 2,380,929,623.19
Other current assets 1,642,421,944.45 1,642,421,944.45
Debt investments 1,034,222,222.22 1,034,222,222.22
Long-term receivables 305,070,001.45 305,070,001.45
Other equity instruments 5,851,882,930.20 5,851,882,930.20
Haier Smart Home Co., Ltd. Annual Report 2022 315
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 46,097,333,903.45 46,097,333,903.45
Financial assets held for trading 2,786,075,529.09 2,786,075,529.09
Derivative financial assets 79,819,974.01 79,819,974.01
Receivable 13,354,791,068.29 13,354,791,068.29
Accounts receivable 14,625,260,856.04 14,625,260,856.04
Other receivables 1,957,886,257.19 1,957,886,257.19
Other current assets 316,590,333.42 316,590,333.42
Long-term receivables 308,998,755.30 308,998,755.30
Other equity instruments 4,851,884,944.63 4,851,884,944.63
Other non-current assets 46,832,494.61 46,832,494.61
Financial liabilities
Items Closing Balance
Financial Financial
liabilities liabilities
measured at measured at
fair value amortised cost Total
Short-term borrowings 9,643,374,732.46 9,643,374,732.46
Derivative financial liabilities 104,594,040.66 104,594,040.66
Bills payable 25,090,945,421.28 25,090,945,421.28
Accounts payable 41,883,694,299.24 41,883,694,299.24
Other payables 17,511,771,662.70 17,511,771,662.70
Non-current liabilities due in one year 2,854,446,929.32 2,854,446,929.32
Long-term borrowings 13,590,866,873.43 13,590,866,873.43
Long-term payables 44,240,087.94 44,240,087.94
Other non-current liabilities 16,916,789.10 16,916,789.10
316 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
Financial liabilities (continued)
Items Opening Balance
Financial Financial
liabilities liabilities
measured at measured at
fair value amortised cost Total
Short-term borrowings 11,226,212,134.39 11,226,212,134.39
Financial liabilities held for trading 6,294,014.40 6,294,014.40
Derivative financial liabilities 80,212,433.24 80,212,433.24
Bills payable 25,023,238,406.72 25,023,238,406.72
Accounts payable 42,363,218,840.33 42,363,218,840.33
Other payables 17,570,339,925.76 17,570,339,925.76
Non-current liabilities due in one year 6,745,950,334.20 6,745,950,334.20
Long-term borrowings 3,038,573,824.53 3,038,573,824.53
Bonds payable 334,730,048.82 334,730,048.82
Long-term payables 99,602,707.76 99,602,707.76
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. Annual Report 2022 317
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.
XVII. OTHER SIGNIFICANT EVENTS
The Company has no other significant events that need to be disclosed.
318 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
XVIII. NOTES TO MAIN ITEMS OF FINANCIAL STATEMENTS OF THE PARENT
COMPANY
1. Accounts receivable
Closing Opening
Aging Balance Balance
Within one year 379,679,227.77 546,532,442.90
1–2 years 533,963,843.29
2–3 years
Over 3 years
Accounts receivable balance 913,643,071.06 546,532,442.90
Allowance for bad debts
Net receivables 913,643,071.06 546,532,442.90
Changes in bad debt provision for accounts receivable in the current period:
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
2. Other receivables
√ Applicable □ Not Applicable
Unit and Currency: RMB
Items Closing Balance Opening Balance
Interest receivable 29,783,516.95 51,632,471.99
Dividend receivable 1,015,840,000.00 3,615,840,000.00
Other receivables 13,341,408,140.62 12,577,807,696.42
Total 14,387,031,657.57 16,245,280,168.41
Haier Smart Home Co., Ltd. Annual Report 2022 319
Section X Financial Report
Interest receivable
√ Applicable □ Not Applicable
Unit and Currency: RMB
Aging Closing Balance Opening Balance
Within 1 year 29,783,516.95 51,632,471.99
More than 1 year
Total 29,783,516.95 51,632,471.99
Dividend receivable
√ Applicable □ Not Applicable
Unit and Currency: RMB
Aging Closing Balance Opening Balance
Within 1 year 1,000,000,000.00 3,615,840,000.00
More than 1 year 15,840,000.00
Total 1,015,840,000.00 3,615,840,000.00
Other receivable
① The disclosure of other receivables by aging is as follows:
Aging Closing Balance Opening Balance
Within one year 6,278,019,144.67 12,040,141,153.64
More than one year 7,066,828,954.97 537,791,379.00
Other receivables balance 13,344,848,099.64 12,577,932,532.64
Allowance for bad debts 3,439,959.02 124,836.22
Net other receivables 13,341,408,140.62 12,577,807,696.42
② Changes in bad debt provision for other receivables in the current period:
Increase for Decrease for
the current period the current period
Provision for Write-off and
Opening the current Other other Closing
Items Balance period increase Reversal movement Balance
Allowance for bad
debts 124,836.22 3,315,122.8 3,439,959.02
320 Haier Smart Home Co., Ltd. Annual Report 2022
Section X Financial Report
3. Long-term equity investment
√ Applicable □ Not Applicable
(1) Details of long-term equity investments:
Unit and Currency: RMB
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 49,632,299,728.31 7,100,000.00 49,377,425,428.31 7,100,000.00
Long-term equity investments in
associates 3,228,239,799.56 109,300,000.00 3,252,734,849.46 109,300,000.00
Total 52,860,539,527.87 116,400,000.00 52,630,160,277.77 116,400,000.00
(2) Long-term equity investments to subsidiaries
Impairment
Increase/ provisions at
Decrease for the end of the
Investee Opening Balance the 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. 329,832,047.28 96,904,371.71 426,736,418.99
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. 42,660,583.21 29,689,700.00 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
Guizhou Haier Electronics Co., Ltd. 96,904,371.71 –96,904,371.71 —
Hefei Haier Air-conditioning Co., Limited 67,110,323.85 12,292,800.00 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
Haier Smart Home Co., Ltd. Annual Report 2022 321
Section X Financial Report
Impairment
Increase/ provisions at
Decrease for the end of the
Investee Opening Balance the period Closing Balance period
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
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 26,022,782,526.24 157,891,800.00 26,180,674,326.24
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. 367,505,635.00 367,505,635.00
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. 20,000,000.00 20,000,000.00
Haier Zhijia 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 49,377,425,428.31 254,874,300.00 49,632,299,728.31 7,100,000.00
322 Haier Smart Home Co., Ltd. Annual Report 2022
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. 145,209,273.31 23,370,283.04 168,579,556.35
Qingdao Haier SAIF Smart
Home Industry
Investment Center
(Limited Partnership) 393,598,372.59 –57,153,662.41 –17,199,060.82 319,245,649.36
Bank of Qingdao Co., Ltd. 1,051,480,863.27 139,485,507.20 83,487,972.18 –112,115,851.23 1,162,338,491.42
Mitsubishi Heavy Industries
Haier (Qingdao)
Air-conditioners Co.,
Ltd. 682,901,976.73 113,559,283.53 –81,000,000.00 715,461,260.26
Qingdao Haier Carrier
Refrigeration Equipment
Co., Ltd. 409,053,808.05 22,213,959.56 –17,900,226.81 413,367,540.80 21,000,000.00
Qingdao Haier Multimedia
Co., Ltd 277,102,563.87 –123,552,329.38 153,550,234.49 88,300,000.00
Hefei Hegang New Material
Technology Co., Ltd. 293,387,991.64 9,482,737.24 –7,173,662.00 295,697,066.88
Total 3,252,734,849.46 139,485,507.20 71,408,243.76 –235,388,800.86 3,228,239,799.56 109,300,000.00
4. Operating revenue and operating cost
√ Applicable □ Not Applicable
Unit and Currency: RMB
Amount for Amount for
the current period the previous period
Items Revenue Cost Revenue Cost
Primary Business 335,344,865.65 292,889,261.14 208,799,283.50 197,653,713.44
Other Business 89,317,060.67 77,735,951.48 144,998,965.02 117,703,392.70
Total 424,661,926.32 370,625,212.62 353,798,248.52 315,357,106.14
Haier Smart Home Co., Ltd. Annual Report 2022 323
Section X Financial Report
5. Investment income
Unit and Currency: RMB
Amount for the Amount for the
Items current period previous period
Long-term equity investments income calculated
by the equity method 71,408,243.76 275,575,730.42
Investment income generated from disposal of long-
term equity investment
Investment income from long-term equity investment
accounted for using cost method 6,328,139,259.26 3,633,540,000.00
Income from wealth management products 31,888,263.12 9,015,443.80
Investment income from investment in other equity
instrument during the holding period 302,249.84 269,896.34
Total 6,431,738,015.98 3,918,401,070.56
XIX. APPROVAL OF FINANCIAL REPORT
This financial report was approved for publication by the Directors of the Company on 30 March
2023.
XX. 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 16.81% 1.58 1.57 17.26% 1.41 1.40
Net profit attributable to ordinary
shareholders of the Company
after deduction of non-recurring
profit or loss 15.95% 1.50 1.49 15.65% 1.27 1.27
324 Haier Smart Home Co., Ltd. Annual Report 2022
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 14,710,923,491.99 13,078,840,517.10
Less: non-recurring profit or loss 747,991,638.21 1,247,567,958.81
Net profit attributable to ordinary shareholders of the Parent
Company after deduction of non-recurring profit or loss 13,962,931,853.78 11,831,272,558.29
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 209,436,774.95
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 766,426,467.17
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 –23,321,060.42
Other non-operating income and expenses except the
aforementioned items –29,750,173.25
Effect of minority equity interest –20,321,980.53
Effect of income tax –167,413,005.22
Effect of profit from business combination under common
control 12,934,615.51
Total 747,991,638.21
3. Differences in accounting data under domestic and overseas accounting
standards
□ Applicable √ Not Applicable
Chairman of the Board: LI Huagang
Date of approval for publication by the Board: 30 March 2023
Information of amendment
□ Applicable √ Not Applicable
Haier Smart Home Co., Ltd. Annual Report 2022 325
