Midea Group Co., Ltd. Semi-Annual Report 2024
Midea Group Co., Ltd.
Semi-Annual Report 2024
August 2024
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Midea Group Co., Ltd. Semi-Annual Report 2024
Section I Important Statements, Contents and Definitions
The Board of Directors, the Supervisory Committee, directors, supervisors and
senior management of Midea Group Co., Ltd. (hereinafter referred to as the
“Company”) hereby guarantee that the information presented in this report is free of
any misrepresentations, misleading statements or material omissions, and shall
together be wholly liable for the truthfulness, accuracy and completeness of its
contents.
Mr. Fang Hongbo, Chairman of the Board and CEO of the Company, Ms. Zhong
Zheng, CFO and Director of Finance of the Company, and Ms. Chen Lihong, head of
the accounting department of the Company, have represented and warranted that
the financial statements in this report are true, accurate and complete.
All directors of the Company attended the Board meeting to review this report.
The future plans and other forward-looking statements mentioned in this report
shall not be considered as promises of the Company to investors. Therefore,
investors are kindly reminded to pay attention to possible investment risks.
The Company plans not to distribute cash dividends or bonus shares or convert
capital reserves into share capital.
This report has been prepared in both Chinese and English. Should there be any
discrepancies or misunderstandings between the two versions, the Chinese version
shall prevail.
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Midea Group Co., Ltd. Semi-Annual Report 2024
Contents
SECTION I IMPORTANT STATEMENTS, CONTENTS AND DEFINITIONS ............................. 2
SECTION II COMPANY PROFILE AND KEY FINANCIAL RESULTS ........................................ 6
SECTION III MANAGEMENT DISCUSSION AND ANALYSIS ................................................... 9
SECTION IV CORPORATE GOVERNANCE .......................................................................... 81
SECTION V ENVIRONMENTAL AND SOCIAL RESPONSIBILITY ......................................... 92
SECTION VI SIGNIFICANT EVENTS ................................................................................... 132
SECTION VII CHANGES IN SHARES AND INFORMATION ABOUT SHAREHOLDERS ..... 144
SECTION VIII PREFERENCE SHARES ............................................................................... 150
SECTION IX BONDS ............................................................................................................ 151
SECTION X FINANCIAL REPORT ........................................................................................ 153
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Midea Group Co., Ltd. Semi-Annual Report 2024
Documents Available for Reference
1. The original of The Semi-Annual Report 2024 of Midea Group Co., Ltd. signed by
the legal representative;
2. The financial statements signed and stamped by the legal representative, the CFO
& Director of Finance and the head of the accounting department;
3. The originals of all company documents and announcements that are disclosed
to the public via newspaper designated for information disclosure during the
Reporting Period; and
4. The electronic version of The Semi-Annual Report 2024 that is released on
http://www.cninfo.com.cn.
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Midea Group Co., Ltd. Semi-Annual Report 2024
Definitions
Term Definition
The “Company”, “Midea”, “Midea Group” or the “Group” Midea Group Co., Ltd.
Midea Holding Midea Holding Co., Ltd.
TLSC Toshiba Lifestyle Products & Services Corporation
KUKA KUKA Aktiengesellschaft
Hiconics Hiconics Eco-energy Technology Co., Ltd.
WDM Beijing Wandong Medical Technology Co., Ltd.
CLOU Electronics ShenZhen CLOU Electronics Co., Ltd.
Swisslog Swisslog Holding AG
Servotronix Servotronix Motion Control Ltd.
WINONE WINONE Elevator Company Limited
Reporting Period 1 January 2024 to 30 June 2024
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Midea Group Co., Ltd. Semi-Annual Report 2024
Section II Company Profile and Key Financial Results
1. Corporate Information
Stock name Midea Group Stock code 000333
Stock exchange where the
shares of the Company are Shenzhen Stock Exchange
listed
Name of the Company in
美的集团股份有限公司
Chinese
Abbr. of the Company name
美的集团
in Chinese (if any)
Name of the Company in
Midea Group Co., Ltd.
English (if any)
Abbr. of the Company name
Midea Group
in English (if any)
Legal representative Fang Hongbo
2. Contact Us
Representative for Securities
Board Secretary
Affairs
Name Jiang Peng You Mingyang
Midea Headquarters Building,
Midea Headquarters Building,
No. 6 Midea Avenue, Beijiao
No. 6 Midea Avenue, Beijiao
Address Town, Shunde District, Foshan
Town, Shunde District, Foshan
City, Guangdong Province,
City, Guangdong Province, China
China
Tel. 0757-22607708 0757-23274957
Fax 0757-26605456
E-mail IR@midea.com
3. Other Information
3.1 Ways to Contact the Company
Changes to the registered address, office address and their zip codes, website address and email
address of the Company in the Reporting Period:
□Applicable N/A
No such changes in the Reporting Period. The said information can be found in the 2023 Annual Report.
3.2 Information Disclosure and Place Where the Semi-Annual Report Is Kept
Changes to the media for information disclosure and the place where materials carrying disclosed
information such as this Report were kept in the Reporting Period:
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Midea Group Co., Ltd. Semi-Annual Report 2024
□Applicable N/A
The newspapers designated by the Company for information disclosure, the website designated by the
CSRC for disclosing this Report and the place where materials carrying disclosed information such as
this Report were kept did not change in the Reporting Period. The said information can be found in the
2023 Annual Report.
3.3 Other Information
Changes to other information in the Reporting Period:
□Applicable N/A
4. Key Accounting Data and Financial Indicators
Whether the Company performed a retroactive adjustment to or restatement of accounting data
□Yes No
H1 2024 H1 2023 Change (%)
Operating revenue (RMB'000) 217,274,086 196,988,402 10.30%
Net profit attributable to shareholders of the
20,804,176 18,232,291 14.11%
Company (RMB'000)
Net profit attributable to shareholders of the
Company before non-recurring gains and 20,180,878 17,651,853 14.33%
losses (RMB'000)
Net cash flows from operating activities
33,488,170 29,784,674 12.43%
(RMB'000)
Basic earnings per share (RMB/share) 3.02 2.67 13.11%
Diluted earnings per share (RMB/share) 3.01 2.66 13.16%
Weighted average ROE (%) 12.20% 12.14% 0.06%
30 June 2024 31 December 2023 Change (%)
Total assets (RMB'000) 506,631,909 486,038,184 4.24%
Net assets attributable to shareholders of
164,797,591 162,878,825 1.18%
the Company (RMB'000)
5. Differences in Accounting Data under Domestic and Overseas Accounting
Standards
5.1 Differences in the net profit and net assets disclosed in the financial reports prepared under
China Accounting Standards (CAS) and International Financial Reporting Standards (IFRS)
□Applicable N/A
No such differences for the Reporting Period.
5.2 Differences in the net profit and net assets disclosed in the financial reports prepared under
CAS and foreign accounting standards
□Applicable N/A
No such differences for the Reporting Period.
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Midea Group Co., Ltd. Semi-Annual Report 2024
5.3 Reasons for differences in accounting data under domestic and overseas accounting
standards
□Applicable N/A
6. Non-recurring Gains and Losses
Applicable □N/A
Unit: RMB'000
Item Amount Note
Gain or loss from disposal of non-current assets 99,217
Except for effectively hedging business related to normal business
operations of the Group, gain or loss arising from the change in
the fair value of financial assets held for trading, derivative
financial assets, financial liabilities held for trading, derivative 364,409
financial liabilities, and other non-current financial assets, as well
as investment income or loss produced from the disposal of the
aforesaid financial assets and liabilities
Other non-operating income and expenses except above-
mentioned items (mainly government grants, reversed impairment
683,733
provisions for receivables that are tested individually for
impairment, compensation income, fine income, etc.)
Less: Corporate income tax 367,479
Minority interests (after tax) 156,582
Total 623,298 --
Particulars about other items that meet the definition of non-recurring gain/loss:
□Applicable N/A
Explain the reasons if the Company classifies an item as a recurring gain/loss item, which is
enumerated as a non-recurring gain/loss in the :
□Applicable N/A
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Midea Group Co., Ltd. Semi-Annual Report 2024
Section III Management Discussion and Analysis
1. Industry Overview for the Reporting Period
1.1 Summary of the business scope
Midea is a leading global technology group comprising the Smart Home Solutions, Energy Solutions &
Industrial Technology, Intelligent Building Technology, Robotics & Automation, and Other Innovation
businesses. With a business portfolio that is focused on the coordinated development of the ToC and
ToB businesses, Midea offers various smart home products and services to individual consumers, as
well as provides diversified commercial and industrial solutions for corporate clients. To be specific,
Midea Smart Home Solutions primarily covers smart appliances, smart home and related peripheral
industries and ecological chains, undertakes the construction of intelligent scenarios for end users, user
operations and data value discovery, and is committed to providing end users with the best experience
of entire-house smart home appliances and service. Midea Energy Solutions & Industrial Technology,
with technology as the core driver, commands key technologies in “green energy” and “key industrial
components”. It operates many brands including GMCC, Welling, CLOU Electronics, HICONICS,
SERVOTRONIX, MR, MOTINOVA, MSCT, TOSHIBA, SUNYE, etc., with its products covering high-
precision core components such as compressors, motors, chips, valves, reducers, auto parts, motion
control and automation, high- and low-voltage variable frequency drive, energy storage and cooling
modules. It provides green, efficient and intelligent products and technology solutions for pan-industrial
customers across the world. Midea Intelligent Building Technology is principally engaged in products
and services in relation to buildings, as well as the relevant operations. With iBUILDING, Midea’s digital
building service platform, as the core, its business covers HVAC, elevators, energy, building control, etc.
Its primary products include VRF units, large chillers, unitary units, machine room air conditioners,
escalators, passenger elevators, freight elevators, etc., as well as building automation software and
building weak electricity integrated solutions. Supported by “Building Equipment and Facilities + Digital
Technology + Industrial Ecosystem”, it facilitates logistics, information, feeling and energy flows of
buildings to empower buildings with digital and low-carbon technologies and build sustainable smart
space. Midea Robotics & Automation primarily focuses on providing solutions of industrial robotics,
automatic logistics systems, and transmission systems for future factory-related fields, as well as
solutions for health care, entertainment, new consumption, etc. The Other Innovation Business mainly
includes Annto, which provides customers with end-to-end digital and intelligent supply chain solutions;
Midea Cloud, which provides industrial software and digitalisation consulting services for intelligent
manufacturing and industrial interconnectivity through its industrial internet platform MIoT; Midea
Lighting, which focuses on the R&D, production, and sales of lighting and intelligent pre-decoration
electrical products; and WDM, which is committed to innovation in medical imaging technology,
providing high-quality medical imaging products and services for clinical use.
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Midea Group Co., Ltd. Semi-Annual Report 2024
With “Bring Great Innovations to Life” as its corporate vision, “Integrate with the World, to Inspire Your
Future” as its mission, “Embrace what’s next - Aspiration、Customer First、Innovation、Collaboration、
Dedication” as its values, “High-quality Development and High-performance Operations” as its
management and operation standard, Midea integrates global resources and promotes technological
innovation to create a better life for over 400 million users, major customers and strategic partners in
different areas worldwide every year with satisfying products and services. In face of higher
requirements for products and services in the digital Internet era, Midea continues to promote its
strategic focus of “Technology Leadership, Direct to Users, Digitization & Intelligence Driven, and
Global Impact”, so as to build Midea in the new era. To be specific, it strives to achieve Technology
Leadership by building scale advantages in R&D and strengthening the efforts and investment in core
and cutting-edge technologies; be Direct to Users through direct contact and interaction with users and
reinventing product service and business models; be Digitization & Intelligence Driven through
“Comprehensive Digitalization and Comprehensive Intellectualization”, as well as improving efficiency
internally and focusing on users externally; and achieve Global Impact by seeking breakthroughs in key
regions in terms of market, channel and business model dimensions and serving global users.
Midea, a global operating company, has now established a global platform with over 400 subsidiaries,
33 R&D centers, 43 major manufacturing bases, and more than 190,000 employees. Its business
covers more than 200 countries and regions. Overseas, Midea has 17 R&D centers and 22 major
manufacturing bases in more than ten countries.
1.2 Position in the home appliance industry
Midea Group ranks No. 277 on the Fortune Global 500 list unveiled in August 2024, marking its ninth
consecutive year on the list. Meanwhile, Midea has also been named to the 2024 Fortune China ESG
Impact list for its environmental, social and corporate governance excellence and industry leadership. In
2024, the Forbes magazine released its Global 2000 list and Midea ranks No. 205. In June 2024, Midea
Group’s programme of “Air Source Heat Pump Multi-grade Heat Energy Efficient Supply Key
Technology and Application” won a second prize of 2023 National Science and Technology Progress
Award. This award is not only an authoritative recognition of Midea's technological innovation ability, but
also a state-level certification of Midea's contribution to promoting industry innovation and serving the
society. Meanwhile, Midea takes the lead among domestic home appliance makers by ranking No. 236
on the Global 500 2024 list released by Brand Finance, a British brand assessment institution. Driven
by the “Global Impact” strategy, Midea continued to strengthen its brand presence in overseas markets
and is selected as one of the “2024 Kantar BrandZ Top 50 Chinese Global Brand Builders” jointly
released by Google and Kantar BrandZ. In June 2024, Midea officially joined UN Women's WEPs
(Women’s Empowerment Principles) programme and became one of the programme's corporate
members across the world, marking another important step in Midea's promotion of gender equality and
women's empowerment. As of June 2024, Midea had 28 state-level green factories, three zero-carbon
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Midea Group Co., Ltd. Semi-Annual Report 2024
factories, nine 5G factories, and five “Lighthouse” factories, which demonstrates its leading position in
intelligent manufacturing and digital development among manufacturers worldwide. Midea has been
given excellent credit ratings by the three major international credit rating agencies, Standard & Poor’s,
Fitch Ratings and Moody’s. The ratings are in a leading position among home appliance manufacturers
worldwide as well as among Chinese non-state-owned enterprises. Particularly, Moody’s has upgraded
Midea Group's credit rating from A3 to A2 in 2024.
In the first half of 2024, Midea has successfully retained the "Number One Engine" of ToC business on
the domestic market. According to data provider AVC, Midea ranks first in the industry with respect to
both the online and offline domestic market share for nine home appliance categories, namely,
residential air conditioners, clothes dryers, countertop pan-microwave ovens, countertop electric ovens,
induction cookers, electric radiators, electric fans, electric kettles, and air fryers.
The table below shows the offline market shares and rankings of the Company’s primary home
appliance products (by value of retail sales) in the first half of 2024.
Product category Market share Ranking
Residential air conditioners 37.7% 1
Laundry appliances 29.6% 2
Clothes dryers 31.3% 1
Refrigerators 17.4% 2
Countertop pan-microwave ovens 65.1% 1
Induction cookers 44.8% 1
Electric fans 44.1% 1
Countertop electric ovens 43.0% 1
Electric radiators 41.8% 1
Electric kettles 36.5% 1
Air fryers 35.6% 1
Water dispensers 25.0% 1
Electric pressure cookers 38.5% 2
Rice cookers 37.4% 2
Electric water heaters 30.2% 2
Electric baking pans 28.5% 2
Water purifiers 18.3% 2
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Midea Group Co., Ltd. Semi-Annual Report 2024
Product category Market share Ranking
Freezers 16.8% 2
Blenders 27.6% 3
The table below shows the online market shares and rankings of the Company’s primary home
appliance products (by value of retail sales) in the first half of 2024.
Product category Market share Ranking
Residential air conditioners 33.2% 1
Laundry appliances 38.3% 1
Clothes dryers 38.7% 1
Refrigerators 22.5% 2
Induction cookers 54.6% 1
Countertop pan-microwave ovens 53.8% 1
Electric kettles 30.6% 1
Electric fans 28.8% 1
Countertop electric ovens 27.2% 1
Air fryers 26.3% 1
Electric radiators 24.1% 1
Water purifiers 20.6% 1
Electric pressure cookers 37.6% 2
Electric water heaters 29.6% 2
Rice cookers 26.7% 2
Electric baking pans 28.0% 2
Blenders 14.8% 2
Freezers 13.5% 2
Water dispensers 12.9% 3
* Residential air conditioners refer to floor-standing and wall-mounted ones only.
1.3 Industry Overview
A. Home Appliance Industry
In the first half of 2024, the overall operation of China's national economy remained stable, with steady
progress and stable production growth. The domestic GDP increased by 5.0% year-on-year. During this
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Midea Group Co., Ltd. Semi-Annual Report 2024
period, the export scale of China's home appliance industry achieved rapid growth, while the domestic
retail market faced pressure. According to the General Administration of Customs, the cumulative
export amount of China's home appliances in the first half of 2024 reached RMB347.9 billion, marking a
year-on-year increase of 18.3%. The domestic retail market for white goods saw a decline, with the
market size reaching RMB231.9 billion, down by 7.0% year-on-year, according to the data from AVC.
From a category perspective within the domestic home appliance market, the air conditioning industry,
after experiencing strong market performance in 2022-2023, entered a replenishment phase in the
second half of 2023. However, in 2024, overall retail demand has been weak, exacerbated by
significant weather-related factors. It is anticipated that there will be a correction in market demand this
year; The cooling and refrigeration industry continues to be driven by replacement needs, with demand
gradually being released under the policy of promoting the replacement of old appliances with new
ones. The market remains generally stable. However, in the context of consumption downgrades, the
structural upgrading driven by the supply side of the refrigerator market has encountered bottlenecks,
posing new challenges to the industry logic of driving growth through high-end products and premium
brands. The wash and care industry saw some recovery in 2023, but overall market competition
intensified due to strategy adjustments by leading enterprises. In 2024, after adjusting its pace, the
wash and care industry has been witnessing rapid growth in washer-dryer combos and a clear
downward trend in overall structure. The major appliances market in the first half of 2024 faced
pressure, linked to both the internal and external environment of the industry, as well as the inevitable
path of the industry's development cycle. In summary, the home appliance market is undergoing
significant changes: (a). Consumption changes: Domestic consumption paths have been evolving from
upgrading, to differentiation, and to downgrading. (b). Brand changes: Brand loyalty has diminished,
with users' brand perceptions being reshaped. (c). Marketing changes: Traditional marketing methods
are losing effectiveness. Current marketing strategies are highly focused on “seeding”, with social
media platforms integrating the processes of “seeding and harvesting”. Precisely targeting real needs
and implementing efficient and accurate product seeding have become new directions for companies to
attract customers. (d). Product changes: White goods have entered a mature phase, while emerging
categories are experiencing rapid growth. High-quality, cost-effective products are increasingly being
brought to consumers, driven by supply-side initiatives.
According to the data from AVC, the domestic retail sales of air conditioners were RMB111.4 billion in
the first half of 2024, down 14.5% year on year. This decline can be attributed to last year’s high
industry base, as well as external factors such as the continuous decline in the real estate market and
frequent rainfall across the country, leading to weak domestic demand for air conditioning. On the
pricing side, consumption downgrading coexists with sluggish demand, and the air conditioning industry
faces intense price competition. In the first half of 2024, the average price of air conditioners in online
and offline retail markets decreased by 4.8% and 2.3%, respectively, year-on-year. However, from a
product perspective, the functional structure continues to show an upgrading trend. In the first half of
2024, the market share of retail sales for new Energy Efficiency Grade 1 products continued to rise,
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Midea Group Co., Ltd. Semi-Annual Report 2024
exceeding 86%. The market share of comfort wind air conditioners also increased further, with the sales
volume share in online and offline markets rising to over 17% and 21%, respectively. The market share
of fresh air function air conditioners in the offline market also steadily increased, with fresh air wall-
mounted units accounting for 6.8% and fresh air floor-standing units accounting for 8.5% of the sales.
According to the data from AVC, in the first half of 2024, the domestic retail sales of washing machines
were RMB42.7 billion, up 1.8% year on year, while those of clothes dryers reached RMB6.7 billion, an
increase of 16.9% year on year. The wash and care sector has a large market scale, with diverse
demand scenarios and strong rigid demand, where washer-dryer combos have become the primary
driving force. The online retail sales of washer-dryer combos exceeded RMB4.3 billion, with a year-on-
year growth of over 42%. At the same time, the product structure continued to steadily upgrade, with
the sales share of heat pump clothes dryers increasing further in both online and offline markets.
According to the data from AVC, the domestic retail sales of refrigerators reached RMB65 billion in the
first half of 2024, marking a 0.4% year-on-year increase, with significant product structure optimization.
From the product perspective, in terms of door structure, the market share of French multi-door
products in the online market has risen, with their online retail sales share reaching 22%. The share of
cross-four-door products in the offline market has significantly increased, with their offline retail sales
share approaching 43%. Mid-to-high-end products have focused on "large freezing compartment" and
"built-in" features as their main competitive advantages. For instance, in the first half of 2024, the retail
sales share of built-in refrigerators increased to 28.1% in the online market and 53.9% in the offline
market. From the perspective of product functionality, features such as "dual systems," "freshness
preservation," and "intelligence" have further emerged and gained attention.
Based on the AVC data, in the first half of 2024, the domestic market for major kitchen and bathroom
appliances saw retail sales of RMB14.9 billion for range hoods and RMB8.4 billion for gas stoves, with
the gas stove market experiencing a slight increase in scale. From the perspective of functional trends,
the market share of products with smart features such as range hood-stove linkage, hand wave control,
and timer functions has grown significantly. Additionally, features such as "slim design," "self-cleaning,"
and "intelligence" have also garnered significant market attention. In the first half of 2024, the domestic
retail sales for dishwashers reached RMB5.8 billion, a year-on-year increase of 5%. On the pricing side,
the average price of dishwashers in the offline market saw a significant increase year-on-year. The
product mix trend indicated a market preference for "buying larger products rather than smaller ones,"
with products continuing to develop toward larger capacities and more specialized functions. Among
these, the offline retail sales share of dishwashers with a capacity of 15 sets or more has increased to
62%, with product technology focusing on "cleanliness," "energy-saving," and "intelligence." In the first
half of 2024, the domestic retail sales of water heaters reached RMB23.5 billion, a year-on-year
decrease of 0.9%, with the replacement and upgrading of gas water heaters continuing, and their retail
volume share increasing to 42.1%. Features such as constant temperature, low noise, and increased
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Midea Group Co., Ltd. Semi-Annual Report 2024
capacity in water heaters are promoting structural upgrades. In the first half of 2024, the domestic retail
sales of water purifiers reached RMB9 billion, a year-on-year decrease of 1%. From the perspective of
flux, the market share of 1,200G products further increased, and the share of 1,000G all-in-one
purification and heating water purifiers also expanded rapidly. In the first half of 2024, the domestic
retail sales of built-in microwave-steamer-ovens reached RMB3.73 billion, a year-on-year increase of
2.2%. From the perspective of product structure, the online market emphasized cost-effectiveness,
while the share of mid-range products in the offline market significantly increased. The product
technology trend indicated a rapid expansion in the layout of microwave-steamer-ovens.
According to the data from AVC, in the first half of 2024, the overall retail sales of small kitchen
appliances in the domestic market reached RMB26.1 billion, a year-on-year decline of 5.4%. Despite
the overall downward trend in the small kitchen appliance category, the retail sales of soybean milk
makers, electric stew pots, and coffee machines showed significant year-on-year increases, reaching
38.6%, 14.6%, and 12.9%, respectively. Additionally, for core essential large items such as rice cookers,
as consumer demand increasingly favors higher quality, product features like low sugar, variable
frequency and voltage, and non-coating are continuously attracting attention, leading to an increase in
the industry’s average price.
According to AVC data, in the first half of 2024, the retail sales of cleaning appliances in the domestic
market reached RMB16.5 billion, representing a year-on-year growth of 9.8%. By category, robotic
vacuum cleaners led the market, with retail sales increasing by 18.8% year-on-year and sales volume
by 11.9%, driven significantly by the launch of new products. The price of floor scrubbers continued to
decline, resulting in a sales growth rate of only 7.0%. From the perspective of floor sweeper products,
there have been several key upgrades: firstly, suction performance has been enhanced, with flagship
models now starting at 10,000 Pa; secondly, there have been further improvements to address user
pain points, such as the anti-hair tangling function, hot water mop washing, and dual mechanical arms;
thirdly, the application of AI large models has enhanced interaction capabilities; and finally, in terms of
product design, both solid-state radar and retractable radar emphasize a slim design, with embedded
products that integrate seamlessly with home decor gradually being introduced.
B. Robotics and Automation Industry
World Robotics 2023 Industrial Robotics released by the International Federation of Robotics (“IFR”)
showed that robotics technology has been rapidly advancing. For example, collaborative robotics,
utilising sensors and visual recognition technology, can respond in real-time to changes in their
environment. With improved safety performance, their range of applications is rapidly expanding.
Intelligent robot grippers, leveraging sensors and visual recognition technology, can identify materials
and apply appropriate force to manipulate workpieces, making them more responsive. Through
software technology and open platform communication architectures, the integration and plug-and-play
convenience of robots have been further optimised. By providing more intuitive and user-friendly
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Midea Group Co., Ltd. Semi-Annual Report 2024
interfaces and enabling natural language or graphical programming, robot programming has become
easier. Sensors, vision systems, and 5G technology assist robots in adjusting parameters based on
real-time conditions, achieving self-optimisation capabilities. By integrating cloud computing technology,
cloud robotics has discovered a broader array of applications, significantly reducing the maintenance
costs of using robots. Additionally, robotics technology is also contributing to sustainability in many
fields. According to IFR data, the global industrial robot installations reached a record high of 553,052
units in 2022, marking a 5% growth over the high base of 2021. In terms of regions, Americas achieved
a year-on-year growth of 8%, Europe achieved a year-on-year growth of 3%, and Asia achieved a year-
on-year growth of 5%. Among the newly installed robots, 73% were installed in Asia. Domestic robot
installations in China increased by 5% year-on-year, reaching 290,258 units in 2022, accounting for 52%
of the global installations. IFR also predicted that the compound annual growth rate from 2023 to 2026
will reach 7%, with the global industrial robot installations expected to reach 718,000 units by 2026.
According to the latest statistics of IFR, in terms of industrial robotic density (the average number of
industrial robotics per 10,000 workers), South Korea ranks No.1 in the world with 1,012 robotics, while
the robotic density of China has increased from 25 to 392 robotics (close to Japan’s 397 robotics)
during the decade from 2013 to 2022, ranking No. 5 across the world. Since 2016, China has been the
fastest growing and largest industrial robotics market in the world. Supported by diverse factors such as
flexible demands of the manufacturing sector, declining demographic dividend, emerging markets and
the development of innovative technologies, industrial robotics will be applied to more and more areas,
with great potential and prospects.
In the first half of 2024, domestic manufacturing enterprises experienced a decline in production
expectations and faced pressure on market demand. The industrial robotics sector remains in the
destocking phase. From the perspective of downstream industry demand, investment in new energy-
related fields has seen a sharp decline, with the photovoltaic industry cooling down and entering a
downward adjustment cycle. The overall demand in the terminal market of the lithium battery industry
has weakened, leading to a slowdown in domestic capacity construction. The main theme of 2024
remains "destocking," although certain demand still exists in sectors such as automotive, consumer
electronics, and general industries.
According to MIR statistics, the sales volume of the industrial robotics market in the first half of the year
was approximately 140,000 units, with a slight year-over-year growth of around 5%, indicating that the
market as a whole has maintained some resilience. Specifically, collaborative robots have continued to
grow rapidly, while sales of other types, such as horizontal multi-joint robots, vertical multi-joint robots,
and parallel robots, have grown at a slower rate compared to the overall market growth. MIR forecasts
that market demand in the second half of 2024 will continue to face pressure, with high inventories,
declining average prices, and a situation where robotics companies see revenue growth without
corresponding profit increases. Industry competition and elimination will further intensify, and the year-
on-year growth rate of China's industrial robot shipments in 2024 is expected to be around 2% to 3%.
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Midea Group Co., Ltd. Semi-Annual Report 2024
C. Intelligent Building Technology Industry
In the intelligent building technology industry, Midea focuses on products, services and related
businesses with respect to buildings. It aims to provide users with comprehensive, intelligent and
sustainable building solutions based on the digital building platform and by facilitating the logistics,
information, feeling and energy flows. The smart building ecosystem mainly includes HVAC, elevator,
intelligent building (building automation) and integrated energy management, covering industrial,
hospital, infrastructure, industrial park, commercial, hotel, school and other scenarios.
From the perspective of the industry competition pattern, domestic HVAC, elevator and building control
have the same pattern and two major characteristics. The first is the high proportion of foreign and joint
venture brands; the second is the low market concentration. According to the data from HVAC,
ChinaIOL.com and Changjiang Securities Research Institute, the proportion of foreign brands of
commercial air conditioner in 2023 was about 43%, and the long tail effect was obvious as only four
manufacturers have a share of more than 10%. For elevators, the data from the Business Yearbook of
Elevator Industry in China indicate that the proportion of foreign and joint venture brands in the elevator
market is as high as 70%, while the revenue scale and market share of the top domestic brands are still
low. In 2023, the four major brands of Kone, Mitsubishi, Hitachi and OTIS's revenues exceeded RMB20
billion in China. The building control market is also dominated by Honeywell, Siemens, Johnson
Controls, Schneider and other foreign brands. From the perspective of the market size and
development prospects, according to the data from ChinaIOL.com, the sales revenue (excluding tax) of
domestic commercial air conditioners in 2023 was RMB142.9 billion, up 11% year on year, of which
domestic sales accounted for about 88%; the compound growth rate in the past three years was 13%.
The application field of commercial air conditioner is mainly divided into residential, commercial,
industrial and public building. By business type, the sales of ToB business accounted for more than
70%, and the revenue surpassed RMB100 billion in 2023. In industrial development, the periodicity of
the non-residential part of commercial air conditioner was smaller than that of residential part, which
was more related to infrastructure investment. For example, government public construction,
transportation, data center, culture, education and entertainment, medicine and other downstream
segmentation still maintained a good growth trend, and a long-term high growth rate. According to the
data from the National Bureau of Statistics, in 2023, the domestic output of elevators, escalators and
lifts was 1.557 million units, maintaining a solid year-on-year growth of approximately 4%, the majority
of which were sold domestically. Judging from the operating data of major manufacturers, the output
value of a single elevator was about RMB200,000, considering the average factory price of a single
elevator equipment and the maintenance business; the annual market size of domestic elevator
equipment was RMB250-300 billion. The 2024 Government Work Report puts retrofitting old buildings
with elevators as a key task this year, which is expected to further expand the scale of the elevator
industry. The data from EqualOcean Intelligence shows that the current market size of intelligent
building, which was about RMB7.1 billion in 2021, is relatively small. The equipment-based businesses
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such as commercial air conditioner and elevator are "organs" in building construction, whereas building
control is the "nervous system" which controls various equipments for the high-efficiency and low-
carbon operation of buildings, and determines the overall quality of building solutions. Overall, the
domestic revenue of the intelligent building industry amounted to as much as RMB400 billion, and by
revenue, the compound annual average growth rate of the industry is probably 5%-10%. Meanwhile,
the rollout of the Action Programme to Promote Large-Scale Equipment Renewal and Consumer Goods
Replacement by the State Council may bring stronger demand.
As indicated in a report released by the Changjiang Securities Research Institute, new opportunities are
ushered into the smart building industry, which are "carbon emission peak and carbon neutrality",
"digital and intelligent transformation" and "domestic replacement". With the establishment of the dual-
carbon strategy, the intelligent and low-carbon process of building construction is expected to
accelerate. Buildings account for a relatively high proportion of energy consumption and carbon
emissions in China. According to data from the Building Energy Efficiency Research Centre of Tsinghua
University, the carbon emissions of building operation accounted for about 22% of the total domestic
carbon emissions in 2021, and the proportion will further increase for the growing newly started
buildings and the decreasing inventory buildings. Therefore, as one of the major sources of carbon
emissions in the whole society, the low-carbon or even zero-carbon process in the construction field will
undoubtedly be propelled. In the recent years, a series of "carbon emissions peaking and carbon
neutrality" policies were successively issued, such as the Opinions on Implementing the New
Development Concept to Achieve Peak Carbon Emissions and Carbon Neutrality in a Complete,
Accurate and Comprehensive Manner, the Opinions on Advancing the Green Development of Urban
and Rural Development, the Action Plan for Peak Carbon Emissions by 2030, and the 14th Five-Year
Plan for Comprehensive Work on Energy Conservation and Emission Reduction. China’s local
governments have issued their action plans for peaking carbon emissions while the ministries and
committees of the central government rolled out documents for the same purpose, such as the Opinion
on Fiscal Support for Peaking Carbon Emissions and Achieving Carbon Neutrality issued by the
Ministry of Finance, the 14th Five-Year Plan for Building Energy Efficiency and Green Buildings issued
by the Ministry of Housing and Urban-Rural Development, and the Advanced, Energy-saving and
Accessible Levels of Energy Efficiency for Key Energy Consuming Products and Equipment (2024
Edition) unveiled by the National Development and Reform Commission. All these policies mention
buildings, HVAC, etc., with a view to improving the building energy consumption management system,
enhancing the building energy consumption monitoring capacity, building energy saving management
capacity, and building energy efficiency level, and promoting the large-scale development of ultra-low
energy consumption, near-zero energy consumption, and low-carbon buildings. With stronger policy
incentives and constraints, the building energy-saving upgrading, intelligent operation, and cooperative
energy management are bound to become the main measures for the targets in addition to the
construction of low-carbon building standards and administrative supervision. As to the market side, the
electricity price reform, "power rationing" and other measures have raised the cost and the input-output
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Midea Group Co., Ltd. Semi-Annual Report 2024
ratio in building energy saving renovation, energy management, and digital operation, and thus more
and more market entities begin to positively carry out the “dual carbon” strategy and energy saving
renovation. Taken as a whole, under the background of "dual carbon", the building construction, as one
of the main sources of energy consumption and carbon emissions in the whole society, accelerates the
process of energy conservation and carbon reduction, and catalyzes the outbreak of demand for
efficient low-carbon building solutions. The demand for digital intelligent building will also increase
significantly, as the development level of buildings is a key link in "smart city" and still lagging behind
under the trend of digital economy. At the same time, with continuous progress of communication,
computing power and algorithms, the system-level control such as HVAC and elevators will move to the
building-level control - the first is the space expansion brought by changes from "control" to "service";
the second is the narrowing gap to foreign enterprises with first mover advantage. Additionally, the more
positive and clear signal comes from the transformation and upgrading of the elevator industry driven
by digital intelligence. In 2018, the General Office of the State Council issued the Opinions on
Strengthening the Quality and Safety of Elevators for the purpose of promoting the elevator installation
on existing residences and the maintenance of old elevators. Specifically, the maintenance should
press for quality, and resources should be allocated on the basis of fully grasping the operation of
elevators, hence the application of information technology such as big data and IoT is getting more
important. In 2020, the State Administration for Market Regulation divided the maintenance methods of
different elevators according to the standard of "whether there is a remote monitoring system based on
IoT". The domestic replacement of commercial air conditioner has undergone three processes: single
unit, multi-split unit, and large chiller. The share of homegrown brands was approximately 57% in 2023,
and that of the homegrown brands of large chillers, where the barriers are relatively high, is also
increasing. The commercial air conditioner industry has entered the stage of domestic replacement in
all aspects, and thus there is a large space for future growth. Compared with air conditioner, the
domestic replacement process of elevator is relatively slow, but the relevant market pattern will be
optimized with the gradually weakened real estate dividend, the changes in maintenance mode, and the
application of IoT. In the medium and long term, there will be more opportunities and increasing
competition in the smart building industry with the market structure of "high proportion of foreign
investment & low market concentration". On the one hand, the policy of "double carbon" is fostering the
energy-saving upgrading and smart operation under the context of high proportion of carbon emissions
and energy consumption by buildings. On the other hand, with the improvement of digital intelligence,
the input-output effect of smart buildings is changing qualitatively.
2. Business Scope in the Reporting Period
In the first half of 2024, consumer demand in the domestic market grew at a slower rate compared to
last year and the domestic retail market of white goods was under significant pressure. Meanwhile, the
global political and economic environment remained complex and the business environment remained
challenging due to fluctuations in overseas economies, currency movements and the deterioration of
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Midea Group Co., Ltd. Semi-Annual Report 2024
geopolitical conflicts overseas. Against this backdrop, Midea Group held firm to its operating
philosophies, faithfully implemented its annual operating principle of “enhancing value chain-wide
efficiency alongside structural growth through upgrades”, and continued to focus on its core businesses
and products. As a result, Midea achieved particularly remarkable growth in its overseas operations, a
bigger business size, and better key indicators such as profitability and cash flow, demonstrating its
operational resilience and long-term, high-quality growth. For the first half of 2024, Midea achieved, on
a consolidated basis, total revenue of RMB218.1 billion, up 10% YoY; and a net profit attributable to its
shareholders of RMB20.8 billion, up 14% YoY.
A. Focused on users and scene-based product planning, and continuously refined the whole
value chain leveraging Midea’s multi-category advantages and digital technologies, so as to
upgrade business scenes, products and services
In order to carry on with the “customer-oriented” strategic reform, the Company creates more user
value in business scenes, products and services which are in direct contact with users. Based on users'
yearning and pursuit for a better life, Midea pursues higher goals such as originality, sustainable selling
points and technology explicitness, and continues to empower itself with the tool of big data, so as to
achieve the vision of "Bring Great Innovations to Life". In addition, based on user needs and
consumption trends, Midea offers its own products and ecosystem products. It provides users with
differentiated entire-house smart solutions with the deep integration of “smart home appliances + smart
home”; and launches homegrown core terminals, such as smart central control and household smart
host which deeply integrate home appliances and smart home systems, making life at home more
efficient, convenient, healthy and comfortable. By doing so, it aims to lead the way in the innovation of
smart household appliances.
Residential air conditioners:
Based on three major directions of carbon neutrality, air value, and smart home, Midea has been
focused on its technological strategy of “cooling, heating, energy conservation, intelligence, health, and
comfort”, and exploring disruptive and differentiated product technologies to enhance product
competitiveness. In the first half of 2024, for the European air conditioning market, Midea rolled out the
industry's first user-DIY PortaSplit portable split air conditioner that can be easily installed in three steps
through the factory-reserved small, lightweight outdoor unit and the innovative, self-developed multi-
scenario-adapted mounting bracket, saving thousands of euros in installation costs. The product has a
cooling and heating effect far beyond traditional portable air conditioners, its energy efficiency reaches
the EU A++ level, and its new 3D air guide design can evenly and quickly cool or heat the entire house.
With a compressor with multi-layer composite acoustic isolation design, the product's operation noise is
far lower than that of traditional portable air conditioners. It has won a number of international awards,
such as the iF Design Award, and has been praised by overseas professional media, such as
Germany's EMT Evaluation Magazine and The Verge, a U.S. technology medium. For North America's
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Midea Group Co., Ltd. Semi-Annual Report 2024
heating needs, Midea rolled out a modular heat pump air duct for cold weather, which is designed for
the North American market's diverse installation scenarios. With the industry's first quick-dismantle
modular structure, it allows for free combination and matching of different sub-modules, and in
combination with a compact low-flow-resistance, high-energy-flow-density heat exchanger and a self-
developed constant-air-flow-driven DC motor, it can replace the traditional gas heater through direct
installation with a smaller size. The energy efficiency of the product reaches the leading level of the U.S.
CEE Advanced Tier standard, and enables 100% output of heating performance at low temperatures
down to -15℃, being an alternative solution to most gas heaters. With the industry's first self-adaptive
wide-voltage adaptation technology that realises 230/115 V voltage self-adaptation, the product can
respond to power grid load regulation instructions, thus providing more efficient electrified heating
solutions for North American families and helping North American brands make breakthroughs. For
users' energy-saving needs and comfortable experience, Midea rolled out the Kushengdian Pro-series
Wall-mounted Air Conditioner that enables self-adaptation of user demands precise temperature control
under environmental loads and machine capacity with the new-generation iECO technology, providing
users with a more comfortable and energy-saving experience. The product achieved good market
performance after roll-out. For domestic heating demands in China, Midea's “Zhennuan” series integral
heat pump heater, as the first integral heat pump heater covering 14 kw to18 kw for domestic use and
backed by high-pressure-ratio continuous sensible heat injection compression technology and high-
efficiency spiral grooved mesh-teeth casing technology, realises stable operations in ultra-low
temperature environments down to -35℃ and at ultra-wide voltage range of 150 V to 264 V, and can
maintain the effluent temperature of 60℃ without attenuation at -20℃ ambient temperature, reaching
the industry-leading full Energy Efficiency Grade 1. For the domestic high-end market, Midea launched
COLMO Turing 2.0 Residential Central Air Conditioner that breaks through the industry’s technological
limitations with the homegrown AI three-tube multimodal technology and nine-square variable
temperature technology, providing comfortable experience during full cooling seasons and precise
temperature and humidity control. With the dual-engine dehumidification technology, the product
dehumidifies at 200 L/day, and with whole-chain noise source suppression and elimination, the product
achieves significant noise reduction effects of its indoor and outdoor units, supporting its development
in the high-end market.
Laundry appliances and refrigerators:
In view of the four demand directions of cleanness, health, efficiency and care, Midea comprehensively
builds its core competitiveness in the global wash and care industry. COLMO New Image Zero Built-In
Washer-Dryer Suite is equipped with the industry's first pure-flat, seamless, zero built-in and automatic
electronic pop-open doors, realizing pure-flat integration of door glasses and machines. To be specific,
the washer features clean care soft washing, realises "second-speed" dissolution of detergent through
high-pressure multi-pre-mixing and instant dissolution, Venturi suction foaming and high-pressure
mousse spraying, as well as non-porous inner drum gentle washing, reducing the wear and tear of the
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clothes by 40% and achieving the industry's leading utilisation rate of detergent; and the clothes dryer,
equipped with AI Light Dry Cleaning 2.0, a full variable frequency system, a steam care function and the
energy-efficient drying technology, dries clothes efficiently while caring for clothes delicately. This
product suite won the Best of the Best Award of 2024 Red Dot Design Award. Toshiba T27 Zero Built-in
Washer-Dryer Suite, equipped with pure-flat push-open doors and innovative timber control panels, is
coated with Japan-imported paints. To be specific, the washer is innovatively equipped with Ultra Fine
Bubble (UFB)/Nano Particle Fresh Clothes technology for intensive cleaning of clothes and healthy
washing, and bears the green mark of "Wool Hand Wash Safe", and the clothes dryer, equipped with
the full variable frequency system, high power density compressor and motor integrated variable
frequency drive, realises high-efficiency and even drying, can dry clothes of 3 kg in 59 minutes the
fastest, and together with nano-particle clothes caring function, effectively deodorises, sterilises and
purifies clothes, bearing the blue mark of "Wool Hand Wash Safe". Little Swan Washer-Scrubber Max,
equipped with the brand-new and self-developed heat pump platform and the front drawer lint collection
unit, quickly dries clothes at low temperatures through dual-cooling and dual-heating of the patented
dual-boosting heat pump system. Together with Little Swan Blue Oxygen colour protection technology,
the product features blue oxygen deodorisation in different scenarios. Backed by AI large model
technology and Lingxi smart interaction system, the product facilitates full-scenario smart home based
on the sweeping robot as the mobile terminal. With 10,000 Pa suction power, the product integrates
washing, drying, caring, sweeping and mopping functions. Little Swan Bense Wall-mounted Washer-
Dryer adopts the new Blue Oxygen II technology and silver ion, Blue Oxygen, high-temperature boiling
de-bacteria technologies, provides four special programs for fine zoning washing and drying with first-
class energy efficiency. The innovative product form, with 303 mm ultra-thin body and 280 mm ultra-
large pick-up opening suiting balconies and bathrooms and the full-screen anti-scald glass door, won
the 2024 Red Dot Design Award.
Midea's high-end brand COLMO rolled out AVANT Big Cube Built-in Refrigerator for unlimited food
storage and placement in all kinds of houses. With Module A for nutrition and Module B for enjoyment,
the free combination of A and B modules enables diversified modular space. The pure-flat and zero
built-in design align doors and kitchen cabinets and enables wide opening of doors, and bottom heat
dissipation saves the efforts to reserve room for dissipation. Module A uses light quantum enrichment
technology to increase anthocyanins, enhance high efficiency antioxidants and improve nutrient
elements by 38%, uses the AI purine inhibition technology to reduce the risk of consumption of aquatic
seafood, uses the DPS high-energy ion sterilisation technology to effectively inhibit the corruption of
the ingredients and rapidly eliminate odours for healthier food, and uses the -30°C deep-freeze fresh
maintenance technology for sharp freezing and faster and more even refrigeration. Module B adopts
panoramic sensor window, three-in-one light filtering door, glazed porcelain coating and inner LOW-E
filming, and is filled with argon gas to reduce ultraviolet transmission and maintain the best quality of
wines and beverages, with the fresh storage cabin ensuring the quality of high-end ingredients. The
automatic ice-making function can be remotely activated and controlled for clean and fresh ice at any
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time. Toshiba Master Series Refrigerator is the industry's first flagship star-rated cooking refrigerator
and leads the way in the industry with a volume up to 702 L. It adopts a high-efficiency energy-saving
variable-frequency compressor and premium vacuum insulation materials to achieve the best energy-
saving and silence performance among refrigerators of the same volume. In the refrigerator, the fruit
and vegetable storage zone is equipped with industry-leading fruit and vegetable constant humidity
preservation technology and the meat storage zone is equipped with industry-leading meat refreshing
technology so that ingredients can be maintained fresh in seven days in slightly frozen state at -3℃ and
can be defrosted in 30 minutes. The 122 L wide-range variable temperature zone allows for four-tier
temperature regulation to meet ingredient storage demands in diverse scenarios, such as chilled fish at
0℃, soft-frozen steak at -8℃ and fresh freezing at -18℃. The 24 L ultra-large independent ice storage
zone features the industry's leading ice making speed in 60 minutes and automatic cleaning at twice
per two minutes. Being the first product equipped with UV sterilisation for ice making, the refrigerator
enjoys a sterilisation rate of 99%, makes clean ices. With an 8kg freezing capacity for deep freezing at -
30℃ (an ultra-low temperature), the refrigerator maintains the original taste and flavour of ingredients.
Kitchen appliances and other home appliances:
For whole-house water use, COLMO Yunshu Electric Water Heater has a brand new double-layer
water tank, the inner layer of which is coated with aerospace-grade polymer materials and the outer
layer is of high-strength one-piece tensile stainless steel design evenly and entirely coated with
precision polymer materials that forms a dense shield to greatly enhance anti-corrosion performance for
10 years of use. The internal polymer surface is smooth, hydrophobic and scale-proof without the use
of the magnesium bar, thus preventing magnesium dregs from making water alkaline and saving the
efforts of subsequent maintenance and replacement. COLMO Energy Efficiency Grade 1 Condenser-
free AVANT Gas Water Heater, equipped with the international leading Reco dual-core technology, is a
perfect solution to the problems encountered by users as to the discharge of condensate water from
traditional Energy Efficiency Grade 1 gas water heaters. The machine's thermal efficiency is close to
105%, saving gas substantially. The product is also backed by a number of patented technologies and
has been certified by authorities of the industry. Midea Fresh Mineral Water + Purified Water Machine
adopts the industry's pioneer fresh mineral reduction technology to absorb and degrade heavy metals
and harmful microorganisms and retain the characteristic mineral elements of the water source, so that
users can have fresh mineral water and purified water for drinking, cooking and tea making through one
machine at any time, which has been certified as “Internationally Leading”. Also equipped with anti-
bacteria technology, the product can remove 99.9% of heavy metals and bacteria while restoring local
water quality to the maximum extent. The newly developed homogeneous membrane filtration
technology for pure water quality enjoys a desalination rate up to 96%, and has won the first prize of
Science and Technology Award from the Membrane Industry Association of China. In view of its
Southeast Asian market demands, Toshiba OrigiPure Water Purifier products adopt local innovative
technologies and the self-developed 10-filter-cartridge 13-grade pure natural filtration system, and
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extracts minerals from natural rocks through Ro Plus fixed-ratio macro-mineral retention technology to
meet the local demand for mineral, alkaline, and hydrogen-rich water. The four-dimensional aseptic
system of the products ensures full sterilisation of water, the powerful refrigeration and control system
discharges ice water up to 1.3 L at 4℃ per time, providing better localized water intake experience in
diverse scenarios, and low-pressure water discharge without electricity and Touchless hovering water
intake meet local needs in washing and cooking scenarios.
Aiming at delivering a more comfortable kitchen environment, Midea starts with the kitchen environment
and cooking smoke, grease and odours and has rolled out efficient and intelligent range hoods and
stoves. To protect users' health, a range of products, including dishwashers, steamer-ovens, and rice
cookers, has been introduced to respond to users' demands for kitchenware cleaning and sterilisation,
and healthy cooking. Midea AK5 PRO Series Steam Wash-Suction Range Hood is of European-style
design, equipped with an open-close smoke gathering function, and is 25% smaller in the front and rear
to perfectly fit in kitchen cabinets. With Midea's variable frequency technology, the product's air volume
in flash-fry mode is up to 23 m/min, which, working together with the open-close smoke gathering plate,
ensures great smoke suction performance. With Midea's exclusive steam wash function, the product's
cleaning rate is up to 99.1%. Midea Q518S Gas Stove, focusing on "Creating Fragrance", continues to
use the volcano-shape fire so that the flame is close to pans for flash fry. Backed by co-frequency
precision valve control, fire sizes can be synchronized for same temperatures at every spot of a pot.
The newly upgraded Midea Anti-Dry 3.0 technology boosts firepower to 5.2 kW and thermal efficiency
to 65% through the upgraded temperature sensing probe. Updates to the intelligent algorithm enable
faster and more responsive recognition of water cooking scenarios to prevent kitchen fire accidents,
protect pots and pans, and lower the possibility of food scorching.
COLMO’s brand new TURING Dishwasher, EVOLUTION Heshu Zero Built-in Dishwasher and
EVOLUTION Tianshu Zero Built-in Dishwasher adopt the unique full-coverage water curtain spray
technology to solve the problems of low coverage, blind sides and uneven water pressure of water
streams from traditional sprinkler arms. The innovative fan-shaped water streams realise a more
uniform flow rate and a coverage ratio of 100%, greatly improving the washing capacity and effectively
washing and caring for tableware. TURING Dishwasher saves users from frequent bending through its
lifting basket that can be smoothly and quietly pushed in and pulled out and has passed the 43,800-
times service life test and the 144-hours salt spray test, and its highly integrated water flow system
provides more usable space and has the industry-leading first-class volume ratio. Media Jingyan Series
Dishwasher, the first product equipped with Midea's self-developed double-vented drying system,
features instant whole-cavity drying and significantly saves washing and drying time. The standard self-
developed intelligent phased detergent application function uses micro-spectral sensing and the fuzzy
algorithm to intelligently detect and judge the degree of contamination for thorough washing. The
variable frequency washing technology improves the washing pressure to 73%, and the five-arm
partition enhanced washing improves the washing rate of heavy oil stains by more than 60%.
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Midea Group Co., Ltd. Semi-Annual Report 2024
Toshiba Qinmichui Vacuum Pressure IH Rice Cooker adopts the technology of vacuum water
absorption at normal negative pressure to increase the water absorption rate of rice grains by 20% at
the water absorption stage and the sweetness by 39.4% for better taste of rice. Cooked at 20 kPa
variable pressure and 105℃, the best temperature for gelatinization, rice is evenly heated and boiled at
720° through multi-stage IH technology. The imported forged inner liner, featuring sufficient heat
storage and fast heat transfer, wrap the pot sufficiently and evenly and thus thoroughly gelatinize rice.
The Steam-Fire Air Fryer takes humidity as the key parameter of air frying, and adopts the patented
micro steam structure for continuous feed-in of 130℃ steam. With AI intelligent control three-step water
locking curtain, the humidity of the cavity can be improved by 3.6 times, and the water retention rate of
the food can be improved to more than 95%, so as to realise the "crispy outside and tender inside"
mouthfeel. The micro steam light fire program can lower the fire factor, and the aluminium alloy casting
plate structure allows for the maximum temperature of 220℃ and improves the degreasing rate by
76.4%.
COLMO BLANC 2.0 High-end Built-in Steamer-Oven adopts the world's leading RF radio frequency
technology, the self-developed AI-based adaptive multi-functional cooking centre, the RF radio
frequency directional zone-based cooking technology, the world's leading band algorithms and
structures and the radar phased array technology for precise and directional control of food energy and
simultaneous partition cooking of different ingredients. RF radio frequency pattern recognition and
superposition technology realise extremely even heating and quick defrosting, and better retain food
nutrition. The AI smart camera function and the deep learning algorithms enable real-time perception of
food status and accurate matching of firepower. The quantum sensing light interaction technology and
RGB lamps allow for dynamic and visual interactions and real-time presentation of the working state.
Toshiba Kiln Microwave-Steamer-Oven-Fryer YD5000 innovatively adopts the kiln dome structure and
the distinct automatic AI kiln baking function to make superheated-water-steamed dishes.
With respect to whole-house intelligent cleaning, Midea continued to iterate products and technologies.
Eureka E20 Plus Sweeping Robot has a large suction power of 8,000 Pa, its new vacuum fan brings
stronger cleaning performance, its new V-shaped whole-rubber brush effectively reduces hair
entanglement, and its DuoDetect AI 3D precision obstacle avoidance unit allows for dual-line and cross-
line laser obstacle avoidance and can accurately perceive obstacle contours for higher cleaning
coverage. Midea's new Floor Scrubber X11, featuring light dry cleaning, anti-tangling and hot washing
and quick drying, uses the innovative floating scraper technology for effective control of residual water
stains on the ground. Its upgraded dense rectangular-ambulatory-shaped double-layer tooth comb
scraper has an anti-tangling rate up to 99% as tested. The base that can be heated up to 85℃ uses hot
water for better self-cleaning, and dries the roller brush in five minutes through two-way timed rotation
with 80℃ hot wind while keeping all the runners dry, effectively avoiding odours and bacteria. The
original three-way edge brush is designed with a unique double-hanging bracket structure to realise
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Midea Group Co., Ltd. Semi-Annual Report 2024
zero-distance edge cleaning.
For living rooms, Midea Lucky Clover Quiet and Soft Floor Fan adopts the innovative and patented fan
blade to reduce blade rotation noise. With submarine-propeller-shaped blades, the vortex generated by
the rotation of the blades is distributed to the whole fan and innovatively makes a Mbius Strip-shaped
airflow passage to further reduce noise.
B. Adhered to technological innovation, established a digital R&D system for agile innovation,
improved the "Three Generations" R&D model, implemented the standardization strategy of
“Innovation Patentability, Patent Standardization, Standard Internationalization and Midea
Standard Goes Out”, continuously strengthened the commercialization of R&D results, and
promoted the strategy of “Technology Leadership” in a comprehensive manner
Midea continued to invest in R&D. Through larger investments in this respect, it aims to achieve
leadership in R&D achievements and product trends, as well as a stronger presence in the industry and
a better R&D environment. The Company made innovations with respect to mechanism, and developed
more leading products through both excellent user experience and differentiated technologies, reform of
the whole value chain of R&D using digital technology, and deep integration of big data analysis and
R&D. It kept reforming its product development model according to the strategic focus of “Leading
Products”. An innovative R&D model featuring a “Three-Tier Technical Committee System” and a “Four-
Tier R&D System” from the organizational dimension and “Three Generations” from the technology
dimension has been put in place and constantly refined to support the fulfillment of the goal of “Being
the Number One or the Only One” in respect of various product categories. Centering on customer
needs and based on different organizations and technologies, the Company carries out innovative
product development, research on cutting-edge platforms, research on core components, creation of
differentiated selling points and improvement of the basic product performance. Through group
development of products across the world, building a global product platform, as well as increasing
product development efficiency by way of group planning and group development, Midea is building
“Technology Leadership”. As of June 2024, Midea boasts 16 national-level science and innovation
platforms, including national key laboratories, national open innovation platforms for artificial
intelligence, national cross-industry and cross-field platforms, national industrial design centres and
corporate technology centres, national demonstration bases for talent introduction, post-doctoral
research stations, etc.; as well as 80 provincial- or ministerial-level science and innovation platforms,
including provincial and ministerial-level corporate technology centres, innovation centres, engineering
technology research centres, industrial design centres or key laboratories, and doctoral workstations.
Under the guidance of the strategy of “Technology Leadership”, the innovation platform serves as the
core of its technology innovation system and is responsible for the implementation of technology
development strategies and the commercialization and application of technology innovation
achievements, thus driving Midea’s transformation towards a global technology group in a faster
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manner.
Midea Group is committed to investing in the research of core technologies and has made significant
breakthroughs in the main tracks and in the field of new industrial technology. In the field of smart home,
Midea, through the "AI Data-driven Variable Frequency Control Key Technology and Application"
project, pioneered precise temperature control, fixed-point dehumidification and continuous wind control
technologies for better-than-industry precision in temperature control, wind control and humidity control,
which has been applied to a variety of air conditioning products to make its AI variable frequency
technology more advantageous. In the "Key Technology and Application of Preparation of Graphene
Modified Anti-corrosion Coating for Air Conditioner Heat Exchangers" project, Midea developed the
high-performance heat exchanger graphene-modified coatings on the basis of self-developed life
assessment model and a new evaluation method for coated aluminium foils, which enhances not only
the anti-corrosion ability and thermal conductivity but also the anti-light aging performance of the
coating for long-lasting energy saving. This achievement, with a service life equivalent to that of more
than 20 years in salt-containing industrial environments, has passed the accelerated test of Intertek and
has been applied to a number of high-end products for breakthroughs in the high-end market. In the
"Green Design and Manufacturing Key Technology and Application of Split Floor-standing Air
Conditioners", Midea proposed the industry's first green design technology of core parts of cabinet air
conditioners, with an industry-leading cold-to-weight ratio, realizing large air volume of 1,800 m
heating at -35℃, cooling at 65℃, and up-down 120°air supply, boosting the structural upgrading of air
conditioner products. In the "Key Technology for Efficient Utilisation of Energy in Household
Photovoltaic Storage, Cooling and Heating System and its Industrialization Application" project, Midea
significantly improved the single-circuit inverter power of energy storage and the communication anti-
jamming ability, optimized multi-energy scheduling and enabled efficient utilisation of household energy,
bringing a more low-carbon and energy-saving home experience to the users. In the "Key Technology
and Industrialization of Zero Built-in Washer-Dryer Suite Electrocatalytic Stain Removal and Colour
Protection with Frequency Conversion and Silent Drying" project, Midea developed the multi-phase
quick dissolving and direct spraying of detergents and rare-earth alloy electrocatalytic activated oxygen
stain removal and colour protection technology with first-class anti-colour stringing performance, which,
working together with high power-density compressor and motor with variable frequency drive,
composite material of stacked structure, double-ring independent inner-outer air ducts and clothes even
drying control technology, significantly reduces low noise effect and improves drying evenness. In the
"Research and Application of Key Technology of High Power Density Dual-Stage Booster Pump for
Gas Water Heaters" project, Midea, for the first time, developed the high power density dual-engine
booster pump for gas water heaters for super high flow rate and high lift of gas water heaters. In the
"Research and Application of Directional Oxygen Replenishment and Dual Internal Flame Combustion
Technology for Gas Stoves" project, Midea re-designed the combustion and heat exchange system of
gas stoves and developed the directional turbine oxygen replenishment technology so that the energy
efficiency performance of gas stoves can far exceed the national Energy Efficiency Grade 1 standard.
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Midea Group Co., Ltd. Semi-Annual Report 2024
In the "Research and Application of Key Technologies for Efficient Utilisation of Thermal Energy in
Dishwashers" project, Midea developed the small heat exchanger for dishwashers with high heat
transfer performance and the ultra-integrated system for efficient utilisation of thermal energy so that
the energy efficiency of the whole machine can be significantly better than the international A-grade
standard. In the "Research and Application of Key Technology of Water Purification for Fresh Mineral
Water + Purified Water" project, Midea developed a dual-path water purifier that can accurately remove
heavy metals and provide mineral water and pure water, and equipped it with antibacterial activated
carbon fibre composite (MPC) cartridges to meet users' needs for healthy water in different scenarios.
In the "Microwave Rapid Cooking Key Technology Research and Its Product Application" project, Midea
developed the microwave energy enhancement technology with double-arc back plate and the hot air
cooking technology with porous air ducts for microwave-hot air rapid cooking to effectively shorten the
cooking time. In the "Research on the Key Technology of Long-lasting Steaming and its Application in
Microwave-steamer-oven Products", Midea developed the double-helix steam generating technology
based on the Dion vortex, which not only greatly improves the heat transfer coefficient and steam
utilisation efficiency but also reduces the size of the evaporator and the accumulation of water and
effectively extends the scale-resistant life of the evaporator.
In the field of commercial and industrial solutions, Midea, through the "Research and Industrialisation of
Key Technologies for Highly Adaptable Silent Variable Frequency Compressor" project, developed the
harmonic magnetic field modulation technology that uses TFSS methodology to alleviate from the
source the vibration and noise problems of the compressor system through dimensional analysis of
energy flow and noise vibration of the system, and greatly improved product reliability by making
comprehensive optimization of the flow field of variable frequency compressors. In the "Research and
Industrialization of the Key Technology of High Power Density Permanent Magnet Motor and its
Compressor" project, Midea greatly enhanced the power density of variable frequency compressors,
made compressors smaller and improved products' energy efficiency, in order to provide end-users with
economic and energy-saving quality products. In the "High Torque Density Low Torque Pulsating Direct
Drive Permanent Magnet Motor" project, Midea focused on the research and application of the key
technology for high power density low torque pulsating direct drive permanent magnet motors,
developed the high power density system component technology that can reduce the total volume of
the "motor+electronic control+wind turbine", increase the power density of the product, reduce the
amount of materials used, and reduce carbon emissions. In the "Global Low-carbon Heating
Technology for the Ultra-low-temperature Gas-liquid Co-injection Heat Pump System and its
Industrialization" project, we targeted the problems of difficult operation of air source heat pump in ultra-
low temperature environment, high defrost loss in cold and wet environment, high energy consumption
in transmission and distribution and mismatch of temperature difference, proposed the quasi-secondary
compression gas-liquid joint injection heat pump cycle technology and the optimal solution to control the
heat pump injection volume, broadened the operation range of air source heat pumps to -35℃,
significantly improved the capacity energy efficiency of low-temperature heating, and developed the
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Midea Group Co., Ltd. Semi-Annual Report 2024
self-learning defrosting technology based on dynamic identification to improve the capacity energy
efficiency of low-temperature heating defrosting cycle by more than 8% and the optimal temperature
difference intelligent matching load demand heating technology that scientifically matches the optimal
temperature difference between the system source and load to significantly reduce the energy
consumption of the transmission and distribution, reducing the energy consumption of the air-source
heat pump heating system. In the first half of 2024, Midea received one national and 30
provincial/ministerial science and technology awards, along with 26 technologies being certified as
“Internationally Leading/Advanced”. Cumulatively, Midea has won four national science and technology
awards, and more than 470 provincial and ministerial science and technology awards, as well as
received over 350 "Internationally Leading/Advanced" certificates for its technologies. In terms of
industrial design, Midea leads the way in user experience and interaction upgrading with ongoing
innovations. In the first half of 2024, Midea won a total of 112 industrial design awards, including 36
Red Dot Design Awards, 47 iF Design Awards, and 29 IDEA Awards. On a cumulative basis, it has
received nearly 900 industrial design awards.
While engaging in core technology research, Midea continued to intensify the transformation of
innovative results and protection of patents. Now Midea has become one of the world's largest holders
of patent families, and ranked eighth in the world in this respect according to 2023 Global 250: The
World's Largest Patent Holders released by the U.S. IFI in January 2024. In the first half of 2024, it was
granted over 5,000 new patents. As of June 2024, Midea has lodged more than 100,000 patent
applications across the globe and is holding more than 85,000 valid patent. Midea has continued to
promote the improvement of patent quality, and has won more than 130 prizes of China Patent Awards,
including six golden prizes and 12 silver prizes.
In order to provide strong support for the fulfillment of the strategic objective of “Technology Leadership”,
Midea further implements the “3+1” standardization strategy of “Innovation Patentability, Patent
Standardization, Standard Internationalization and Midea Standard Goes Out”. And through a two-tier
(Group-business divisions) standardization management system and the double drivers of “standard
innovation + product innovation”, Midea shifts innovation achievements to advanced standards. In the
first half of 2024, Midea took part in the formulation/revision of 89 new or existing technological
standards, including eight international standards, 35 national standards, nine industry standards, and
37 local or association standards. Cumulatively, it has participated in the formulation/revision of over
1,900 new or existing technological standards in total. Midea takes charge of an international
standardization taskforce at the Institute of Electrical and Electronics Engineers (IEEE), and won the
Standardization Organisation Award and the Standard Project Award (third prize) of Guangdong
Provincial Standard Outstanding Contribution Award.
C. Always being user- and customer-oriented, highlighted retail service capability, promoted
business model upgrades and DTC transformation to achieve direct connection with customers
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Being user- and customer-oriented, Midea continued to advance the construction of the "Midea Cloud
Sales" ecosystem and improve whole-chain retail experiences by building exclusive store bases,
optimizing outlet supply experience and performing digital retail transformation DTC reform. First, it kept
upgrading the "Midea Cloud Sales" ecosystem, made grid layout of its exclusive stores in the domestic
market, constructed its flagship stores at district and county levels, promoted full-category, front-loading,
digital and online upgrading and transformation of nearly 30,000 outlets, and built 15,000 Midea digital
retail demonstration stores to boost the high-quality development of its self-run channels. Second, it
reconstructed the retail system of stores based on the "Midea Cloud Sales" App and the "Midea Home
Delivery" applet to continuously optimize supply experience as to visual delivery period, overdue
compensation, simplified online policies, and empowered cloud warehouses and online to offline (O2O)
services. This resulted in 100% delivery visibility, 95% delivery accuracy, a simple online transaction
policy of 99% automation, and automatic refunding for overdue orders. Meanwhile, the cloud
warehouse-based shared inventory system helped reduce own inventories by 50%, and asset-light
operation of stores are enabled through home delivery service, cloud credit, the returnable and
exchangeable policy, etc. Third, with the help of digital marketing tools, it promoted stores' online and
offline whole-scene marketing and promotions through multiple flow platforms such as model rooms in
residential communities, trade-in the old for the new, targeted customer attraction and Midea partner
sales, in order to promote online-offline integration and realise high-efficiency customer attraction and
potential customer conversion and retention. Fourth, it developed a digital and intelligent platform
operations system to improve stores' management efficiency and conducted classified product
operation and hierarchical store management based on the label-based system for products and stores
so that retail data and business activities can be reviewed online, stores can carry out rapid analysis
and precise operation and business can be offered online on Midea's industry-leading digital service
platform.
In the first half of 2024, e-commerce sales (including e-commerce sales in lower-tier markets)
accounted for nearly 50% of Midea’s total domestic sales. Midea continued to promote scenario
experience in e-commerce channels, provided one-stop whole-house solutions, upgraded product
services to meet consumers' different segmented needs, deepened its layout for interest-based e-
commerce platforms, and achieved continuous breakthroughs. During the "18 June" sale, Midea ranked
first in the industry for 12 consecutive years in terms of total sales online. Midea built its capabilities in a
shared inventory system and local marketing services, promoted the integration of online and offline
business in the domestic market, and achieved breakthroughs in new business capabilities such as
O2O and OMO which covered over 40,000 offline stores cumulatively. Midea simultaneously deepened
the development of the omnichannel Midea e-commerce ecosystem customer system and improved
customer operational efficiency. Midea actively responded to the national "double carbon" strategy,
cooperated deeply with JD, Tmall, Douyin, Pinduoduo and other platforms to promote "trade-in", and
assisted users in low-carbon consumption. Midea made vigorous efforts to expand into the new retail
market (the lower-tier market) and core channels such as offline chains. As a result, Midea's overall
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market share in the core channel platform ranked first in the industry, promoting direct system
connections with major customers and improving digital operational efficiency. Targeting different user
needs, Midea provided consumers with a brand new experience of series procurement experience by
displaying samples based on product suite scenarios. Midea continued to promote the launch of new
categories and products, launching five new product suites, continuously tapping into new market
consumption potential, and through OMO and other methods for attracting traffic, it continuously
attracted customers to stores, and implemented various marketing models to improve consumption
conversion. At the same time, by offering cleaning services, clothing care, and exchange instead of
repair in a year services, Midea provided high-quality whole-chain consumer services from pre-sale
stage to in-sale and post-sale stages, and kept strengthening the consumer royalty by building
channels. Despite the continuous cooling of macro market demand, the engineering business still
demonstrated strong resilience, with sales growth of 8% in the first half of the year. By optimizing the
goods sharing mechanism and implementing direct delivery strategies, overall operational efficiency
and customer satisfaction were significantly improved. Media built new growth driving forces, deeply
acquired professional customers, and expanded cross-industry cooperation, with professional
customers increasing by 16%, and business opportunities increasing by 11%. Midea built a benchmark
for COLMO product real estate supporting facilities and upgraded cooperation with real estate
developers.
In terms of marketing, Midea used "humanizing technology, M-Smart Sense and human-oriented
design" as carriers to release multiple product suites such as “Muse” and “Xingrui” targeting
differentiated user needs, continuously upgrading comfortable and high-quality life for users, and
conveying Midea's brand concept of humanizing technology. Midea tracked changes in consumer
lifestyles and catalytic habits, transformed towards digital and precision marketing, integrated brand
strategy, content, and delivery, and built an "exposure - search - traffic attraction" whole-chain
marketing through higher quality content and more precise outreach, accumulating brand audience
assets and improving marketing efficiency. In the first half of 2024, Midea's crowd assets ranked first
among home appliance makers on both the Xiaohongshu platform and the Douyin platform. In terms of
user operation, Midea further integrated user interaction tools to create an integrated automated
operation scenario for the entire pre-sale stage to in-sale and post-sale stages. Midea accurately
divided user behaviour, preferences, and values, designed personalised services and product
recommendations for different users, built a b/C integrated operation system, empowered stores to
provide proactive operations to consumers, and achieved active operations for 15 million people in the
first half of 2024, further improving user experience and satisfaction, and creating the best mode of user
reach efficiency. As at June 2024, Midea's registered membership had exceeded 200 million people.
Midea developed a whole-house intelligent system with a leading performance that integrates four core
technologies of "wired + wireless" stable connection, full space environment and human perception,
natural distributed interaction, and "cloud + edge and terminal" multi-dimensional autonomous decision-
making, continuously strengthening the foundation of whole-house intelligent technology. Midea
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improved the whole-house intelligent products and solutions, launched a series of whole-house
intelligent products, and connected Midea's full range of home appliances and smart home products
through three core terminals of smart central control, home gateway, and smart sensors, forming a
unique deep integration solution of "smart home appliances + smart home". By building a whole-house
intelligent super experience centre and a smart sensory experience hall, Midea created a scenario-
based user store journey experience, promoted the "smart home and home appliance integration" sales
model to form a replicable standardised store model, and enabled smart homes and smart appliances
to attract traffic together, promoting sales growth. The online application of the digital solution design
tool "Midea Home Master" empowered store solution design services and created a whole-process
service capability for intelligent solution design, delivery, and debugging.
For users, customers, and engineers, Midea insisted on promoting the transformation of its user service
system business model and digital transformation, improving service quality and user satisfaction,
creating a third-party service platform, and providing one-stop solutions for whole-house smart home
appliance services. First, Midea upgraded service standards based on the peak experience principle,
updated the service procedure and technical process for various categories of home appliances and
introduced them to the public through press conferences and mainstream media. It implemented
proactive push of service standards and reports, and allowed users to query online at any time and
confirm the service loop through user confirmation. Second, in terms of promoting the large model
application in the customer service field, Midea helped improve service efficiency from three aspects of
intelligent diversion, representative assistance, and knowledge management. It launched IoT proactive
service functions to assist customer service personnel in real-time troubleshooting and rapid response,
and promoted front-line authorisation mechanisms, to quickly solve user problems. Midea promoted
1+N butler services for front-end users, with dedicated butlers providing standardised and visualised
services throughout the entire process. Based on the global Voice of Customer (VOC) system, Midea
achieved a "unified language" for the entire value chain, streamlined and reconstructed customer voice
tags, and gained in-depth insights into user needs and pain points. Third, Midea improved the service
capabilities of product suite installation and delivery, created a "one district, one county, one point"
product suite service network layout, and achieved comprehensive coverage of all categories of product
suites in domestic district and county markets. It built a technical training and capability certification
system for engineers in the prefecture-level cities, enhanced the multi-category service capabilities of
engineers, and achieved a service model of "one contact person, one visit" for users buying a series of
products with service network transformation and multi-skill engineer cultivation. Fourth, Midea
developed the whole-house smart service capacity, established a whole-house intelligent service
training base based on the distribution of stores and provided special training, improved the certification
system for the whole-house intelligent service capabilities of engineers, and achieved comprehensive
coverage of whole-house intelligent services. Fifth, Midea simplified the return and exchange process
and optimised relevant policies, enhanced the return and exchange service experience, established
user evaluation scenarios for returns, exchanges, and repairs, and used user evaluation supervision to
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drive service improvement. Sixth, Midea enhanced the differentiated service experience of high-end
brands, achieved "one appointment and one delivery and installation" for product suites. It upgraded its
high-end brand service standards and comprehensively carried out high-end brand engineer
certification. Through projects such as "Customised Installation", "Butler-style Service", and “High-end
Private Care”, Midea created a distinctive premium service experience that leaves a lasting impression.
Annto, a subsidiary of Midea Group, is a technological innovation-based supply chain management
company and is committed to providing end-to-end integrated, digital and intelligent supply chain
solutions. It enhances the whole-chain value of enterprise customers and the service experience of
individual users, insists on deepening mechanism reform, and feeds back business flow with logistics
and digital technology innovation. Annto deeply fosters itself in the industrial supply chain service sector
and, adhering to the "customer-centric" business philosophy, provides customers with end-to-end digital
and intelligent supply chain solutions ranging from production and logistics services from raw materials
to finished products, a shared inventory system from online to offline channels, ToB/C integration, to
integration services of warehouse distribution logistics and integration services of delivery and
installation. It helps enterprises promote channel reform and supply chain efficiency improvement and
improve competitiveness, and keeps supporting customers' high-quality growth and sustainable
development. With the industry-leading practical experience in channel reform of major enterprise
customers such as Midea and the continuous improvement of the intelligent warehouse network system
for domestic supply chains, Annto has covered thousands of brand customers in daily chemical,
beverage, wine, food, home appliances, home furnishing and new energy industries, with its market
share and brand presence steadily strengthened.
In the first half of 2024, Annto continued to increase its digital capabilities, achieved cost reduction,
efficiency improvement, and operational quality enhancement through various innovative applications,
improved end-to-end service capabilities, and achieved an integrated efficiency upgrade of "a shared
inventory system" and "warehouse distribution logistics" across all channels. Through the "1+3" end-to-
end digital supply chain solution, it provided one-stop services of "consulting + digital products +
logistics operation" for customers in multiple industries. Production logistics are important parts of the
manufacturing supply chain under the “1+3” service model. Centering on the role of an expert in
advanced, lean and digital logistics in the manufacturing industry, Annto applied its experienced
“Lighthouse Factory Supply Chain Solution” to manufacturing customers, and consolidated its core
strengths from aspects of lean logistics and digital empowerment. On the one hand, it realised the
whole-chain digital application from suppliers, VMI warehouses to pre-production plants, including VMI
intelligent replenishment, circular pickup, intelligent scheduling, quality pre-service, intelligent sorting,
and intelligent control of materials and equipment. On the other hand, it shortened the pre-production
material preparation cycle and reduced logistics costs through the online JIT distribution of materials
and the whole-process intelligence.- In the field of warehousing, with the direction of "warehouse
network planning, area integration, labour reform, and efficiency breakthroughs", Annto optimised
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warehousing efficiency and costs through operational mode changes, labour cost management, lean
operations, and storage planning; through the application of online elements, online business, online
management, and IoT smart parks, Annto created a digital service platform, build digital warehousing
capabilities, and established a whole-chain warehousing operation capability from base warehouses to
regional warehouses. It established an industry-leading warehousing operation system and provided
customers with whole-scene and whole-chain warehousing operation solutions. In the field of trunk line
distribution, Annto integrated line resources, built the line traffic monitoring system and line cost
capacity. Meanwhile, it promoted online management of single vehicles, made the whole chain visible
online, and built a high-efficiency whole-vehicle performance platform with individual transport capacity
resources. It established a routinised and standardised "zero-carriage" network by promoting
cooperation in industrial belt and ecosystem parks. This was achieved through the integration of
resources and structural optimisation, which resulted in a transformation of transport capacity, and the
creation of national front-end assembling and point-to-point delivery capabilities. It promoted product-
wise line operation on the basis of line-based operation, established a line-based business model, and
constructed the "zero-carriage" network composed of one-way short chains. Through technical tools
and management reform, Annto promoted online management of business at all links, thus improved
customer experience. In the field of urban distribution, Annto achieved warehousing efficiency through
warehouse capacity integration, and optimised personnel efficiency and flat effect. Annto concentrated
on route traffic, expanded direct control over the routes, adjusted transport structure, and increased the
total amount of controllable transport capacity, including over 7,000 units of new energy transport
capacity. The distribution network covered over 99% of towns and villages across the country, and
through adjustments in operational modes and optimisation of vehicle routing, more than 80% of ToC
orders were delivered on the same day/next day, and over 98% of orders were delivered within 48
hours. Annto fully promoted the application of intelligent algorithm for vehicle scheduling, with an
adoption rate of over 98%. In the field of end services, Annto strengthened its "2C integrated delivery
and installation" capabilities to support businesses in connecting with users. Based on terminal
capabilities building, it optimised the delivery and installation management platform and "Annto Service
+" applet, continued to deepen network capacity building, launched digital management and service
tools, and achieved online management and operation of final delivery and installation engineers
nationwide. By the end of June 2024, it had cooperated with over 4,000 domestic outlets and had more
than 40,000 delivery and installation engineers. Focusing on home appliances, home furnishing, new
energy, healthy travel and life services, it provided standardised service products, including the
integration of delivery and installation of home appliances, "three-guarantee and five-guarantee"
services, and new energy-related "surveying and installation" services. It optimised service processes
through strong-control appointment, text message rescheduling, emergency delivery, suite delivery,
positioning signing, trade-in and so on. Combined with integrated and smart supply chain service
capabilities, it comprehensively improved and enhanced customer/user service experience in the field
of order services. Through a series of digital platforms, it achieved quality monitoring and feedback
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Midea Group Co., Ltd. Semi-Annual Report 2024
throughout the whole process from ordering, delivery, to after-sales, responded promptly to each
service process, achieved visual and controllable control of the whole order process, and enhanced
customer satisfaction. In the field of data applications, by strengthening the building of data floor price
capabilities and end-to-end data connectivity, Annto improved big data portals, real-time and offline data
warehouses, and unified data service centres, and enhanced the real-time and security of data
processing. In terms of the building of smart supply chain platforms, Annto continued to build
warehouse network planning and supply chain control towers to promote refined management and
optimization of the supply chain. In addition, in response to the needs of industry channel
transformation and change, Annto launched the Annto Link digitalised channel solution, provided
transparent and efficient solutions for channel data by relying on an integrated "business flow +
logistics" digital platform, and connecting numerous distribution networks, provided operational support
for customer transformation and helped customers implement DTC strategic changes.
D. Promoted “Global Impact”, enhanced localized operations overseas and adhered to a
customer-oriented principle when it comes to products
In the first half of 2024, a variety of risks and challenges such as fluctuation of macro economy, fierce
change of exchange rate and continuing high inflation were seen in overseas home appliance markets,
yet the overseas business of Midea sustained large-scale growth in performance. Aiming at the local
primary markets, Midea continued to forward-deploy its overseas business organisations. In order to
respond to the market more quickly and meet local customer demands more effectively, the role of the
international business headquarters transitioned to the Centre of Excellence (CoE), providing further
support for the organisational capabilities of the overseas marketing teams. It established and perfected
organisational teams in various overseas regions, accelerated investment and scale expansion of
overseas R&D centre, and continuously promoted a diverse, equitable, and inclusive (DEI) corporate
culture, continuously increased the building of overseas local talent teams, continuously integrated
localisation talents into the system of internationalisation and optimisation talents, and optimised its
talent system to ensure continuing development of overseas business. Meanwhile, Midea built up the
core capability system on all fronts, involving studies on front-end users' demands, definition and
development of products, channel expansion, sales and operation, user service, etc. It organised teams
in various regions across the globe to hold several meetings to share and discuss local best business
practices and future development plans, enhancing team cohesion. It continued to build a digitalised
human resources system, and a whole-module human resources system will be in use worldwide by
2025.
Midea continued to expand its overseas manufacturing layout, accelerated the promotion of the "China-
based Supply for the World + Local Supply" model, promoted the smooth production of four national
manufacturing bases and the construction of new plants in four production bases, and promoted
collaborative support between domestic and overseas plants in the manufacturing end. It strengthened
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the management of overseas joint venture plants, drew on the successful practices of domestic
Lighthouse factories, continuously cultivated overseas lean manufacturing talents, carried out
production line layout improvement and automation transformation projects in overseas manufacturing
bases, and enhanced overseas manufacturing efficiency and delivery capabilities. Midea improved its
global service system and global service capacity, adhered to customer-centred approach, made
improvements from four dimensions of spare parts delivery, customer contact, service network, and
service technology engineering, optimised customer service experience, and continuously and
efficiently operated the global spare parts centre. It realised online and visualised order fulfillment,
transformed its operation into global professional operation, continuously built a warehouse network
layout for the spare parts supply chain that covered global manufacturing bases, and ensured the
globalisation of spare parts supply. It launched regional warehouses covering the Middle East and the
European Union in 2023, and started the construction of new base spare parts warehouses in 2024.
Midea optimised service networks of iService system (an overseas post-sale system) and cloud call
centre platform, and master data management of global outlets and service projects, realised interface
sharing between call centre and post-sale service system, and significantly improved the accuracy and
efficiency of service. Meanwhile, it deeply promoted the digital transformation of services, gradually
improved end-to-end system procedures, and achieved standardised and normalised service
procedures. Midea introduced Amazon Connect, a global, omnichannel cloud contact service system, to
achieve the iterative upgrade of its global contact centre, thereby achieving the whole-procedure
closed-loop management ranging from user reaching to service completion, while significantly reducing
operating cost and improving voice call quality through the cloud-based transformation of the call centre.
Amazon cloud security tool was adopted to satisfy the compliance requirements of all relevant countries
for data security management. By June 2024, Midea had launched the cloud call system in the 18
countries and regions. Meanwhile, Midea additionally incorporated such functions as speech analysis,
semantic recognition and access to social media by intelligent voice robots in an effort to construct a
fast-response and proactive global service system. Midea continued to build international logistics
delivery capabilities for overseas self-owned brand manufacturing, channels, and customer service.
Midea Group's global production base export business saw a year-on-year increase of over 20% in
cumulative shipment volume in the first half of 2024. It continuously deepened the integrated operation
mode, deepened cooperation among strategic partners, trunk line distribution, trailers, railways, ports
and other parties, and created an efficient and cost-effective digital international logistics delivery
system. It strengthened the quality control of the whole operation chain of export orders, and improved
the operational quality and delivery efficiency of each process. Midea continued to build its overseas
local logistics capabilities and customs compliance system, piloted pre-production logistics operations
in the ASEAN region, connected the whole operation process domestically and internationally, and
achieved efficiency improvement and cost reduction. It established central warehouses in multiple
locations in Europe to achieve shared warehousing and centralised distribution of goods of different
categories for different customers. It continuously built e-commerce logistics fulfillment and operation
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capabilities, and realised Amazon e-commerce logistics business and Amazon Global Logistics (AGL)
direct delivery business in multiple overseas regions with overseas warehouse delivery. Midea focused
on improving its own brand product structure, firmly promoted user orientation, and integrated market
data analysis and consumer insights into the whole process of product development and launch. From
January to May 2024, the sales growth rate of mid- to high-end products in the Asia Pacific market was
nearly 20% higher than the average growth rate, and the mid- to high-end products in the air
conditioning category maintained high-speed growth in the Americas; sales of mid- to high-end multi-
door refrigerators increased by over 100% year-on-year, while sales of front-loading washing machines
increased by over 40% year-on-year. At the same time, Midea continued to develop the overseas smart
home industry and improved user experience. In the first half of 2024, the new registered overseas
users of the MSmartLife App exceeded 1 million and its registered users reached 3.1 million, and the
average monthly active users increased by nearly 150% year-on-year. To strengthen its development of
overseas self-owned brands, Midea sped up its efforts to make breakthroughs in self-owned brands
worldwide, facilitated the synergy of brands, products and services, deepened its access to users in the
front-end market, expanded product-based branding, and enhanced the brand awareness in all links of
operation and service. It further deepened the cooperation with the world-famous Manchester City
Football Club (Manchester City) and team star Erling Haaland, effectively reached hundreds of millions
of fans around the world, and continued to enhance brand value and expanded brand influence. By
reference to North America-specific brand development model, Midea strengthened the influence of its
brands from numerous perspectives, including offline retail experience, shopping guide team
development, social media launch and marketing of whole-house product suites, in global markets.
Besides, it boosted online content-based marketing inside and outside its websites, advanced the
building of its brands' official websites, refined the brand matrix, upgraded its content planning, visual
presentation and shopping experience in all aspects, and established marketing resource pool. Midea
accelerated the expansion and improvement of its overseas channel layout, continued to promote the
building of terminal outlets and breakthroughs in professional channels, upgraded and improved its
channel structure, improved the display of new products in terminal outlets, and enhanced user
interaction and brand awareness. It insisted on digital transformation, empowered overseas terminal
retail with digital tools, added over 1,500 digital terminal outlets, and used digital tools to empower
traffic acquisition, conversion improvement, and user retention. It launched digital business assistants to
enhance retail terminal efficiency and improve customer service timeliness. It utilised new media
content marketing to enhance product and user interaction, and optimised the contents launched at
various contact points in quality and efficiency. Midea accelerated its overseas e-commerce business to
support the development of its own brands. In the first half of 2024, its e-commerce sales revenue
increased by more than 50% year-on-year. It continued to optimise its business quality and made
continuous efforts in product innovation, business diversification, and digital operations, fully leveraging
Midea's overall advantages. It combined market big data insights to promote product innovation,
enhanced the competitiveness of e-commerce channel products, and maintained a core category
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advantage in online channels in multiple countries, with multiple products listed on the Amazon's best-
seller list. It made channel business diversified, actively expanded new channels globally, cooperated
with leading emerging e-commerce platforms, promoted influencer sales models, increased brand and
product exposure on social media, and launched a global brand advertising strategy. In terms of
operational digitisation, Midea leveraged internal and external resources to gradually build AI whole
chain empowerment for operations.
In the first half of 2024, despite multiple challenges such as rising costs caused by the depreciation of
JPY, shrinking demand in the overall home appliance market, and increasingly fierce market
competition, TLSC remained calm and flexible in responding to market uncertainty challenges based on
enhancing customer experience value. On the one hand, it strengthened communication with key
customers, continuously improved services, increased marketing efforts through various channels,
increased investment in online channels, focused on exploring new channels, optimised product pricing
strategies, and actively promoted new product sales, thus achieving overall performance that
outperformed the market. At the same time, it signed new brand spokespersons to support its medium -
and long-term brand development strategy. On the other hand, by strengthening the collaboration with
the Group and related product divisions, it significantly improved the product quality and optimised the
product development flow to ensure launch of new products and supply of products, and continued to
exert synergy effects in brand building, research and development innovation, supply chain integration,
and quality improvement.
E. Stepped up the comprehensive digitalization to materialize data- and platform-based
operations in the whole value chain, and thus to become more competitive in the digital era
With a focus on the “Digitisation & Intelligence Driven” strategy, Midea stepped up the comprehensive
digitalisation to materialise data- and platform-based operations in the whole value chain, and thus to
become more competitive in the digital era. In the domestic sales field, Midea continued to promote the
digital upgrade of "DTC strategy", "worry-free retail 2.0" and "a shared inventory system". Through
cloud warehouse inventory sharing, the physicals fulfillment rate increased by 11%, on-time delivery
rates were improved, and the separation of warehousing and distribution capabilities were piloted to
support flexible and changing business scenarios. It promoted policy onlineisation and automation, with
significantly increased automatic redeeming of customer policies, as well as online and automatic
redeeming of retail policies; it launched OMO multi-platform traffic project, focused on the three major
traffic platforms of Douyin, Meituan and Amap, and relied on the social media platform to reach
consumers directly, realising the real-time experience of local services and commodity distribution. The
gross merchandise volume (GMV) of this business exceeded RMB1.5 billion. By digitising the whole
marketing process, Midea improved its marketing efficiency, covering over 16,000 stores and more than
40,000 events; the registered membership size of Midea exceeded 200 million, with over 24 million new
members added in the first half of 2024. The user experience continued to improve, and the net
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Midea Group Co., Ltd. Semi-Annual Report 2024
promoter score (NPS) increased by 30% year-on-year. Midea continuously iterated and upgraded the
"Midea Cloud Sales" App, and significantly improved customer operational efficiency and experience,
with an average daily page view (PV) of over three million.
Concerning overseas sales, Midea focused on the "Digitalization 3.0" project to enhance global
business efficiency. Through end-to-end panoramic analysis of the value chain, it focused on the digital
capability improvement of overseas staff, product management, order management, overseas
manufacturing, overseas logistics, overseas e-commerce, direct access to overseas users, and supply
chains, promoting domestic digital transformation experience abroad and facilitating the “Global Impact”
strategy. The iBOS system was planned to cover 11 business units throughout the year, and it
integrated end-to-end whole-process information on project production, shipment, logistics, and orders,
realised whole-chain data visualisation, improved overseas order fulfillment efficiency by 20%, and
achieved online credit risk management. It promoted the improvement of overseas channel
management systems, with over 4,000 registered channel customers and installed in over 7,000
supermarkets, further enhancing the channel operation framework system and online installation
service data overseas. In the field of international logistics, Midea completed the global planning of the
overall informationisation route in the logistics sector. In the first half of 2024, Midea carried out online
projects for overseas finished product warehousing in Vietnam, Thailand, and Egypt, effectively
improving the efficiency, warehousing accuracy, and service quality of overseas logistics. Midea
established three sets of digital solutions in the field of overseas manufacturing, namely "basic,
standard, and advanced", to accelerate the digital transformation of overseas manufacturing bases.
These solutions were applied in manufacturing bases such as Thailand, Vietnam, Indonesia, and Egypt
to enhance overseas delivery capabilities. At the same time, through the integration of information
throughout the whole process from order to delivery, Midea reduced the risk of production stoppage
caused by material shortages and achieved a 50% reduction in delivery cycles. In the field of research
and development, Midea further built key capabilities in "technological innovation, R&D efficiency
improvement, global R&D, and value chain collaboration", deepened the implementation of the "Three
Generations", promoted key projects from planning to implementation, and achieved an on-time project
initial rate of over 90% and an on-time completion rate of 95%. More than 80% of researchers' labour
hours were dedicated to research, resulting in a 20% increase in procedure efficiency. This enhanced
digital planning and technological innovation capabilities, enabling AI empowerment in scenarios such
as planning, technology research, and industrial drawing. Midea continuously improved the R&D
system and tool building, built a virtual experimental platform for whole-house home environments,
achieved simulation testing as a substitute for experiments, and empowered R&D with automated and
intelligent virtual testing. In the field of manufacturing, Midea improved efficiency through breakthroughs
in digital capabilities such as quality, process, manufacturing, EHS, and energy carbon. It used market
quality data to automatically analyse warnings and trigger improvements, and applied dynamic
inspection models to increase detection rates and enhance manufacturing quality. Combined with the
large-scale implementation of process digitisation production lines, Midea integrated the whole process
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from product planning to manufacturing, achieving automatic generation of process routes and
automatic optimization of process parameters, and shortening the product development cycle by 10%.
It built multiple sheet metal and injection moulding dark factories and digital unmanned laboratories to
enhance unmanned production capabilities. It built an EHS centralised control centre based on Midea's
ESG strategy, enhanced the intelligent operation capability of the park, and achieved risk control in the
manufacturing park. By using microgrid technology to achieve integrated scheduling of photovoltaic and
energy storage in the park, the green electricity consumption rate of the Hefei Laundry appliances
factory park increased by 19% and carbon emissions reduced by 18.5%. In terms of industrial
empowerment, the M.IoT Platform served more than 1,000 enterprises in more than 50 subdivisions,
including auto parts, electronic semiconductors, agriculture and animal husbandry food, around the five
scenarios of digital transformation, Lighthouse/digital factory, smart supply chain, digital park, and
industrial cluster solutions. Midea Cloud "M.IoT Digital Twin Global Operation Platform based on
Industrial Internet of Things" was successfully selected into the list of "2023 Industrial Internet of Things
Pilot Demonstration" by the Ministry of Industry and Information Technology. In the ToB business, Midea
built ToB marketing templates and manufacturing templates. Based on the unified planning and building
of a multi-industry form, it built a ToB repurchase marketing platform, achieving a 46% and 72%
increase in end-to-end procedure efficiency for domestic and foreign sales fulfillment, respectively.
Midea explored ToB project-based business templates, designed digital business solutions that lead the
whole value chain around "marketing services - research and development - manufacturing - data
operations", promoted the mobility of business opportunity management, and shortened data
transmission time by 75%. For project-based pre-sales business, Midea connected various channel
leads through digital means, and automatically introduced and accurately pushed channel follow-up. In
terms of business management, Midea carried out digital building of functional departments to support
the domain, achieved cost reduction, efficiency improvement and compliance risk control, promoted the
building of digital finance, digital human resources and other fields, implemented digital building of
overseas human resources, deepened the efficiency and consistency of overseas financial accounting,
supported the deepening of global financial sharing mode, and empowered global tax compliance and
trade compliance with digital tools.
Midea steadily advanced its data empowerment initiatives, and concentrated on data empowerment
within core business scenarios such as research and development, marketing, supply chain, overseas
markets, and ToB domains. In terms of R&D, Midea continued to deepen digital-driven product
innovation, created exclusive AI planning assistants for domestic, ToB, and overseas markets,
achieving intelligent analysis of multiple planning scenarios, improving planning efficiency, and helping
create popular products during the "18 June" sale. In terms of manufacturing, Midea focused on data
empowerment in workshop operations. Through real-time scheduling of abnormal operations in the
sheet metal workshop, it assisted in the standardisation of dark scenarios and achieved a 30%
reduction in pilot workshop work hour losses. In terms of the logistics, a real-time analysis model
framework was built to help pilot units reduce their logistics tail rate by nearly 10% and improve their
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on-time performance at N points by over 6%. In terms of marketing, it accelerated the deepening of
DTC transformation, completed the building of a full staff cockpit, and promoted data consistency
building among stores, merchants, operators, operation centres, and headquarters through a multi-
terminal data sharing model. Midea optimised user interaction and user demand acquisition to enhance
user satisfaction and help convert transaction amounts of nearly RMB4 billion. In terms of channels, by
utilising digital site selection empowerment, Midea provided accurate recommendations for over 2,000
model room events, helping the "trade-in" activities held in more than 30,000 properties and providing
data support for channel expansion. In terms of services, the coverage rate of user service digitalization
scenarios exceeded 70%. By providing regional maps to view "work order density", Midea supported
differentiated operations of network business in remote areas, reconstructed the VOC label system of
the VOC platform, and optimised algorithm models to provide accurate and effective data support for
channel optimisation and product pricing of overseas business.
Midea continued to strengthen the building of its digital base and information security protection system,
initiated the Global Neutral Cloud Platform (GNC) construction, and initially completed deployment in
the Asia Pacific and North American regions, achieving the "two unifications" of its digital base, namely
domestic and foreign unification, and the unification of public and private clouds. Midea built "one global
network", a unified virtual network that spans the physical networks of private and public clouds,
avoiding repeated adaptation and development of multi-cloud applications by upper level applications,
enhancing the flexibility of public cloud selection, improving the research and deployment efficiency of
digital applications, and enhancing Midea's global business response capabilities. It continuously
improved the building of the data platform, completed the independent research and development of
the cloud host platform, and launched applications in Gui'an data centre and some overseas regions. It
is expected to save over RMB10 million in costs every year, with an increase of over 30% in data
processing volume and computing tasks. In addition, the Company continued to explore new
breakthroughs in enterprise digital transformation and upgrading in new technology fields such as
Artificial Intelligence Generated Content (AIGC), middle-office technology, and big data. On the one
hand, it actively attempted and successfully practised the application of large models in different fields
such as administrative office, visual art, intelligent Q&A, and digital humans, greatly saving time and
improving operational efficiency. The cumulative saved time reached nearly 400,000 hours. On the
other hand, with the application of AIGC in the field of maritime logistics, automated booking projects
was implemented, resulting in an overall efficiency improvement of 20% in terms of booking services,
an automation coverage rate of 80%, and an overall business efficiency improvement of over 8%.
Midea promoted the strategy of "Digitization & Intelligence Driven" and accelerated the implementation
of "Comprehensive Intellectualization" to "Customise a Smarter Midea Life for You". In the first half of
2024, the MSmartLife App continued to improve its application experience, reducing device abnormal
offline rate by 19% and plugin white screen rate by 71%, and cloud SLA availability reached over 99%.
The comprehensive performance reached an industry-leading level, creating a stable and smooth user
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experience. As at June 2024, the registered users of the MSmartLife App exceeded 58 million, and the
average monthly active users exceeded 9.3 million for the first half of the year. Midea fully upgraded its
edge and terminal algorithm and deployment toolchain, empowering various intelligent products, and
applied them to products such as washer-scrubbers, floor sweepers, voice-enabled air conditioners,
and energy-conservation air conditioners. Its operator library covered and supported fields such as
speech recognition, language understanding, computer vision, and energy-conservation deep learning
algorithms. The edge and terminal algorithm and its toolchain were upgraded and adapted to run
efficiently on various chips and hardware platforms, and four series of modules including
communication, sensing, computing, and sensing computing were mass-produced, significantly
improving research and development efficiency in different business scenarios. In addition, Midea
actively participated in promoting the establishment and formulation of relevant industry standards at
home and abroad, including the international standard N1241 in the field of edge and terminal
algorithms, the IEEE P3342 international standard for edge and terminal algorithms, and the national
standard, Functional Requirements of Edge and Terminal Device Model Deployment Toolchain.
F. In view of consumer stratification, launched multiple brands and diversified product portfolios,
and enhanced the promotion of the core values of these brands to empower retail sales and
user operation
In the first half of 2024, Midea continued to promote the "COLMO+Toshiba" dual high-end brand
strategy. For the same period, overall retail sales of the dual high-end brands saw a year-on-year
growth of over 20%. COLMO has been at the forefront of technological innovation, using AI technology
to offer consumers new suite-based smart high-end home appliances designed for the future. In terms
of products, COLMO launched the AVNAT suite, featuring "free, flexible embedding" and "small size, big
capacity", allowing for adaptable integration into various home layouts and designs. COLMO BLANC
Built-in Steamer-oven uses globally leading radio frequency (RF) technology to precisely control the
energy directed at food, enabling multiple ingredients to be cooked simultaneously in different zones,
achieving a perfectly even molecular-level cooking effect. COLMO TURING Residential Central A/C
System introduces a groundbreaking temperature and humidity control mode, allowing users to set their
desired temperature and humidity in one mode for year-round comfort. The new COLMO AVANT
Refrigerator, Big Cube, redefines traditional 1+1 refrigerator expansion with a unique AB dual-cabinet
configuration that allows for flexible combinations, earning it an honour at the China Refrigerator
Industry Symposium and the iF Design Award. COLMO New Image Zero Built-In Washer-Dryer Suite,
which pushes the boundaries of design by blending home aesthetics, won the prestigious "Best of Best"
award in the 2024 Red Dot Design Award. COLMO Dishwasher, equipped with AI Pro technology that
mimics handwashing, ensures thorough cleaning without missing a spot, earning certifications from
TV Rheinland for tableware protection and high cleaning efficiency. COLMO Platinum Fresh Water
Series Electric Water Heater uses innovative polymer materials in the inner tank to achieve natural anti-
corrosion, coupled with multiple patented technologies, eliminating water quality issues caused by
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magnesium rods in traditional electric water heaters. In terms of brands, for the new product in the
COLMO AVNAT Suite launched, Midea partnered with top-tier key opinion leaders (KOLs), achieving an
overall exposure of 500 million unique visitors (UVs). Brand searches saw a significant increase year on
year. At the same time, during the "18 June" sale, COLMO's brand asset value among its target
audience grew by nearly 45%, with the average transaction value (ATV) per customer increasing by
nearly 30% and gross merchandise value (GMV) on Douyin growing by more than 170% year on year.
At the user and market ends, COLMO has constructed a user rights system centred around the entire
lifecycle of home appliances, enhancing the overall user experience and launching highlight benefits
and services such as deep appliance cleaning, 1V1 butler service, and exclusive member activities,
covering over 1.8 million member users. At the same time, Midea has accelerated the development of
high-end, whole-scene channels, establishing nearly 900 COLMO Intelligent Experience Centres in
over 260 cities. According to data from AVC, in the first half of 2024, the proportion of COLMO products
in the high-end market increased significantly, with floor-standing air conditioners and water dispensers
capturing over 20% of the high-end market. Meanwhile, wall-mounted air conditioners and water
purifiers held more than 10% of the high-end market share.
Toshiba upholds its positioning as “the first Takumi and exquisite brand of high-end home appliances”,
committed to creating a breakthrough star-level lifestyle for consumers with its inherited Takumi and
exquisite aesthetics. As a globally renowned home appliance brand with a century of history, Toshiba
has emerged as a new choice for high-end consumer groups in the domestic market. In the first half of
2024, Toshiba's domestic retail sales exceeded RMB2.3 billion, marking a year-on-year increase of
over 47%. The brand also saw continued growth in e-commerce, with total online retail sales during the
"18 June" sale up by 45% compared to the previous year. In terms of products, Toshiba continued to
solidify its position in the high-end market for refrigerators. Toshiba 548 White Pearl Refrigerator, within
just two months of its launch, became the top-selling French-door model among joint-venture brands in
the RMB8,000 and above price segments. Toshiba Washing Machine, particularly focused on the zero
built-in models, saw a sales increase of over 300% year on year in the first half of the year. Additionally,
Toshiba's electric toilets reached retail sales of RMB100 million in the first half of the year, achieving a
year-over-year growth of 21%. Toshiba's high-end multifunctional microwave-steamer-ovens, Toshiba
Vacuum Qinmichui Rice Cooker, and Toshiba's fans such as Huaxinfeng and Fengdaiyue also
delivered outstanding market performance during the same period. In terms of brand, with a focus on
the brand proposition of “Details Matter”, Toshiba has established a complete brand communication
chain, effectively covering the 5A crowd, from brand dissemination to end empowerment. This includes
activities such as the high-end designer tour salons in 15 cities across the country, store designer
experience events, and quarterly store experiences. In terms of channel, Toshiba actively promoted
retail transformation. Toshiba completed the cooperation with over 200 brand operators, built 350 star-
level life pavilions of Toshiba brand and over 470 Toshiba brand joint halls, promoted the realisation of a
latest unified terminal image and preliminarily completed the building of the national retail system.
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WAHIN positions itself as a brand for "young, high-tech and trendy appliances", creating trendy home
environments with "Trendy Designs, Practical Functions and Fun Interactions". The brand keenly
identifies the demands in the young home appliance market, focusing on product performance
development and upgrading trendy interactive designs. In the first half of 2024, WAHIN's overall sales
approached RMB6 billion. During the "18 June" sale, WAHIN ranked among the top three self-operated
residential air conditioner brands on JD.com. The brand's hit air conditioner model, 35HE1PRO,
consistently stayed on JD.com's top-selling list and Tmall's hot-selling quiet air conditioner list. In terms
of brand marketing, WAHIN continued to engage deeply with the youth demographic, leveraging
diverse cross-industry collaborations. During China's Youth Day in 2024, WAHIN partnered with
pioneering youth communities such as Polaris Youth, using cutting-edge artificial intelligence-generated
content (AIGC) technology to enhance its marketing efforts and interact deeply with young consumers.
During the "618" festival, WAHIN teamed up with Bilibili for the Graduation Concert, offering home
appliance shopping guides to help graduates start their new life chapters. WAHIN also collaborated with
Mr. Zhang Xuefeng, a career planning expert popular with graduates, to embody the brand's philosophy
of "Growing with Young People". In the first half of 2024, WAHIN's total online exposure exceeded 430
million UVs, with over 300,000 new followers gained across platforms. In terms of products and
distribution channels, WAHIN remains committed to differentiated innovation with a focus on users,
products, and experiences, expanding into multiple categories, striving for peak product performance,
and providing users with smart, comfortable, and connected scenarios. WAHIN has also continued to
improve its conversion chain, maintain a synergy between quality and effectiveness, empower e-
commerce sales, and solidify its "Social Media + Content + E-commerce" model, driving sales growth.
G. With technological innovation as the core driving force, focused on green energy and key
industrial components, grasped growth opportunities in the industry, and provided green,
efficient and intelligent products and technology solutions for pan-industrial customers across
the world
Midea Energy Solutions & Industrial Technology is a co-builder in digital transformation and green
sustainable development across the global pan-industrial sector. With the vision of "Technology Drives
the Whole World”, it provides technologically advanced, reliable and eco-friendly key components for
the consumer appliance and industrial automation segments based on decades of experience in the
home appliance and HVAC industries, as well as offers green energy solutions across the entire energy
value chain based on its expertise in energy management. The Industrial Technology Research Institute
and a strategic development organisation have been established in 2021 to focus on both independent
development and acquisitions. Based on the solid root technology system, such as thermal
management technology, drive control technology, energy storage technology, power and electronic
technology, etc., a complete industrial chain layout and product matrix have been put in place in the
field of key industrial components and new energy. Continuous efforts are also made to increase the
investment in key and cutting-edge technologies, and enhance the introduction of senior experts in the
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industry.
In the first half of 2024, Midea Energy Solutions & Industrial Technology received quite a few awards for
its R&D achievements. The project "Air Source Heat Pump Multi-grade Heat Energy Efficient Supply
Key Technology and Application" in which Midea participated was awarded a second prize of 2023
National Science and Technology Progress Award. Midea Energy Solutions & Industrial Technology
also led the project "Research and Industrialisation of Key Technologies for Highly Adaptable Silent
Variable Frequency Compressor", which won a first prize of 2023 Science and Technology Progress
Award of China National Light Industry Council. Furthermore, the project "Research and
Industrialisation of Key Technologies for High Power Density Permanent Magnet Motors and Their
Compressors" led by Midea Energy Solutions & Industrial Technology earned the first prize in the 2023
Science and Technology Award of China General Chamber of Commerce. Additionally, Guangdong
Welling Motor Manufacturing Co., Ltd. was recognised for its "Air Conditioning Fan Motors", being
included in the eighth batch of National Single Champions in Manufacturing Industry in 2023 by the
Ministry of Industry and Information Technology and the China Federation of Industrial Economics. In
the first half of 2024, Midea Energy Solutions & Industrial Technology filed over 680 new patent
applications, with a total of more than 2,700 granted invention patents to date. It also received one Gold
Award and two Excellence Awards at the 10th Guangdong Province Patent Awards, and a Silver Award
at the 10th Anhui Province Patent Awards. The "High Torque Density, Low Torque Ripple Direct Drive
Permanent Magnet Motor" technology led by Midea Energy Solutions & Industrial Technology offers
more compact and silent motor solutions for air conditioning products. In 2024, this technology was
appraised by an industry expert panel and was recognised as “Internationally Leading”. Midea Energy
Solutions & Industrial Technology's "High-Efficiency Miniaturised Drive Motor System for Front-loading
Washing Machines" and "Integrated Rotary Compressor" both won the AWE 2024 Award for Core
Component, while the "Green High-Quality Thin Permanent Magnet Motor" was awarded the "Golden
Award Product" at the China Refrigeration Expo 2024.
By maintaining the focus on the field of core industrial components for consumer appliances, Midea
Energy Solutions & Industrial Technology continued to consolidate its leading position in the industry.
According to data from ChinaIOL.com, in the first half of 2024, Midea maintained its global number-one
market share for residential air conditioner compressors. Meanwhile, it achieved over 10% growth in
market share in industry segmentations such as dehumidifier compressors, heat pump clothes dryer
compressors, and base station air conditioning compressors. Midea also remained a top player in the
global refrigerator compressor market. At the same time, it firmly advanced structural upgrades and
overseas growth strategies, with the sales of inverter products up by more than 60% and overseas
sales rising by 14%. The global sales shares of residential air conditioner motors and laundry appliance
motors remained industry-leading, with continual breakthroughs made in key international markets and
clients. Midea Energy Solutions & Industrial Technology has been dedicated to digital transformation
and has constantly improved its production capacity. The Foshan Xingtan Base had three new
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Midea Group Co., Ltd. Semi-Annual Report 2024
production lines put into operation. At the same time, Midea Energy Solutions & Industrial Technology
is working to build an industry-leading smart manufacturing base for refrigerator compressors to further
strengthen its global supply capability for core components. Additionally, Midea Energy Solutions &
Industrial Technology has continued to invest more in R&D of chip products and technologies, as 12
chip products of four major series (namely, master control, touch control, inverter, and IPM) have been
put into mass production, with an internationally advanced performance regarding the quality indicators
for the same type of products. This is followed by the successful supply of these products to
mainstream manufacturers of household appliances.
In response to the rapid growth of the renewable energy industry, Midea Energy Solutions & Industrial
Technology focused on providing comprehensive, effective, and integrated green energy solutions
throughout the entire energy value chain. These solutions encompass large-scale energy storage,
commercial and industrial energy storage, residential energy storage, smart grids, photovoltaic, and
new energy vehicle components. In the energy supply segment, it offered photovoltaic solutions; in the
energy allocation segment, it provided intelligent power distribution system solutions; in the energy
consumption segment, it delivered new energy vehicles and pedelec components that achieve higher
energy efficiency, as well as efficient and energy-saving variable frequency drives; in the energy
regulation segment, it offered energy storage solutions that enhance load adjustability and ensure
power supply reliability; and in the energy management segment, it provided intelligent energy
measurement solutions. In the field of new energy, in the first half of 2024, CLOU Electronics
successfully delivered multiple overseas energy storage projects, particularly making a breakthrough in
the US market, which demonstrated its product strength. Domestically, CLOU Electronics gradually
expanded its influence among key clients. In terms of market, CLOU Electronics collaborated with
Midea's ToB business to establish a nationwide integrated channel sales and operational service
system, covering investment, development, and sales in the commercial and industrial energy storage
sectors. This enhanced its industry influence and rapidly built up its capabilities of developing energy
storage channels. In April 2024, with its excellent system integration capability, product innovation
capability and commercial application of energy storage, CLOU Electronics was selected by Bloomberg
New Energy Finance (BNEF), a world-renowned data provider, onto its “Energy Storage Tier 1 List 2Q
2024”. As to products, the energy storage products of CLOU Electronics' Aqua C Series received the
world's first Mean Time Between Failure (MTBF) third-party certification for energy storage systems
from the international authoritative certification body, DEKRA. This series employs advanced active
balancing technology, achieving full-chain active balancing throughout “battery cells-battery clusters-
battery boxes”, significantly enhancing the overall performance and safety of the energy storage system
while reducing operational costs. The system also utilises an efficient liquid cooling temperature control
strategy to ensure efficient and stable operation in extreme environments. By optimising the integration
of battery modules, the energy density reaches 111.47 Wh/kg, and the discharge capacity over the
system's lifecycle is increased by 10%, further reducing the levelised cost of electricity (LCOE).
Hiconics continued to invest in R&D to strengthen its core product competitiveness in the first half of
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2024. It collaborated deeply with globally renowned testing and certification organizations such as TV
and CSA. Hiconics' Residential Energy Storage and Solar Inverter Testing Centre has been certified as
a “TV Nord Witness Laboratory”, “TV Rheinland Witness Laboratory”, “TV SD Qualified
Laboratory”, and “CSA Authorized Laboratory”. And its all-in-one solution for residential energy storage
has been VDE-AR-E 2510-50 and ISO 13849 certified by TV, and the functional safety level of its
battery system has reached “PL d”, proving that this product has leading safety and reliability
performance across the industry. Hiconics' PV engineering, procurement, and construction (EPC)
business also saw rapid growth in the first half of 2024. At the 9th Century Photovoltaic Conference,
Hefei Midea-Hiconics Photovoltaic Technology Co., Ltd. was recognised with the "PVBL 2024 Fastest
Growing Company in Global PV&ES Industry". Additionally, at the 17th (2024) International
Photovoltaic Power Generation and Smart Energy Exhibition, Hiconics launched new products,
including solar inverters, charger points, balcony solar energy storage systems, and green power
solutions for villas, fully expanding its presence in the PV and storage new energy sector.
Deepening its focus on intelligent transportation components, Midea Energy Solutions & Industrial
Technology leverages its solid core technology in the consumer appliances field to quickly develop
three major product lines: Automotive Grade thermal management, electric drive systems, and chassis
actuation systems. In the first half of 2024, Midea's compressors continued to gain recognition from
multiple clients and were integrated into the best-selling models of several emerging domestic
automobile manufacturers. Additionally, for its newly launched air pump, Midea Energy Solutions &
Industrial Technology secured project contracts with renowned overseas automobile manufacturers,
marking another breakthrough in the market. Midea Welling's next-generation 900V round wire stator
was rolled out to match customers’ newly launched vehicle models through customised supply chains.
These products are at the forefront of the industry. The production line, with an automation level of up
to 93%, significantly enhances production efficiency and quality. The line not only allows for agile and
rapid model changes during the entire production process but also enables precise traceability of
process parameters during assembly. Furthermore, in April 2024, Midea executed a strategic
cooperation agreement with NIO. The two parties will collaborate extensively in areas such as new
energy vehicle components, automation, digitalisation, low-carbon, sustainable campuses, and smart
logistics, aiming to create a model of intelligent manufacturing within the new energy vehicle industry.
In the field of industrial automation, Servotronix, Hiconics, and SUNYE under Midea Energy Solutions &
Industrial Technology provide complete solutions from the sensing to the control level for customers in
the process, hybrid and discrete industries, helping industrial customers improve quality and efficiency,
and achieve digital transformation and green development. Servotronix, as a specialist in industrial
automation control, has focused on layout in programmable logic controllers (PLCs), direct drives,
standard servos, motion controllers, and industrial automation. It continues to provide motion control
solutions for clients across various sectors and expands its product technology applications into new
fields. In the first half of 2024, Servotronix launched several new products, including the BD3+PH3
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Third-Generation Standard Servo, the CDHD2S Direct Drive Extended Specification Product, the
smartPX All-in-One Servo Drive, the SC301/302 Controllers, and the PLC product SP2N. These new
offerings further enhance the competitiveness of its servo products and expand their application
scenarios. Hiconics, a leading domestic brand in the high-voltage variable frequency drive field,
continued to drive product technology development and application innovation in the first half of 2024. It
rolled out the first “high-voltage variable frequency drive high-speed direct drive electric feed pump”
solution on the domestic market of high-voltage variable frequency drives, marking a new breakthrough
for the application of high-voltage variable frequency drives. Furthermore, Midea Energy Solutions &
Industrial Technology actively works on reducer and other key component technologies. It has
completed the development of four series of harmonic reducers: High-torque, short-barrel, integrated,
and customised harmonic reducers. These products are designed to meet the performance
requirements of multi-joint industrial robots, SCARA robots, collaborative robots, and humanoid robots.
In the first half of 2024, Midea Energy Solutions & Industrial Technology made significant
breakthroughs in the application market for harmonic reducers in industrial and humanoid robots.
Thanks to industry-leading product performance and rapid service response, Midea Energy Solutions &
Industrial Technology has established partnerships with several leading international and domestic
brands. At the 2024 China Humanoid Robot Technology Application Summit, Midea Energy Solutions &
Industrial Technology was recognised as a "2024 Quality Enterprise in the Humanoid Robot Supply
Chain". Leveraging Midea's well-proven manufacturing management system and supply chain
advantages, Midea Energy Solutions & Industrial Technology now has the intelligent manufacturing
capability of producing 80,000 harmonic reducers annually.
H. Seized market opportunities amid domestic and international circulations, responded to
China’s goals regarding “carbon emission peak” and “carbon neutrality”, made technological
innovations and business model upgrades, and provided customers with full-stack solutions for
intelligent buildings
Midea Intelligent Building Technology, with the vision “to be a global leader in building technology" and
the mission of "co-building sustainable smart space", has transformed from a commercial air
conditioning product supplier to an integrated solution service provider for intelligent building
ecosystems. Midea Intelligent Building Technology has six major product manufacturing bases and
seven R&D centres worldwide, with a sales network covering global markets. It has formed the largest
and most comprehensive professional smart building product matrix and service network in China. In
the first half of 2024, according to data from ChinaIOL.com, Midea continued to rank first in terms of
domestic sales of commercial air conditioners. It also had the largest market share of around 36% and
13%, respectively, for unitary units and modular units, among other core products. And its domestic
market share of VRFs was also among the largest at over 21%. Data from the Central Air Conditioning
Market magazine show that by sales volume, Midea’s market share exceeded 14% in the domestic
market of centrifuges in the first half of 2024, representing the largest market share in the competition
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with top foreign brands in China. According to the European Heat Pump Association's data forecasts, to
achieve the REPowerEU plan, the number of heat pumps in the European market will increase to 60
million units by 2030. In view of that, Midea Intelligent Building Technology is continuously expanding its
heat pump production base in Italy, and comprehensively enhancing its competitiveness in the
European market. In March 2024, the groundbreaking ceremony for Midea Intelligent Manufacturing
(Thailand) Technology Park was held in Rayong Province, Thailand. This base will further enhance
Midea's global market competitiveness in heating, ventilation, and air conditioning (HVAC) products.
In early 2024, Midea Intelligent Building Technology unveiled new products in five major business
areas—iBUILDING, fluorine-based systems, chillers, building automation, and elevators—at the 3rd
TRUE Building Technology Summit, themed "Green Symbiosis TRUE Evolution". The summit
focused on the concept of "Digitalisation+" and showcased how the integration of core products of
Midea Building Technologies (MBT) with iBUILDING can drive digital transformation and facilitate the
upgrading and evolution of various industries. Among these, iBUILDING released the 2024
Digitalisation, Engineering, Procurement, Construction, and Operation (DEPCO) Research Report,
marking an upgrade from Version 1.0 to 2.0. DEPCO 2.0 enhances intelligent buildings across four key
dimensions: Experience, cost reduction and efficiency enhancement, operations, and environmental,
social, and governance (ESG). This makes intelligent buildings more quantifiable, assessable, and
improvable. Additionally, iBUILDING introduced the iBUILDING aPaaS platform, which assists users in
easily developing various building management applications. The fluorine-based system brand MDV
launched the Air C+ 2.0 Cross-Flow Air-Duct Indoor Unit, which features rapid sewage discharge in just
one second, quick fan wheel removal in one minute, and left-right piping connection with a single-step
operation. Additionally, MDV introduced a new-generation floor-standing indoor unit for industrial and
agricultural use, equipped with a DC-driven fan, constant airflow technology, an all-metal fan air duct,
and aluminium alloy motorised air deflector blades. The high-quality product is aimed at helping
industrial and agricultural users enhance production efficiency and economic value. The chiller brand K
WING has unveiled its next-generation, fully self-developed magnetic levitation product, designed to be
"reliable", "efficient", and "intelligent". This cutting-edge unit boasts a host of advanced features,
including integrated electromechanical control, comprehensive thermal management, magnetic
levitation bearings, and intelligent anti-surge algorithms. It also comes with a self-powering mode and
long-life backup bearings, ensuring stable and precise operation even under the most demanding
conditions. Due to its innovative design, which includes a high-efficiency compressor, a new efficient
heat exchanger, and AI-driven adaptive technology, this product achieves double Grade 1 energy
efficiency and approximately a 50% reduction in operating costs. The magnetic levitation technology
helps the high-efficiency integrated cooling station improve the overall operating efficiency. Additionally,
the system offers a streamlined selection process with its efficient software and provides intelligent
operational and maintenance services through the chiller's intelligent operations and maintenance
platform and expert diagnostics from ChillerDoctor. The building automation brand KONG has launched
the KONG DDS Smart Space Perception Control System and the KONG Smart Control HVAC
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Equipment Operation Optimisation System. The KONG Smart Control system is equipped with three
key capabilities: System simulation and prediction, real-time global optimisation, and health diagnostics
analysis, all of which contribute to the efficient operation of building HVAC equipment systems. In the
elevator segment, the brand LINVOL unveiled its Chinese name, "领沃", along with a whole-scene
smart vertical transportation solution for buildings. This includes digital and intelligent elevator solutions
tailored for commercial, residential, sightseeing, medical, villa, and private home settings under the
LINVOL brand. Additionally, WINONE has released an industrial park freight elevator solution, covering
heavy-duty freight elevators, high-speed freight elevators, and specialised freight elevators designed to
meet the demands of specific scenarios.
In the first half of 2024, Midea Intelligent Building Technology participated in several major exhibitions,
including the 14th China Heat Pump Exhibition (HPE), the Mostra Convegno Expocomfort (MCE) in
Milan, the China Refrigeration Expo 2024, the 89th China International Medical Equipment Fair (CMEF),
the 2024 ISH China & CIHE, the China Hospital Construction Conference, International Hospital Build
and Infrastructure Exposition (CHCC), and the 17th (2024) International Photovoltaic Power Generation
and Smart Energy Conference & Exhibition (SNEC). At these events, Midea showcased various R&D
achievements and solutions, including the MDV-FIT Series of large multi-split systems, the TR+ Series
of All DC Inverter air duct units, the MDV Power Series of light commercial air conditioners, the light
commercial TR Series of air duct units, the MDV industrial floor-standing units, the Xueyan Air Source
Heat Pump, the Nuanjia III Air Source Heat Pump, the Arctic HT Air Source Heat Pump, the Lieyan R32
All DC Inverter Air-Cooled Large Scroll Heat Pump Unit, the K WING 10MW Large Temperature Rise
High-Temperature Centrifugal Heat Pump Unit, the Second-Generation iEasyEnergy Energy
Management System, the R290 Thunder Commercial Heat Pump, the LINVOL EVIN-X "Age-friendly"
Retrofit Smart Lift, Midea's lift-specific air conditioners, the Smart Control Building HVAC Equipment AI
Energy-Saving System, and the Smart Hospital LIFE3.0 Solution.
In terms of market expansion, in the first half of 2024, Midea Intelligent Building Technology continued
to establish benchmark projects across various industries. For example, the Dezhou Smart Agricultural
Industrial Park Project utilised Midea's K WING high-temperature heat pump unit to implement an
energy upgrade, replacing natural gas with "1,500-metre mid-deep geothermal energy". In Chongqing
Guangyang Island, Midea's large-scale energy EPC model was adopted, achieving 100% clean energy
utilisation across the island and an overall HVAC energy-saving rate of over 50%. The Gui'an Midea
Cloud Data Centre, which implemented a dual cooling source system combining Midea's direct vent air
handling unit (AHU) and chilled water, was awarded the China IDC Industry Innovative Technology and
Product Award. Additionally, Midea provided a full range of fluorine-based system products for Alibaba's
global headquarters in Hangzhou, creating a low-carbon, energy-efficient, and green intelligent
experience. Other notable benchmark projects include China Telecom's first large-scale fully liquid-
cooled intelligent computing power data centre in the Guangdong-Hong Kong-Macao Greater Bay Area,
Lanzhou Zhongchuan International Airport, Suzhou Metro Line 6, and the Shanghai Li-Ning Centre
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Flagship Store.
In terms of technological innovation and standardisation, in the first half of 2024, Midea Intelligent
Building Technology continuously increased its R&D investment, achieving notable results. The "Air
Source Heat Pump Multi-grade Heat Energy Efficient Supply Key Technology and Application" project
won a second prize of 2023 National Science and Technology Progress Award. The "Global Low-
Carbon Heating Technology and Industrialisation of the Ultra-Low Temperature Air-Liquid Combined
Spray Heat Pump System" project received the first prize in the Guangdong Provincial Science and
Technology Progress Award. The "Research and Application of Key Technologies for Efficient Air
Conditioning and Refrigeration Plant Rooms" project won the 2023 China Award for Science and
Technology in Construction. The "Submicron Magnetic Levitation Key Technology and Its Application in
Centrifugal Compressors" project was honoured with the 2023 Chongqing Municipal Science and
Technology Award. Additionally, the "MDV-Link Communication Technology Research and Application"
project secured the 2023 Chinese Institute of Electronics Science and Technology Award. At the
beginning of 2024, Midea was approved by the Department of Science and Technology of Guangdong
Province to establish the Guangdong Provincial Key Laboratory for Thermal Energy Storage
Technology in Buildings. Midea also actively participated in the drafting and revision of various
standards, including the energy storage industry's first national standard for thermal management,
Thermal Management of Energy Storage: Refrigeration (Heat Pump) Units, and GB/T 19412 Method of
Measurement and Rating of Air Conditioning System with Cold (Heat) Storage. Furthermore, Midea's
new commercial heat pump product MARS received Ultra-High-Temperature Hot Water Performance
Certification from Intertek. The Midea iBUILDING Smart Building Series Digital Service Platform
successfully passed SOC 2 Type II and SOC 3 certifications, comprehensively covering all five
dimensions: Security, availability, confidentiality, process integrity, and privacy. This platform possesses
globally leading multi-dimensional comprehensive service capabilities and long-term, sustained
effectiveness in control execution.
I. Strengthened innovation in robotic product development, promoted high-performance
operations in the whole value chain and integration in the industrial chain, as well as
accelerated development of the robotics business for the China market
KUKA, a subsidiary of Midea, is a world-renown robotics manufacturer. Relying on its industry-leading
movement algorithm, KUKA can ensure superior movement performance of robotics products
throughout their life cycle, and its mature design concept can continuously give birth to new products
able to lead the market. KUKA, a subsidiary of Midea, is a world-renowned robotics manufacturer.
Relying on its industry-leading movement algorithm, KUKA can ensure superior movement
performance of robotics products throughout their life cycle, and its mature design concept can
continuously give birth to new products able to lead the market. In the first half of 2024, KUKA achieved
significant progress in both technological innovation and product development, launching new, higher-
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performance products targeted at segmentations. As the demand for precision assembly in high-end
manufacturing sectors such as consumer electronics, semiconductors, medical equipment, and
automotive parts continues to grow, KUKA introduced clean versions of the KR SCARA CS Series of
robots to meet the increasing demand for cleanliness. These robots cater to load capacities of 6 kg and
20 kg, offering enhanced rigidity, precision, and stability, and meeting stringent cleanliness
requirements. KUKA also launched the KR SCARA CS 60 kg Robot, which addresses the heavy load
requirements in the lithium battery industry. With a maximum payload of 60 kg, a compact design, and
a total weight of 120 kg, it boasts an industry-leading load-to-weight ratio of 1:2, a standard cycle time
of 0.8 seconds, efficient and rapid completion of work, and IP54 protection, making it highly resistant to
water and dust, and capable of operating in harsh environments. To address industry pain points and
demands such as insufficient production takt time, limited workspace, and high precision requirements
in specific scenarios, KUKA has launched new products in the KR Cybertech-2 Series: KR 12 R1450-2
E and KR 35 R1840-2 E. These new products feature a lightweight design and stable performance,
meeting automation requirements in various industries, including automotive manufacturing, electronics
assembly, metal processing, and food processing. KUKA has also launched a new version of the KR
FORTEC Industrial Robot, which features dynamic performance, cost-efficiency, and reliability. With its
high dynamic performance and compact form, this robot is particularly well-suited for tasks such as
material handling and spot welding. The product includes an extendable arm that can handle loads of
up to 240 kg within a reach of 3,700 millimetres. The cross-model modular design of this heavy-duty
robot ensures high component transferability and reduced spare parts storage costs, enabling a lower
total cost of ownership (TCO). At the LogiMAT 2024 in Stuttgart, KUKA introduced KMP 3000P, an
omnidirectional heavy-duty autonomous mobile robot (AMR) that integrates laser Simultaneous
Localization and Mapping (SLAM) and QR code navigation technology. It has a rated load capacity of
3,000 kg, enabling omnidirectional movement, 360-degree safety coverage, five-layer full-dimensional
protection, and rapid inductive charging. The robot features a new inductive charging system, enabling
round-the-clock operation, and integrates a 3D visual system and laser scanner to ensure the flexibility
and safety of the working environment. It is suitable for material handling and assembly tasks in
industries such as automobiles, aerospace, PV, lithium batteries, and construction machinery. In the
field of logistics automation, Swisslog Logistics, a subsidiary of KUKA, has launched the MegaStore
pallet carrier shuttle system. This is a multi-deep automated storage system for handling palletised
goods. It offers a highly customisable logistics solution with a high return on investment. The system
supports a maximum load of 1,500 kg, with the mother vehicle reaching speeds of 3.5 m/s and the child
vehicle at 1.36 m/s. It also features a single-column high-speed hoist that can reach heights of up to 40
metres, with a lift speed of 1.5 m/s. The system is not only efficient and reliable but also provides high
storage density and throughput, significantly enhancing storage capacity by 40-60% compared to
traditional flat storage. KUKA has also introduced a new version of its KUKA.MixedReality Software,
which integrates augmented reality (AR) technology. This software allows users to visualise robot cells'
environments in real-time via a smartphone, facilitating quick, safe, and intuitive robot start-up. By
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linking the physical and virtual worlds, it provides clear and concise digital information about the robot
cell's environment, enabling users to swiftly detect and correct errors, thereby accelerating installation
and enhancing safety. Moreover, KUKA and Swisslog are actively exploring the application of AI in the
industry. KUKA is training AI chatbots with extensive robot programming codes and is working to make
its AI chatbot available to customers, aiming to enable them to operate robots using voice commands in
the future. Swisslog is leveraging AI, cameras, and robots to interact seamlessly, delivering higher-
quality services. Its AI models are already capable of identifying waste and differentiating between
shampoo and shower gel, enabling the automatic picking of various items to meet the combined
delivery needs of customer orders.
In terms of market expansion, in the first half of 2024, KUKA concluded a framework agreement with
Volkswagen Group to supply over 700 robots for body-in-white production at Volkswagen in Spain over
the course of this year and the next two years, including the popular KR QUANTEC Robot. KUKA is
supporting its customers in transitioning to more sustainable transportation methods with cutting-edge
technology. KUKA will provide a customer in the automotive industry with 23 friction stir welding units
integrated with KUKA's industrial robots for an electric vehicle welding production line. This order is
worth tens of millions of euros. KUKA is also supplying its KUKA iiQoT System to automotive supplier
BOOSTER Precision Components GmbH. This system helps monitor the entire robot fleet and
consolidates all essential information in an open and clear manner on the KUKA iiQoT Dashboard,
making the robots smarter. By collecting intelligent data on the secure platform Microsoft Azure,
KUKA's customers can minimise machine downtime in their production operations and maximise
uptime.
KUKA continues to advance its resource integration and expansion in the Chinese market and deepen
organisational transformation and product iteration while focusing on industry applications and key
customers. In terms of market, according to statistics from MIR, KUKA's domestic market share of
industrial robot sales increased to around 7.8% in the first half of 2024. KUKA China saw a significant
rise in orders within the consumer electronics sector during this period. With the accelerated global
expansion of Chinese manufacturing, KUKA China's overseas orders also grew substantially year on
year. Regarding the mobile robotics business, the overseas operating revenue accounted for nearly 50%
in the first half of 2024. Fully leveraging its overseas channel network and market access advantage, it
supports market development abroad with China’s homegrown robotics. Leveraging the multi-industry
resource coordination advantage of Midea Group, KUKA China continues to focus on market
segmentations such as glass, education, and aerospace, establishing multi-level partnerships with
leading domestic enterprises. It has also set up corporate business modules to drive the acquisition and
conversion of opportunities in centralised procurement. In terms of manufacturing and supply chains,
KUKA China has further increased its localisation efforts, extending the range of localised products
from robot bodies to integrated applications, thereby enhancing product competitiveness. The
localisation of materials for robot bodies accelerated. Special efforts have been made to localise the
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manufacturing of overseas products, including the heavy-duty automated guided vehicle (AGV) robot,
as well as Swisslog's system integration projects such as PTS, Unipick, Megastore, and SuperCarry. In
the first half of 2024, KUKA Robotics Guangdong Co., Ltd. was recognised in the "2023 Industrial
Internet of Things Pilot Demonstration List" of the Ministry of Industry and Information Technology and
the "2024 Guangdong Provincial Single Champions in Manufacturing Industry" of the Department of
Industry and Information Technology of Guangdong Province for its "High-Quality Design Verification
and Manufacturing System Platform Development for High-End Heavy-Duty Robots Based on Industrial
Internet of Things" and "Medium to Large Payload Multi-Functional Six-Axis Industrial Robots".
Furthermore, KUKA also proactively assisted Midea Group in boosting its intelligent manufacturing. By
June 2024, the robot density of Midea reached 620 units per 10,000 persons, and Midea Group will
further increase its input to boost its intelligent manufacturing capacity.
J. Deepened the long-term incentive and protected the interests of shareholders
In the first half of 2024, Midea continued to encourage the core management to take responsibility for
the Company’s long-term development and growth by further enhancing its long-term incentive
schemes. Midea has launched nine stock option incentive schemes, seven restricted share incentive
schemes, eight global partner stock ownership schemes, five business partner stock ownership
schemes and the 2023 and 2024 stock ownership schemes, which have helped, in a more effective
manner, to align the long-term interests of senior management and core business backbones with that
of all shareholders. Midea Group protects its shareholders’ interests by ensuring a consistent dividend
policy. It shares its growth with shareholders with a cumulative amount of cash dividend payouts that
exceeds RMB107 billion since the Group’s listing in 2013. In addition to the consistent dividend payouts,
the Company has carried out a string of share repurchase plans. To further stabilize the market
capitalization and protect the shareholders’ interests, the Company has launched share repurchase
plans for four consecutive years since 2019. And the repurchased shares would be used for equity
incentive schemes and employee stock ownership schemes.
3. Core Competitiveness Analysis
With the following core competitive edges, Midea is able to fully grasp development opportunities and
achieve significant growth.
A leading global technology company in smart home and commercial and industrial solutions
As a leading global technology company in smart home and commercial and industrial solutions, Midea
provides services to customers in over 200 countries and regions. It leads the way in various markets,
including various household appliances and their key components, commercial air conditioners,
robotics and automation. In 2023, Midea Group’s revenue reached RMB373.7 billion, marking its ninth
consecutive year on the Fortune Global 500 list, demonstrating its global leadership and outstanding
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performance. Midea persists in consolidating its market leadership in the global home appliance
industry. According to a report by Frost & Sullivan, based on sales volume and revenue in 2023, Midea
is the world’s largest home appliance supplier. Currently, Midea has an extensive brand matrix targeting
high-end, mass-market, and young consumer segments, and provides various smart home appliance
products. Based on value of retail sales in 2023, Midea’s products ranked first in eight categories in
both online and offline markets in Mainland China. Furthermore, Midea has become a sizable provider
of commercial and industrial solutions, leading the way in multiple markets. According to production
volume, Midea ranked first in the residential AC compressor market in 2023, with a global market share
of over 45%. Also, based on production volume, Midea ranked first in residential air conditioner and
laundry appliance motors, with global market shares of 40% and 22%, respectively. According to a
report by Frost & Sullivan, based on revenue in 2023, Midea is the largest commercial air conditioner
supplier in Mainland China and the fifth largest globally. Additionally, according to Frost & Sullivan’s
report, KUKA Group, a subsidiary of Midea, is one of the “Big Four” industrial robot companies globally
and the second largest heavy-duty robot company based on sales volume and revenue in 2023.
World-leading research and development capabilities for sustainable innovation
Midea possesses leading research and development capabilities and is committed to allocating
significant resources to R&D efforts. From 2021 to 2023, the total R&D investment exceeded RMB39
billion, with R&D spending surpassing RMB7.6 billion in the first half of 2024, showing a year-on-year
growth of over 15%. As of 30 June 2024, Midea has over 23,000 R&D personnel worldwide, accounting
for over 50% of its non-production staff. According to a report by Frost & Sullivan, as of 31 December
2023, Midea ranks among the top 10 globally in the total number of patent families, with over 28,000
invention patents.
Midea has established and continues to enhance its R&D system, including research units and teams
within the Corporate Research Centre (CRC) and various business divisions. Based on research on
technology, users, and markets, Midea has adopted a “Three Generations” R&D model and
continuously optimised the “Four-Tier R&D System”. This system relies on the CRC for cutting-edge,
basic, and common technologies, while business divisions focus on product technologies, collectively
constructing world-class R&D capabilities. Midea strengthens the operation mechanism of the “Three-
Tier Technical Committee System”, as well as drives the exploration of cutting-edge technologies,
breakthroughs in core technologies, and the layout of technology commercialisation projects. It also
promotes the alignment of technology strategies with medium and long-term product planning, driving
growth through the dual-wheel propulsion of technology and products. The building of a global R&D
network has been accelerated. The Group has set up a total of 33 R&D centres in 11 countries. With
the “2+4+N” global R&D network, it has gained the advantage of scale in R&D across the world.
Domestically, Midea Global Innovation Center in Shunde District, Foshan City and Midea Global
Innovation Center in Shanghai are the cores of Midea’s R&D arm. Overseas, with Midea America
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Research Center, Midea Germany Research Center, Midea Japan Research Center and Midea Italy
Research Center as the cores, Midea makes use of the regional technological advantages, integrates
global R&D resources, and builds complementary global R&D capabilities. Following the strategy of
“Technology Leadership”, it attracts more and better talents, particularly top technology leaders and
talents, to build a competitive edge of talents.
While strengthening its global R&D network, Midea also works on constructing an open platform of
innovative ecosystems. Through deepening the implementation of technology projects to integrate
quality technological resources across the world, a global innovation system has been put in place. By
way of integrating various resources of large companies, technology companies, universities, research
institutes and innovation consulting agencies, a technology ecosystem has been put in place and
continuously expanded, which has access to enormous resources for technological innovation.
Additionally, a scientist system has been established with seven academician workstations/workshops
and 18 academicians on more than 200 cooperation projects. These projects cover green, energy-
saving, health, intelligent, robotics, automaton, medical and energy technologies, among others. In
terms of basic research, the Group cooperates with domestic and foreign scientific research institutions,
such as the University of Illinois at Urbana-Champaign, Purdue University, The University of Sheffield,
University of Minnesota System, UC Berkeley, Tsinghua University, Shanghai Jiao Tong University,
Zhejiang University, the Chinese Academy of Sciences, Harbin Institute of Technology, Xi’an Jiaotong
University, Huazhong University of Science and Technology, South China University of Technology, and
Jiangnan University, in order to establish joint labs for deepening technological cooperation. The Group
also upgrades and make innovations on cooperation models by carrying out strategic cooperation with
tech companies such as BASF, Honeywell, 3M, and SCHOTT to build a global innovation ecosystem
through multiple channels. Midea continues to achieve major technological breakthroughs and product
innovations through R&D investment, and its R&D achievements continue to optimise its product
portfolio and refine its brand image, as well as contributing to the technological progress of the industry.
High-performance operations and digitisation throughout the value chain
Every operational link of enterprises, including supply chain, manufacturing, sales, and product
development, faces intricate processes and vast scales. Every year, Midea procures raw materials and
components worth hundreds of billions of RMB from over 5,000 suppliers and sells products across
more than 200 categories to tens of thousands of small and medium-sized retailers and other
customers. Therefore, digitisation is crucial for the Company’s operations. More than 5,000
professionals within the Group are dedicated to the digital transformation and upgrade of the Group.
In terms of the supply chain, Midea’s Integrated Supply Chain (ISC) management system sets an
example of excellent supply chain management operations. It provides a vital system architecture for
efficiently fulfilling customer orders and managing global supply chains, achieving intelligent
replenishment and faster inventory turnover, and enhancing the collaborative efficiency of production,
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supply, and sales throughout the value chain. The ISC management system enables seamless
connection with suppliers and automation of the procurement process based on sales and inventory
data. Supported by an efficient supply chain and big data, inventory building and replenishment of the
entire warehouse product portfolio can be achieved in an efficient manner, greatly improving production
efficiency.
With respect to intelligent manufacturing, leveraging digital technologies, Midea is committed to building
high-quality, flexible, green and efficient factories. Five factories have been recognised as “Lighthouse
Factories” by the World Economic Forum, representing significantly improved production efficiency.
After digital transformation, the residential AC factory in Nansha, Guangdong, has reduced operating
costs by 23% and increased production efficiency by 36%. The experience of Lighthouse Factories is
rapidly promoted across multiple production bases globally. Midea’s intelligent manufacturing
capabilities combined with efficient supply chains enable a rapid response to customer demands,
aligning production with customer needs, increasing production efficiency, and reducing inventory.
In terms of market channels, Midea leverages digital technologies to directly connect with an extensive
network of small and medium-sized retailers, continuously optimising sales channel networks. Through
the “Midea Cloud Sales” platform, small and medium-sized retailers can directly order products,
promoting the sales of core products and new products. Midea continues to enhance the functionality of
“Midea Cloud Sales” and constructs the “Midea Cloud Sales+” ecosystem covering all tiers of markets.
As a core competitive edge, Midea possesses an exclusive store system that covers extensive markets.
And it says steadfast in promoting the enhancement and transformation of the exclusive store system in
service, operation, and comprehensive retailing, among other capabilities.
In terms of product development, Midea improves its product development capabilities through
digitisation. By establishing a digital product planning platform, Midea rapidly translates technology into
products that meet customer needs. It keeps advancing platform modularisation to increase the
accuracy of product planning. During the period from 2020 to 2023, the project development cycle
(calculated based on the average time from project initiation to completion) has been shortened by
approximately 30%. Leveraging its comprehensive product portfolio and considerable economies of
scale, combined with a digital consumer engagement model, Midea continuously enhances user
research and insight capabilities to assist in formulating efficient research and development strategies
and developing products and solutions that meet market demands.
High-performance operations and economies of scale throughout the value chain has brought
operational efficiency advantages that are difficult to replicate. Midea’s “T+3” model, supported by
comprehensive digitisation, efficient supply chain management, and production and sales channel
operations, has led to improvements in multiple efficiency indicators year by year. For example, the
average cycle time from order placement to delivery in the domestic market decreased from 21 days in
2021 to 12.5 days in 2023, significantly lower than the industry average.
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A comprehensive and continuously deepening global network
In the domestic market, with its continuous efforts over the years, Midea has formed a multi-channel
network which has a complete business layout and covers a wide range of areas, thus meeting the
purchase needs of online and offline consumers for household appliances. Midea continues to improve
its offline business layout around user needs, and has created a network layout of comprehensive
household appliance stores, specialty stores of self-owned products, traditional retailers and e-
commerce franchise stores, covering the entire market from first-tier cities to townships. It also provides
professional scenario-based solutions for corporate customers. Particularly, Midea boasts a unique
exclusive shop system in the industry with tens of thousands outlets, where various needs of users from
new decoration to updates can be met in pre-decoration stores, flagship stores, professional stores,
combo stores and other stores. Midea continuously provides industry-leading digital platform services to
retail stores. It also focuses on expanding and constructing premium brand stores for COLMO and
Toshiba. Centred around "smart suite operation" and "entire-house renovation solutions", Midea actively
cooperates with home decoration, furniture, building materials, and design channels, seeking to capture
front-end traffic. In 2023, the retail sales on the pre-decoration market saw a year-on-year increase of
over 80%. With exclusive stores as the core, the Company builds a “Midea Cloud Sales +” ecosystem
covering markets at all tiers, establishes an exclusive store system with core competitiveness for
various markets, as well as firmly promotes and transforms the exclusive store service, operation, and
all-product-category retailing capabilities, among others. In addition, Midea is also accelerating the
development of new channels such as Pinduoduo, Douyin, Kuaishou, and Xiaohongshu. These efforts,
together with membership operation, product suite promotion and intelligent transformation, can drive
sales and user growth.
In overseas markets, Midea has put in place a global network for research and development,
manufacturing, and marketing, representing the capability for global development. With 17 overseas
research and development centres in 10 countries, Midea integrates global R&D resources to build
complementary advantages in global technological research and development. Among the 43 major
production bases globally, 22 are located overseas. As such, Midea is able to realise global production
and delivery, seizing growth opportunities in overseas markets. Overseas sales contribute to over 40%
of Midea’s total sales, with products exported to over 200 countries and regions worldwide. In many
overseas markets, online and offline sales networks have been established, with approximately 5,000
after-sales service outlets. Continuously deepening the application of digital sales platforms in overseas
markets, over 9,000 retailers in Southeast Asia have joined Midea’s overseas sales platform. As of 30
June 2024, Midea has over 35,000 overseas employees. Midea also continuously deepens and
expands its global business network through strategic acquisitions and joint ventures. The rapid growth
of Midea’s overseas original brand manufacture (OBM) business is evident, with OBM revenue
exceeding 40% of overseas smart home revenue in 2023. Mainly featuring Toshiba, Midea, and
Comfee brands, OBM products have demonstrated strong competitiveness in numerous overseas
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markets. In 2023, on the Amazon platform in the United States, the market shares of Midea’s own-
brand window air conditioners and microwave ovens approached 30% and exceeded 40%, respectively.
Additionally, TLSC achieved a turnaround from loss to profit within approximately three years after the
acquisition, showcasing Midea’s capabilities in global business integration and global brand
management.
Sustained growth in the business of commercial and industrial solutions
Midea has established a rapidly growing business of commercial and industrial solutions. Revenue from
this business as a percentage of total revenue has increased from 18.5% in 2020 to over 26% in 2023,
with revenue from the said business approaching RMB100 billion in 2023. Commercial and industrial
solutions have become one of the main engines driving the continuous growth in Midea’s business.
Midea Energy Solutions & Industrial Technology, with technology as the core driver, commands key
technologies in “green energy” and “key industrial components”. With a rich brand portfolio, it continues
to deepen cooperation with customers in high-growth areas such as consumer appliances, industrial
automation, photovoltaic energy storage, and intelligent transportation, among others. It provides global
pan-industrial customers with green, efficient and intelligent products and technological solutions. The
business group continues to increase investment in key and cutting-edge technologies. Through the
acquisition of new energy companies—CLOU Electronics and Hiconics, it has entered the energy
storage industry with tremendous market potential.
Midea Intelligent Building Technology offers integrated solutions for intelligent buildings in various fields,
including infrastructure, utilities, industrial parks, and agricultural facilities. Its comprehensive smart
solutions mainly cover smart low-carbon solutions, smart rail transit, smart hospitals, and smart parks.
With the digital platform iBUILDING at its core, it empowers building equipment and enhances the
operational and management efficiency of building facilities. It has successfully provided solutions for
landmark projects such as the Jakarta-Bandung High-Speed Railway in Indonesia and the National
Stadium (Bird’s Nest) in Beijing.
With KUKA Group at its core, the robotics and automation systems business, as one of the world-
renowned providers of intelligent robotic automation solutions, KUKA provides comprehensive products,
system integration, and services to customers in various industries such as automobile, electronics,
consumer goods, logistics/e-commerce, healthcare, and more. KUKA continues to consolidate and
enhance its market leadership in the field of robotics and automation solutions. In 2023, both revenue
and profit of KUKA Group hit record highs. Its business performance in China was particularly
outstanding, with revenue contribution from KUKA China increasing from 15% in 2020 to over 20% in
2023.
Midea possesses diversified commercial and industrial solutions, providing integrated solutions to
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clients across multiple industries. In horizontal expansion, it consistently enriches product categories,
expands scale, and enhances efficiency advantages. In vertical expansion, it continuously develops
and iterates compressors, motors, and other key industrial components, and enters cutting-edge
technology fields through acquisitions, such as servo systems and industrial robots. Through both
horizontal and vertical expansions, Midea creates industrial synergies, laying a solid foundation and
injecting strong momentum for the sustained growth of its business of commercial and industrial
solutions.
Advanced corporate governance and values
Midea is built to grow on the back of advanced governance mechanism, future-proof values, and
managerial mindset growth. Midea’s corporate governance emphasises the shared responsibilities,
rights and obligations, striving to establish an internal entrepreneurial group and fully inspire
entrepreneurial spirit. Midea has long been committed to creating maximum value for employees,
customers, shareholders, and society. To recognise employee contributions and acknowledge
performance, Midea has established a multi-tiered long-term incentive mechanism primarily based on
stock incentives. As of 30 June 2024, Midea has launched nine Stock Option Incentive Schemes, seven
Restricted Share Incentive Schemes, and 15 Stock Ownership Schemes for its management teams and
key employees at different levels. Midea is committed to providing the best experience for customers,
striving to deeply understand their needs and preferences, and optimising product development and
business models accordingly. Over the years, Midea’s product portfolio has continuously expanded to
meet diverse customer needs. The trust and support from shareholders are crucial to Midea’s
development. Midea is dedicated to creating value for shareholders and sharing growth with them.
Since its listing in 2013, Midea has paid out a total of over RMB107 billion in cash dividends and
implemented share repurchases totalling over RMB27.1 billion. Midea attaches great importance to
environmental and social responsibility, striving for sustainable development. It was named to the 2023
Fortune China ESG Impact list, and in “Forbes China 2023 ESG Inspiring Cases” selection, it was
recognised as one of the ESG Case Companies with Practical Reference Significance.
Development strategies of the Company
Midea adheres to the strategic focus of “Technology Leadership, Direct to Users, Digitization &
Intelligence Driven, and Global Impact”, focuses on “Comprehensive Digitalization and Comprehensive
Intellectualization”, drives balanced development of ToC and ToB businesses under the guidance of the
strategic focus, as well as builds a complementary cycle among diverse industries. The Company
drives profitability improvement through the enhancement of product strength and core technologies in
the ToC end, providing strategic support for the transformation of the ToB business. Also, it continues to
strengthen its globalisation capability, striving to transform from a China-based company to a global one.
While maintaining its superiority in efficiency, the Company drives growth through innovation and builds
product and technological advantages. Midea are built to grow on the back of advanced governance
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mechanism, future-proof values, and managerial mindset growth. Midea will continuously improve the
governance mechanism by empowering responsibilities, rights and obligations, clarify decentralization
and authorization, constantly refine the agent mechanism, optimize the incentive and constraint system,
encourage entrepreneurship and boost organizational vitality, and establish a flat and agile organization
and optimization process. It will also adhere to the values of long-termism and altruism, truly put
employees, users, customers and partners at the center of all things, and improve the EHS governance
and ESG rating. Additionally, the Management will endeavor to achieve all-round growth both spiritually
and intellectually. Meanwhile, Midea will continue to improve the talent structure, build diverse teams
that are inclusive and collaborative, and create a simple, straightforward, flat and equal environment. In
the meantime, it will constantly improve consistency management across the Group, so as to achieve
consistent operations, corporate culture and values and philosophies, which will ensure the sustained
and steady development of the Company.
With strategic certainty, Midea is well prepared for uncertainties in the future. It firmly upgrades its
business models. In terms of the home appliance business, the key is to achieve further growth through
business model upgrades such as the Chinese Market DTC reform and the Overseas OBM Priority
strategy, and to explore new approaches to continuously drive cost reduction and efficiency
improvement through the combination of the through-value-chain, no-breakpoint, seamless, and
people-never-see-people digitalisation capabilities and lean management. It is also important to insist
on structural upgrading, i.e. adjusting large structures, refining small structures, and creating new
structures. The key is to provide high-quality, differentiated products. The Company continues to invest
in and improve the "Three Generations" R&D system to increase added value and profitability of
products, better support technological research and development and structural upgrading, and
continue to invest in the future in order to achieve stable and sustained high-quality growth. In addition,
Midea insists on business upgrading. By further increasing investment in the ToB business,
continuously improving product strength, realising value chain autonomy, grasping opportunities to
quickly seize market share, the Company fully fires up the "Second Growth Engine". With the customer-
oriented principle as the root of corporate innovation and reform, the Company accelerates DTC
breakthroughs. Grasping capital flow, cargo flow, information flow and other information of the whole
value chain through direct contact with customers/users, the Company is able to deepen the
implementation of an online system for policies and visualisation of the whole order process. By doing
so, it can gather retail data in real time, and acquire first-hand information on customer needs for its
reform and innovation. Further, the Company shortens the factory-to-user process through the
development of online capabilities and the further online-offline integration, so that the products and
services can be delivered to the users at the lowest cost and the fastest speed.
Key operation points in the second half of 2024:
In the second half of 2024, Midea will adhere to the four core strategic focuses with “Technology
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Leadership” at the centre. It will further solidify the operational principle of "enhancing value chain-wide
efficiency alongside structural growth through upgrades". enhancing value chain-wide efficiency will be
achieved by improving efficiency and reducing costs to establish a cost advantage. Structural growth
through upgrades will involve creating a competitive advantage based on timing differences. Midea will
continue to drive domestic DTC reform, the Overseas OBM Priority strategy, and the industrial upgrade
strategy. The Company will also firmly implement the following four core tasks: Firstly, Midea will firmly
adhere to the OBM Priority strategy and fully expand into overseas markets. Midea will completely
change its approach, learn from outstanding overseas companies, and strive to become a global
enterprise. Wherever there is demand for household appliances, Midea will seek growth opportunities.
At the same time, Midea will continue to promote the layout of overseas factories, further increase
overseas investments, and strengthen brand promotion. Secondly, Midea will actively engage in dual
competition in both the digital and physical worlds. This approach will help Midea establish a
competitive advantage based on timing differences. Digitalization and artificial intelligence are inevitable
trends. Midea will actively embrace generative AI and other new technologies and applications. Midea
will use digital and AI technologies to reconstruct its traditional value chain, creating new competitive
advantages. Thirdly, Midea will develop the "Three Generations" capability. Global development
experience over the past century shows that technological progress, transformation and innovation are
the core of any corporate succession and industry transition. Achieving industrial upgrading is the key to
ensuring long-term success. The critical aspects of developing the "Three Generations" capability are
breaking through mental barriers, clarifying key technological directions, and identifying critical technical
talents. Fourthly, Midea will continuously optimize its business structure, organizational structure, and
personnel structure. The business structure will be dynamically evaluated and adjusted in a timely
manner; the organizational structure will be constantly reviewed and refined; and the personnel
structure will be continuously optimized. These efforts should yield positive results in the Company's
financial performance and key data indicators.
Midea will strive for a bigger business size through structural growth, globalised regional expansion and
upgrading of the ToB business. Continuous efforts will be made to optimise cash flow, improve cost
management and focus on developing competitive businesses at both the strategic and operational
levels. By working on overall efficiency improvement instead of partial fine-tuning, Midea is in a position
to better cope with market volatility and uncertainty. It will endeavour to achieve its annual objectives in
a steady and high-quality manner. Meanwhile, further efforts will be made to promote the
decentralisation and improvement of the governance mechanism, develop an internal entrepreneurial
group, and fully stimulate entrepreneurial spirit. Midea will strive to be the best it can be in a long cycle,
looking at its own problems and shortcomings in a calm and rational manner. Key tasks for the second
half of 2024 include:
a. Based on the core strategy of “Technology Leadership”, Midea will increase investment in R&D,
improve talent structure, carry out the tasks of technology innovation, product innovation, business
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model innovation, and process innovation, as well as build a mechanism that can support “Technology
Leadership”. Midea will continue to promote the transformation of R&D organisations, enhance
research capabilities, establish the scientist system, attract global research talents and high-end R&D
personnel, improve the R&D network, accelerate the cultivation of overseas R&D capabilities,
strengthen the development and management of overseas R&D organisations, advance the planning
and implementation of overseas R&D centres by various business units, and focus on the construction
of research organisations and overseas OBM R&D teams as well as talent structure to develop
differentiated products with potential brand effects for its global development. Through the
implementation of the “Three Generations” plan, it will promote the improvement of operational quality,
establish a quantified evaluation system for the “Three Generations,” use leading research projects and
common technology projects as leverage, and continuously build a future technological leadership moat
from the dimensions of technology, patents, and standards. It will continuously optimise the structure of
projects related to exploring cutting-edge technologies, breakthroughs in core technologies, and
technology transfer to promote the implementation of research results and enhance product capabilities.
It will continue to advance the product technology planning of dual high-end brands, guide the product
structure upgrade of relevant product business units with “big structures, small structures, and new
structures”, and further support business development through the layout and implementation of new
products.
b. Midea will keep a high-quality development direction and stick to organic, sustained and effective
organic growth. In the process of implementing new strategies to boost new growth areas, the key lies
in improving operational efficiency. Therefore, Midea will optimize the delivery cycle, enhance the
inventory turnover, improve the cash cycle, and implement the shared inventory system. Being
customer-oriented, Midea will strive to be “Direct to Users” through user research, user insight, product
plan transforming and user operation. Midea will promote the T+3 business model reform and high-
performance operations in the whole value chain in every link from product planning to after-sales
service, so as to increase efficiency in the whole value chain and the data-driven efficiency. Channel
reform will be firmly pushed forward for the front-end market. In order to win in competition, it is
important to develop high-end products to refine the product mix. Midea will plan for, establish and
refine business middle platforms, especially data and technology middle platforms. In the meantime, it
will maintain overall consistency by sticking to “One Midea, One System, One Standard”. In face of
common problems such as fluctuations in exchange rates and prices of bulk raw materials, as well as
sourcing management, Midea will firmly promote its internal coordination and sharing mechanism and
keep perfecting the relevant solutions. It will also maintain effective investments, control non-operating
expenses, increase labor productivity, improve human resource allocation efficiency, promote lean
management and provide fresh impetus for continual growth through relentless innovation.
c. In the domestic market, based on the “Direct to Users” strategy, Midea will continue to deepen the
reform of its organisational structure, improve retail capacity, and develop user operation and back-end
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capacity. Midea will also commit itself to intelligent experience terminals and user experience. In offline
channels, Midea will continue to deepen the DTC transformation, focusing on cost, experience, and
efficiency, with digitization as the main driving force. Midea will drive the transformation of the value
chain and business model around customers and users, focusing on developing retail capabilities and
enhancing user experience. Midea will achieve digital operation empowerment centered on the
customer by providing delivery visibility, overdue compensation, simplified online policies, and cloud
warehouse empowerment mechanisms, all of which will enhance delivery efficiency. Midea will promote
inventory sharing and the integration of online and offline product pools to implement a shared
inventory system, improving store inventory rates and turnover efficiency. Midea will use O2O as the
core method for offline stores to acquire and retain users and will accelerate its coverage and
application. Midea will implement cost-reduction and efficiency-enhancement initiatives such as cloud
warehouses, home delivery, O2O, cloud credit, and cloud warehouse return/exchange processes.
Midea will focus on tool iteration to promote merchants' full-category operations, improving the quality of
the shared inventory system, with a user-centric approach in the b2C channel. Midea will empower
users with digitalized full-link retail, continuously optimizing user rights, improving the user experience
across the entire service chain, and cultivating user operation capabilities and intelligent analysis and
decision-making abilities. Midea will integrate C-end resources and unify online and offline entry points
to aggregate its own traffic, driving direct user engagement. Midea will focus on integrating distribution
tools and upgrading the user experience across thousands of stores, and promoting short-chain
transformation. In online channels, Midea will optimize the input of on-site and off-site traffic resources
and strengthen user operations, particularly in content/interest e-commerce channels. Midea will
continuously enhance the construction of the online customer ecosystem, advance the simplification
and digitalization policies, and further improve the customer ecosystem, making cooperation between
customers and Midea simpler and more efficient. Midea will also further promote the integration of
multi-platform online and offline operations, unify cross-category marketing, and continuously deepen
the shared inventory capability across online and offline channels. In marketing, Midea will continue to
expand the OMO multi-channel platform marketing capabilities, empowering retail customers and
experience consultants. Midea will link with social media platforms such as Douyin, Meituan, and Amap
through digital marketing systems to co-create content marketing activities and connect with a wide
range of users without boundaries. Midea will focus on nationwide marketing activities and high-quality
content marketing centered around trade-in and green branding, driving the transition to green, low-
carbon consumption and lifestyle. The annual focus will be on the "trade-in" campaign, launching an 8
billion RMB subsidy plan to strengthen Midea's brand effect. Midea will continuously expand the base of
private domain users to enhance user satisfaction and loyalty. In user operations and services, In user
operations and services, Midea will integrate offline and online experiences across private and public
domain markets, increase investment in user rights, enhance user online interaction, and deliver a full-
process, high-standard service within private domain traffic, thereby improving the consumer
experience. Through refined hierarchical management of service outlets and engineer training
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certification systems, service capabilities and service quality will be enhanced. Midea will expand
customer service evaluation scenarios, achieve digital and intelligent analysis of evaluation results, and
implement closed-loop management. Midea will build a service product operation platform through
enhancing fulfillment capabilities, optimizing products, and reshaping channels, enabling commercial
operations and continuously advancing various reform projects to provide users with a one-stop service
experience. Midea will improve the service quality of high-end brand engineers by further optimizing
high-end brand services, settlement, and return/exchange processes. Midea will also pilot innovative
measures in certain regions, such as direct manufacturer management and dedicated engineers, to
explore new operational models for high-end home appliance services. In the field of whole-house
intelligence, Midea will continue to advance AI generative models and apply them to products,
launching exclusive AI service capabilities for whole-house intelligent users. Midea will provide users
with a new experience of proactive sensing, proactive reminders, proactive adjustment, and proactive
service, based on products like smart central control. Midea will develop a whole-house intelligent
system that leads the industry in key indicators, based on a system architecture of "omnidirectional
connection, home space sensing, natural interaction, and proactive decision-making". Midea will
continuously enrich and improve the differentiated product matrix, emphasizing the deeply integrated
user experience of "smart home appliances + smart home". Midea will rapidly expand the sales network
for whole-house intelligence using the existing sales system, diversify channel structures, and introduce
a one-stop product suite-based shopping experience that includes both home appliances and smart
home products. Midea will strengthen the "smart home and home appliance integration" sales model.
Midea will strengthen the construction of the intelligent service network, covering multi-regional
integrated sales and service capabilities, promoting growth in intelligent user sales. Midea will build a
user-centric whole-house intelligent delivery system, ensuring service chain visibility online, and will
guarantee the user experience through an exclusive service steward mechanism.
d. In the overseas market, Midea will adhere to the front-end organisational system and regionalised
development as the core, accelerate the front-end infrastructure construction, build a front-end market
resource sharing platform, cultivate an international organisation and talent system, particularly
emphasising the strengthening of localisation teams, and initiate the “Global Talent Development and
Reserve Plan”. Midea will firmly invest in the construction of its proprietary brands, focusing on products,
retail, and channels. On the product side, Midea will continuously improve product efficiency, adhere to
the “OBM Priority” strategy, and promote the differentiation and competitiveness of proprietary brand
products. On the channel side, Midea will continue to focus on the development of overseas e-
commerce, improve consumer experience at retail stores, product-centric, efficiency-oriented, actively
exploring new models, embracing AI tools, focusing on the entire value chain operation, achieving high-
quality growth and sustainable development. In logistics and warehousing, Midea will further deepen
the specialization and refinement of pre-production logistics operations at overseas manufacturing
bases. Midea will ensure timely replenishment and allocation according to production needs to
guarantee smooth production operations. Midea will establish central warehouses and distribution
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networks at overseas pilot bases, empowering the sales system to enhance the rapid delivery
experience of after-sales logistics. Midea will create a one-stop management platform through digital
transformations, including control towers, end-to-end visibility, and collaborative platforms, enabling
online supply chain management. In the service sector, Midea will continue to build a global service
system. This system will cover multi-language, multi-channel customer contact centres, a spare parts
supply chain and warehousing network, multi-technology and multi-scenario localized global repair and
delivery capabilities, and intelligent-driven digital IT systems and organizational capabilities. Midea will
also pilot the creation of an overall overseas service solution in three countries, using industry
benchmarks as a reference. Midea will continue to carry out basic service capacity building, promote
the application of intelligent tools such as AIGC, and access social media and brand official websites to
improve the efficiency and quality of call centres. Midea will optimise and promote the application of a
global service knowledge base, establish training centres in key markets, systematise training
management, update service personnel’s knowledge and skills, improve the quality of technical
materials and intelligent applications, establish localised repair capabilities in multiple scenarios and
technologies, and improve network coverage and on-time single-rate completion in key markets. This
aims to further enhance service quality, providing customers with consistent and high-quality service
experiences, and improving the digital capabilities of after-sales service.
e. In the second half of 2024, Midea will continue to deepen the implementation of its dual high-end
brands strategy, further strengthening the dual-engine power of COLMO and Toshiba brands. The
COLMO brand will advance the combination of territory retail and precision distribution, continue to
expand brand store construction, deepen cloud warehouse transformation, while focusing on crowd
assets, layout sales accounts, and achieve online and offline full-domain operations. COLMO will
further evolve around products and user experience, launching more product suites to enhance the
high-end market position of air conditioners and refrigerators, and build a diversified portfolio of high-
end products around the comprehensive smart air and water heating solutions for the whole house. In
the field of comprehensive smart home, COLMO will launch products such as home smart hosts, smart
dimming drivers, and switch panels, and based on its self-developed large-scale model capabilities,
provide users with more complete, reliable, and intelligent smart home appliances and integrated home
solutions. To further enhance the brand store image and experience, COLMO will provide one-stop
purchase through entire-house smart home appliance solution design services, and enhance user
repurchase and recommendation rates through integrated delivery and installation, 1V1 manager
services, appliance cleaning, and other member rights and services. The Toshiba brand will continue to
expand its network of outlets, increasing both brand awareness and reputation to better meet customer
needs. The total number of star-rated living halls and brand joint halls is expected to exceed 1,000. The
Toshiba brand will continuously innovate products and improve their quality and performance to satisfy
the diverse needs of different customers. A new high-end product suite has been launched in late July,
further enhancing Toshiba's product lineup and strengthening its position in the high-end market. The
Toshiba brand will continue to enhance its channel integration capabilities, utilizing new retail formats
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such as Douyin OMO and O2O to integrate online and offline channels, empowering brand stores and
consistently driving traffic to them. The Toshiba brand will place greater emphasis on customer service
quality, offering a series of membership benefits and services to both new and existing customers in the
second half of the year to increase user loyalty. WAHIN will continue to focus on differentiated
innovation centered on users, products, and experiences, expanding multi-category products and
developing products with exceptional performance to provide users with an intelligent, comfortable, and
intelligent scenario-based experience. It will continuously innovate its marketing strategies, targeting the
forward-looking youth segment, and engaging in diverse cross-sector collaborations during graduation
and job-hunting seasons. It will consistently improve the conversion chain, maintaining synergy
between branding and effectiveness, empowering e-commerce sales conversion, and strengthening the
"social media + content + e-commerce" model to drive sales growth.
f. Midea will continue to focus on the "Digitization & Intelligence Driven" strategy, emphasizing key
digital transformation projects such as Digitalization 3.0, DTC reform, the ToB business platform, and
user operations. In the domestic sales sector, Midea will rely on the "Midea Cloud Sales" platform to
strengthen DTC direct-to-user connections, optimize short-chain transformations, and enhance the
sharing of data, goods, and logistics. Midea will upgrade the "Worry-Free Retail 2.0" and "Shared
Inventory" strategies to increase in-stock rates across all channels and accelerate inventory turnover.
Midea will combine public and private domain traffic matrix operations, using social media platforms to
reach consumers and precisely meet user needs. In the overseas sales sector, Midea will further
explore the transformation of the OBM business model, improving overall business capabilities through
the introduction and piloting of digital tools in areas such as NPI, digital marketing, e-commerce
expansion, and after-sales satisfaction enhancement. In the ToB sector, Midea will deepen and drive
digital transformation based on the ToB project-based marketing platform, reducing order fulfillment
cycles, achieving full-process order visibility and early warnings, and enhancing customer satisfaction.
In the manufacturing sector, Midea will focus on driving OBM order model transformation and
continuously improving OBM product delivery efficiency. Midea will support the addition of new
"Lighthouse Factories" and expand the scope of "Sustainable Lighthouse Factories”. In the operations
and HR digitalization sector, Midea will use AIGC to expand digital applications and transformation in
employee services, continuing to achieve digitalization in performance and compensation management,
global assignments, and recruitment.
Midea will establish a cloud-native application management platform centered around applications,
unifying the tenant model, object management model, permission management, and user experience.
Midea will build an intelligent computing platform, standardizing the GPU computing pool across the
entire group, providing GPU virtualization and sharing capabilities to improve GPU resource utilization
and ensure stability. Midea will create a global network by integrating data center and public cloud
network capabilities, with the Gui’an Data Center as the core, forming a "two locations, three centres"
architecture encompassing the Gui’an Public Cloud and Nanhai Data Center. The Company will
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establish an industry-leading active-active disaster recovery system, significantly enhancing the
resilience and scalability of the Group's digital infrastructure, providing a solid foundation for continuous
business innovation and steady growth. Midea will continue to build big data and database platform
capabilities to achieve unified management and services for global data platforms. Midea will further
strengthen the construction of intelligent office capabilities, continuously improving daily operational
management efficiency.
g. Midea aims to drive further growth in its energy solutions and industrial technology business,
continuously expand business boundaries, and accelerate growth. In the second half of 2024, CLOU
Electronics will continue to uphold the philosophy of providing outstanding value to customers, focusing
on the European and American markets, expanding along the Belt and Road Initiative, and deeply
cultivating relationships with the five major and six minor power generation groups, as well as the two
grid and two construction companies. CLOU Electronics will establish ecosystem relationships with
energy enterprises, with a focus on developing and building commercial and industrial channel
networks, fully deploying in the energy storage market, continuously increasing customer diversity, and
strengthening its market position. At the same time, CLOU Electronics will continue to strengthen
internal R&D investment, improve product quality and performance, and develop products that meet the
demands of all market scenarios. CLOU Electronics will establish localized after-sales teams, enhance
talent pipeline construction, and strengthen the recruitment of industry-expert talents, attracting and
cultivating more high-quality professionals to continuously support the growth of the energy storage
business. Hiconics will continue to invest resources in building core competencies, enhancing product
strength, and expanding new industrial markets to accelerate business growth. Hiconics will continue to
invest resources in building core competencies, enhancing product strength, and expanding into new
industrial markets, continuously accelerating business growth. Hiconics will systematically complete the
construction and commissioning of the Anqing manufacturing base, vigorously promote new products
such as photovoltaic inverters and the "Meishu" villa green power solutions, and continuously improve
operational quality. Hiconics will continue to advance platform-based R&D, optimize product processes,
and accelerate the development and certification of new overseas products. At the same time, Hiconics
will collaborate with Midea's supply chain resources to continuously promote cost reduction and
efficiency improvement, optimize inventory management capabilities, and enhance operational
management quality. Midea will focus on its core business and accelerate the growth of new industries,
initially building differentiated competitive capabilities for the future. In the smart transportation field,
Midea will integrate the innovation advantages of the Midea system, increase product technology
investment to achieve new breakthroughs in new energy vehicle components. Midea will continue to
expand the market by acquiring more key domestic and international customers, focusing on industry-
leading new energy vehicle customers, and increasing the market coverage and share of various
thermal management products for different vehicle models to ensure rapid sales growth. Midea will
continuously enhance manufacturing capabilities, complete the production launch of new electric power
steering motor production lines, and continuously increase capacity to meet the growing demand from
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customers. In the industrial automation field, Midea will continue to invest in R&D to strengthen its
competitiveness in motion control, planning to launch several new products, including economic,
general-purpose, and high-performance drive products, to maintain its leading position in the domestic
direct drive market. Midea will also focus on expanding overseas and e-commerce businesses, deeply
cultivating high-end application fields such as semiconductors, lasers, photovoltaics, lithium batteries,
3C, robotics, and consumer electronics. Midea will further solidify its technological accumulation in the
field of motion control, combining market conditions and competitive strategies to conduct differentiated
research and development based on its technological advantages. Midea will focus on iterating and
improving controller products, pairing controllers with drives, and expanding coverage to more
applications, with an emphasis on promoting industry-wide integrated solutions. Midea will also further
refine the layout of its harmonic reducer product line and continuously expand its presence among top-
tier industry customers to achieve scale breakthroughs. In the field of core components for consumer
appliances, Midea will continue to enhance digitalisation and data operations, increase investment in
R&D resources, improve the processes and mechanisms of technology and platform research, optimise
the product mix, and driving profitability. Also, it will make continuous breakthroughs in new products
and technologies, providing customers with eco-friendly, efficient, and intelligent products and
technology solutions. Continued breakthroughs will be driven in market segments such as valve, pump
and other products in terms of production capacity. Moreover, the Company will improve production
efficiency and strengthen product cost advantages, bolster its global supply chain capabilities, as well
as enhance global competitiveness by fully leveraging the local advantages of the overseas factories.
Midea will create an overseas professional service platform, offering one-stop services for small and
medium-sized customers and specialised services for large customers, achieving breakthroughs with
overseas key customers and increasing the global market share of its products. The Company
continues to strengthen the competitiveness of its chips for home appliances. It is developing high-
quality industrial-grade chips for home appliances such as master control, touch control, and variable
frequency chips, in addition to driving integration of chips. Relying on the advantages of the Group's
industrial chain cluster, continuous efforts are also made to drive sales and production capacity, as well
as attract other major home appliance makers.
h. Midea will fully leverage the advantages of domestic rapid response and manufacturing capabilities,
continuously enhancing KUKA’s global competitiveness. In terms of research and development, Midea
will continue to increase research and development investment, accelerating the innovation of core
components and software systems through the collaboration of internal and external resources of
Chinese and German research teams. In terms of market development, Midea will actively cooperate
with leading enterprises in various industries to expand into new energy, general industry, electronics,
medical, logistics, and service sectors, accelerating the layout in new industries. In manufacturing,
Midea will improve the domestic manufacturing layout, leverage domestic manufacturing bases to
accelerate the formation of advantages in the industrial robot industry chain, further enhance
operational efficiency, shorten product delivery cycles, provide basic support for integrated business,
69
Midea Group Co., Ltd. Semi-Annual Report 2024
and establish collaborative robotic capacity. Through industry-education integration, Midea will
accelerate the layout of the KUKA education sector, expedite talent recruitment, strengthen the team
size for pre-sales, post-sale, and project implementation, and provide talent reserves for business
expansion. KUKA China will take faster and decisive actions to ensure localization, internationalization,
and diversification, actively seeking new growth opportunities. KUKA China will be bold in deploying
and investing in new businesses to explore greater growth potential.
i. Annto will continue to advance the 1+3 strategy and implement the "shared inventory + one link less"
cost reduction and efficiency improvement initiative to help customers enhance operational efficiency
across all channels. In the warehousing sector, It will build integrated supply chain capabilities centered
on warehousing operations. Annto will promote end-to-end lean operations and resource development
to drive cost reduction and efficiency improvement throughout the entire process. It will develop
scenario-specific service capabilities for fast-moving consumer goods, large items, small items, etc.,
standardizing costs, efficiencies, and SOPs to enhance operational capabilities across all scenarios,
thereby creating more value for partners. In the urban distribution and installation sector, Annto will
continue to strengthen its B2C integrated delivery fulfillment capabilities. It will continuously improve
fulfillment timeliness and service quality through adjustments to warehousing and distribution operation
patterns and route scheduling. Annto will adhere to the Green Strategy, driving digital transformation in
transportation capacity to achieve platform-based, visualized, intelligent, and ecological transportation
management. It will establish a transparent, long-term stable new transportation capacity cooperation
ecosystem to provide comprehensive integrated supply chain service solutions for brand partners.
Annto will increase investment in new energy vehicles to promote energy conservation and emission
reduction. It will also build an operations and dispatching platform to enable full-process online
operations, ensuring complete transparency of all orders. In the delivery and installation service sector,
Annto will achieve business, service, and management digitalization through the construction of a
digital platform, building a self-managed and self-controlled service network. It will diversify network
supply based on business needs. Returning to the end-business scenario, Annto will promote the
"direct-from-warehouse + landing match" ToC delivery model. It will provide the most cost-effective,
efficient, and user-friendly delivery method based on route and ToC order distribution. At the same time,
Annto will improve the layout of installation service points to enhance coordination efficiency between
delivery and installation, as well as overall delivery efficiency.
4. Analysis of Main Business
Overview
See contents under the heading “2. Business Scope in the Reporting Period” above.
YoY changes in key financial data:
Unit: RMB’000
H1 2024 H1 2023 YoY Change (%) Main reasons for
70
Midea Group Co., Ltd. Semi-Annual Report 2024
change
Operating revenue 217,274,086 196,988,402 10.30%
Cost of sales 158,407,597 147,276,358 7.56%
Changes in the
Interest costs 1,781 19,681 -90.95% operations of the
finance business
Selling and
21,455,838 17,133,216 25.23%
distribution expenses
General and
administrative 6,693,799 5,670,400 18.05%
expenses
Research and
development 7,662,534 6,610,954 15.91%
expenses
Increased exchange
Financial income 606,893 1,363,661 -55.50%
losses
Income tax expenses 4,310,302 3,578,491 20.45%
Increased additional
Other income 1,367,008 772,764 76.90%
deduction of input VAT
Increased profits from
Investment income 545,292 410,154 32.95% associates and joint
ventures
Changes in the fair
Gains/(losses) on
248,977 -103,703 340.09% value of derivative
changes in fair value
financial instruments
Asset impairment Increased inventory
-325,371 -189,060 -72.10%
losses valuation losses
Decreased losses on
Credit impairment
-42,273 -221,424 80.91% bad debts of accounts
losses
receivable
Increased gains on
Gains on disposal of
114,007 8,525 1237.33% disposal of non-
assets
current assets
Non-operating Increased other
190,580 124,256 53.38%
income income
Non-operating Decreased other
52,072 101,742 -48.82%
expenses expenses
Net cash flows from
33,488,170 29,784,674 12.43%
operating activities
Net cash flows from
-20,635,554 -27,046,688 23.70%
investing activities
Increased cash
Net cash flows from
-20,977,156 -6,437,928 -225.84% repayments of
financing activities
borrowings
Decreased net cash
Net increase in cash
-8,386,546 -3,571,173 -134.84% flows from financing
and cash equivalents
activities
Major changes to the profit structure or sources of the Company in the Reporting Period:
□Applicable N/A
No such cases in the Reporting Period.
Breakdown of operating revenue:
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Midea Group Co., Ltd. Semi-Annual Report 2024
Unit: RMB’000
H1 2024 H1 2023
As a percentage As a percentage YoY Change (%)
Amount of total operating Amount of total operating
revenue (%) revenue (%)
Total 217,274,086 100% 196,988,402 100% 10.30%
By business segment
Manufacturing 194,900,088 89.70% 177,405,216 90.06% 9.86%
By product category
HVAC 101,461,115 46.70% 92,006,787 46.71% 10.28%
Consumer
75,138,372 34.58% 68,136,204 34.59% 10.28%
appliances
Robotics,
automation
systems and
18,300,601 8.42% 17,262,225 8.76% 6.02%
other
manufactured
products
By geographical segment
Mainland China 126,197,955 58.08% 116,452,278 59.12% 8.37%
Other countries
91,076,131 41.92% 80,536,124 40.88% 13.09%
or regions
During the Reporting Period, the Company’s Smart Home Solutions, Energy Solutions & Industrial
Technology, Intelligent Building Technology, and Robotics & Automation recorded respective revenue of
RMB147.6 billion (up 11% year on year), RMB17.1 billion (up 26% year on year), RMB15.7 billion (up 6%
year on year), and RMB13.9 billion (down 9% year on year).
The slowdown in revenue growth of Intelligent Building Technology in the Reporting Period was mainly
attributed to changes in subsidy policies for heat pumps in some countries and the continuous decline
in energy prices in Europe. Except for heat pumps, revenue of other product categories recorded a
year-on-year growth of 18%.
The year-on-year decline in revenue of Robotics & Automation in the Reporting Period was mainly due
to the put-off of production ramp-up plans of domestic automobile manufacturers and product strategy
adjustments of overseas automobile manufacturers.
Business segments, products or geographical segments contributing over 10% of the operating
revenue or profit
Applicable □N/A
Unit: RMB’000
YoY change YoY change YoY change
Operating Gross profit
Cost of sales of operating of cost of of gross profit
Revenue margin
revenue (%) sales (%) margin (%)
By business segment
Manufacturing 194,900,088 138,692,981 28.84% 9.86% 6.73% 2.09%
By product category
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Midea Group Co., Ltd. Semi-Annual Report 2024
HVAC 101,461,115 74,725,772 26.35% 10.28% 5.99% 2.98%
Consumer
75,138,372 50,052,891 33.39% 10.28% 8.01% 1.40%
appliances
Robotics,
automation
systems and
18,300,601 13,914,318 23.97% 6.02% 6.14% -0.09%
other
manufactured
products
By geographical segment
PRC 126,197,955 93,198,104 26.15% 8.37% 6.51% 1.29%
Outside PRC 91,076,131 65,209,493 28.40% 13.09% 9.09% 2.62%
Under the circumstances that the statistical standards for the Company's main business data adjusted
in the Reporting Period, the Company's main business data in the recent period is calculated based on
adjusted statistical standards at the end of the Reporting Period
□Applicable N/A
Reason for any over 30% YoY movements in the data above
□Applicable N/A
5. Analysis of Non-Core Business
□Applicable N/A
6. Assets and Liabilities
6.1 Material changes of asset items
Unit: RMB’000
30 June 2024 31 December 2023
Explanation
As a As a Change in
about any
percentage of percentage of percentage
Amount Amount material
total assets total assets (%)
change
(%) (%)
Cash at bank
101,949,934 20.12% 81,673,846 16.80% 3.32%
and on hand
Accounts
43,859,227 8.66% 32,884,739 6.77% 1.89%
receivable
Contract
3,617,571 0.71% 4,045,925 0.83% -0.12%
assets
Inventories 40,329,230 7.96% 47,339,255 9.74% -1.78%
Investment
1,234,600 0.24% 1,293,629 0.27% -0.03%
properties
Long-term
equity 4,840,550 0.96% 4,976,109 1.02% -0.06%
investments
Fixed assets 31,535,431 6.22% 30,937,963 6.37% -0.15%
Construction 4,774,313 0.94% 4,681,220 0.96% -0.02%
73
Midea Group Co., Ltd. Semi-Annual Report 2024
in progress
Right-of-use
2,881,293 0.57% 3,048,785 0.63% -0.06%
assets
Short-term
18,545,127 3.66% 8,819,176 1.81% 1.85%
borrowings
Contract
34,683,769 6.85% 41,765,475 8.59% -1.74%
liabilities
Long-term
39,832,425 7.86% 46,138,736 9.49% -1.63%
borrowings
Lease
1,911,438 0.38% 2,047,319 0.42% -0.04%
liabilities
6.2 Main assets overseas
□Applicable N/A
6.3 Assets and liabilities measured at fair value
Applicable □N/A
Unit: RMB’000
Profit or Amount
Cumulative
loss from provided
fair value Purchased
Opening change in for Sold in the Other Closing
Item change in the
balance fair value impairment period changes balance
recorded in period
during the in the
equity
period period
Financial assets
1. Financial assets held
for trading (excluding
1,790,588 -166,708 0 1,957,011 842,037 6,237 2,745,091
derivative financial
assets)
2. Derivative financial
1,670,754 1,035,054 -201,779 166,300 1,083,293 -30,195 1,556,841
assets
3. Receivables
13,330,008 0 0 6,562,095 0 19,892,103
financing
4. Other debt
10,983,476 0 4,689,535 130,929 6,424,870
investments
5. Investments in other
37,874 0 48 0 0 -212 37,710
equity instruments
6. Other non-current
7,769,938 937,884 -11,729 218,540 2,170,059 491,397 7,235,971
financial assets
7. Other investments 30,000 30,000 0
Sub-total of financial
35,612,638 1,806,230 -213,460 0 8,903,946 8,814,924 598,156 37,892,586
assets
Investment properties
Productive living assets
Others
Sub-total of the above 35,612,638 1,806,230 -213,460 0 8,903,946 8,814,924 598,156 37,892,586
Financial liabilities 1,762,178 204,711 45,470 0 232,866 -1,831 1,777,662
Contents of other changes
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Midea Group Co., Ltd. Semi-Annual Report 2024
Whether there were any material changes on the measurement attributes of major assets of the
Company during the Reporting Period
□ Yes No
6.4 Restricted asset rights as of the end of this Reporting Period
As of the end of this Reporting Period, there were no such circumstances where any main assets of the
Company were sealed, distrained, frozen, impawned, pledged or limited in any other way.
7. Investment Made
7.1 Total investment amount
Applicable □N/A
Total investment amount of the Total investment amount of the same
YoY Change (%)
Reporting Period (RMB’000) period of last year (RMB’000)
82,114,656 87,829,148 -6.51%
7.2 Significant equity investment made in the Reporting Period
□Applicable N/A
7.3 Significant non-equity investments ongoing in the Reporting Period
□Applicable N/A
7.4 Financial investments
7.4.1 Securities investments
Applicable □N/A
Unit: RMB’000
Gain or
Cumula
Mea loss from
tive fair
Type sure change Gain or Fund
Code of Abbreviat Initial Opening value Purchas Sold in Closing
of men in fair loss in Accounting ing
securitie ion of investme carrying change ed in the the carrying
secur t value the title sour
s securities nt cost amount recorde period period amount
ities met during period ce
d in
hod the
equity
period
Dom Fair
Financial
estica valu Own
1,000,00 1,455,24 1,291,16 assets
lly 688249 Nexchip e -164,077 -164,077 fund
0 4 7 held for
listed met s
trading
stock hod
75
Midea Group Co., Ltd. Semi-Annual Report 2024
Dom Fair
Financial
estica valu Own
assets
lly 688322 Orbbec 300,000 e 285,282 -82,518 -82,518 202,764 fund
held for
listed met s
trading
stock hod
Fair
Over Financial
valu Own
seas XIAOMI- - assets
1810 718,641 e 791,674 11,485 5,692 89,985 193,893 fund
listed W 693,458 held for
met s
stock trading
hod
Dom Fair
Financial
estica valu Own
assets
lly 688165 EFORT 130,845 e 299,001 -87,211 -15,803 -94,808 188,390 fund
held for
listed met s
trading
stock hod
Fair
Over Financial
valu Own
seas SoundHo assets
SOUN 157,203 e 63,204 54,748 543 54,748 118,495 fund
listed und AI held for
met s
stock trading
hod
Dom Fair
Financial Rais
estica valu
assets ed
lly 688097 BOZHON 55,000 e 114,087 -37,479 - -37,479 76,608
held for fund
listed met
trading s
stock hod
Dom Fair
Financial Rais
estica valu
assets ed
lly 688162 JEE 88,180 e 112,218 -43,259 - -43,259 68,959
held for fund
listed met
trading s
stock hod
Dom Fair
Financial Rais
estica valu
Real- assets ed
lly 301135 39,435 e 69,297 -10,362 -1,658 -9,703 57,936
Design held for fund
listed met
trading s
stock hod
Dom Fair
Financial Rais
estica valu
assets ed
lly 688159 Neoway 2,671 e 6,365 -3,694 -7,424 1,059 -
held for fund
listed met
trading s
stock hod
Dom Fair
Highpow Financial Rais
estica valu
er assets ed
lly 001283 3,514 e 7,245 -3,731 -6,053 -1,192 -
Technolo held for fund
listed met
gy trading s
stock hod
Dom Fair
Zhengba Financial Debt
estica valu
ng assets restr
lly 002157 210 e 210 17 17 227
Technolo held for uctur
listed met
gy trading ing
stock hod
2,495,69 - 3,203,82 - - - 2,198,43
Total 6,235 - - -
9 7 366,081 724,396 287,227 9
7.4.2 Derivatives investments
Applicable □N/A
76
Midea Group Co., Ltd. Semi-Annual Report 2024
A. Derivatives investments for hedging purposes in the Reporting Period
Applicable □N/A
Unit: RMB'000
Closing
Gain or Cumulativ amount as
loss from e fair a
Initial Purchase
Type of Opening change in value Sold in the Closing percentag
investmen d in the
derivative amount fair value change period amount e of the
t amount period
during the recorded Company’
period in equity s closing
net assets
Futures
81,092 81,092 0 -76,006 0 0 5,086 0.0031%
contracts
Forex
118,788 118,788 808,276 -171,243 78,071 128,792 673,474 0.4087%
contracts
Cross-
currency
interest 3,137,717 3,137,717 736,906 -11,729 218,540 1,462,229 3,107,163 1.8854%
rate
swaps
Total 3,337,597 3,337,597 1,545,182 -258,978 296,611 1,591,021 3,785,723 2.2972%
Explanation of significant changes in
accounting policies and specific
financial accounting principles in
No change
respect of the Company's hedges for
the period as compared to the prior
period
Actual gain from derivatives investments during the Reporting Period was
Actual gain/loss in the period
RMB2,219.868 million.
The Company's major risks during the Reporting Period included foreign
exchange risk exposures and raw material price risks. Foreign exchange
risks included foreign currency-denominated asset and liability exposures
arising from overseas sales, raw material purchases, financing and other
Results of hedges operations. And raw material price risks included exposures to fluctuations in
spot trading market prices for bulk material purchases. These uncertainties
arising from currency fluctuations were effectively hedged against by buying
derivative contracts of the same amount and maturity but in opposite
directions.
Source of derivatives investment
All from the Company’s own funds
funds
For the sake of eliminating the cost risk of the Company's bulk purchases of
raw materials as a result of significant fluctuations in raw material prices, the
Company not only carried out futures business for some of the bulk
materials, but also made use of bank financial instruments and promoted
forex funds business, with the purpose of avoiding the risks of exchange and
interest rate fluctuation, realizing the preservation and appreciation of forex
assets, reducing forex liabilities, as well as achieving locked-in costs. The
Company has performed sufficient evaluation and control against derivatives
investment and position risks, details of which are described as follows:
Risk analysis of positions held in
1. Legal risk: The Company's futures business and forex funds businesses
derivatives during the Reporting
shall be conducted in compliance with laws and regulations, with clearly
Period and explanation of control
covenanted responsibility and obligation relationship between the Company
measures (Including but not limited to
and the agencies.
market risk, liquidity risk, credit risk,
Control measures: The Company has designated relevant responsible
operational risk, legal risk, etc.)
departments to enhance learning of laws and regulations and market rules,
conducted strict examination and verification of contracts, defined
responsibility and obligation well, and strengthened compliance check, so as
to ensure that the Company's derivatives investment and position operations
meet the requirements of the laws and regulations and internal management
system of the Company.
2. Operational risk: Imperfect internal process, staff, systems and external
issues may cause the Company to suffer from loss during the course of its
futures business and forex funds business.
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Midea Group Co., Ltd. Semi-Annual Report 2024
Control measures: The Company has not only developed relevant
management systems that clearly defined the assignment of responsibility
and approval process for the futures business and forex funds business, but
also established a comparatively well-developed monitoring mechanism,
aiming to effectively reduce operational risk by strengthening risk control over
the business, decision-making and trading processes.
3. Market risk: Uncertainties caused by changes in the prices of bulk
commodity and exchange rate fluctuations in foreign exchange market could
lead to greater market risk in the futures business and forex funds business.
Meanwhile, inability to timely raise sufficient funds to establish and maintain
hedging positions in futures operations, or the forex funds required for
performance in forex funds operations being unable to be credited into
account could also result in loss and default risks.
Control measures: The futures business and forex funds business of the
Company shall always be conducted by adhering to prudent operation
principles. For futures business, the futures transaction volume and
application have been determined strictly according to the requirements of
production & operations, and the stop-loss mechanism has been
implemented. Besides, to determine the prepared margin amount which may
be required to be supplemented, the futures risk measuring system has been
established to measure and calculate the margin amount occupied, floating
gains and losses, margin amount available and margin amount required for
intended positions. As for forex funds business, a hierarchical management
mechanism has been implemented, whereby the operating unit which has
submitted application for funds business should conduct risk analysis on the
conditions and environment affecting operating profit and loss, evaluate the
possible greatest revenue and loss, and report the greatest acceptable
margin ratio or total margin amount, so that the Company can update
operating status of the funds business on a timely basis to ensure proper
funds arrangement before the expiry dates.
The Company carried out recognition and measurement according to
“Section VII Recognition of Fair Value” in the Accounting Standard No. 22 for
Business Enterprises—Recognition and Measurement of Financial
Instruments.
Changes in the fair value of derivatives were recognized at RMB1,286.204
Changes in market prices or fair value
million during the Reporting Period.
of derivative products during the
1. The fair value of futures contracts was determined on the basis of publicly
Reporting Period, specific methods
quoted prices in the futures market.
used and relevant assumption and
2. The fair value of forex contracts was determined based on banks’ quoted
parameter settings shall be disclosed
prices for foreign exchange products.
for analysis of fair value of derivatives
3. The main parameter assumptions used in the analysis of the fair value of
cross-currency interest rate swaps included interest rate paid, interest rate
received, frequency of interest received, frequency of interest paid, USD
interest rate curve, EUR interest rate curve, USD/EUR exchange rate curve,
etc.
Litigation involved (if applicable) N/A
Disclosure date of the announcement
about the board’s consent for the 28 March 2024
derivative investment (if any)
Disclosure date of the announcement
about the general meeting’s consent 20 April 2024
for the derivative investment (if any)
B. Derivatives investments for speculative purposes in the Reporting Period
□ Applicable N/A
No such cases in the Reporting Period.
7.5 Use of funds raised
□ Applicable N/A
No such cases in the Reporting Period.
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Midea Group Co., Ltd. Semi-Annual Report 2024
8. Sale of Major Assets and Equity Interests
8.1 Sale of major assets
□Applicable N/A
No such cases in the Reporting Period.
8.2 Sale of major equity interests
□Applicable N/A
9. Analysis of Major Subsidiaries
□Applicable N/A
During the Reporting Period, there were no important subsidiaries of the Company of which the
information should be disclosed.
10. Structured Entities Controlled by the Company
Applicable □N/A
As of the end of the Reporting Period, one structured entity was included in the Group’s consolidated
financial statements, which is a private-equity fund controlled by the Group. As a manager and investor
of the structured entity, the Group has relevant management power in and variable returns from the
entity, and has the ability to exercise its management power to impact the returns.
11. Risks Faced by the Company and Countermeasures
a. Risk of macro economy fluctuation
The market demand for the Company’s consumer appliances, HVAC equipment, industrial robotics,
among other products, can be easily affected by the economic situation and macro control. If the global
economy encounters a heavy hit and consumer demand slows down in growth, the growth of the
industries in which the Company operates, may slow down accordingly, and as a result, this may affect
the product sales of Midea Group.
b. Risks in the fluctuation of production factors
The raw materials required by Midea Group to manufacture its consumer appliances and core
components primarily include different grades of copper, steel, plastics and aluminum. At present, the
household appliance manufacturing sector belongs to a labor intensive industry. If the price of raw
materials fluctuate largely, or there is a large fluctuation in the cost of production factors (labor, water,
electricity, and land) caused by a change to the macroeconomic environment and policy change, or the
cost reduction resulted from lean production and improved efficiency, as well as the sale prices of end
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Midea Group Co., Ltd. Semi-Annual Report 2024
products cannot offset the total effects of cost fluctuations, the Company’s business will be influenced to
some degree.
c. Risk in global asset allocation and overseas market expansion
Internationalization and global operations is a long-term strategic goal of the Company. The Company
has built joint-venture manufacturing bases in many countries around the world. Progress has been
made day by day regarding the Company’s overseas operations and new business expansion.
However, its efforts in global resource integration may not be able to produce expected synergies; and
in overseas market expansion, there are still unpredictable risks such as local political and economic
situations, significant changes in law and regulation systems, and sharp increases in production costs.
d. Risk in foreign exchange losses caused by exchange rate fluctuation
As Midea carries on with its overseas expansion plan, its overseas sales have accounted for more than
40% of the total revenues. Any sharp exchange rate fluctuation might not only bring negative effects on
the overseas operations of the Company, but could also lead to exchange losses and increase its
finance costs.
e. Market risks brought by trade frictions and tariff barriers
Due to the rise of anti-globalization and trade protectionism, China saw more uncertainties in export in
2023. The trade barriers and frictions of some major markets will affect the export business in the short
run, as well as marketing planning and investment in the medium and long run. Political and compliance
risks are rising in international trade. These can mainly be seen on compulsory safety certificates,
international standards and requirements, and product quality and management systems certification,
energy-saving requirements, the call for increasingly strict environmental protection requirements, as
well as with rigorous requirements for recycling household appliances waste. Trade frictions caused by
anti- dumping measures implemented by some countries and regions aggravate the burden in costs
and expenses for household appliance enterprises, and have brought about new challenges to market
planning and business expansion for enterprises.
In face of the complicated and changeable environment and risks at home and abroad, Midea will
strictly follow the Company Law, the Securities Law, the CSRC regulations and other applicable rules,
keep improving its governance structure for better compliance, and reinforce its internal control system
so as to effectively prevent and control various risks and ensure its sustained, steady and healthy
development.
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Midea Group Co., Ltd. Semi-Annual Report 2024
12. Implementation of the Action Plan for "Dual Enhancement of Development
Quality and Investor Returns"
Indicate whether the Company has disclosed its Action Plan for “Dual Enhancement of Development
Quality and Investor Returns”.
□ Yes No
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Midea Group Co., Ltd. Semi-Annual Report 2024
Section IV Corporate Governance
1. Annual and Extraordinary General Meetings of Shareholders Convened during the
Reporting Period
1.1 General meetings of shareholders convened during the Reporting Period
Investor Resolution of the
Meeting Type Convened date Disclosure date
participation ratio meeting
Announcement
No. 2024-008 on
Resolutions of
First
First Extraordinary
Extraordinary
60.9148% 29 January 2024 30 January 2024 General Meeting
General Meeting Extraordinary
of Shareholders of
of Shareholders
2024, disclosed
of 2024
on
www.cninfo.com.c
n
Announcement
No. 2024-027 on
Resolutions of
2023 Annual 2023 Annual
General Meeting Annual 57.9500% 19 April 2024 20 April 2024 General Meeting
of Shareholders of Shareholders,
disclosed on
www.cninfo.com.c
n
Announcement
No. 2024-063 on
Resolutions of
Second Second
Extraordinary Extraordinary
General Meeting Extraordinary 56.6184% 2 July 2024 3 July 2024 General Meeting
of Shareholders of Shareholders of
of 2024 2024, disclosed
on
www.cninfo.com.c
n
1.2 Extraordinary general meetings of shareholders convened at the request of preference
shareholders with resumed voting rights
□ Applicable N/A
2. Changes in Directors, Supervisors and Senior Management
□ Applicable N/A
The Company’s directors, supervisors and senior management remained unchanged during the
Reporting Period. For their information, see the 2023 Annual Report.
82
Midea Group Co., Ltd. Semi-Annual Report 2024
3. Preliminary Plan for Profit Distribution and Converting Capital Reserves into
Share Capital for the Reporting Period
□ Applicable N/A
The Company plans not to distribute cash dividends or bonus shares or convert capital reserves into
share capital for the first half of the year.
4. Implementation of any Equity Incentive Scheme, Employee Stock Ownership
Scheme or Other Incentive Measures for Employees
Applicable □N/A
4.1 Equity incentive schemes
A. Overview of the Fifth Stock Option Incentive Scheme
a. The Company has implemented the 2023 Annual Profit Distribution Plan. Based on the
6,926,759,241 shares that were eligible for the profit distribution (the total share capital of
6,975,318,129 shares minus the repurchased 48,558,888 shares), under an unchanged dividend per
share, a cash dividend of RMB30 per 10 shares was paid out to all the shareholders. The record date
was 14 May 2024 and the ex-date was 15 May 2024.
b. The Proposal for the Adjustment to the Exercise Prices for the Stock Option Incentive Scheme was
approved at the 27th Meeting of the Fourth Board of Directors on 15 May 2024. As the 2023 Annual
Profit Distribution Plan had been carried out, the exercise price for the reserved stock options under the
Fifth Stock Option Incentive Scheme was revised from RMB38.54 to RMB35.56 per share.
c. The Proposal for the Retirement of Unexercised Stock Options in the First Grant under the Fifth
Stock Option Incentive Scheme upon Expiry and the Proposal for the Retirement of Unexercised
Reserved Stock Options under the Fifth Stock Option Incentive Scheme upon Expiry were approved at
the 28th Meeting of the Fourth Board of Directors on 14 June 2024. As such, 144,900 stock options of
14 awardees that had been unexercised upon expiry were retired.
d. At the above-mentioned meeting, the Proposal for the Adjustments to the Awardees and Their
Exercisable Stock Options for the Reserved Stock Options under the Fifth Stock Option Incentive
Scheme was approved. It was agreed to adjust the awardees and their exercisable stock options for the
reserved stock options under the Fifth Stock Option Incentive Scheme due to the resignation,
substandard individual or business unit performance, or other factors of some awardees. Upon the
adjustments, the number of locked-up reserved stock options under the Fifth Stock Option Incentive
Scheme was reduced from 880,000 to 555,000.
e. At the above-mentioned meeting, the Proposal for Matters Related to the Stock Option Exercise for
83
Midea Group Co., Ltd. Semi-Annual Report 2024
the Fourth Exercise Period for the Reserved Stock Options under the Fifth Stock Option Incentive
Scheme was approved. As the exercise conditions have been satisfied for the fourth exercise period for
the reserved stock options under the Fifth Stock Option Incentive Scheme, a total of 36 awardees who
are eligible for the reserved stock options under the Fifth Stock Option Incentive Scheme have been
allowed to exercise 555,000 stock options in the fourth exercise period (ended 10 March 2025).
f. During the Reporting Period, 4,849,110 shares were exercised with respect to the first grant under the
Fifth Stock Option Incentive Scheme.
g. During the Reporting Period, 442,950 shares were exercised with respect to the reserved stock
options under the Fifth Stock Option Incentive Scheme.
B. Overview of the Sixth Stock Option Incentive Scheme
a. The Proposal for the Adjustment to the Exercise Prices for the Stock Option Incentive Scheme was
approved at the 27th Meeting of the Fourth Board of Directors on 15 May 2024. As the 2023 Annual
Profit Distribution Plan had been carried out, the exercise price for the Sixth Stock Option Incentive
Scheme was revised from RMB45.54 to RMB42.56 per share.
b. The Proposal for the Retirement of Unexercised Stock Options under the Sixth Stock Option
Incentive Scheme upon Expiry was approved at the 28th Meeting of the Fourth Board of Directors on
14 June 2024. As such, 15,100 stock options of three awardees that had been unexercised upon expiry
were retired.
c. At the above-mentioned meeting, the Proposal for the Adjustments to the Awardees and Their
Exercisable Stock Options for the Sixth Stock Option Incentive Scheme was approved. It was agreed to
adjust the awardee list and their exercisable stock options under the Sixth Stock Option Incentive
Scheme due to the resignation, substandard individual/business unit performance or other factors of
some awardees. Upon the adjustments, the number of locked-up stock options granted to them under
the Sixth Stock Option Incentive Scheme was reduced from 8,491,250 to 7,518,250.
d. At the above-mentioned meeting, the Proposal for Matters Related to the Stock Option Exercise for
the Fourth Exercise Period for the Sixth Stock Option Incentive Scheme was approved. As the exercise
conditions have been satisfied for the fourth exercise period for the Sixth Stock Option Incentive
Scheme, a total of 777 awardees who are eligible for the Sixth Stock Option Incentive Scheme have
been allowed to exercise 7,518,250 stock options in the fourth exercise period (ended 29 May 2025).
e. During the Reporting Period, 4,799,167 shares were exercised under the Sixth Stock Option
Incentive Scheme.
C. Overview of the Seventh Stock Option Incentive Scheme
84
Midea Group Co., Ltd. Semi-Annual Report 2024
a. The Proposal for the Adjustment to the Exercise Prices for the Stock Option Incentive Scheme was
approved at the 27th Meeting of the Fourth Board of Directors on 15 May 2024. As the 2023 Annual
Profit Distribution Plan had been carried out, the exercise price for the Seventh Stock Option Incentive
Scheme was revised from RMB44.69 to RMB41.71 per share.
b. During the Reporting Period, 14,903,638 shares were exercised under the Seventh Stock Option
Incentive Scheme.
D. Overview of the Eighth Stock Option Incentive Scheme
a. The Proposal for the Adjustment to the Exercise Prices for the Stock Option Incentive Scheme was
approved at the 27th Meeting of the Fourth Board of Directors on 15 May 2024. As the 2023 Annual
Profit Distribution Plan had been carried out, the exercise price for the Eighth Stock Option Incentive
Scheme was revised from RMB77.24 to RMB74.26 per share.
b. The Proposal for the Adjustments to the Awardees and Their Exercisable Stock Options for the
Eighth Stock Option Incentive Scheme was approved at the 28th Meeting of the Fourth Board of
Directors on 14 June 2024. It was agreed to adjust the awardee list and their exercisable stock options
under the Eighth Stock Option Incentive Scheme due to the resignation, substandard
individual/business unit performance or other factors of some awardees. Upon the adjustments, the
number of locked-up stock options granted to them under the Eighth Stock Option Incentive Scheme
was reduced from 45,785,250 to 39,939,684.
c. At the above-mentioned meeting, the Proposal for Matters Related to the Stock Option Exercise for
the Second Exercise Period for the Eighth Stock Option Incentive Scheme was approved. As the
exercise conditions have been satisfied for the second exercise period for the Eighth Stock Option
Incentive Scheme, a total of 1,278 awardees who are eligible for the Eighth Stock Option Incentive
Scheme have been allowed to exercise 15,861,350 stock options in the second exercise period (ended
3 June 2025).
E. Overview of the Ninth Stock Option Incentive Scheme
a. The Proposal for the Adjustment to the Exercise Prices for the Stock Option Incentive Scheme was
approved at the 27th Meeting of the Fourth Board of Directors on 15 May 2024. As the 2023 Annual
Profit Distribution Plan had been carried out, the exercise price for the Ninth Stock Option Incentive
Scheme was revised from RMB52.11 to RMB49.13 per share.
b. The Proposal for the Adjustments to the Awardees and Their Exercisable Stock Options for the Ninth
Stock Option Incentive Scheme was approved at the 28th Meeting of the Fourth Board of Directors on
14 June 2024. It was agreed to adjust the awardee list and their exercisable stock options under the
Ninth Stock Option Incentive Scheme due to the resignation, substandard individual/business unit
85
Midea Group Co., Ltd. Semi-Annual Report 2024
performance or other factors of some awardees. Upon the adjustments, the number of locked-up stock
options granted to them under the Ninth Stock Option Incentive Scheme was reduced from
107,673,000 to 90,715,622.
c. At the above-mentioned meeting, the Proposal for Matters Related to the Stock Option Exercise for
the First Exercise Period for the Ninth Stock Option Incentive Scheme was approved. As the exercise
conditions have been satisfied for the first exercise period for the Ninth Stock Option Incentive Scheme,
a total of 2,399 awardees who are eligible for the Ninth Stock Option Incentive Scheme have been
allowed to exercise 26,610,964 stock options in the first exercise period (ended 6 June 2025).
F. Overview of the 2018 Restricted Share Incentive Scheme
a. The Proposal on the Repurchase and Retirement of Certain Incentive Shares under the 2018
Restricted Share Incentive Scheme was approved at the 24th Meeting of the Fourth Board of Directors
on 10 January 2024. As such, it was agreed to repurchase and retire 29,584 restricted shares that had
been granted to four awardees but were still in lockup due to the resignation, reassignment, or other
factors of these awardees.
b. The Proposal on the Repurchase and Retirement of Certain Incentive Shares under the 2018
Restricted Share Incentive Scheme was approved at the First Extraordinary General Meeting of
Shareholders of 2024 on 29 January 2024. As such, it was agreed to repurchase and retire 29,584
restricted shares that had been granted to four awardees but were still in lockup due to the resignation,
reassignment, or other factors of these awardees.
c. The Company filed the application to the Shenzhen branch of China Securities Depository and
Clearing Corporation Limited (CSDC Shenzhen) for the retirement of the 29,584 restricted shares that
had been granted to four awardees but were still in lockup under the 2018 Restricted Share Incentive
Scheme. On 25 March 2024, as reviewed and confirmed by CSDC Shenzhen, the retirement of the said
restricted shares was completed.
d. The Proposal for the Adjustments to the Repurchase Prices for the Restricted Share Incentive
Schemes was approved at the 27th Meeting of the Fourth Board of Directors on 15 May 2024. As the
2023 Annual Profit Distribution Plan had been carried out, the repurchase price for the reserved
restricted shares under the 2018 Restricted Share Incentive Scheme was revised from RMB14.96 to
RMB11.96 per share.
e. The Proposal on the Repurchase and Retirement of Certain Incentive Shares under the 2018
Restricted Share Incentive Scheme was approved at the 28th Meeting of the Fourth Board of Directors
on 14 June 2024. As such, it was agreed to repurchase and retire 12,500 reserved restricted shares
that had been granted to one awardee but were still in lockup due to the 2022 and 2023 annual
operating performance being “average” or “poor” for the business unit of the awardee.
86
Midea Group Co., Ltd. Semi-Annual Report 2024
f. At the above-mentioned meeting, the Proposal on the Satisfaction of the Conditions for the Fourth
Unlocking Period for the Reserved Restricted Shares under the 2018 Restricted Share Incentive
Scheme was approved. A total of 15 awardees were eligible for this unlocking, with 277,916 restricted
shares (0.0040% of the Company’s total existing share capital) unlocked for public trading on 24 June
2024, of which 25,000 shares were unlocked for senior management Zhao Wenxin.
G. Overview of the 2019 Restricted Share Incentive Scheme
a. The Proposal on the Repurchase and Retirement of Certain Incentive Shares under the 2019
Restricted Share Incentive Scheme was approved at the 24th Meeting of the Fourth Board of Directors
on 10 January 2024. As such, it was agreed to repurchase and retire 234,230 restricted shares that had
been granted to 18 awardees but were still in lockup due to the resignation, reassignment, violation of
the Company’s “Red Lines”, or other factors of these awardees.
b. The Proposal on the Repurchase and Retirement of Certain Incentive Shares under the 2019
Restricted Share Incentive Scheme was approved at the First Extraordinary General Meeting of
Shareholders of 2024 on 29 January 2024. As such, it was agreed to repurchase and retire 234,230
restricted shares that had been granted to 18 awardees but were still in lockup due to the resignation,
reassignment or other factors of these awardees.
c. The Company filed the application to the Shenzhen branch of China Securities Depository and
Clearing Corporation Limited (CSDC Shenzhen) for the retirement of the 234,230 restricted shares that
had been granted to 18 awardees but were still in lockup under the 2019 Restricted Share Incentive
Scheme. On 25 March 2024, as reviewed and confirmed by CSDC Shenzhen, the retirement of the said
restricted shares was completed.
d. The Proposal for the Adjustments to the Repurchase Prices for the Restricted Share Incentive
Schemes was approved at the 27th Meeting of the Fourth Board of Directors on 15 May 2024. As the
2023 Annual Profit Distribution Plan had been carried out, the repurchase price for the 2019 Restricted
Share Incentive Scheme was revised from RMB18.46 to RMB15.46 per share.
e. The Proposal on the Repurchase and Retirement of Certain Incentive Shares under the 2019
Restricted Share Incentive Scheme was approved at the 28th Meeting of the Fourth Board of Directors
on 14 June 2024. As such, it was agreed to repurchase and retire 428,698 restricted shares that had
been granted to 38 awardees but were still in lockup due to the resignation, reassignment, substandard
individual or business unit performance for 2022 and 2023, or other factors of these awardees.
f. At the above-mentioned meeting, the Proposal on the Satisfaction of the Conditions for the Fourth
Unlocking Period for the 2019 Restricted Share Incentive Scheme was approved. A total of 280
awardees were eligible for this unlocking, with 4,614,947 restricted shares unlocked for public trading
on 11 July 2024, of which 30,000 shares, 25,000 shares and 25,000 shares were unlocked for senior
87
Midea Group Co., Ltd. Semi-Annual Report 2024
management Wang Jinliang, Zhao Wenxin, and Guan Jinwei, respectively.
H. Overview of the 2021 Restricted Share Incentive Scheme
a. The Proposal on the Repurchase and Retirement of Certain Incentive Shares under the 2021
Restricted Share Incentive Scheme was approved at the 24th Meeting of the Fourth Board of Directors
on 10 January 2024. As such, it was agreed to repurchase and retire 190,750 restricted shares that had
been granted to eight awardees but were still in lockup due to the resignation, reassignment, violation
of the Company’s “Red Lines”, or other factors of these awardees.
b. The Proposal on the Repurchase and Retirement of Certain Incentive Shares under the 2021
Restricted Share Incentive Scheme was approved at the First Extraordinary General Meeting of
Shareholders of 2024 on 29 January 2024. As such, it was agreed to repurchase and retire 190,750
restricted shares that had been granted to eight awardees but were still in lockup due to the resignation,
reassignment or other factors of these awardees.
c. The Company filed the application to the Shenzhen branch of China Securities Depository and
Clearing Corporation Limited (CSDC Shenzhen) for the retirement of the 190,750 restricted shares that
had been granted to 18 awardees but were still in lockup under the 2021 Restricted Share Incentive
Scheme. On 25 March 2024, as reviewed and confirmed by CSDC Shenzhen, the retirement of the said
restricted shares was completed.
d. The Proposal for the Adjustments to the Repurchase Prices for the Restricted Share Incentive
Schemes was approved at the 27th Meeting of the Fourth Board of Directors on 15 May 2024. As the
2023 Annual Profit Distribution Plan had been carried out, the repurchase price for the 2021 Restricted
Share Incentive Scheme was revised from RMB35.75 to RMB32.75 per share.
e. The Proposal on the Repurchase and Retirement of Certain Incentive Shares under the 2021
Restricted Share Incentive Scheme was approved at the 28th Meeting of the Fourth Board of Directors
on 14 June 2024. As such, it was agreed to repurchase and retire 299,904 restricted shares that had
been granted to 35 awardees but were still in lockup due to the resignation, reassignment, substandard
individual or business unit performance for 2022 and 2023, or other factors of these awardees.
f. At the above-mentioned meeting, the Proposal on the Satisfaction of the Conditions for the Second
Unlocking Period for the 2021 Restricted Share Incentive Scheme was approved. A total of 99
awardees were eligible for this unlocking, with 1,923,726 restricted shares unlocked for public trading
on 25 July 2024, of which 24,000 shares, 30,000 shares, 30,000 shares, and 24,000 shares were
unlocked for senior management Zhao Wenxin, Li Guolin, Wang Jinliang, and Jiang Peng, respectively.
I. Overview of the 2022 Restricted Share Incentive Scheme
88
Midea Group Co., Ltd. Semi-Annual Report 2024
a. The Proposal on the Repurchase and Retirement of Certain Incentive Shares under the 2022
Restricted Share Incentive Scheme was approved at the 24th Meeting of the Fourth Board of Directors
on 10 January 2024. As such, it was agreed to repurchase and retire 463,250 restricted shares that had
been granted to 11 awardees but were still in lockup due to the resignation, reassignment, violation of
the Company’s “Red Lines”, or other factors of these awardees.
b. The Proposal on the Repurchase and Retirement of Certain Incentive Shares under the 2022
Restricted Share Incentive Scheme was approved at the First Extraordinary General Meeting of
Shareholders of 2024 on 29 January 2024. As such, it was agreed to repurchase and retire 463,250
restricted shares that had been granted to 11 awardees but were still in lockup due to the resignation,
reassignment or other factors of these awardees.
c. The Company filed the application to the Shenzhen branch of China Securities Depository and
Clearing Corporation Limited (CSDC Shenzhen) for the retirement of the 463,250 restricted shares that
had been granted to 11 awardees but were still in lockup under the 2022 Restricted Share Incentive
Scheme. On 25 March 2024, as reviewed and confirmed by CSDC Shenzhen, the retirement of the said
restricted shares was completed.
d. The Proposal for the Adjustments to the Repurchase Prices for the Restricted Share Incentive
Schemes was approved at the 27th Meeting of the Fourth Board of Directors on 15 May 2024. As the
2023 Annual Profit Distribution Plan had been carried out, the repurchase price for the 2022 Restricted
Share Incentive Scheme was revised from RMB23.97 to RMB20.97 per share.
e. The Proposal on the Repurchase and Retirement of Certain Incentive Shares under the 2022
Restricted Share Incentive Scheme was approved at the 28th Meeting of the Fourth Board of Directors
on 14 June 2024. As such, it was agreed to repurchase and retire 617,938 restricted shares that had
been granted to 22 awardees but were still in lockup due to the resignation, reassignment, substandard
individual or business unit performance for 2022 and 2023, or other factors of these awardees.
f. At the above-mentioned meeting, the Proposal on the Satisfaction of the Conditions for the First
Unlocking Period for the 2022 Restricted Share Incentive Scheme was approved. A total of 153
awardees were eligible for this unlocking, with 2,837,812 restricted shares unlocked for public trading
on 22 July 2024, of which 24,000 shares, 24,000 shares, 24,000 shares, and 24,000 shares were
unlocked for senior management Zhao Wenxin, Li Guolin, Wang Jinliang, and Jiang Peng, respectively.
J. Overview of the 2023 Restricted Share Incentive Scheme
a. The Proposal on the Repurchase and Retirement of Certain Incentive Shares under the 2023
Restricted Share Incentive Scheme was approved at the 24th Meeting of the Fourth Board of Directors
on 10 January 2024. As such, it was agreed to repurchase and retire 3,000 restricted shares that had
been granted to one awardee but were still in lockup due to the reassignment of the awardee.
89
Midea Group Co., Ltd. Semi-Annual Report 2024
b. The Proposal on the Repurchase and Retirement of Certain Incentive Shares under the 2023
Restricted Share Incentive Scheme was approved at the First Extraordinary General Meeting of
Shareholders of 2024 on 29 January 2024. As such, it was agreed to repurchase and retire 3,000
restricted shares that had been granted to one awardee but were still in lockup due to the reassignment
of the awardee.
c. The Company filed the application to the Shenzhen branch of China Securities Depository and
Clearing Corporation Limited (CSDC Shenzhen) for the retirement of the 3,000 restricted shares that
had been granted to one awardee but were still in lockup under the 2023 Restricted Share Incentive
Scheme. On 25 March 2024, as reviewed and confirmed by CSDC Shenzhen, the retirement of the said
restricted shares was completed.
d. The Proposal for the Adjustments to the Repurchase Prices for the Restricted Share Incentive
Schemes was approved at the 27th Meeting of the Fourth Board of Directors on 15 May 2024. As the
2023 Annual Profit Distribution Plan had been carried out, the repurchase price for the 2023 Restricted
Share Incentive Scheme was revised from RMB23.97 to RMB20.97 per share.
e. The Proposal on the Repurchase and Retirement of Certain Incentive Shares under the 2023
Restricted Share Incentive Scheme was approved at the 28th Meeting of the Fourth Board of Directors
on 14 June 2024. As such, it was agreed to repurchase and retire 484,358 restricted shares that had
been granted to 46 awardees but were still in lockup due to the resignation, reassignment, substandard
individual or business unit performance for 2022 and 2023, or other factors of these awardees.
f. At the above-mentioned meeting, the Proposal on the Satisfaction of the Conditions for the First
Unlocking Period for the 2023 Restricted Share Incentive Scheme was approved. A total of 402
awardees were eligible for this unlocking, with 7,054,767 restricted shares unlocked for public trading
on 30 July 2024.
4.2 Employee stock ownership schemes
Applicable □N/A
Outstanding employee stock ownership schemes during the Reporting Period
As a percentage
Scope of Number of
Total shares held Change of the Company’s Funding source
employees employees
total share capital
Employees under
the Seventh Global
Special fund for the
Partner Stock 15 2,436,518 N/A 0.03%
scheme
Ownership
Scheme
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Midea Group Co., Ltd. Semi-Annual Report 2024
Employees under
Special fund for the
the Fourth
scheme and part of the
Business Partner 44 1,985,611 N/A 0.03%
performance bonuses for
Stock Ownership
senior management
Scheme
Employees under
the Eighth Global
Special fund for the
Partner Stock 15 3,770,433 N/A 0.05%
scheme
Ownership
Scheme
Employees under
Special fund for the
the Fifth Business
scheme and part of the
Partner Stock 55 2,826,759 N/A 0.04%
performance bonuses for
Ownership
senior management
Scheme
Employees under Employees’ legal income,
the 2023 Stock performance bonuses, or
147 9,946,276 N/A 0.14%
Ownership other sources allowed by
Scheme laws and regulations
Employees under
the 2024 Stock Special fund for the
604 20,106,662 N/A 0.29%
Ownership scheme
Scheme
Shares held by directors, supervisors and senior management under employee stock ownership
schemes during the Reporting Period
Shares held at the As a percentage of the
Shares held at the end
Name Office title beginning of the Company’s total share
of the Reporting Period
Reporting Period capital
Chairman of the Board
Fang Hongbo
and CEO
Director and Vice
Wang Jianguo
President
Director and Vice
Fu Yongjun
President
Director and Vice
Guan Jinwei
President
Director and Vice
Gu Yanmin
President
Bai Lin Vice President
1,882,065 4,366,240 0.06%
Zhao Lei Vice President
Vice President, CFO
Zhong Zheng and Director of
Finance
Zhang Xiaoyi Vice President
Wang Jinliang Vice President
Li Guolin Vice President
Hu Ziqiang Vice President
Wei Chang Vice Director and CTO
Zhao Wenxin Chief People Officer
91
Midea Group Co., Ltd. Semi-Annual Report 2024
Jiang Peng Board Secretary
Change of asset management organizations during the Reporting Period
□Applicable N/A
Equity changes incurred by disposal of shares by holders, etc. during the Reporting Period
□Applicable N/A
Exercise of shareholder rights during the Reporting Period
During the Reporting Period, holders under employee stock ownership schemes exercised the
shareholder rights to receive the cash dividends for 2023. Other than that, they did not exercise other
shareholder rights such as voting in a meeting of shareholders.
Other information about employee stock ownership schemes during the Reporting Period
□Applicable N/A
Changes in members of the management committees for employee stock ownership schemes
□Applicable N/A
Financial impact of employee stock ownership schemes on the Company during the Reporting Period
and the relevant accounting treatments
Applicable □N/A
As per the Accounting Standard No. 11 for Business Enterprises—Share-based Payments, for equity-
settled share-based payments in exchange for services from employee that are exercisable when
services in the vesting period are completed or specified performance conditions are met, at every
balance sheet date during the vesting period, the services obtained in the current period are included in
the relevant costs/expenses and capital surplus at the fair value of the equity instruments at the grant
date based on the best estimate of the number of exercisable equity instruments. The expense
amortization of the Company’s share-based payment incentive schemes stood at RMB224.87 million for
the first half of 2024, which was included in the relevant expense items and capital surplus.
Termination of employee stock ownership schemes during the Reporting Period
□Applicable N/A
4.3 Other incentive measures for employees
□Applicable N/A
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Midea Group Co., Ltd. Semi-Annual Report 2024
Section V Environmental and Social Responsibility
1. Major Environmental Issues
Whether the Company or any of its subsidiaries is declared a heavily polluting business by the environmental protection authorities
Yes □ No
Policies and industry standards for environmental protection
The Company has attached great importance to environmental protection. It has been strictly abiding by the Law of the People's Republic of China on
Environmental Protection, the Law of the People's Republic of China on Water Pollution Prevention and Control, the Law of the People's Republic of China
on Air Pollution Prevention and Control, the Law of the People's Republic of China on Noise Pollution Prevention and Control, the Law of the People's
Republic of China on the Prevention and Control of Environmental Pollution by Solid Wastes, the Law of the People's Republic of China on Environmental
Impact Assessment, the Regulations on Administration of Discharge Permits as well as other applicable laws, administrative rules and regulatory documents.
The Company has been taking practical and effective environmental protection measures to protect the ecological environment and fulfill its corporate
responsibility.
In terms of pollutant management, the Company has been in compliance with the existing pollutant discharge standards and limits, which are specified as
follows:
With respect to wastewater management, the Company is subject to the Integrated Wastewater Discharge Standard (GB8978-1996), the Discharge Limits of
Water Pollutants (DB44/26-2001), the Discharge Standard of Water Pollutants for Electroplating (DB44/1597-2015), and the Discharge Limits of Water
Pollutants of Guangdong Province (DB44/26-2001), among other standards.
With respect to waste gas management, the Company is subject to the Integrated Emission Standard of Air Pollutants (GB16297-1996), the Emission
Standard of Air Pollutants for Boiler (GB13271-2014), the Emission Control Standard of Volatile Organic Compounds for Industrial Enterprises (DB13/2322-
93
Midea Group Co., Ltd. Semi-Annual Report 2024
2016), the Emission Standard of Pollutants for Synthetic Resin Industry (GB31572-2015), the Emission Limits of Air Pollutants (DB44/27-2001), the Emission
Standard of Volatile Organic Compounds for Furniture Manufacturing Operations (DB44/814-2010), and the Emission Standard of Air Pollutants for Industrial
Kiln and Furnace (GB9078-1996), among other standards.
With respect to noise management, the Company is subject to the Emission Standard for Industrial Enterprises Noise at Boundary (GB12348-2008).
With respect to treatments of solid and hazardous waste, the Company has been in strict compliance with the Law on the Prevention and Control of the
Environmental Pollution of Solid Waste, disposing of solid and hazardous waste in a compliant manner.
Administrative permits in relation to environmental protection
According to the requirements of the applicable environmental protection laws and regulations, all construction projects of the Company fulfill the procedures
of environmental impact assessment and other administrative licensing procedures for environmental protection, strictly abide by the environmental
requirements for construction projects, and implement environmental treatment. After the completion of the project construction, according to the
requirements of the environmental impact assessment documents, the Company commissions a third-party monitoring organisation to test the project's
wastewater, waste gas, noise and other indicators, and applies for a discharge permit in accordance with the Regulations on the Administration of Discharge
Permits and other regulations and standards.
During the Reporting Period, the existing discharge permits of the Company's subsidiaries were all within the validity period. During the validity period of the
discharge permits, if there are matters such as changes in the basic information of the discharge permits, implementation of revisions in pollutant discharge
standards, changes in the total pollutant discharge limits, etc., the subsidiaries of the Company shall, in accordance with the relevant requirements, submit
an application for change of the discharge permits to the local competent environmental protection authorities within a specified period of time.
Industry standards for discharges and discharges of pollutants in production and operation activities
Num
Name
ber
of the Approve
Type of Name of of Concentration
Compa Distribution of discharge Pollutant discharge Total discharge d total Excess
major major Discharge method disch of the
ny or outlets standards (ton) discharg discharge
pollutant pollutant arge discharge
subsidi e (ton)
outlet
ary
s
94
Midea Group Co., Ltd. Semi-Annual Report 2024
Physical
and
comprehens COD 114mg/L 12.654 70.898 No
ive
indicators
Ammonia-
Inorganic
nitrogen 1.75mg/L 0.194 2.496 No
pollutants
(NH3-N)
Physical Discharge after being treated by Integrated Wastewater
and Western gate of the Wuhu
Five-day wastewater treatment system and 1 Discharge Standard
comprehens plant 54.6mg/L 6.061 / No
BOD reaching the standard (GB8978-1996)
ive
indicators
Oil Petroleum 14.5mg/L 1.610 / No
Wuhu Total
Inorganic
Midea phosphor 0.04mg/m 0.004 / No
pollutants
Kitchen us (by P)
& Bath Inorganic Fluoride
Applian 8.92mg/m 0.990 / No
pollutants (by F-)
ces
Mfg. Particles Soot 3.96mg/m 6.49 / No
Co., Gaseous
Ltd. Sulfur
inorganic <3mg/m Emission Standard of Air 1.16 / No
dioxide
substances 15m high altitude discharge Pollutants for Boiler
(GB13271-2014)
Gaseous
inorganic Oxynitride <3mg/m 1.16 / No
substances
Particles Dust 3.68mg/m Integrated Emission 1.53 / No
45 Plants at each workshop Standard of Air Pollutants
Aromatic
Xylene <0.0015mg/m (GB16297-1996) 0.0001 / No
compounds
Fatty
hydrocarbon Overall High altitude discharge after being Emission Control Standard
s and volatile treated by waste gas treatment station for Industrial Enterprises
halogenated organic 5.25mg/m Volatile Organic 3.765 / No
fatty compound Compounds (DB13-2322-
hydrocarbon s (VOCs) 2016)
s
95
Midea Group Co., Ltd. Semi-Annual Report 2024
Physical
and
comprehens COD 114mg/L 8.892 / No
ive
indicators
Ammonia-
Inorganic
nitrogen 1.75mg/L 0.137 / No
pollutants
(NH3-N)
Western gate of the Wuhu
Physical Discharge after being treated by plant Integrated Wastewater
and wastewater treatment system and 1 (Shared kitchen and Discharge Standard
Five-day
comprehens reaching the standard bathroom wastewater 54.6mg/L (GB8978-1996) 4.259 / No
BOD
ive treatment plant)
indicators
Oil Petroleum 14.5mg/L 1.131 / No
Wuhu Total
Midea Inorganic
phosphor 0.04mg/m 0.003 / No
Smart pollutants
us (by P)
Kitchen
Applian Inorganic Fluoride
8.92mg/m 0.696 / No
ces pollutants (by F-)
Manufa Particles Soot 10 5.69mg/m 1.71 / No
cturing
Co., Gaseous
Sulfur
Ltd. inorganic 6 <3mg/m Emission Standard of Air 0.299 / No
dioxide
substances 15m high altitude discharge Pollutants for Boiler
(GB13271-2014)
Gaseous
inorganic Oxynitride 6 4.2mg/m 0.39 / No
substances
Particles Dust 6 5.75mg/m Integrated Emission 1.05 / No
Plants at each workshop Standard of Air Pollutants
Aromatic
Xylene 2 <0.0015mg/m (GB16297-1996) 0.00005 / No
compounds
Fatty
hydrocarbon Overall High altitude discharge after being Emission Control Standard
s and volatile treated by waste gas treatment station for Industrial Enterprises
halogenated organic 13 3.04mg/m Volatile Organic 1.34 / No
fatty compound Compounds (DB13-2322-
hydrocarbon s (VOCs) 2016)
s
96
Midea Group Co., Ltd. Semi-Annual Report 2024
Physical
and
comprehens COD 57.84mg/L 1.781
ive
indicators
Ammonia-
Inorganic
nitrogen 0.8mg/L 0.0286
pollutants
(NH3-N)
Physical
and
Five-day
comprehens 16.37mg/L 0.59
BOD
ive
indicators
Total Takeover Standards for
Inorganic Sewage Treatment Plants
nitrogen 8.14mg/L 0.302
pollutants in Western Clusters of
(by N)
Discharge after being treated by Hefei City
Hefei The eastern side of 1#
Total wastewater treatment system and 1 / No
Midea Inorganic plant Integrated Wastewater
phosphor reaching the standard
Heatin pollutants 0.04mg/L Discharge Standard 0.00159
us (by P)
g& (GB8978-1996), Level 3
(by P)
Ventilat
ing Other Anionic
0mg/L 0
Equipm indicators surfactant
ent Physical
Co., and
Suspende
Ltd. comprehens 7.67mg/L 0.277
d matters
ive
indicators
Oil Petroleum 0.057mg/L 0.02
Physical
and
comprehens pH value 7.23 /
ive
indicators
Fatty 1 set in 3# plant and 1 unit
RTO equipment 2 3.69mg/m 0.149
hydrocarbon in 4# plant
s and Non- 2 sets at 1# plant and 1 Integrated Emission
halogenated methane Water spray and activated carbon 3 8.35mg/m 0.12
set at 2# plant Standard of Air Pollutants / No
fatty hydrocarb
hydrocarbon GB16279-1996 Level 2
ons 3 at 1# plant, 2 at 2# plant,
Two-stage activated carbon
s 9 1 at 3# plant, 2 at 4# plant 5.695mg/m 0.561
equipment
and 1 cyclopentane
97
Midea Group Co., Ltd. Semi-Annual Report 2024
2 at 1# plant, 3 at 2# plant,
Particles Soot Filter cartridge dust collector 8 2 at 3# plant and 1 at 4# 2.49mg/m 0.428 / No
plant
Physical
and The eastern side of Takeover Standards for
comprehens COD wastewater treatment 88.153mg/L Sewage Treatment Plants 3.65 58.150 No
ive station in Western Clusters of
Discharge after being treated by Hefei City
indicators 1
wastewater treatment station
Ammonia- The eastern side of Integrated Wastewater
Inorganic Discharge Standard
nitrogen wastewater treatment 0.481mg/L 0.021 / No
Hefei pollutants (GB8978-1996), Level 3
(NH3-N) station
Midea
Laundr Total
y suspende
Applian d
ce Co., particulate High altitude discharge after being
matter treated by cyclone + filter cartridge
Ltd.
(TSP) dust collector/High altitude discharge
(monito Particles Plants at each workshop 0.75mg/m 1.52 / No
red by (aerodyna after being treated by water spraying Table 5 of the Emission
mic + demister + activated carbon +
the Standard of Pollutants for
activated carbon
munici diameter Synthetic Resin Industry
pal 15
below (GB 31572-2015): Special
govern 100μm) Emission Limit
ment) Requirements
Fatty
High altitude discharge after being
hydrocarbon
Non- treated by water spraying + demister +
s and
methane activated carbon + activated
halogenated Plants at each workshop 1.85mg/m 2.13 / No
hydrocarb carbon/High altitude discharge after
fatty
ons being treated by the two-stage
hydrocarbon
activated carbon
s
GD Physical
Midea and
Air- comprehens COD 32mg/L 0.7475 9.59 No
Conditi ive Discharge after being treated by The southeastern side of Discharge Limits of Water
1
oning indicators wastewater treatment station 4# plant Pollutants (DB44/26-2001)
Equipm Ammonia-
ent Inorganic
nitrogen 0.065mg/L 0.1518 / No
Co., pollutants
(NH3-N)
98
Midea Group Co., Ltd. Semi-Annual Report 2024
Ltd. Physical
and
Suspende
comprehens 11mg/L 0.25698 / No
d matters
ive
indicators
Oil Petroleum 0.11mg/L 0.025698 / No
Physical
and
comprehens COD 39mg/L 0.085176 9.59 No
ive
indicators
Physical
and Discharge after being treated by The eastern side of 2# Discharge Limits of Water
Suspende 1
comprehens wastewater treatment station plant 14mg/L Pollutants (DB44/26-2001) 0.030576 / No
d matters
ive
indicators
Ammonia-
Inorganic
nitrogen 1.625mg/L 0.0035 / No
pollutants
(NH3-N)
Oil Petroleum 1.17mg/L 0.0025552 / No
Total Emission Standard of
volatile Volatile Organic
Other 15m high altitude discharge after
organic Compounds for Furniture
organic being treated by spray tower + 3 4# plant 0.57mg/m 0.039 14 No
compound Manufacturing (DB44/814-
compounds activated carbon
s (spray 2010) the second time
powder) period
Overall
volatile Emission Standard of
Other 15m high altitude discharge after
organic Volatile Organic
organic being treated by environmental 4 1# and 9# plants 0.49mg/m 0.064 / No
compound Compounds for Printing
compounds protection equipment
s (screen Industry (DB44/815-2010)
printing)
Overall
volatile
Emission Standard of
Other organic 15m high altitude discharge after
Volatile Organic
organic compound being treated by environmental 2 10# plants 0.61mg/m 0.5267 / No
Compounds for Printing
compounds s protection equipment
Industry (DB44/815-2010)
(electronic
s)
99
Midea Group Co., Ltd. Semi-Annual Report 2024
Fatty
hydrocarbon
Non-
s and 15m high altitude discharge after Emission Limits of Air
methane
halogenated being treated by environmental 5 2#, 5# plants 4.61mg/m Pollutants (DB44/27- 2001) 1.302 / No
hydrocarb
fatty protection equipment the second time period
ons
hydrocarbon
s
Physical
and
comprehens COD 59.0mg/L 1.687 7.5
ive
indicators
Physical
and
Suspende
comprehens 33.85mg/L 0.909 /
d matters Integrated Wastewater
ive Discharge after treatment by the
indicators The northern side of the Discharge Standard
sewage and wastewater station to 1 No
park (GB8978-1996) Table 4,
Physical meet the standards
Level 3
and
Five-day
comprehens 23.775mg/L 0.785 /
BOD
Wuhu ive
Maty indicators
Air- Ammonia-
Conditi Inorganic nitrogen 19.75mg/L 0.560 0.675
oning pollutants
(NH3-N)
Equipm
ent Oil Petroleum 0.2835mg/L 0.00768 /
Co., Integrated Emission
Ltd. Particles Soot 11 1#, 2#, 3#, 4# plants 0 Standard of Air Pollutants 4.54 /
(GB16297-1996)
Fatty
hydrocarbon Emission Control Standard
Non-
s and for Industrial Enterprises
methane
halogenated 10 1#, 2#, 3#, 4# plants 9.314mg/m3 Volatile Organic 9.36 /
hydrocarb 15m high altitude discharge after
fatty Compounds (DB13-2322-
ons being treated by environmental No
hydrocarbon 2016)
protection equipment
s
Gaseous
inorganic Oxynitride 3 3# plant 1.26mg/m3 0.192 2.209
Integrated Emission
pollutants
Standard of Air Pollutants
Gaseous
Sulfur (GB16297-1996)
inorganic 3 3# plant 1.53mg/m3 0.162 /
dioxide
pollutants
100
Midea Group Co., Ltd. Semi-Annual Report 2024
Physical
and
comprehens COD 24mg/L 6.3648 16.28 No
ive
indicators
Physical
and
Suspende
comprehens 11mg/L 2.9172 / No
d matters
ive
indicators
Oil Petroleum 1.27mg/L Discharge Standard of 0.336804 / No
Total Water Pollutants for
Inorganic
phosphor 0.43mg/L Electroplating DB 44/1597- 0.114036 / No
Guang pollutants
us (by P) 2015
dong
Meizhi Metals and
Precisi metal Total zinc Near the wastewater 0.09 0.0238 / No
compounds Discharge after being treated by
on- 1 treatment station in the
wastewater treatment station
Manufa Physical north side of the plant
cturing and
Co., comprehens pH value 7.8mg/L / / No
Ltd. ive
indicators
Inorganic Total
5.28mg/L 1.400256 / No
pollutants nitrogen
Ammonia-
Inorganic
nitrogen 0.1mg/L 0.0265 2.034 No
pollutants
(NH3-N)
Discharge Limits of Water
Pollutants in Guangdong
Inorganic Fluoride DB44/26-2001
0.442mg/L 0.11721 / No
pollutants (by F-)
101
Midea Group Co., Ltd. Semi-Annual Report 2024
Total
suspende
d Emission Limits of Air
particulate Pollutants (DB44/27-2001)
matter 15m high altitude discharge after /
Particles (TSP) being treated by environmental 7 Roof of the plant Emission Standard of Air 0.2543 / No
(aerodyna protection equipment 1.523mg/m Pollutants for Industrial Kiln
mic and Furnace (GB 9078-
diameter 1996)
below
100μm)
Gaseous 15m high altitude discharge after
Sulfur
inorganic being treated by environmental 4 Roof of the plant 0 0 0.436 No
dioxide Emission Standard of Air
pollutants protection equipment
Pollutants for Boiler
Gaseous 15m high altitude discharge after (DB44/765-2019)
inorganic Oxynitride being treated by environmental 4 Roof of the plant 10.25mg/m 0.99388 2.039 No
pollutants protection equipment
Overall
Other volatile 15m high altitude discharge after
organic organic being treated by environmental 10 Roof of the plant 0.307mg/m 0.217836 4.553 No
compounds compound protection equipment
Emission Standard of
s (VOCs)
Volatile Organic
15m high altitude discharge after Compounds for Surface
Aromatic
Benzene being treated by environmental Roof of the plant 0.01mg/m Coating of Automobile 0 / No
compounds
protection equipment Manufacturing Industry
Total 2 (DB44/816-2010)
15m high altitude discharge after
Aromatic toluene
being treated by environmental Roof of the plant 0.035mg/m 0.000576 / No
compounds and
protection equipment
xylene
Physical
and
comprehens COD 64mg/L 4.64 6.046 No
Guang ive Discharge Standard of
dong indicators Water Pollutants for
1 Near the wastewater
Meizhi Discharge after being treated by Electroplating of
Physical treatment station in the
Compr wastewater treatment station Guangdong Province DB-
and north side of the plant
essor Suspende 441597-2015, before 1
comprehens 20mg/L 3.62 / No
Limited d matters September 2012
ive
indicators
Oil Petroleum 2.16mg/L 0.1566 / No
102
Midea Group Co., Ltd. Semi-Annual Report 2024
Total
Inorganic
phosphor 0.82mg/L 0.0594 / No
pollutants
us (by P)
Metals and
metal Total zinc 0.038mg/L 0.002755 / No
compounds
Physical
and
comprehens pH value 7.5mg/L / / No
ive
indicators
Inorganic Total
6.44mg/L 0.712 / No
pollutants nitrogen
Ammonia-
Inorganic
nitrogen 5.14mg/L 0.37265 0.756 No
pollutants
(NH3-N)
Inorganic Fluoride
0.536mg/L 0.03886 / No
pollutants (by F-)
Metals and
Total
metal 0 0 0.024 No
nickel
compounds
Total
suspende
d
particulate Discharge Limits of Air
matter Pollutants (DB44/27-2001)/
15m high altitude discharge after
(TSP) Roof of main plant and Emission Standard of Air
Particles being treated by environmental 17 0 0 8.705 No
(aerodyna metal plate workshop Pollutants for Industrial Kiln
protection equipment
mic and Furnace (GB9078-
diameter 1996)
below
100μm)
Gaseous 15m high altitude discharge after
Sulfur Roof of main plant and
inorganic being treated by environmental 11 0 0 0.799 No
dioxide metal plate workshop Emission Standard of Air
pollutants protection equipment
Pollutants for Boiler
Gaseous 15m high altitude discharge after (DB44/765-2019)
Roof of main plant and
inorganic Oxynitride being treated by environmental 11 13.8mg/m 2.8729 7.814 No
metal plate workshop
pollutants protection equipment
15m high altitude discharge after Emission Standard of
Aromatic Roof of main plant and
Benzene being treated by environmental 2 0 Volatile Organic 0 / No
compounds metal plate workshop
protection equipment Compounds for Surface
103
Midea Group Co., Ltd. Semi-Annual Report 2024
Total Coating of Automobile
15m high altitude discharge after Manufacturing Industry
Aromatic toluene Roof of main plant and
being treated by environmental 2 0.02mg/m (DB44/816-2010) 0.002562 / No
compounds and metal plate workshop
protection equipment
xylene
Overall
Other volatile 15m high altitude discharge after
Roof of main plant and
organic organic being treated by environmental 7 0.64375mg/m 0.2792 5.718 No
metal plate workshop
compounds compound protection equipment
s (VOCs)
Physical
and
comprehens COD 85.5 Discharge Standard of 6.434 16.87 No
ive Discharge after being treated by
Water Pollutants for
indicators wastewater treatment system and Sewage treatment station
1 Electroplating (DB44/1597-
reaching the standard
Oil Petroleum 0.22 2015) 0.015 / No
Ammonia-
Inorganic
nitrogen 11.11 1.710 2.103 No
pollutants
(NH3-N)
Foshan Total Table 1 of the Emission
Waste gas sprayers 1 and
Shund Aromatic toluene High altitude discharge after being Standard of Volatile
2 at 3# plant, outlets 1, 2 0.14 0.199 / No
e compounds and treated by waste gas treatment station Organic Compounds for
and 3 for waste gas from
Midea xylene Furniture Manufacturing
wave-soldering, painting
Electric Overall 17 (DB44/814-2010):
and drying at 6# plant,
al Other volatile Discharge Limits for VOCs
High altitude discharge after being outlets 1 and 2 for waste
Heatin organic organic 1.2 through Exhaust Funnel/for 2.167 36.43 No
treated by waste gas treatment station gas from reflow soldering
g compounds compound Time Period II
at 6# plant
Applian s (VOCs)
ces Fatty
Manufa Outlet of injection molding Table 4 of the Emission
hydrocarbon
cturing Non- waste gas in the south Standard of Pollutants for
s and
Co., methane High altitude discharge after being side of 1# plant, outlet of Synthetic Resin Industry
halogenated 2 4.89 0.988 / No
Ltd. hydrocarb treated by waste gas treatment station injection molding waste (GB 31572- 2015):
fatty
ons gas in the south side of 9# Emission Limits of Air
hydrocarbon
plant Pollutants
s
Inhalable
Table 2 of the Emission
particles
Limits of Air Pollutants
(aerodyna Outlets 1 and 2 of sanding
(DB44/27-2001): Emission
mic waste gas at 3# plant,
Particles Pulse bag dust collecting 10 17.06 Limits of Industrial Waste 7.640 / No
diameter outlets 1 and 2 of polishing
Gas (Time Period 2), Level
10 waste gas at 3# plant
2
below
100μm)
104
Midea Group Co., Ltd. Semi-Annual Report 2024
Gaseous
Sulfur
inorganic 0 0 3.8231 No
dioxide High altitude discharge after being Oxidation wire roof of 3#
pollutants
treated by waste gas treatment station 4 plant, Drying furnace of 3#
Gaseous plant
inorganic Oxynitride 13.07 3.201 13.132 No
pollutants
Emission Standard of
Discharge after being treated by South and north section
Particles Fume 2 0.33 Cooking Fume (Trial) (GB 0.110 / No
waste gas treatment station canteens
18483-2001)
Physical
and Takeover Standards for
comprehens COD 43mg/L Sewage Treatment Plants 8.59 / No
The western side of the in Western Clusters of
ive Discharge after being treated by
comprehensive Hefei City
indicators wastewater treatment system and 1
wastewater treatment
reaching the standard Integrated Wastewater
Ammonia- station
Inorganic Discharge Standard
nitrogen 5.75mg/L (GB8978-1996), Level 3 0.962 / No
pollutants
(NH3-N)
No. 1 workshop welding
soot discharge outlet for 1.4mg/m
waste gas Integrated Emission
Standard of Air Pollutants
No.3 workshop discharge (GB16297-1996)
Anhui
outlet for the welding 1.4mg/m
Meizhi
Compr Total waste gas
essor suspende Waste gas outlet of 1#
Co., d heat-treating furnace at 3.6mg/m Emission Standard of Air
Ltd. particulate No. 2 workshop Pollutants for Industrial Kiln
matter
Collected by gas trap hood + 15m Waste gas outlet of 2# and Furnace (GB9078-
Particles (TSP) 10 1.394 65.45 No
high exhaust cylinder heat-treating furnace at 5.3mg/m 1996)
(aerodyna
mic No. 2 workshop
diameter Integrated Emission
Waste gas outlet for die
below 5.9mg/m Standard of Air Pollutants
casting at No. 2 workshop
100μm) (GB16297-1996)
Waste gas outlet for die Integrated Emission
5.1mg/m
casting at No. 4 workshop Standard of Air Pollutants
Waste gas outlet of 1# (GB16297-1996)
heat-treating furnace at 3.03mg/m Emission Standard of Air
No. 4 workshop Pollutants for Industrial Kiln
105
Midea Group Co., Ltd. Semi-Annual Report 2024
and Furnace (GB9078-
1996)
Waste gas outlet of 2#
Emission Standard of Air
heat-treating furnace at 1.31mg/m
Pollutants for Industrial Kiln
No. 4 workshop
and Furnace (GB9078-
1996)
Waste gas outlet for Integrated Emission
electrophoresis and drying 3.2mg/m Standard of Air Pollutants
at No. 1 workshop (GB16297-1996)
Waste gas outlet for Integrated Emission
electrophoresis and drying 2.95mg/m Standard of Air Pollutants
at No.3 workshop (GB16297-1996)
Outlet of 1# heat-treating
38mg/m
furnace at No.2 workshop
Outlet of 2# heat-treating
27.6mg/m
furnace at No.2 workshop
Waste gas outlet for die Integrated Emission
Gaseous 10mg/m
Sulfur Collected by gas trap hood + 15m casting at No. 2 workshop Standard of Air Pollutants
inorganic 6 8.404 112.2 No
dioxide high exhaust cylinder (GB16297-1996) Standard
pollutants Outlet of 1# heat-treating
47.6mg/m Level 2
furnace at No.4 workshop
Outlet of 2# heat-treating
32.5mg/m
furnace at No.4 workshop
Waste gas outlet for die
<3mg/m
casting at No.4 workshop
Outlet of 1# heat-treating
7.8mg/m
furnace at No.2 workshop
Outlet of 2# heat-treating
9.3mg/m
furnace at No.2 workshop
Waste gas outlet for die Integrated Emission
Gaseous 10.6mg/m
Collected by gas trap hood + 15m casting at No. 2 workshop Standard of Air Pollutants
inorganic Oxynitride 6 3.133 33.24 No
high exhaust cylinder Outlet of 1# heat-treating (GB16297-1996) Standard
pollutants 20.3mg/m
furnace at No.4 workshop Level 2
Outlet of 2# heat-treating
22mg/m
furnace at No.4 workshop
Waste gas outlet for die
5.3mg/m
casting at No.4 workshop
106
Midea Group Co., Ltd. Semi-Annual Report 2024
Waste gas outlet of the
drying furnace at No. 1 28.4mg/m
workshop
Overall Collected by gas trap hood + 15m Waste gas outlet of 1# Emission Control Standard
Other volatile high exhaust cylinder drying furnace at No. 3 1.42mg/m for Industrial Enterprises
organic organic 4 workshop Volatile Organic 2.006 21.6 No
compounds compound Direct-fired waste gas incinerator + Compounds (DB12/ 524-
s (VOCs) 15m high exhaust cylinder Die casting at No. 2 2020)
6.2mg/m
workshop
Die casting at No. 4
3.7mg/m
workshop
Emission Standard of
Volatile Organic
Aromatic Waste gas outlet around Compounds for Furniture
Benzene Zeolite drum + RO 1 0mg/m 0.00 / No
compounds plant C Manufacturing (DB44/814-
2010) the second time
period
Guang
dong Emission Standard of
Welling Total Volatile Organic
Motor Aromatic toluene Waste gas outlet around Compounds for Furniture
Zeolite drum + RO 1 0mg/m 0.00 / No
Manufa compounds and plant C Manufacturing (DB44/814-
cturing xylene 2010) the second time
Co., period
Ltd.
Emission Standard of
Overall
Volatile Organic
Other volatile
Waste gas outlet around Compounds for Furniture
organic organic Zeolite drum + RO 1 14mg/m 3.972 17.09 No
plant C Manufacturing (DB44/814-
compounds compound
2010) the second time
s (VOCs)
period
Physical
Guang Discharge Limits of Water
and
dong Pollutants in Guangdong
comprehens COD 36 8.51 22.77 No
Midea Discharge to the municipal sewage The eastern side of DB-44/26-2001
ive
Kitchen system after being treated by 1 wastewater treatment Emission Standard of
indicators
Applian wastewater treatment system station in Malong base Volatile Organic
ces Ammonia- Compounds for Furniture
Inorganic
Manufa pollutants nitrogen 0.603 Manufacturing (DB44/814- 0.143 4.554 No
cturing (NH3-N) 2010)/ Emission Standard
Co., Particles Soot 20m high altitude discharge after 114 27 outlets at A1 plant, 47 <20 of Volatile Organic 0 / No
107
Midea Group Co., Ltd. Semi-Annual Report 2024
Ltd. Gaseous being treated by waste gas treatment outlets at A2 plant, 20 Compounds for Surface
Sulfur equipment and reaching the standard outlets at B2 plant, 11 Coating of Automobile
inorganic 3 0.007 1.055 No
dioxide outlets at C2 plant, 2 Manufacturing Industry
pollutants
outlets at C3 plant, 1 outlet (DB44/816-2010)/
Gaseous at wastewater treatment Emission Standard of
inorganic Oxynitride station and 6 outlets at 3 Pollutants for Synthetic 1.67 10.314 No
pollutants canteen Resin Industry (GB 31572-
Aromatic 2015)/ Guangdong
Benzene 0.01 0.002 / No
compounds Province Emission Limits
of Air Pollutants (DB44/27-
Total
2001)/ Emission Standard
Aromatic toluene
0.1 of Volatile Organic 0.31 / No
compounds and
Compounds for Printing
xylene
Industry (DB44/815-2010)/
Overall Emission Standard of
Other volatile Cooking Fume (on Trial)
organic organic 1.02 (GB 18483-2001) 1.6 35.051 No
compounds compound
s (VOCs)
Fatty
hydrocarbon
Non-
s and
methane
halogenated 2.49 0.41 / No
hydrocarb
fatty
ons
hydrocarbon
s
Aromatic Ethylbenz
0.42 0.035 / No
compounds ene
15m high altitude discharge after
Particles Fume being treated by oil fume purification 0.3 0.128 / No
facility and reaching the standard
Anhui Physical
Meizhi and
Precisi comprehens COD The south side of Building 70.335mg/L Integrated Wastewater 33.038082 185.61 No
ive Discharge after being treated by 6 for night shift at the north
on Discharge Standard
wastewater treatment system and 2
Manufa indicators side of the plant area (GB8978-1996) Table 4,
reaching the standard
cturing Ammonia- (General outlet) Level 3
Co., Inorganic 6.014
nitrogen 2.773727 9.81 No
Ltd. pollutants mg/L
(NH3-N)
108
Midea Group Co., Ltd. Semi-Annual Report 2024
Physical
and 23.9
Five-day
comprehens 11.0324 / No
BOD mg/L
ive
indicators
Physical
and 27.5
Suspende
comprehens 12.667823 / No
d matters mg/L
ive
indicators
2.02
Oil Petroleum 0.9324 / No
mg/L
Integrated Wastewater
Metals and 0.091
Total Discharge Standard
metal 0.042 0.108 No
nickel mg/L (GB8978-1996), the first
compounds Outlet in the sewage class pollutant standard
station
Metals and 0.24 Integrated Wastewater
metal Total zinc Discharge Standard 0.11 2.03 No
compounds mg/L (GB8978-1996)
Outlet for molybdenum-
2.49mg/m3
containing waste gas 1
Collected by gas trap hood + 21m Outlet for molybdenum-
3 2.40 mg/m3 No
high exhaust cylinder containing waste gas 2
Outlet for molybdenum-
6.74mg/m3
containing waste gas 3
1# Outlet for waste gas
1.31mg/m3
Fatty from machining
hydrocarbon Relevant standard limit
Non- 2# Outlet for waste gas requirements in Table 1 of
s and 1.71mg/m3
methane from machining Shanghai Integrated
halogenated 2.71 /
hydrocarb 3# Outlet for waste gas Emission Standard of Air
fatty ons 1.72mg/m3 Pollutants (DB31/933-
hydrocarbon from machining
2015)
s Collected by gas trap hood + 25m 4# Outlet for waste gas
7 1.89mg/m3 No
high exhaust cylinder from machining
5# Outlet for waste gas
3.05mg/m3
from machining
6# Outlet for waste gas
4.07mg/m3
from machining
7# Outlet for waste gas
3.68mg/m3
from machining
109
Midea Group Co., Ltd. Semi-Annual Report 2024
Outlet for waste gas from
4.25mg/m3
coating 1
Outlet for waste gas from
2.29mg/m3
coating 2
4
Outlet for waste gas from
21.2mg/m3
coating 3
Outlet for waste gas from
2.31mg/m3
coating 4
Outlet for heat treatment 1 <20mg/m3
Outlet for heat treatment 2 11.45mg/m3
Outlet for heat treatment 3 <20mg/m3
Outlet for heat treatment 4 23.2mg/m3
Outlet for heat treatment 5 <20mg/m3
Outlet for heat treatment 6 10.4mg/m3
Outlet for heat treatment 7 22.5mg/m3
Outlet for heat treatment 8 25.2mg/m3
Total Outlet for heat treatment 9 <20mg/m3
suspende
d Outlet for heat treatment
<20mg/m3
particulate 10
matter Outlet for heat treatment Comprehensive Control
Collected by gas trap hood + 25m <20mg/m3 Plan for Air Pollution of
Particles (TSP) 22 11 8.0678 / No
(aerodyna high exhaust cylinder Industrial Furnaces
Outlet for heat treatment (H.D.Q. [2019] No. 56)
mic <20mg/m3
12
diameter
Outlet for heat treatment
below 100 <20mg/m3
13
μm)
Outlet for heat treatment
21.7mg/m3
14
Outlet for heat treatment
<20mg/m3
15
1# outlet for waste gas
from pre-coating treatment <20mg/m3
and kiln
2# outlet for waste gas
from pre-coating treatment <20mg/m3
and kiln
110
Midea Group Co., Ltd. Semi-Annual Report 2024
3# outlet for waste gas
from pre-coating treatment <20mg/m3
and kiln
3rd stage sintering furnace
4.5mg/m3
outlet
5th stage coating sintering
23.2mg/m3
furnace outlet
Outlet for waste gas from
<20mg/m3
aluminum melting 1
Outlet for waste gas from
<20mg/m3
aluminum melting 2
Outlet for the welding
<20mg/m3
waste gas 1
Outlet for the welding
20.8mg/m3
waste gas 2
Outlet for the welding
21.9mg/m3
waste gas 3
Outlet for the welding
27.7mg/m3
Collected by gas trap hood + 21m waste gas 4
8
high exhaust cylinder Outlet for the welding
25.6mg/m3
waste gas 5
Outlet for the welding
20.1mg/m3
waste gas 6
Outlet for the welding
24.1mg/m3
waste gas 7
Outlet for the welding
14mg/m3
waste gas 8
Outlet for heat treatment 1 ＜3mg/m3
Outlet for heat treatment 2 ＜3mg/m3
Outlet for heat treatment 3 ＜3mg/m3
Outlet for heat treatment 4 12mg/m3 Comprehensive Control
Gaseous
Sulfur Collected by gas trap hood + 25m Plan for Air Pollution of
inorganic 22 Outlet for heat treatment 5 <3mg/m3 5.8799 / No
dioxide high exhaust cylinder Industrial Furnaces
pollutants
Outlet for heat treatment 6 6mg/m3 (H.D.Q. [2019] No. 56)
Outlet for heat treatment 7 18mg/m3
Outlet for heat treatment 8 9mg/m3
Outlet for heat treatment 9 66mg/m3
111
Midea Group Co., Ltd. Semi-Annual Report 2024
Outlet for heat treatment
<3mg/m3
10
Outlet for heat treatment
70mg/m3
11
Outlet for heat treatment
<3mg/m3
12
Outlet for heat treatment
3mg/m3
13
Outlet for heat treatment
32mg/m3
14
Outlet for heat treatment
123mg/m3
15
1# outlet for waste gas
from pre-coating treatment <3mg/m3
and kiln
2# outlet for waste gas
from pre-coating treatment 22mg/m3
and kiln
3# outlet for waste gas
from pre-coating treatment 22mg/m3
and kiln
3rd stage sintering furnace
4.5mg/m3
outlet
5th stage coating sintering
35mg/m3
furnace outlet
Outlet for waste gas from
10mg/m3
aluminum melting 1
Outlet for waste gas from
9mg/m3
aluminum melting 2
Outlet for heat treatment 1 <3mg/m3
Outlet for heat treatment 2 14.5mg/m3
Outlet for heat treatment 3 <3mg/m3
Comprehensive Control
Gaseous Outlet for heat treatment 4 <3mg/m3
Collected by gas trap hood + 25m Plan for Air Pollution of
inorganic Oxynitride 22 3.35 / No
high exhaust cylinder Outlet for heat treatment 5 <3mg/m3 Industrial Furnaces
pollutants
(H.D.Q. [2019] No. 56)
Outlet for heat treatment 6 14mg/m3
Outlet for heat treatment 7 32mg/m3
Outlet for heat treatment 8 18mg/m3
112
Midea Group Co., Ltd. Semi-Annual Report 2024
Outlet for heat treatment 9 4mg/m3
Outlet for heat treatment
<3mg/m3
10
Outlet for heat treatment
<3mg/m3
11
Outlet for heat treatment
<3mg/m3
12
Outlet for heat treatment
<3mg/m3
13
Outlet for heat treatment
9mg/m3
14
Outlet for heat treatment
<3mg/m3
15
1# outlet for waste gas
from pre-coating treatment ＜3mg/m3
and kiln
2# outlet for waste gas
from pre-coating treatment 32mg/m3
and kiln
3# outlet for waste gas
from pre-coating treatment 7mg/m3
and kiln
3rd stage sintering furnace
18mg/m3
outlet
5th stage coating sintering
8mg/m3
furnace outlet
Outlet for waste gas from
3mg/m3
aluminum melting 1
Outlet for waste gas from
10mg/m3
aluminum melting 2
GD Overall Emission Standard of
Other Gas trap hood + dry filtering + UV +
Midea volatile During the screen printing Volatile Organic
organic activated carbon + 15m high altitude 1 1.980 0.06368 / No
Environ compounds organic process of the south plant Compounds for Printing
discharge
ment compound Industry (DB44/815-2010)
113
Midea Group Co., Ltd. Semi-Annual Report 2024
Applian s (VOCs) Emission Standard of
ces Other Gas trap hood + dry filtering + UV +
During the screen printing Volatile Organic
Mfg. organic activated carbon + 15m high altitude 1 1.710 0.08174 / No
process of the north plant Compounds for Printing
Co., compounds discharge
Industry (DB44/815-2010)
Ltd.
Fatty
hydrocarbon
Exhaust funnel for waste Emission Standard of
s and Gas trap hood + dry filtering + UV +
gas from the baking and Pollutants for Synthetic
halogenated activated carbon + 15m high altitude 6 0.592 0.73626 / No
injection molding Resin Industry (BG 31572-
fatty discharge
processes 2015)
hydrocarbon
s
Fatty
hydrocarbon
Exhaust funnel for waste Emission Standard of
s and Gas trap hood + dry filtering + UV +
gas from the baking and Pollutants for Synthetic
halogenated activated carbon + 15m high altitude 2 1.210 0.25714 / No
injection molding Resin Industry (BG 31572-
fatty discharge
processes 2015)
hydrocarbon
s
Fatty
hydrocarbon
Non- Emission Standard of
s and Gas trap hood + dry filtering + UV +
methane Metal plate dusting waste Pollutants for Synthetic
halogenated activated carbon + 15m high altitude 3 0.453 0.04879 / No
hydrocarb gas exhaust cylinder Resin Industry (BG 31572-
fatty discharge
ons 2015)
hydrocarbon
s
Fatty
hydrocarbon
Outlet for waste gas from
s and Dry filtering + direct combustion of
dip coating, drying and Emission Limits of Air
halogenated natural gas + 15m high altitude 1 1.320 0.09606 / No
hardening of the north Pollutants (DB44/27-2001)
fatty discharge
plant
hydrocarbon
s
Fatty
hydrocarbon
Outlet for waste gas from
s and
Dry filtering + RCO + 15m high dip coating, drying and Emission Limits of Air
halogenated 1 1.470 0.01375 / No
altitude discharge hardening of the south Pollutants (DB44/27-2001)
fatty
plant
hydrocarbon
s
114
Midea Group Co., Ltd. Semi-Annual Report 2024
Fatty
hydrocarbon
s and Metal spray painting, Emission Limits of Air
Water spray + dry separation +
halogenated 1 outlet for waste gas from 1.550 Pollutants (DB44/27-2001): 0.24522 / No
activated carbon device
fatty drying Time Period 2, Level 2
hydrocarbon
s
Fatty
hydrocarbon
Outlet for waste gas from
s and Emission Limits of Air
Water spray + dry separation + ceramic spraying, drying,
halogenated 1 7.050 Pollutants (DB44/27-2001): 0.68799 / No
activated carbon device sandblasting, powder
fatty Time Period 2, Level 2
spraying and hardening
hydrocarbon
s
Gas trap hood + water spraying + dry Emission Limits of Air
Metal plate dusting, waster
Particles filtering + UV + activated carbon + 1 4.000 Pollutants (DB44/27-2001): 0.07834 / No
gas hardening
15m high altitude discharge Time Period 2, Level 2
Outlet for waste gas from Emission Limits of Air
Gas trap hood + Water wash spray
Particles 1 aluminum casting machine 10.000 Pollutants (DB44/27-2001): 0.39822 / No
+15m high exhaust
Total polishing and grinding Time Period 2, Level 2
suspende
Emission Standard of Air
d Gas trap hood + Water wash spray + Outlet for waste gas from
Particles 1 4.200 Pollutants for Casting 0.28699 / No
particulate Oil fume purifie + 15m high exhaust die casting
Industry (GB 39726-2020)
matter
(TSP) Gas collection hood + Energy-saving
Outlet for furnace at Emission Standard of Air
(aerodyna cooling device + Cyclone plate tower
Particles 1 machine side and natural 4.400 Pollutants for Casting 0.23850 / No
mic + Wet electrostatic precipitator + 15m
gas and waste gas Industry (GB 39726-2020)
diameter high exhaust
below 100 Metal spray painting, Emission Limits of Air
Water spray + dry separation +
Particles μm) 1 outlet for waste gas from 10.000 Pollutants (DB44/27-2001): 1.58209 / No
activated carbon device
drying Time Period 2, Level 2
Outlet for waste gas from
Emission Limits of Air
Water spray + dry separation + ceramic spraying, drying,
Particles 1 10.000 Pollutants (DB44/27-2001): 0.46261 / No
activated carbon device sandblasting, powder
Time Period 2, Level 2
spraying and hardening
Emission Standard of
Fume hood + electrostatic range hood Cooking fume outlet at
Particles Fume 7 0.800 Cooking Fume GB18483- 0.02061 / No
+ 15m high altitude discharge canteen
2001
Physical Discharge Standard of
and Oil separation and slagging - Pollutants for Municipal
Suspende Domestic wastewater
comprehens hydrolysis and acidification - contact 1 4.500 Wastewater Treatment 0.12868 / No
d matters treatment station
ive oxidation - MBR Plant GB18918-2002
indicators Emission standard
115
Midea Group Co., Ltd. Semi-Annual Report 2024
Physical GB18918-2002
and
comprehens COD 15.137 0.42745 / No
ive
indicators
Animal
and
Oil 0.245 0.00647 / No
vegetable
oil
Ammonia-
Inorganic
nitrogen 0.166 0.00483 / No
pollutants
(NH3-N)
Physical
and
comprehens pH value 6.600 / / No
ive
indicators
Physical
and
Five-day
comprehens 3.550 0.09964 / No
BOD
ive
indicators
Metals and
metal Total zinc 0.005 0.00051 0.08 No
compounds
Physical
and
comprehens COD 11.265 1.31782 3.9191 No
ive
indicators Discharge Standard of
Coagulation and sedimentation +
Physical Production wastewater Water Pollutants for
hydrolysis and acidification + aeration 1
and treatment station Electroplating DB 44/1597-
Suspende + biological tank + MBR + water reuse 2015
comprehens 3.500 0.42469 / No
d matters
ive
indicators
Physical
and
comprehens pH value 7.650 / / No
ive
indicators
116
Midea Group Co., Ltd. Semi-Annual Report 2024
Total
Inorganic
phosphor 0.048 0.00617 / No
pollutants
us (by P)
Ammonia-
Inorganic
nitrogen 0.300 0.02663 0.6279 No
pollutants
(NH3-N)
Oil Petroleum 0.115 0.01461 / No
Metals and
metal Aluminum 0.414 0.04591 / No
compounds
Metals and
metal Total iron 0.005 0.00057 / No
compounds
Physical
and
comprehens COD 94mg/L 2.27 5.715 No
ive
indicators
Ammonia-
Inorganic
nitrogen 13.4mg/L 0.29 0.9975 No
pollutants
(NH3-N)
Physical Discharge to municipal domestic
and sewage network and then to the
Five-day Integrated Wastewater
comprehens wastewater treatment plant of Outlets for domestic 25.8mg/L 0.72 / No
Hubei COD 1 Discharge Standard
ive Jingzhou Shenlian Environmental sewage at the plant
Midea (GB8978-1996)
indicators Technology Co., Ltd. for reaching the
Refrige
Physical standard before discharge
rator
and
Co., Suspende
comprehens 20mg/L 0.34 / No
Ltd. d matters
ive
indicators
Animal
and
Oil 0.08mg/L 0.01 / No
vegetable
oil
Physical After deep treatment by industrial
and waste water treatment station, Integrated Wastewater
comprehens COD discharge to municipal industrial 1 Freezer waste water outlet 24mg/L Discharge Standard 0.65 5.715 No
ive sewage network and then to the (GB8978-1996)
indicators wastewater treatment plant of
117
Midea Group Co., Ltd. Semi-Annual Report 2024
Ammonia- Jingzhou Shenlian Environmental
Inorganic
nitrogen Technology Co., Ltd. for reaching the 0.0125mg/L 0.002 0.9975 No
pollutants
(NH3-N) standard before discharge
Physical
and
Five-day
comprehens 3.5mg/L 0.12 / No
COD
ive
indicators
Physical
and
Suspende
comprehens 6mg/L 0.22 / No
d matters
ive
indicators
Oil Petroleum 0.3mg/L 0.02 / No
Animal
and
Oil 0.03mg/L 0.01 / No
vegetable
oil
After photo-catalytic oxidation +
First installation branch
activated carbon, 15m high altitude 1 0.29mg/m 0.02 / No
waste gas outlets
discharge
After photo-catalytic oxidation +
Second installation branch
activated carbon, 15m high altitude 1 0.82mg/m 0.02 / No
waste gas outlets
discharge
After photo-catalytic oxidation + Waste gas outlets at the
activated carbon, 15m high altitude 1 injection molding 0.64mg/m 0.03 / No
discharge workshop
After dry filtering + photo-catalytic
Fatty Waste gas outlets at the Integrated Emission
oxidation + activated carbon, 15m 1 0.71mg/m 0.07 / No
hydrocarbon extrusion workshop Standard of Air Pollutants
Non- high altitude discharge
s and (GB16297-1996)
methane V photocatalysis + activated carbon, 1
New injection molding
0.42mg/m 0.03 / No
halogenated 15m high altitude discharge outlet Emission Standard of
hydrocarb
fatty Pollutants for Synthetic
ons Cooling and dehumidification + UV
hydrocarbon Resin Industry (GB31572-
photocatalysis + activated carbon, 1 Foam outlet 20.2mg/m 0.03 / No
s 2015)
15m high altitude discharge
Dry filter + two-stage activated Two-door gallbladder
1 12.5mg/m 0.61 / No
carbon, 15m high altitude discharge molding outlet
After wet scrubber + rotating-stream-
Waste gas outlets at the
tray scrubber + demister + activated 1 0.7mg/m 0.04 / No
freezer branch
carbon, 15m high altitude discharge
Dry filter + two-stage activated One-box gallbladder
1 21.5mg/m 0.75 / No
carbon, 15m high altitude discharge molding outlet
Dry filter + two-stage activated Two-box gallbladder
1 16.6mg/m 0.39 / No
carbon, 15m high altitude discharge molding outlet
118
Midea Group Co., Ltd. Semi-Annual Report 2024
Rotating-stream-tray scrubbe + dry
filter + two-stage activated carbon, 1 Freezer No.2 # plant outlet 1.24mg/m 0.27 / No
15m high altitude discharge
Dry filter + two-stage activated
/ No
carbon, 15m high altitude discharge Injection molding machine
Rotating-stream-tray scrubbe + dry 1 and injection granulation 28.1mg/m 4.26
filter + activated carbon, 15m high outlet / No
altitude discharge
Rotating-stream-tray scrubbe + dry
filter + activated carbon, 15m high 1 Extruder outlet 17.5mg/m 0.31 / No
altitude discharge
Dry filter + two-stage activated
1 Molding machine outlet 12.2mg/m 0.59 / No
carbon, 15m high altitude discharge
Rotating-stream-tray scrubbe + dry
Molding and extrusion
filter + activated carbon, 15m high 1 13.6mg/m 0.44 / No
granulation outlet
altitude discharge
Dry filter + two-stage activated
1 Door foam outlet 17.5mg/m 0.31 / No
carbon, 15m high altitude discharge
Dry filter + two-stage activated
1 Box foam outlet 26.7mg/m 1.14 / No
carbon, 15m high altitude discharge
Total Cartridge dust removal, 15m high Molding and extrusion
1 2.2mg/m 0.05 / No
suspende altitude discharge crushing outlet
d Cartridge dust removal, 15m high
1 Injection crushing outlet 1.5mg/m 0.11 / No
particulate altitude discharge
matter
Particles (TSP)
(aerodyna After wet scrubber + rotating-stream-
mic Waste gas outlets at the
tray scrubber + demister + activated 1 10mg/m 0.62 / No
freezer branch
diameter carbon, 15m high altitude discharge
below 100
μm)
Physical
and
Wuxi comprehens COD 239.5mg/L 44.87 123.9074 No
Little ive
Integrated Wastewater
Swan indicators Discharge to municipal sewage Exit at the middle gate of
1 Discharge Standard
Electric Physical network the plant
(GB8978-1996)
Co., and
Ltd. comprehens Suspende 34.5mg/L 6.46 87.2553 No
d matters
ive
indicators
119
Midea Group Co., Ltd. Semi-Annual Report 2024
Animal
and
Oil 0.72mg/L 0.13 10.7034 No
vegetable
oil
Total
Inorganic
phosphor 3.03mg/L 0.56 1.0701 No
pollutants
us (by P)
Inorganic Total
34.21mg/L 6.41 11.2612 No
pollutants nitrogen
Ammonia-
Inorganic
nitrogen 21.96mg/L 4.11 6.6906 No
pollutants
(NH3-N)
Total
suspende
d Water spraying + UV photocatalysis +
particulate activated carbon + filter cartridge dust
matter collection + high altitude
Particles (TSP) discharge/Two-stage activated carbon Plants at each workshop 3.05mg/m 0.207 2.0696 No
(aerodyna + high altitude discharge/Filter Integrated Emission
mic cartridge dust collection + high altitude Standard of Air Pollutants
diameter discharge/High altitude discharge (GB16297-1996)/
below 100 Tianjin Emission Control
μm) Standard for Industrial
Water spraying + UV photocatalysis + Enterprises Volatile
Fatty Organic Compounds
activated carbon + filter cartridge dust 11
hydrocarbon (DB12/524-2014)/
Non- collection + high altitude
s and Emission Standard of
methane discharge/Zeolite + CO + high altitude
halogenated Plants at each workshop 1.31mg/m Pollutants for Synthetic 0.428 1.2199 No
hydrocarb discharge/Dry filtering + electrostatic
fatty Resin Industry (GB 31572-
ons oil removal + high altitude
hydrocarbon 2015)/ Emission Standard
discharge/Two-stage activated carbon
s of Air Pollutants for Boiler
+ high altitude discharge
(GB13271-2014)
Gaseous
Sulfur Natural gas for the metal
inorganic Hight altitude discharge 0mg/m 0 0.624 No
dioxide plate process
pollutants
Gaseous
Natural gas for the metal
inorganic Oxynitride Hight altitude discharge 5mg/m 0.028 3.38 No
plate process
pollutants
120
Midea Group Co., Ltd. Semi-Annual Report 2024
Integrated Emission
Bag + activated carbon + high altitude Standard of Air Pollutants
0
Particles Soot discharge/Activated carbon + high Buildings A and B (GB16297-1996) for 0 0.2859 No
altitude discharge mg/m particles and chemical
Wuxi
Filin compounds
Electro Fatty 4 Subject to Tianjin Emission
nics hydrocarbon
Co., Non- Control Standard for
s and Activated carbon + high altitude 5.35
Ltd. halogenated methane Industrial Enterprises
discharge/Bag + activated carbon + Buildings A and B 1.1388 2.6389 No
hydrocarb mg/m Volatile Organic
fatty high altitude discharge
ons Compounds (DB12/524-
hydrocarbon
2014)
s
Total
suspende
d
particulate
matter
Particles (TSP) 1#: Two-stage activated carbon; 1.35mg/m3 1.272 3.806 No
(aerodyna 5#: Grade 3 filtering + honeycomb
Huaian mic zeolite + CO;
Welling diameter 6#: Electrostatic demisting + grade 2
Motor below 100 filtering + activated carbon; Integrated Emission
Manufa μm) 10 1, 2, 3# plants Standard of Air Pollutants
7#: Spray tower + plasma;
cturing (GB16297-1996)
Co., Fatty 8#: Grade 2 filtering + two-stage
Ltd. hydrocarbon activated carbon;
Non-
s and 9#: Bag filtering;
methane
halogenated 10#: Two-stage activated carbon. 3.66mg/m3 0.2226 0.835 No
hydrocarb
fatty
ons
hydrocarbon
s
Aromatic
Styrene 0.04mg/m3 0.01188 0.032 No
compounds
Midea Physical
Integrated Wastewater
Group and Main sewage outlet on the
Discharge after treatment at the Discharge Standard
Wuhan comprehens pH value sewage treatment plant
1 west side of the factory 7.7
(GB8978-1996)
/ / No
Refrige ive area
ration indicators
121
Midea Group Co., Ltd. Semi-Annual Report 2024
Equipm Physical
ent and
Co., comprehens COD 69.5mg/L 0.7613 9.951 No
Ltd. ive
indicators
Ammonia-
Inorganic
nitrogen 0.456mg/L 0.0043 1.002 No
pollutants
(NH3-N)
Physical
and
Suspende
comprehens 7mg/L 0.0693 / No
d matters
ive
indicators
Oil Petroleum 2.59mg/L 0.0246 / No
Total
Inorganic
phosphor 0.035mg/L 0.0004 / No
pollutants
us (by P)
Inorganic Fluoride
6.235mg/L 0.0621 / No
pollutants (by F-)
Metals and
metal Total zinc 3.125mg/L 0.0348 / No
compounds
Physical
and
Five-day
comprehens 19.2mg/L 0.2107 / No
BOD
ive
indicators
Particles Soot 20 15.42mg/m 1.1775 / No
Gaseous
Sulfur
inorganic 16 1# plant, 3# plant, 4# 10.18mg/m 0.5944 / No
dioxide
pollutants plant, 5# plant
Integrated Emission
Gaseous Discharge after being treated by Standard of Air Pollutants
inorganic Oxynitride environmental protection equipment 16 36.93mg/m (GB16297-1996) 5.4938 / No
pollutants
Metal
Tin and its
elements
compound 3 3# plant 0.0028mg/m 0.0012 / No
and their
s
compounds
122
Midea Group Co., Ltd. Semi-Annual Report 2024
Other
Acrylonitril
organic 1 0.2mg/m 0.0291 / No
e 5# plant
compounds
Aromatic
Styrene 1 0.007mg/m 0.001 / No
compounds
Overall
Other volatile
organic organic 7 1# plant, 3# plant, 4# plant 1.96mg/m 1.8068 / No
compounds compound
s (VOCs)
Fatty 1) Non-methane
hydrocarbon hydrocarbons:
Non-
s and Implementation of the
methane
halogenated 9 1#, 2# plants 5.84mg/m emission concentration 3.848 / No
hydrocarb
fatty limits on organic chemicals
ons
hydrocarbon in Table 1 of Emission
s Control Standard for
Particles Soot 2 1# plant 5.2mg/m Industrial Enterprises 0.8516 7.135 No
Gaseous Volatile Organic
inorganic Oxynitride 2 1# plant 3.22mg/m Compounds (DB13/2322- 0.5109 9.369 No
pollutants 2016)
Handa
Gaseous 2) Sulfur dioxide/ nitrogen
n Sulfur 15m high altitude discharge after
oxides/ particles:
Midea inorganic dioxide being treated by environmental 2 1# plant 3mg/m 0.4751 9.408 No
pollutants Implementation of the new
Air- protection equipment
furnace standards in Table
Conditi
1 and Table 2 of Emission
oning
Standard of Air Pollutants
Equipm
for Industrial Kiln and
ent
Metal Furnace (DB13/1640-
Co., Tin and its
elements 2012)
Ltd. compound 4 2# plant 0.0035mg/m 3) Tin and its compounds: 0.0014 / No
and their
s Implementation of the
compounds
requirements of Level 2 in
the Integrated Emission
Standard of Air Pollutants
(GB16297-1996)
Physical Requirements for inflow
and Discharge after being treated by water quality of wastewater
North side of the power
comprehens COD wastewater treatment system and 1 135mg/L treatment plant in Handan 1.09 9.42 No
house
ive reaching the standard Economic and
indicators Technological
123
Midea Group Co., Ltd. Semi-Annual Report 2024
Ammonia- Development Zone
Inorganic
nitrogen 2.66mg/L 0.02 0.7 No
pollutants
(NH3-N)
Physical
and
comprehens pH 7.05 / / No
ive
indicators
Physical
and
Suspende
comprehens 18mg/L 0.139 / No
d matters
ive
indicators
Oil Petroleum 1.57mg/L 0.012 / No
Inorganic Fluoride
1.1mg/L 0.009 / No
pollutants (by F-)
Physical
and
comprehens pH value 7.4 / /
ive
indicators
Physical
and
Suspende
comprehens 12.5mg/l 0.9028 /
Chong d matters
ive
qing
indicators
Midea
Genera Physical
Integrated Wastewater
l and Discharge to municipal wastewater
General sewage discharge Discharge Standard
Refrige comprehens COD treatment plant after being treated by 1 89.5mg/l 6.4640 / No
exit of plant areas (GB8978-1996) Table 4,
ration ive the wastewater treatment system
Level 3
Equipm indicators
ent Ammonia-
Co., Inorganic
nitrogen 7.225mg/l 0.5218 /
Ltd. pollutants
(NH3-N)
Below
Oil Petroleum 0.0000 /
detection limit
Physical
and
Five-day
comprehens 22.45mg/l 1.6214 /
BOD
ive
indicators
124
Midea Group Co., Ltd. Semi-Annual Report 2024
Other Anionic
0.1715mg/l 0.0124 /
indicators surfactant
Inorganic Phosphat
0.03mg/l 0.0022 /
pollutants e
Inorganic Fluoride
0.69mg/l 0.0498 /
pollutants (by F-)
Metals and
Total Below
metal 0.0000 /
copper detection limit
compounds
Total
suspende
d
particulate
matter
Particles (TSP) 2.475mg/l 0.0390 /
(aerodyna
mic
diameter
below 100
μm)
Fatty
hydrocarbon
s and Non-
halogenated methane 2 sets for paint spraying
Integrated Emission
fatty waste gas of 1# and 4# 4.823mg/m 0.8568 /
hydrocarb High altitude discharge after being Standard of Air Pollutants
hydrocarbon 5 plants each, and 1 set for
ons treated by waste gas treatment station DB 50/418-2016 Table 1
s paint spraying waste gas
Central Downtown
of 2# plant
Sulfuric
Particles 6.022mg/m 1.0937 /
acid mist
Gaseous
Hydrogen Lye spray towers (one is out of Acid pickling waste gas Integrated Emission
inorganic 2 2.390mg/m 0.0013 /
chloride service, and the other one is used for outlets for 1# and 4# Standard of Air Pollutants
pollutants
125
Midea Group Co., Ltd. Semi-Annual Report 2024
Total occasional emergency cleaning of plants DB 50/418-2016 Table 1
suspende abnormal materials) Central Downtown
d
particulate
matter
Particles (TSP) 5.150mg/m 0.0029 /
(aerodyna
mic
diameter
below 100
μm)
Gaseous
Sulfur
inorganic 6.300mg/m 0.0602 /
dioxide
pollutants
Gaseous
inorganic Oxynitride 6.500mg/m 0.0972 /
pollutants Integrated Emission
Standard of Air Pollutants
Fatty
DB 50/418-2016 Table 1
hydrocarbon
Volatile oil drying waste Central Downtown
s and Non- 1 set of RTO 1
halogenated methane gas outlet Emission Standard of Air
fatty 6.500mg/m Pollutants for Industrial Kiln 0.0857 /
hydrocarb
hydrocarbon ons and Furnace DB 50/659-
s 2016 Table 1/2
Ringelma
Physical
nn 5.080mg/m 0.0644 /
indicator
emittance
Physical
and
Chong comprehens pH value 7.4 / / No
qing ive
Midea indicators
Air- Integrated Wastewater
Conditi Physical Treatment by waste water treatment Discharge Standard
and 1 West gate
oning station and reaching the standard (GB8978-1996) Table 4,
Equipm comprehens COD 219mg/L Level 3 5.04 76.63 No
ent ive
Co., indicators
Ltd. Physical Suspende
and 17mg/L 0.53 / No
d matters
comprehens
126
Midea Group Co., Ltd. Semi-Annual Report 2024
ive
indicators
Ammonia-
Inorganic
nitrogen 12.3mg/L 0.45 5.32 No
pollutants
(NH3-N)
Oil Petroleum 0.26mg/L 0.01 / No
Inorganic Fluoride
3.73mg/L 0.09 / No
pollutants (by F-)
Physical
and
Five-day
comprehens 58.2mg/L 1.27 / No
BOD
ive
indicators
Other Anionic
0.593mg/L 0.01 / No
indicators surfactant
Metals and
metal Total zinc 0.239mg/L 0.01 / No
compounds
Animal
and
Oil 4.39mg/L 0.13 / No
vegetable
oil
Particles Particles 9.4mg/m 4.31 / No
Gaseous
Sulfur
inorganic 13mg/m 0.6 / No
dioxide
pollutants
Gaseous
inorganic Oxynitride 13mg/m 0.88 / No
pollutants
Metal After treatment by environmental Integrated Emission
Tin and its protection and treatment facilities and East, west, south and Standard of Air Pollutants
elements 10
compound reaching the standard, 25m high north corners of the plant 7.3mg/m DB 50/418-2016 Table 1 0.72 / No
and their
s altitude discharge Central Downtown
compounds
Fatty
hydrocarbon
Non-
s and
methane
halogenated 9.4mg/m 2.20 / No
hydrocarb
fatty
ons
hydrocarbon
s
127
Midea Group Co., Ltd. Semi-Annual Report 2024
Waste
mineral
oil, waste
oil-
containing
liquid,
Guang
waste
zhou
packaging
Hualing
, waste
Refrige
activated Treatment entrusted to third-party
rating N/A N/A N/A N/A N/A 67.029 / No
carbon, qualified enterprises
Equipm
waste
ent
lead
Co.,
battery,
Ltd.
waste
filter
cotton,
waste
circuit
board, etc
Treatment of pollutants
During the Reporting Period, all subsidiaries have strictly abided by the laws and regulations related to environment protection, and no major environmental
pollution incidents occurred. All subsidiaries have set up reliable waste water and gas treatment systems. Through regular monitoring, supervision and
inspection mechanisms, as well as third-party testing, it is ensured that the discharge of waste water, waste gas and solid waste during the production and
operation process meets the national and local laws and regulations. There is no excessive discharge by any subsidiary, which is in compliance with the
relevant requirements of the environment administrations.
Contingency plans for environmental accidents
All subsidiaries have finished the compilation and approval of their contingency plans for environmental accidents. Emergency mechanisms for
environmental pollution accidents have been established and improved, and the subsidiaries’ ability to deal with environmental pollution accidents has been
enhanced, so as to maintain social stability, protect the lives, health and properties of the public, protect the environment, and promote a comprehensive,
coordinated and sustainable development of the society.
128
Midea Group Co., Ltd. Semi-Annual Report 2024
According to the accident levels, subsidiaries have formulated rules covering working principles, contingency plans, risk prevention measures, commanding
departments, responsibilities and labor division, and have filed these contingency plans with the government.
Spending on environmental management and protection and payment of environmental protection tax
All subsidiaries strictly observe the laws and regulations governing environmental protection, and all construction projects are in compliance with the
environmental effect requirements and other rules, with no misdeeds during the Reporting Period. Once a construction project is finished, a third-party
testing institution is hired to examine indexes including waste water, waste gas and noise, and the compilation and approval of the environmental effect
evaluation report is finished in time.
Environment self-monitoring plans
All the subsidiaries have formulated their own environment self-monitoring plans according to China’s relevant laws and regulations, which include: 1) Waste
gas pollution source monitoring: Sampling points are set at various discharge ports of waste gas for monitoring on a quarterly basis. Major discharge points
are equipped with an online pollution discharge monitoring system for stationary pollution sources to produce and upload real-time data to Midea
Environmental Protection Online Monitoring Platform; 2) Waste water pollution source monitoring: Samples are fetched at intake and outlet ports of waste
water treatment stations to monitor changes of pollution source of waste water and up-to-standard emission of waste water after being treated at the waste
water treatment stations. Monitoring items include CODcr, SS and petroleum, etc. The data is uploaded to the governmental monitoring authority online and
the government authority conducts real-time monitoring; 3) Noise monitoring: Noise monitoring points are set at noise sensitive points and on the border of
factories. Noise is monitored once in spring and summer respectively and at daytime and at nighttime respectively each time; 4) Solid waste pollution source
monitoring: Hazardous waste produced from the subsidiaries is handed over to the units with qualifications for treatment, monitoring systems are established,
and related management forms and accounts are set up.
Administrative penalties received during the Reporting Period due to environmental issues
The Company received no administrative penalties during the Reporting Period due to environmental issues.
Other environment-related information that should be made public
129
Midea Group Co., Ltd. Semi-Annual Report 2024
None
Measures taken to reduce carbon emissions during the Reporting Period and the results
a. Midea improved its carbon emissions management organizational structure. Under the Group's ESG Committee, Midea established eight sub-committees,
including the Green Design and Product Carbon Footprint Sub-committee and the Green Manufacturing and Carbon Emissions Management Sub-committee,
to comprehensively coordinate and advance the Group's carbon emissions management efforts. Starting from the four dimensions of "Protecting the Blue
Planet, Building Harmonious Communities, Bringing Great Innovations to Life, and Co-creating a Prosperous Ecosystem”, Midea has built a global green,
safe, and stable supply chain to provide green, intelligent, and user-friendly products and services to global users. This initiative has promoted the
maintenance of a green, ecological, and sustainable community environment, working together with global users to build a green and beautiful world.
b. Midea continuously implemented energy-saving and carbon-reduction projects. In the first half of 2024, Midea planned and advanced 1,415 energy-saving
and carbon-reduction projects, with an expected annual energy-saving and carbon-reduction benefit of approximately RMB171.62 million. Among these,
photovoltaic power generation reached 141 million kWh, with green electricity accounting for approximately 10.1%. As of the end of the reporting period in
2024, the cumulative photovoltaic carbon reduction amounted to 80,000 tons. Midea's residential air conditioner factory in Thailand, in partnership with
Constant Energy and Hiconics, a subsidiary of Midea Industrial Technology, completed the signing of a 12MW photovoltaic project contract for the Thailand
factory. Midea promoted the procurement of external green electricity, completing approximately 45 million kWh of green electricity/green certificates in 2024.
Midea continued to improve the energy management system certification of its manufacturing plants, with 36 plants certified as of June 2024. In response to
the national "Zero Waste City" initiative, all domestic manufacturing bases comprehensively advanced the construction of waste management systems, and
as of June 2024, 10 factories had been awarded the "Zero Waste Factory" honor by local governments. Midea accelerated the green and low-carbon
transformation of its manufacturing bases, with 28 manufacturing bases recognized as national "Green Factories" and 9 companies recognized as national
"Green Supply Chain Management Enterprises" by the end of the reporting period.
c. Midea continuously promoted carbon reduction across the entire value chain, including green design, green sourcing, green logistics, and green recycling.
Midea Building Technology won a second prize of 2023 National Science and Technology Progress Award for its project "Air Source Heat Pump Multi-grade
Heat Energy Efficient Supply Key Technology and Application”. Annto advanced the adjustment of its new energy vehicle transport capacity structure,
completing the registration of over 1,500 new energy vehicles by June 2024, with a cumulative total of over 10,000 dispatch trips. Through recycling
channels such as trade-in programs, after-sales service points, and other collection methods, Midea successfully completed the recycling and compliant
130
Midea Group Co., Ltd. Semi-Annual Report 2024
dismantling of 2.15 million units/sets of discarded home appliances.
Other environment-related information
None
2. Corporate Social Responsibility (CSR)
A. Exploring new models for rural revitalisation
Since 2024, Midea Group has collaborated with Huanglong Village in Beijiao, Shunde, and Baiqiao Village in Gaozhou, Maoming, to carry out the "Village-
Enterprise Co-construction and Village-Pairing" activities. Midea Group, utilizing its resource advantages, has concentrated on resolving issues concerning
infrastructure construction and industrial development in Baiqiao Village. At the current stage, multiple support projects have been formulated, which will be
gradually implemented throughout this year to enhance the village's appearance and environment, thereby contributing to the "High-Quality Development
Project for Hundreds of Counties, Thousands of Towns, and Tens of Thousands of Villages" and the rural revitalization pairing and co-construction efforts.
B. Practicing long-termism with the "Education First" approach
In the first half of 2024, Midea Group’s Zhongshan factory donated RMB1 million for the reconstruction of Dongfeng No. 2 Middle School, aiming to improve
the school’s teaching and learning environment. This initiative was also intended to inspire more philanthropic individuals and enterprises to invest in the
development of Dongfeng’s education sector, thereby supporting the successful implementation of the "High-Quality Development Project for Hundreds of
Counties, Thousands of Towns, and Tens of Thousands of Villages" in the local area.
Additionally, Midea Group has cumulatively donated RMB400,000 to Beijing Dandelion School to support the school's award programs for teaching and
learning and to improve the living conditions of both teachers and students. Beijing Dandelion School is the first non-profit middle school in Beijing
established specifically for the children of migrant workers. Since its establishment in 2005, more than 3,000 school-age students have received education at
this school, which has been recognized as a 5A social organization by Daxing District, Beijing.
C. Subsequent plans
131
Midea Group Co., Ltd. Semi-Annual Report 2024
It is Midea Group’s vision to “Bring Great Innovations to Life”. Midea hopes to deliver the power of science and technology through public welfare activities,
adhere to the sustainable long-termism with the "Education First" approach, as well as promote both rural revitalisation and talent development, so as to play
its part in creating more value for society.
132
Midea Group Co., Ltd. Semi-Annual Report 2024
Section VI Significant Events
1. Undertakings of the Company’s Actual Controller, Shareholders, Related
Parties and Acquirer, as well as the Company and Other Commitment Makers
Fulfilled in the Reporting Period or Overdue at the Period-end
□Applicable N/A
No such cases in the Reporting Period.
2. Occupation of the Company’s Capital by the Controlling Shareholder or Its
Related Parties for Non-Operating Purposes
□Applicable N/A
No such cases in the Reporting Period.
3. Illegal Provision of Guarantees for External Parties
□Applicable N/A
No such cases in the Reporting Period.
4. Engagement and Disengagement of CPA Firm
Have the semi-annual financial statements been audited by a CPA firm?
□ Yes No
The semi-annual financial statements are unaudited by a CPA firm.
5. Explanation of the Board of Directors and the Supervisory Committee
Regarding the "Non-standard Audit Opinion" for the Reporting Period
□Applicable N/A
6. Explanation of the Board of Directors Regarding the "Non-standard Audit
Opinion" for Last Year
□Applicable N/A
7. Bankruptcy and Reorganization
□Applicable N/A
No such cases in the Reporting Period.
133
Midea Group Co., Ltd. Semi-Annual Report 2024
8. Litigation
Material litigation and arbitration:
□Applicable N/A
No such cases in the Reporting Period.
Other legal matters:
□Applicable N/A
9. Punishments and Rectifications
□Applicable N/A
No such cases in the Reporting Period.
10. Credit Conditions of the Company as well as Its Controlling Shareholder
and Actual Controller
□Applicable N/A
11. Significant Related Transactions
11.1 Continuing related transactions
Applicable □N/A
Proporti
on in Obtaina
the ble
total Approv market Index
Transac
Related Type of Content amount ed Mode price to the
Pricing Transa tion Over Disclos
transac Relatio the s of the s of transac of for the disclo
principl ction amount approv ure
tion n transac transac transac tion line settlem transac sed
e price (RMB’0 ed line date
party tion tion tion of (RMB’0 ent tion of inform
00)
the 00) the ation
same same
kind kind
(%)
Controll
ed by
Orinko family
Advanc membe www.
Procure Payme 28
ed r of Procure Market 1,900,0 cninfo
ment of - 627,320 0.45% No nt after - March
Plastics Compa ment price 00 .com.
goods delivery 2024
Co., ny’s cn
Ltd. actual
controll
er
Controll
Midea ed by
www.
Real Compa Payme 28
Sale of Market 250,00 cninfo
Estate ny’s Sale - 80,870 0.04% No nt after - March
goods price 0 .com.
Holding actual delivery 2024
cn
Limited controll
er
2,150,0 - - - - -
- - 708,190 -
00
Details of any sales return of a
Zero
large amount
134
Midea Group Co., Ltd. Semi-Annual Report 2024
Give the actual situation in the
Reporting Period (if any) where a
The line for continuing related transactions between the Company and the related
forecast had been made for the
parties and their subsidiaries did not exceed the total amount of continuing related
total amounts of continuing
transactions estimated by the Company by type.
related-party transactions by type
to occur in the current period
Reason for any significant
difference between the
N/A
transaction price and the market
reference price (if applicable)
11.2 Related transactions regarding purchase or sales of assets or equity interests
□Applicable N/A
No such cases in the Reporting Period.
11.3 Related transactions arising from joint investments in external parties
□Applicable N/A
No such cases in the Reporting Period.
11.4 Credits and liabilities with related parties
□Applicable N/A
No such cases in the Reporting Period.
11.5 Transactions with related finance companies
□Applicable N/A
The Company did not make deposits in, receive loans or credit from and was not involved in any
other finance business with any related finance company or any of its related parties.
11.6 Transactions between finance companies controlled by the Company and related
parties
□Applicable N/A
No related parties made deposits in, received loans or credit from or was involved in any other
finance business with any finance company controlled by the Company.
11.7 Other significant related transactions
□Applicable N/A
No such cases in the Reporting Period.
135
Midea Group Co., Ltd. Semi-Annual Report 2024
12. Significant Contracts and Their Execution
12.1 Trusteeship, contracting and leasing
12.1.1 Trusteeship
□Applicable N/A
No such cases in the Reporting Period.
12.1.2 Contracting
□Applicable N/A
12.1.3 Leasing
□Applicable N/A
12.2 Major guarantees
Applicable □N/A
Unit: RMB'000
Guarantees provided by the Company and its subsidiaries for external parties (excluding those for subsidiaries)
Disclosur Guar
Actual
e date of antee
occurrence Term
the Line of Actual for a
date (date Type of of Due
Guaranteed party guarante guarante guarante relate
of guarantee guara or not
e line e e amount d
agreement ntee
announce party
signing)
ment or not
No such cases
Total actual external
Total external guarantee line approved during the
0 guarantee amount during 0
Reporting Period (A1)
the Reporting Period (A2)
Total actual external
Total approved external guarantee line at the end of guarantee balance at the
0 0
the Reporting Period (A3) end of the Reporting
Period (A4)
Guarantees provided by the Company for its subsidiaries
Disclosur Guar
Actual
e date of antee
occurrence Term
the Line of Actual for a
date (date Type of of Due
Guaranteed party guarante guarante guarante relate
of guarantee guara or not
e line e e amount d
agreement ntee
announce party
signing)
ment or not
2024/3/2 1,500,00 One
Midea Group Finance Co., Ltd. 2024/2/29 40,450 Joint liability No No
8 0 year
GD Midea Air-Conditioning Equipment 2024/3/2 14,700,0 6,012,10 One
2024/1/12 Joint liability No No
Co., Ltd. 8 00 0 year
Guangzhou Hualing Refrigerating 2024/3/2 One
900,000 2024/1/1 800 Joint liability No No
Equipment Co., Ltd. 8 year
Foshan Midea Carrier Air-Conditioning 2024/3/2 One
170,000 - Joint liability No No
Equipment Co., Ltd. 8 year
136
Midea Group Co., Ltd. Semi-Annual Report 2024
GD Midea Group Wuhu Air-Conditioning 2024/3/2 1,250,00 One
- Joint liability No No
Equipment Co., Ltd. 8 0 year
Wuhu Maty Air-Conditioning Equipment 2024/3/2 One
250,000 2024/1/29 44,970 Joint liability No No
Co., Ltd. 8 year
Midea Group Wuhan Refrigeration 2024/3/2 One
300,000 - Joint liability No No
Equipment Co., Ltd. 8 year
Guangdong Midea Precision Molding 2024/3/2 One
25,000 - Joint liability No No
Technology Co., Ltd. 8 year
Handan Midea Air-Conditioning 2024/3/2 One
50,000 - Joint liability No No
Equipment Co., Ltd. 8 year
Chongqing Midea Air-Conditioning 2024/3/2 1,000,00 One
- Joint liability No No
Equipment Co., Ltd. 8 0 year
Midea Group Wuhan Heating & 2024/3/2 One
150,000 - Joint liability No No
Ventilating Equipment Co., Ltd. 8 year
Foshan Welling Washer Motor 2024/3/2 One
258,530 2024/3/25 3,550 Joint liability No No
Manufacturing Co., Ltd. 8 year
Guangdong Welling Motor Manufacturing 2024/3/2 One
735,250 2024/2/22 151,780 Joint liability No No
Co., Ltd. 8 year
Welling (Wuhu) Motor Manufacturing Co., 2024/3/2 One
17,000 2024/1/1 30 Joint liability No No
Ltd. 8 year
Huaian Welling Motor Manufacturing Co., 2024/3/2 One
67,500 - Joint liability No No
Ltd. 8 year
2024/3/2 2,600,00 One
Wuhu Welling Motor Sales Co., Ltd. 2024/1/29 240,000 Joint liability No No
8 0 year
2024/3/2 One
Hainan Welling Motor Sales Co., Ltd. 250,000 - Joint liability No No
8 year
2024/3/2 One
Anhui Welling Auto Parts Co., Ltd. 34,000 - Joint liability No No
8 year
2024/3/2 One
Anqing Welling Auto Parts Co., Ltd. 250,000 - Joint liability No No
8 year
2024/3/2 One
Guangdong Meizhi Compressor Limited 943,500 2024/1/18 348,270 Joint liability No No
8 year
Guangdong Meizhi Precision- 2024/3/2 One
34,000 - Joint liability No No
Manufacturing Co., Ltd. 8 year
2024/3/2 One
Anhui Meizhi Compressor Co., Ltd. 34,000 2024/2/21 300 Joint liability No No
8 year
Anhui Meizhi Precision Manufacturing 2024/3/2 One
102,000 - Joint liability No No
Co., Ltd. 8 year
2024/3/2 4,800,00 One
Zhejiang Meizhi Compressor Co., Ltd. 2024/1/30 340,000 Joint liability No No
8 0 year
Guangdong Midea Environmental 2024/3/2 One
34,000 - Joint liability No No
Technologies Co., Ltd. 8 year
Guangdong Midea Intelligent 2024/3/2 One
75,000 - Joint liability No No
Technologies Co., Ltd. 8 year
2024/3/2 One
Dorna Technology Co., Ltd. 25,000 - Joint liability No No
8 year
Guangdong Jiya Precision Machinery 2024/3/2 One
90,000 - Joint liability No No
Technology Co., Ltd. 8 year
MiSiliconn SemiConductor Technologies 2024/3/2 One
130,000 - Joint liability No No
Co., Ltd. 8 year
Servotronix Motion Technology 2024/3/2 One
125,000 - Joint liability No No
Development (Shenzhen) Ltd. 8 year
WuHan TTium Motor Technology Co., 2024/3/2 One
5,000 - Joint liability No No
Ltd. 8 year
Guangdong Midea Kitchen Appliances 2024/3/2 5,500,00 2024/1/15 858,600 Joint liability One No No
137
Midea Group Co., Ltd. Semi-Annual Report 2024
Manufacturing Co., Ltd. 8 0 year
Guangdong Witol Vacuum Electronic 2024/3/2 One
60,000 2024/3/29 320 Joint liability No No
Manufacture Co., Ltd. 8 year
Jiangsu Midea Cleaning Appliances Co., 2024/3/2 One
550,000 2024/1/31 - Joint liability No No
Ltd 8 year
Wuhu Midea Kitchen Appliances 2024/3/2 1,800,00 One
- Joint liability No No
Manufacturing Co., Ltd. 8 0 year
GD Midea Heating & Ventilating 2024/3/2 2,292,00 One
2024/1/5 126,620 Joint liability No No
Equipment Co., Ltd. 8 0 year
Hefei Midea Heating & Ventilating 2024/3/2 One
240,000 - Joint liability No No
Equipment Co., Ltd. 8 year
Chongqing Midea General Refrigeration 2024/3/2 One
60,000 2024/1/5 12,780 Joint liability No No
Equipment Co., Ltd. 8 year
Meitong Energy Technology (Chongqing) 2024/3/2 One
47,600 2024/4/23 8,570 Joint liability No No
Co., Ltd. 8 year
Guangdong MeiKong Intelligent Building 2024/3/2 One
40,000 - Joint liability No No
Co., Ltd. 8 year
Shanghai M-BMS Intelligent Construction 2024/3/2 One
50,000 - Joint liability No No
Co., Ltd. 8 year
2024/3/2 1,000,00 One
Winone Elevator Company Limited 2024/1/5 124,180 Joint liability No No
8 0 year
Hubei Midea Building Technology Co., 2024/3/2 One
45,000 - Joint liability No No
Ltd. 8 year
Guangdong WINONE Elevator 2024/3/2 One
15,000 - Joint liability No No
Engineering Co., Ltd. 8 year
MeiKong Smart Environment (Xi'an) Co., 2024/3/2 One
46,500 - Joint liability No No
Ltd. 8 year
Ningbo Midea United Materials Supply 2024/3/2 1,540,00 One
2024/1/24 153,170 Joint liability No No
Co. Ltd. 8 0 year
Shanghai Kaizhao Commercial and 2024/3/2 One
200,000 - Joint liability No No
Trading Co., Ltd 8 year
Guangdong Midea Consumer Electric 2024/3/2 One
50,000 2024/6/14 - Joint liability No No
Manufacturing Co., Ltd. 8 year
Foshan Shunde Midea Electrical Heating 2024/3/2 One
280,000 2024/1/4 10,560 Joint liability No No
Appliances Manufacturing Co., Ltd. 8 year
GD Midea Environment Appliances Mfg. 2024/3/2 One
200,000 2024/6/26 150,000 Joint liability No No
Co., Ltd. 8 year
Wuhu Midea Life Appliances Mfg Co., 2024/3/2 1,250,00 One
2024/6/26 550,000 Joint liability No No
Ltd. 8 0 year
Foshan Midea Chungho Water 2024/3/2 One
17,000 - Joint liability No No
Purification Equipment. Co., Ltd. 8 year
Foshan Shunde Midea Washing 2024/3/2 1,400,00 One
2024/1/1 2,430 Joint liability No No
Appliances Manufacturing Co., Ltd. 8 0 year
Wuhu Midea Kitchen & Bath Appliances 2024/3/2 1,600,00 One
2024/1/23 181,090 Joint liability No No
Mfg. Co., Ltd. 8 0 year
Wuhu Midea Smart Kitchen Appliance 2024/3/2 One
33,000 - Joint liability No No
Manufacturing Co., Ltd. 8 year
Foshan Shunde Midea Water Dispenser 2024/3/2 One
280,000 2024/1/4 - Joint liability No No
Manufacturing Company Limited 8 year
Guangdong Midea Kitchen & Bath 2024/3/2 One
600,000 - Joint liability No No
Appliances Manufacturing Co., Ltd. 8 year
2024/3/2 One
Hubei Midea Laundry Appliance Co., Ltd. 25,000 - Joint liability No No
8 year
2024/3/2 2,000,00 One
Hefei Midea Laundry Appliance Co., Ltd. 2024/1/5 595,290 Joint liability No No
8 0 year
138
Midea Group Co., Ltd. Semi-Annual Report 2024
2024/3/2 One
Wuxi Filin Electronics Co., Ltd. 50,000 - Joint liability No No
8 year
2024/3/2 3,300,00 One
Wuxi Little Swan Electric Co., Ltd. 2024/1/19 270,000 Joint liability No No
8 0 year
2024/3/2 3,400,00 One
Hefei Midea Refrigerator Co., Ltd. 2024/5/16 403,270 Joint liability No No
8 0 year
2024/3/2 1,000,00 One
Hefei Hualing Co., Ltd. 2024/1/24 545,110 Joint liability No No
8 0 year
2024/3/2 1,000,00 One
Hubei Midea Refrigerator Co., Ltd. 2024/1/22 252,450 Joint liability No No
8 0 year
Guangzhou Midea Hualing Refrigerator C 2024/3/2 One
500,000 2024/1/25 285,320 Joint liability No No
o., Ltd. 8 year
Toshiba Home Appliances Manufacturing 2024/3/2 One
50,000 - Joint liability No No
(Nanhai) Co., Ltd 8 year
2024/3/2 One
Midea Group E-Commerce Co., Ltd. 155,000 - Joint liability No No
8 year
Guangdong Midea Smart Link 2024/3/2 One
68,000 - Joint liability No No
Technologies Co., Ltd. 8 year
2024/3/2 One
Reis Robotics (Kunshan) Co., Ltd. 60,000 2024/1/25 28,310 Joint liability No No
8 year
2024/3/2 One
KUKA Systems (China) CO., Ltd. 630,000 2024/1/25 146,650 Joint liability No No
8 year
KUKA Robotics Manufacturing China 2024/3/2 One
25,000 - Joint liability No No
Co., Ltd. 8 year
2024/3/2 One
KUKA Robotics Guangdong Co., Ltd 75,000 - Joint liability No No
8 year
2024/3/2 One
KUKA Robotics (Shanghai) Co.,Ltd. 170,000 2024/1/5 740 Joint liability No No
8 year
2024/3/2 One
Shanghai Swisslog Healthcare Co., Ltd. 51,000 2024/4/22 18,840 Joint liability No No
8 year
Guangdong Swisslog Technology Co., 2024/3/2 One
20,000 - Joint liability No No
Ltd. 8 year
2024/3/2 One
Swisslog (Shanghai) Co., Ltd. 60,000 - Joint liability No No
8 year
2024/3/2 One
Shanghai Swisslog Technology Co., Ltd. 190,000 2024/1/4 96,800 Joint liability No No
8 year
Guangdong Meikuruisi Medical 2024/3/2 One
2,500 - Joint liability No No
Technology Co., Ltd. 8 year
2024/3/2 One
Guangdong Midea Electric Co., Ltd. 50,000 - Joint liability No No
8 year
Guangdong Midea Intelligent Robotics 2024/3/2 One
2,500 - Joint liability No No
Co., Ltd. 8 year
Guangdong Midea-SIIX Electronics Co., 2024/3/2 One
150,000 2024/1/2 4,000 Joint liability No No
Ltd. 8 year
2024/3/2 One
Hefei Midea-SIIX Electronics Co., Ltd. 50,000 - Joint liability No No
8 year
Guangdong Meichuangxi Technology 2024/3/2 One
150,000 - Joint liability No No
Co., Ltd. 8 year
2024/3/2 One
Foshan Meicloud Technology Co., Ltd. 5,000 - Joint liability No No
8 year
2024/3/2 One
Suzhou Meicloud Technology Co., Ltd. 20,000 - Joint liability No No
8 year
2024/3/2 One
Meicloud Technology Co., Ltd. 20,000 2024/1/1 6,370 Joint liability No No
8 year
Midea International Corporation 2024/3/2 20,022,6 2024/1/1 12,755,0 Joint liability One No No
139
Midea Group Co., Ltd. Semi-Annual Report 2024
Company Limited 8 00 00 year
Midea Investment Development 2024/3/2 3,285,00 3,150,00 One
2024/1/1 Joint liability No No
Company Limited 8 0 0 year
2024/3/2 24,000,0 23,100,0 One
Midea Electric Netherlands (I) B.V. 2024/1/1 Joint liability No No
8 00 00 year
Total actual guarantee
Total guarantee line for subsidiaries approved amount for subsidiaries
110,687,480 51,482,150
during the Reporting Period (B1) during the Reporting
Period (B2)
Total actual guarantee
Total approved guarantee line for subsidiaries at the balance for subsidiaries
110,687,480 51,018,720
end of the Reporting Period (B3) at the end of the
Reporting Period (B4)
Guarantees between subsidiaries
Disclosur Guar
Actual
e date of antee
occurrence Term
the Line of Actual for a
date (date Type of of Due
Guaranteed party guarante guarante guarante relate
of guarantee guara or not
e line e e amount d
agreement ntee
announce party
signing)
ment or not
2024/3/2 One
Toshiba Sales & Services Sdn. Bhd. 35,480 - Joint liability No No
8 year
Toshiba Lifestyle Products & Services 2024/3/2 1,200,89 One
- Joint liability No No
Corporation 8 0 year
Toshiba Lifestyle Electronics Trading Co., 2024/3/2 One
10,500 - Joint liability No No
Ltd 8 year
Toshiba Consumer Products (Thailand) 2024/3/2 One
330,350 - Joint liability No No
Co.,Ltd. 8 year
2024/3/2 One
Thai Toshiba Electric Industries Co., Ltd. 33,780 - Joint liability No No
8 year
2024/3/2 One
Control Component Co. Ltd. 16,590 - Joint liability No No
8 year
2024/3/2 One
Toshiba Thailand Co., Ltd. 107,970 - Joint liability No No
8 year
Toshiba Vietnam Consumer Products 2024/3/2 One
49,060 - Joint liability No No
Co., Ltd. 8 year
2024/3/2 One
Toshiba Home Technology Corporation 7,960 - Joint liability No No
8 year
2024/3/2 One
Midea America Corp. 400,000 - Joint liability No No
8 year
2024/3/2 One
Midea America (Canada) Corp. 67,500 - Joint liability No No
8 year
2024/3/2 One
Midea Mexico, S. DE R.L. DE C.V. 168,750 2024/1/3 18,980 Joint liability No No
8 year
2024/3/2 One
Midea Emerging Technology Co., Ltd. 50,000 - Joint liability No No
8 year
Midea Electrical Manufacturing México, 2024/3/2 One
168,750 - Joint liability No No
S. de R.L. de C.V. 8 year
2024/3/2 One
MG Land Mexico, S. DE R.L. DE C.V. 895,000 - Joint liability No No
8 year
Midea Industria E Comercio Do Brasil 2024/3/2 One
601,500 - Joint liability No No
Ltda. 8 year
2024/3/2 One
Midea Colombia Equipments SAS 80,000 - Joint liability No No
8 year
2024/3/2 One
Midea Peru S.A.C. 50,000 - Joint liability No No
8 year
140
Midea Group Co., Ltd. Semi-Annual Report 2024
2024/3/2 One
Midea India Private Limited 273,750 - Joint liability No No
8 year
2024/3/2 8,000,00 One
Midea Electrics Netherlands B.V. - Joint liability No No
8 0 year
2024/3/2 One
PT Jaya Refrigeration Equipment 189,800 - Joint liability No No
8 year
2024/3/2 One
Wuhu Midea Annto Logistics Co., Ltd. 800,000 2024/1/1 4,760 Joint liability No No
8 year
2024/3/2 One
Ningbo Annto Logistics Co., Ltd. 300,000 - Joint liability No No
8 year
Hainan Annto Logistics Supply Chain 2024/3/2 One
200,000 - Joint liability No No
Management Co., Ltd. 8 year
Total actual guarantee
Total line for guarantees between subsidiaries amount between
14,037,630 206,860
approved during the Reporting Period (C1) subsidiaries during the
Reporting Period (C2)
Total actual guarantee
Total approved line for guarantees between balance between
14,037,630 23,740
subsidiaries at the end of the Reporting Period (C3) subsidiaries at the end of
the Reporting Period (C4)
Guarantees provided with the Company’s asset pool
Disclosur Guar
Actual
e date of antee
occurrence Term
the Line of Actual for a
date (date Type of of Due
Guaranteed party guarante guarante guarante relate
of guarantee guara or not
e line e e amount d
agreement ntee
announce party
signing)
ment or not
GD Midea Group Wuhu Air-Conditioning 2024/3/2 One
700,000 - Joint liability No No
Equipment Co.,Ltd. 8 year
GD Midea Air-Conditioning Equipment 2024/3/2 5,900,00 2,966,24 One
2024/1/16 Joint liability No No
Co.,Ltd. 8 0 0 year
Midea Group Wuhan Refrigeration 2024/3/2 1,300,00 One
2024/1/25 866,170 Joint liability No No
Equipment Co.,Ltd. 8 0 year
Wuhu Maty Air-Conditioning Equipment 2024/3/2 One
500,000 - Joint liability No No
Co., Ltd 8 year
Guangzhou Hualing Refrigerating 2024/3/2 One
850,000 2024/3/25 489,210 Joint liability No No
Equipment Co., Ltd. 8 year
Handan Midea Air-Conditioning 2024/3/2 One
500,000 - Joint liability No No
Equipment Co., Ltd. 8 year
Chongqing Midea Air-Conditioning 2024/3/2 One
900,000 - Joint liability No No
Equipment Co., Ltd. 8 year
2024/3/2 One
Anhui Welling Auto Parts Co., Ltd. 100,000 - Joint liability No No
8 year
2024/3/2 One
Anqing Welling Auto Parts Co., Ltd. 150,000 - Joint liability No No
8 year
2024/3/2 2,150,00 One
Wuhu Welling Motor Sales Co., Ltd. 2024/3/19 280,000 Joint liability No No
8 0 year
2024/3/2 2,500,00 One
Zhejiang Meizhi Compressor Co., Ltd. 2024/2/20 280,000 Joint liability No No
8 0 year
Servotronix Motion Technology 2024/3/2 One
100,000 - Joint liability No No
Development (Shenzhen) Ltd. 8 year
Guangdong Midea Kitchen Appliances 2024/3/2 1,875,00 One
2024/4/28 583,620 Joint liability No No
Manufacturing Co., Ltd. 8 0 year
Jiangsu Midea Cleaning Appliances Co., 2024/3/2 One
500,000 2024/3/21 114,550 Joint liability No No
Ltd 8 year
Wuhu Midea Kitchen Appliances 2024/3/2 125,000 2024/1/12 102,790 Joint liability One No No
141
Midea Group Co., Ltd. Semi-Annual Report 2024
Manufacturing Co., Ltd. 8 year
2024/3/2 1,000,00 One
Hefei Midea Laundry Appliance Co., Ltd. - Joint liability No No
8 0 year
2024/3/2 1,500,00 One
Wuxi Little Swan Electric Co., Ltd. 2024/1/23 420,000 Joint liability No No
8 0 year
2024/3/2 One
Hubei Midea Laundry Appliance Co., Ltd. 500,000 - Joint liability No No
8 year
2024/3/2 1,800,00 One
Hefei Midea Refrigerator Co., Ltd. 2024/4/18 267,000 Joint liability No No
8 0 year
2024/3/2 One
Hefei Hualing Co., Ltd. 900,000 - Joint liability No No
8 year
2024/3/2 One
Hubei Midea Refrigerator Co., Ltd. 800,000 - Joint liability No No
8 year
Guangdong Midea Intelligent Robotics 2024/3/2 One
17,500 - Joint liability No No
Co., Ltd. 8 year
2024/3/2 One
Reis Robotics (Kunshan) Co., Ltd. 175,000 2024/1/25 25,940 Joint liability No No
8 year
2024/3/2 One
Shanghai Swisslog Healthcare Co., Ltd. 140,000 2024/1/4 7,300 Joint liability No No
8 year
Guangdong Meikuruisi Medical 2024/3/2 One
17,500 - Joint liability No No
Technology Co., Ltd. 8 year
Ningbo Midea United Materials Supply 2024/3/2 1,300,00 One
2024/1/30 993,860 Joint liability No No
Co. Ltd. 8 0 year
Foshan Shunde Midea Washing 2024/3/2 One
750,000 2024/1/24 383,090 Joint liability No No
Appliances Manufacturing Co., Ltd. 8 year
Wuhu Midea Kitchen & Bath Appliances 2024/3/2 One
250,000 2024/5/14 112,480 Joint liability No No
Mfg. Co., Ltd. 8 year
Guangdong Midea Kitchen & Bath 2024/3/2 One
750,000 2024/3/22 350,000 Joint liability No No
Appliances Manufacturing Co., Ltd. 8 year
Foshan Shunde Midea Water Dispenser 2024/3/2 One
250,000 - Joint liability No No
Manufacturing Company Limited 8 year
Guangdong Meichuangxi Technology 2024/3/2 One
50,000 - Joint liability No No
Co., Ltd. 8 year
2024/3/2 One
Midea Group E-Commerce Co., Ltd. 250,000 2024/1/29 25,160 Joint liability No No
8 year
Guangdong Midea Smart Link 2024/3/2 One
350,000 2024/1/26 80,000 Joint liability No No
Technologies Co., Ltd. 8 year
GD Midea Heating & Ventilating 2024/3/2 One
350,000 - Joint liability No No
Equipment Co., Ltd. 8 year
Guangdong Midea-SIIX Electronics Co., 2024/3/2 One
50,000 - Joint liability No No
Ltd. 8 year
Hefei Midea Heating & Ventilating 2024/3/2 One
150,000 - Joint liability No No
Equipment Co., Ltd. 8 year
Hubei Midea Building Technology Co., 2024/3/2 One
150,000 - Joint liability No No
Ltd. 8 year
2024/3/2 One
WINONE Elevator Company Limited 270,000 2024/4/15 4,970 Joint liability No No
8 year
Meitong Energy Technology (Chongqing) 2024/3/2 One
5,000 - Joint liability No No
Co., Ltd. 8 year
Shanghai M-BMS Intelligent Construction 2024/3/2 One
15,000 - Joint liability No No
Co., Ltd. 8 year
Chongqing Midea General Refrigeration 2024/3/2 One
60,000 - Joint liability No No
Equipment Co., Ltd. 8 year
Foshan Shunde Midea Electrical Heating 2024/3/2 One
800,000 2024/1/19 27,940 Joint liability No No
Appliances Manufacturing Co., Ltd. 8 year
142
Midea Group Co., Ltd. Semi-Annual Report 2024
GD Midea Environment Appliances Mfg. 2024/3/2 One
800,000 2024/1/18 155,230 Joint liability No No
Co.,Ltd. 8 year
Wuhu Midea Life Appliances Mfg Co., 2024/3/2 One
400,000 - Joint liability No No
Ltd. 8 year
Hainan Annto Logistics Supply Chain 2024/3/2 One
150,000 - Joint liability No No
Management Co., Ltd. 8 year
2024/3/2 One
Ningbo Annto Logistics Co., Ltd. 450,000 2024/2/5 3,360 Joint liability No No
8 year
Shenyang Annto Logistics Technology 2024/3/2 One
20,000 - Joint liability No No
Co., Ltd. 8 year
Guiyang Annto Logistics Technology Co., 2024/3/2 One
20,000 - Joint liability No No
Ltd. 8 year
Wuhan Annto Logistics Technology Co., 2024/3/2 One
20,000 - Joint liability No No
Ltd. 8 year
2024/3/2 One
Nanjing Meian Logistics Co., Ltd. 20,000 - Joint liability No No
8 year
Shanghai Annto Logistics Supply Chain 2024/3/2 One
20,000 - Joint liability No No
Technology Co., Ltd. 8 year
Jingzhou Meian Warehousing and 2024/3/2 One
20,000 - Joint liability No No
Transportation Co., Ltd. 8 year
Qihe Annto Logistics Technology Co., 2024/3/2 One
20,000 - Joint liability No No
Ltd. 8 year
Hefei Annto Logistics Technology Co., 2024/3/2 One
80,000 - Joint liability No No
Ltd. 8 year
Tianjin Annto Logistics Technology Co., 2024/3/2 One
20,000 - Joint liability No No
Ltd. 8 year
Xuzhou Annto Logistics Technology Co., 2024/3/2 One
20,000 - Joint liability No No
Ltd. 8 year
Zhengzhou Annto Logistics Technology 2024/3/2 One
20,000 - Joint liability No No
Co., Ltd. 8 year
Chongqing Annto Logistics Technology 2024/3/2 One
20,000 - Joint liability No No
Co., Ltd. 8 year
2024/3/2 One
Wuhu Midea Annto Logistics Co., Ltd. 610,000 2024/1/18 100,790 Joint liability No No
8 year
Total actual guarantee
Total line for guarantees provided with the amount provided with the
Company’s asset pool approved during the 33,510,000 Company’s asset pool 8,639,700
Reporting Period (D1) during the Reporting
Period (D2)
Total actual guarantee
Total approved line for guarantees provided with the balance provided with the
Company’s asset pool at the end of the Reporting 33,510,000 Company’s asset pool at 8,639,700
Period (D3) the end of the Reporting
Period (D4)
Total guarantee amount (total of the above-mentioned four kinds of guarantees)
Total actual guarantee
Total guarantee line approved during the Reporting amount during the
158,235,110 60,328,700
Period (A1+B1+C1+D1) Reporting Period
(A2+B2+C2+D2)
Total actual guarantee
Total approved guarantee line at the end of the balance at the end of the
158,235,110 59,682,160
Reporting Period (A3+B3+C3+D3) Reporting Period
(A4+B4+C4+D4)
Proportion of the total actual guarantee amount (A4+B4+C4+D4) in net
36.22%
assets of the Company
Of which:
Amount of guarantees provided for shareholders, the actual controller and 0
143
Midea Group Co., Ltd. Semi-Annual Report 2024
their related parties (D)
Amount of debt guarantees provided directly or indirectly for entities with a
55,289,260
liability-to-asset ratio over 70% (E)
Portion of the total guarantee amount in excess of 50% of net assets (F) 0
Total amount of the three kinds of guarantees above (D+E+F) 55,289,260
Joint responsibilities possibly borne for undue guarantees (if any) N/A
Provision of external guarantees in breach of the prescribed procedures (if
N/A
any)
12.3 Entrusted asset management
□ Applicable N/A
No such cases in the Reporting Period.
12.4 Other significant contracts
□ Applicable N/A
No such cases in the Reporting Period.
13. Other Significant Events
□ Applicable N/A
The Company had no other significant events during the Reporting Period that require disclosure
herein.
14. Significant Events of Subsidiaries
□ Applicable N/A
144
Midea Group Co., Ltd. Semi-Annual Report 2024
Section VII Changes in Shares and Information about
Shareholders
1. Changes in Shares
1.1 Changes in shares
Unit: share
Increase/decrease in Reporting Period
Before After
(+/-)
Percen
Percent
Shares New issue Others Subtotal Shares tage
age (%)
(%)
1. Restricted shares 133,563,090 1.90 -1,186,016 -1,186,016 132,377,074 1.90
1.1 Shares held by the
state
1.2 Shares held by
state-owned
corporations
1.3 Shares held by
other domestic 131,923,090 1.88 -1,170,016 -1,170,016 130,753,074 1.87
investors
Among which: Shares
held by domestic 2,363,601 0.03 -124,357 -124,357 2,239,244 0.03
corporations
Shares held by
129,559,489 1.84 -1,045,659 -1,045,659 128,513,830 1.84
domestic individuals
1.4 Shares held by
1,640,000 0.02 -16,000 -16,000 1,624,000 0.02
foreign investors
Among which: Shares
held by foreign
corporations
Shares held by foreign
1,640,000 0.02 -16,000 -16,000 1,624,000 0.02
individuals
6,892,205,93 - 6,847,774,70
2. Non-restricted shares 98.10 25,111,431 -44,431,231 98.10
5 69,542,662 4
2.1 RMB common 6,892,205,93 - 6,847,774,70
98.10 25,111,431 -44,431,231 98.10
shares 5 69,542,662 4
2.2 Domestically listed
foreign shares
2.3 Overseas listed
foreign shares
2.4 Other
7,025,769,02 - 6,980,151,77
3. Total shares 100.00 25,111,431 -45,617,247 100.00
5 70,728,678 8
Reasons for the changes in shares
Applicable □N/A
a. The Company completed the retirement of 69,807,864 repurchased shares on 7 February
145
Midea Group Co., Ltd. Semi-Annual Report 2024
2024.
b. The 110,852 shares and 13,505 shares respectively held by the Company’s shareholders
HuaLian Finance Co., Ltd. and Jiangsu Little Swan Group Co., Ltd. were unlocked for public
trading on 12 March 2024.
c. On 25 March 2024, the Company completed the retirement of a total of 920,814 restricted
shares that had been granted but were still in lockup under the 2018, 2019, 2021, 2022, and
2023 Restricted Share Incentive Schemes, including 16,000 shares of foreign awardees.
d. The 277,916 restricted shares of a total of 15 eligible awardees for the fourth unlocking period
of the reserved restricted shares under the 2018 Restricted Share Incentive Scheme were
unlocked on 24 June 2024.
e. In the Reporting Period, the awardees of stock options chose to exercise 25,111,431 shares,
which have been registered into the Company’s share capital.
f. In the Reporting Period, locked-up shares held by senior management increased by 137,071
shares.
Approval of share changes
□Applicable N/A
Transfer of share ownership
□Applicable N/A
Progress of any share repurchase
□Applicable N/A
Progress of any repurchased share reduction through centralized price bidding
□Applicable N/A
Effects of changes in shares on basic EPS, diluted EPS, net assets per share attributable to
common shareholders of the Company and other financial indexes over the last year and the last
Reporting Period
□Applicable N/A
Other contents that the Company considers necessary or is required by the securities regulatory
authorities to disclose
□Applicable √N/A
1.2 Changes in restricted shares
Applicable □N/A
Unit: share
Name of Opening Unlocke Increase Repurch Closing Reason for Date of
shareholder restricted d in d in ased restricted change unlocking
146
Midea Group Co., Ltd. Semi-Annual Report 2024
shares current current and shares
period period retired
Awardees of Locked up
2018 Restricted according
320,000 277,916 29,584 12,500 24 June 2024
Share Incentive to the
Scheme Scheme
Awardees of Locked up
2019 Restricted according
5,277,875 234,230 5,043,645 -
Share Incentive to the
Scheme Scheme
Awardees of Locked up
2021 Restricted according
5,149,000 190,750 4,958,250 -
Share Incentive to the
Scheme Scheme
Awardees of Locked up
2022 Restricted 10,830,00 according
463,250 10,366,750 -
Share Incentive 0 to the
Scheme Scheme
Awardees of Locked up
2023 Restricted 18,325,00 according
3,000 18,322,000 -
Share Incentive 0 to the
Scheme Scheme
Locked up
for senior
Zhao Lei - - 77,025 - 77,025 -
manageme
nt
Locked up
for senior
Li Guolin 20,000 - 10,000 - 30,000 -
manageme
nt
Locked up
for senior
Wang Jinliang 93,000 - 10,500 - 103,500 -
manageme
nt
Locked up
for senior
Zhao Wenxin 138,000 - 34000 - 172,000 -
manageme
nt
Locked up
for senior
Jiang Peng 228,950 - 6000 - 234,950 -
manageme
nt
Locked up
for former
Yin Bitong 1,582,691 454 - - 1,582,237 senior -
manageme
nt
41,964,51
Total 278,370 137,525 920,814 40,902,857 -- --
6
2. Issuance and Listing of Securities
□Applicable √N/A
3. Total Number of Shareholders and Their Shareholdings
Unit: share
Total number of common Total number of
284,527 0
shareholders at the period-end preference
147
Midea Group Co., Ltd. Semi-Annual Report 2024
shareholders with
resumed voting rights
at the period-end (if
any)
5% or greater common shareholders or top 10 common shareholders
Share
Total Increase/d Number of Number of Shares in pledge,
holdin
Nature of common ecrease restricted non- marked or frozen
Name of g
sharehold shares held during the common restricted
shareholder perce
er at the Reporting shares common Share
ntage Status
period-end Period held shares held s
(%)
Domestic
non-state-
Midea Holding 2,169,178,71 2,169,178,71
owned 31.08 - - - -
Co., Ltd. 3 3
corporatio
n
Hong Kong
Foreign
Securities 1,283,774,63 - 1,384,550,03
corporatio 18.39 - - -
Clearing 0 54,961,393 4
n
Company Limited
Domestic
non-state-
China Securities
owned 2.84 198,145,134 - - 198,145,134 - -
Finance Co., Ltd.
corporatio
n
Domestic
Fang Hongbo 1.68 116,990,492 - 87,742,869 29,247,623 - -
individual
State-
Central Huijin
owned
Asset 1.26 88,260,460 - - 88,260,460 - -
corporatio
Management Ltd.
n
Domestic
Huang Jian 1.23 86,140,000 -30,000 - 86,170,000 - -
individual
Industrial and
Commercial Bank
of China Limited
－Huatai-
PineBridge CSI Other 0.83 57,830,940 21,093,307 - 58,703,400 - -
300 Traded
Open-ended
Index Securities
Investment Fund
Foreign
Li Jianwei 0.65 45,591,545 - - 54,464,241 - -
individual
China
Construction
Bank Corporation
－ E Fund CSI
300 Traded Other 0.55 38,469,096 24,728,450 - 46,154,545 - -
Open-ended
Index Promoter
Securities
Investment Fund
Domestic
Yuan Liqun 0.51 35,361,950 -1,430,450 - 37,835,332 - -
individual
Strategic investors or general
corporations becoming top-ten
N/A
common shareholders due to
placing of new shares
Related-parties or acting-in-
concert parties among the N/A
shareholders above
Explain if any of the
shareholders above was
N/A
involved in entrusting/being
entrusted with voting rights or
148
Midea Group Co., Ltd. Semi-Annual Report 2024
waiving voting rights
Special account for 28,452,226 shares (or 0.41% of the Company’s total share capital) were held in the
repurchased shares among the special account for repurchased shares of Midea Group Co., Ltd. at the end of the
top 10 shareholders Reporting Period.
Top 10 non-restricted common shareholders
Number of non-restricted common shares held at Type of shares
Name of shareholder
the period-end Type Shares
RMB common
Midea Holding Co., Ltd. 2,169,178,713 2,169,178,713
stock
Hong Kong Securities Clearing RMB common
1,283,774,630 1,283,774,630
Company Limited stock
China Securities Finance Co., RMB common
198,145,134 198,145,134
Ltd. stock
Central Huijin Asset RMB common
88,260,460 88,260,460
Management Ltd. stock
RMB common
Huang Jian 86,140,000 86,140,000
stock
Industrial and Commercial
Bank of China Limited－
RMB common
Huatai-PineBridge CSI 300 57,830,940 57,830,940
stock
Traded Open-ended Index
Securities Investment Fund
RMB common
Li Jianwei 45,591,545 45,591,545
stock
China Construction Bank
Corporation－ E Fund CSI 300
RMB common
Traded Open-ended Index 38,469,096 38,469,096
stock
Promoter Securities
Investment Fund
RMB common
Yuan Liqun 35,361,950 35,361,950
stock
RMB common
Huang Xiaoxiang 34,005,286 34,005,286
stock
Related-parties or acting-in-
concert parties among the top
ten non-restricted common
shareholders and between the N/A
top ten non-restricted common
shareholders and the top ten
common shareholders
The Company’s shareholder Yuan Liqun holds 5,750,000 shares in the Company
through her common securities account and 29,611,950 shares in the Company through
Explanation on the top 10 her account of collateral securities for margin trading, representing a total holding of
common shareholders 35,361,950 shares in the Company.
participating in securities
margin trading (if any) (see The Company’s shareholder Huang Xiaoxiang holds 24,805,286 shares in the Company
Note 4) through his common securities account and 9,200,000 shares in the Company through
his account of collateral securities for margin trading, representing a total holding of
34,005,286 shares in the Company.
5% or greater shareholders, top 10 shareholders and top 10 non-restricted public shareholders
involved in refinancing shares lending
Applicable □N/A
Unit: share
5% or greater shareholders, top 10 shareholders and top 10 non-restricted public shareholders involved in refinancing shares
lending
Shares in the common Shares lent in Shares in the common Shares lent in
Full name of
account and credit refinancing and not yet account and credit refinancing and not yet
shareholder
account at the period- returned at the period- account at the period- returned at the period-
149
Midea Group Co., Ltd. Semi-Annual Report 2024
begin begin end end
As % of As % of As % of As % of
Total Total Total Total
total share total share total share total share
shares shares shares shares
capital capital capital capital
Industrial and
Commercial Bank of
China Limited－
Huatai-PineBridge 36,737,63 57,830,94
0.53% 10,100 0.00% 0.83% 0 0.00%
CSI 300 Traded 3 0
Open-ended Index
Securities
Investment Fund
China Construction
Bank Corporation－
E Fund CSI 300 13,740,64 38,469,09
Traded Open-ended 0.20% 68,000 0.00% 0.55% 0 0.00%
6 6
Index Promoter
Securities
Investment Fund
Indicate whether there was any change to the top 10 shareholders or top 10 non-restricted public
shareholders due to refinancing shares lending/returning during the Reporting Period compared
to the same period of last year.
□Applicable √N/A
Did any of the top 10 common shareholders or the top 10 non-restricted common shareholders of
the Company conduct any promissory repurchase during the Reporting Period
□Yes No
No such cases in the Reporting Period.
4. Changes in Shareholdings of Directors, Supervisors and Senior Management
□Applicable √N/A
No changes occurred to the shareholdings of the Company’s directors, supervisors and senior
management during the Reporting Period. For further information, see the 2023 Annual Report.
5. Change of Controlling Shareholder or Actual Controller in the Reporting
Period
Change of the controlling shareholder during the Reporting Period
□Applicable √N/A
No such cases in the Reporting Period.
Change of the actual controller during the Reporting Period
□Applicable √N/A
No such cases in the Reporting Period.
150
Midea Group Co., Ltd. Semi-Annual Report 2024
Section VIII Preference Shares
□ Applicable N/A
No such cases in the Reporting Period.
151
Midea Group Co., Ltd. Semi-Annual Report 2024
Section IX Bonds
1. Enterprise Bonds
□ Applicable N/A
No such cases in the Reporting Period.
2. Corporate Bonds
Applicable □ N/A
2.1 General information on corporate bonds
Way of
principal
Outstand
Bond Bond Date of Value Interest repayme Place of
Abbr. Maturity ing
name code issuance date rate nt and trading
balance
interest
payment
Midea Interest
Investme payable
nt on a
The
Develop half-year
Stock
ment MIDEAZ ISINXS2 basis,
2022-02- 2022-02- 2027-02- USD450 Exchang
Compan 2.88%02 4321304 2.88% with the
16 24 24 million e of
y Limited /24/2027 53 principal
Hong
2.88% repayabl
Kong
Secured e in full
Notes upon
2027 maturity
Investor eligibility arrangements
N/A
(if any)
Trading system applicable N/A
Risk of termination of listing and
trading (if any) and No such risk
countermeasures
Overdue bonds
□ Applicable N/A
2.2 Triggering and execution of issuer or investor option clauses and investor protection
clauses
□ Applicable N/A
2.3 Changes in credit ratings in the Reporting Period
Applicable □ N/A
Moody’s has upgraded Midea Group's credit rating from A3 to A2 in 2024.
152
Midea Group Co., Ltd. Semi-Annual Report 2024
2.4 Execution and changes with respect to guarantees, repayment plans and other
repayment-ensuring measures in the Reporting Period, as well as the impact on the
interests of bond holders
□ Applicable N/A
3. Debt Instruments as a Non-financial Enterprise
□ Applicable N/A
No such cases in the Reporting Period.
4. Convertible Corporate Bonds
□ Applicable N/A
No such cases in the Reporting Period.
5. Consolidated Loss of the Reporting Period Over 10% of Net Assets as at the
End of Last Year
□ Applicable N/A
6. Key Financial Information of the Company in the Past Two Years
Unit: RMB’000
Item 30 June 2024 31 December 2023 Change
Current ratio 109.20% 111.97% -2.77%
Debt/asset ratio 65.20% 64.14% 1.07%
Quick ratio 91.29% 87.95% 3.33%
H1 2024 H1 2023 Change
Net profit before non-
20,361,375 17,939,515 13.50%
recurring gains and losses
EBITDA/debt ratio 32.36% 28.21% 4.15%
Interest cover (times) 24.91 15.49 60.78%
Cash-to-interest cover
48.07 38.01 26.46%
(times)
EBITDA-to-interest cover
28.51 17.65 61.49%
(times)
Loan repayment ratio (%) 100% 100% 0.00%
Interest payment ratio (%) 100% 100% 0.00%
153
Midea Group Co., Ltd. Semi-Annual Report 2024
Section X Financial Report
1. Auditor’s Report
Have the semi-annual financial statements been audited by a CPA firm?
□ Yes No
The semi-annual financial statements are unaudited by a CPA firm.
2. Financial Statements
(All amounts in RMB’000 Yuan unless otherwise stated)
154
MIDEA GROUP CO., LTD.
CONSOLIDATED AND COMPANY BALANCE SHEETS
AS AT 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
31 December 31 December
30 June 2024 2023 30 June 2024 2023
ASSETS Note Consolidated Consolidated Company Company
Current assets:
Cash at bank and on
hand 4(1) 101,949,934 81,673,846 19,208,887 30,260,602
Financial assets held for
trading 4(2) 2,745,091 1,790,588 188,390 299,001
Derivative financial
assets 966,625 1,278,161 1,681 -
Notes receivable 4(3) 5,939,849 5,521,960 - -
Accounts receivable 4(4) 43,859,227 32,884,739 - -
Receivables financing 4(6) 19,892,103 13,330,008 - -
Advances to suppliers 4(7) 4,075,935 3,316,194 63,398 81,244
Contract assets 4(8) 3,617,571 4,045,925 - -
Loan receivables 4(9) 13,958,685 14,296,958 - -
Other receivables 4(5), 17(1) 1,847,755 2,181,878 23,964,420 19,614,359
Inventories 4(10) 40,329,230 47,339,255 - -
Current portion of non-
current assets 4(11) 13,917,482 10,760,577 11,696,020 9,363,826
Other current assets 4(12) 48,688,111 62,900,891 30,463,836 43,712,760
Total current assets 301,787,598 281,320,980 85,586,632 103,331,792
Non-current assets:
Other debt investments 4(13) 5,137,526 6,319,047 3,196,045 3,334,059
Long-term receivables 4(14) 135,289 250,519 - -
Loan receivables 4(9) 564,901 975,272 - -
Long-term equity
investments 4(15), 17(2) 4,840,550 4,976,109 85,763,882 75,957,844
Investments in other
equity instruments 37,710 37,874 - -
Other non-current
financial assets 4(16) 7,235,971 7,769,938 220,120 285,170
Investment properties 1,234,600 1,293,629 375,625 393,988
Fixed assets 4(17) 31,535,431 30,937,963 2,097,377 1,300,998
Construction in progress 4(18) 4,774,313 4,681,220 50,754 749,934
Right-of-use assets 4(19) 2,881,293 3,048,785 3,905 1,683
Intangible assets 4(20) 17,550,898 18,457,736 612,503 583,714
Goodwill 4(21) 29,986,897 30,858,237 - -
Long-term prepaid
expenses 4(22) 1,708,626 1,736,199 64,454 72,745
Deferred tax assets 4(23) 13,806,344 12,771,150 321,414 289,426
Other non-current
assets 4(24) 83,413,962 80,603,526 70,003,426 71,132,070
Total non-current assets 204,844,311 204,717,204 162,709,505 154,101,631
TOTAL ASSETS 506,631,909 486,038,184 248,296,137 257,433,423
Legal representative: Principal in charge of accounting: Head of accounting department:
Fang Hongbo Zhong Zheng Chen Lihong
155
MIDEA GROUP CO., LTD.
CONSOLIDATED AND COMPANY BALANCE SHEETS (CONT’D)
AS AT 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
31 December 31 December
LIABILITIES AND 30 June 2024 2023 30 June 2024 2023
SHAREHOLDERS’ EQUITY Note Consolidated Consolidated Company Company
Current liabilities:
Short-term borrowings 4(27) 18,545,127 8,819,176 - 400,000
Customer deposits and
deposits from banks and
other financial institutions 59,932 88,960 - -
Financial liabilities held for
trading 1,075,388 1,346,674 5,112 -
Derivative financial liabilities 658,694 257,668 - -
Notes payable 4(28) 23,236,809 21,707,608 - -
Accounts payable 4(29) 84,966,347 72,530,465 - -
Contract liabilities 4(30) 34,683,769 41,765,475 - -
Employee benefits payable 4(31) 6,570,187 9,076,027 89,714 169,349
Taxes payable 4(32) 6,857,991 5,455,102 440,352 411,715
Other payables 4(33) 4,031,055 4,442,928 186,289,095 170,693,950
Current portion of non-
current liabilities 4(34) 10,268,028 14,457,710 4,001,419 6,621,910
Other current liabilities 4(35) 85,412,315 71,297,928 80,559 147,552
Total current liabilities 276,365,642 251,245,721 190,906,251 178,444,476
Non-current liabilities:
Long-term borrowings 4(36) 39,832,425 46,138,736 12,600,000 16,600,000
Debentures payable 4(37) 3,237,884 3,217,969 - -
Lease liabilities 4(38) 1,911,438 2,047,319 2,258 -
Provisions 1,019,047 782,539 - -
Deferred income 4(39) 1,740,573 1,734,932 203,629 157,917
Long-term employee
benefits payable 4(40) 1,282,442 1,433,874 - -
Deferred tax liabilities 4(23) 4,911,935 5,098,280 - -
Other non-current liabilities 45,155 39,165 - -
Total non-current liabilities 53,980,899 60,492,814 12,805,887 16,757,917
Total liabilities 330,346,541 311,738,535 203,712,138 195,202,393
Shareholders' equity:
Share capital 4(41) 6,980,152 7,025,769 6,980,152 7,025,769
Capital surplus 4(43) 17,295,578 21,243,156 25,547,042 29,479,180
Less: Treasury stock 4(42) (6,497,464) (12,871,738) (6,497,464) (12,871,738)
Other comprehensive
income 4(44) (655,616) (164,202) (1,335) (6,639)
General risk reserve 801,897 642,525 - -
Special reserve 17,317 16,040 - -
Surplus reserve 4(45) 10,702,928 10,702,928 10,702,928 10,702,928
Undistributed profits 4(46) 136,152,799 136,284,347 7,852,676 27,901,530
Total equity attributable to
shareholders of the
Company 164,797,591 162,878,825 44,583,999 62,231,030
Minority interests 11,487,777 11,420,824 - -
Total shareholders' equity 176,285,368 174,299,649 44,583,999 62,231,030
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY 506,631,909 486,038,184 248, 296,137 257,433,423
Legal representative: Principal in charge of accounting: Head of accounting department:
Fang Hongbo Zhong Zheng Chen Lihong
156
MIDEA GROUP CO., LTD.
CONSOLIDATED AND COMPANY INCOME STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
For the six months For the six months For the six months For the six months
ended 30 June 2024 ended 30 June 2023 ended 30 June 2024 ended 30 June 2023
Item Note Consolidated Consolidated Company Company
Total revenue 218,121,839 197,795,614 348,937 552,756
Including: Operating revenue 4(47), 17(3) 217,274,086 196,988,402 348,937 552,756
Interest income 4(48) 847,509 806,891 - -
Fee and commission income 244 321 - -
Total operating cost (194,716,430) (176,388,077) 140,854 411,775
Including: Cost of sales 4(47) (158,407,597) (147,276,358) (20,631) (20,582)
Interest costs 4(48) (1,781) (19,681) - -
Fee and commission expenses (971) (753) - -
Taxes and surcharges 4(49) (1,100,803) (1,040,376) (20,300) (11,951)
Selling and distribution expenses 4(50) (21,455,838) (17,133,216) - -
General and administrative expenses 4(51) (6,693,799) (5,670,400) (818,630) (579,154)
Research and development expenses 4(52) (7,662,534) (6,610,954) - -
Finance income 4(53) 606,893 1,363,661 1,000,415 1,023,462
Including: Interest expenses (1,064,685) (1,525,683) (1,447,562) (1,445,938)
Interest income 3,684,635 3,280,782 2,361,916 2,471,387
Add: Other income 4(59) 1,367,008 772,764 2,246 23,448
Investment income 4(57), 17(4) 545,292 410,154 459,386 189,439
Including: Share of profit of associates and joint
ventures 431,939 348,545 160,639 124,458
Gains/(Losses) on changes in fair value 4(56) 248,977 (103,703) (154,732) 126,469
Asset impairment losses 4(54) (325,371) (189,060) - -
(Losses on)/Reversal of credit impairment 4(55) (42,273) (221,424) (1,346) 551
Gains/(Losses) on disposal of assets 4(58) 114,007 8,525 (1,229) (65)
Operating profit 25,313,049 22,084,793 794,116 1,304,373
Add: Non-operating income 190,580 124,256 27,773 1,715
Less: Non-operating expenses (52,072) (101,742) (205) (333)
Total profit 25,451,557 22,107,307 821,684 1,305,755
Less: Income tax expenses 4(60) (4,310,302) (3,578,491) (94,186) (274,921)
Net profit 21,141,255 18,528,816 727,498 1,030,834
(1) Classified by continuity of operations
Net profit from continuing operations 21,141,255 18,528,816 727,498 1,030,834
Net profit from discontinued operations - - - -
(2) Classified by ownership of the equity
Attributable to shareholders of the Company 20,804,176 18,232,291 727,498 1,030,834
Minority interests 337,079 296,525 - -
Other comprehensive income, net of tax (751,540) 36,373 5,304 17,380
Other comprehensive income attributable to equity owners
of the Company, net of tax (491,414) 17,102 5,304 17,380
(1) Other comprehensive income items which will not be
reclassified subsequently to profit or loss 15,477 (21,788) - -
1) Changes arising from remeasurement of defined
benefit plan 15,515 (21,788) - -
2) Changes in fair value of investments in other equity
instruments (38) - - -
(2) Other comprehensive income items which will be
reclassified subsequently to profit or loss (506,891) 38,890 5,304 17,380
1) Other comprehensive income that will be transferred
subsequently to profit or loss under the equity
method 12,565 35,908 5,304 17,380
2) Cash flow hedging reserve (208,372) (124,535) - -
3) Differences on translation of foreign currency
financial statements (288,336) 153,161 - -
4) Others (22,748) (25,644) - -
Other comprehensive income attributable to minority
shareholders, net of tax (260,126) 19,271 - -
Total comprehensive income 20,389,715 18,565,189 732,802 1,048,214
Attributable to equity owners of the Company 20,312,762 18,249,393 732,802 1,048,214
Attributable to minority interests 76,953 315,796 - -
Earnings per share
(1) Basic earnings per share 4(61) 3.02 2.67 Not applicable Not applicable
(2) Diluted earnings per share 4(61) 3.01 2.66 Not applicable Not applicable
Legal representative: Principal in charge of accounting: Head of accounting department:
Fang Hongbo Zhong Zheng Chen Lihong
157
MIDEA GROUP CO., LTD.
CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
For the six months For the six months For the six months For the six months
ended 30 June 2024 ended 30 June 2023 ended 30 June 2024 ended 30 June 2023
Item Note Consolidated Consolidated Company Company
1. Cash flows from operating activities:
Cash received from sales of goods or rendering of
services 191,846,137 174,235,446 - -
Net decrease in loan receivables 795,817 - - -
Cash received from interest, fee and commission 849,774 816,416 - -
Refund of taxes and surcharges 4,977,835 4,053,564 - -
Cash received relating to other operating activities 4(62)(a) 6,545,351 3,291,850 16,967,278 24,634,108
Sub-total of cash inflows 205,014,914 182,397,276 16,967,278 24,634,108
Cash paid for goods and services (116,282,620) (100,290,626) - -
Net increase in loans receivables - (3,312,680) - -
Net decrease in customer deposits and deposits
from banks and other financial institutions (29,028) (29,918) - -
Net increase in deposits with the Central Bank (593,490) (251,030) - -
Cash paid for interest, fee and commission (2,752) (20,434) - -
Cash paid to and on behalf of employees (23,895,264) (20,253,369) (311,314) (271,129)
Payments of taxes and surcharges (10,276,855) (9,975,407) (2,112) (333,143)
Cash paid relating to other operating activities 4(62)(b) (20,446,735) (18,479,138) (5,225,925) (1,193,353)
Sub-total of cash outflows (171,526,744) (152,612,602) (5,539,351) (1,797,625)
Net cash flows from operating activities 4(62)(c) 33,488,170 29,784,674 11,427,927 22,836,483
2. Cash flows from investing activities:
Cash received from disposal of investments 58,933,472 56,866,188 37,985,831 44,664,000
Cash received from returns on investments 2,130,922 3,426,440 1,612,927 2,811,327
Net cash received from disposal of fixed assets,
intangible assets and other long-term assets 382,397 113,016 1 -
Net cash received from disposal of subsidiaries and
other business units 32,311 3,000 - -
Cash received relating to other investing activities - 373,816 - -
Sub-total of cash inflows 61,479,102 60,782,460 39,598,759 47,475,327
Cash paid to acquire fixed assets, intangible assets
and other long-term assets (3,734,576) (2,794,669) (424,279) (340,029)
Cash paid to acquire investments (78,156,904) (84,960,686) (33,780,000) (53,052,212)
Cash paid relating to other investing activities (223,176) (73,793) - -
Sub-total of cash outflows (82,114,656) (87,829,148) (34,204,279) (53,392,241)
Net cash flows from investing activities (20,635,554) (27,046,688) 5,394,480 (5,916,914)
3. Cash flows from financing activities:
Cash received from capital contributions 1,187,830 1,870,241 1,157,766 1,859,226
Including: Cash received from capital contributions
by minority shareholders of
subsidiaries 30,064 11,015 - -
Cash received from borrowings 19,407,555 14,310,153 - 400,000
Cash received relating to other financing activities - 282,897 - -
Sub-total of cash inflows 20,595,385 16,463,291 1,157,766 2,259,226
Cash repayments of borrowings (19,083,158) (3,772,807) (7,019,900) (89,900)
Cash payments for interest expenses and
distribution of dividends or profits (21,670,622) (18,167,904) (22,328,903) (18,760,464)
Including: Cash payments for dividends or profit to
minority shareholders of subsidiaries (84,424) (100,216) - -
Cash payments relating to other financing activities (818,761) (960,508) (28,583) (69,822)
Sub-total of cash outflows (41,572,541) (22,901,219) (29,377,386) (18,920,186)
Net cash flows from financing activities (20,977,156) (6,437,928) (28,219,620) (16,660,960)
4. Effect of foreign exchange rate changes on
cash and cash equivalents (262,006) 128,769 - -
5. Net increase in cash and cash equivalents (8,386,546) (3,571,173) (11,397,213) 258,609
Add: Cash and cash equivalents at the beginning of
the period 59,887,260 51,131,968 29,283,158 27,904,229
6. Cash and cash equivalents at the end of the
period 4(62)(d) 51,500,714 47,560,795 17,885,945 28,162,838
Legal representative: Principal in charge of accounting: Head of accounting department:
Fang Hongbo Zhong Zheng Chen Lihong
158
MIDEA GROUP CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
Amount in the current period
Attributable to equity owners of the Company
Other
Less: Treasury comprehensive General risk Undistributed Total shareholders'
Item Share capital Capital surplus stock income reserve Special reserve Surplus reserve profits Minority interests equity
Balance at the end of the prior year 7,025,769 21,243,156 (12,871,738) (164,202) 642,525 16,040 10,702,928 136,284,347 11,420,824 174,299,649
Add: Changes in accounting policies - - - - - - - - - -
Balance at the beginning of the current year 7,025,769 21,243,156 (12,871,738) (164,202) 642,525 16,040 10,702,928 136,284,347 11,420,824 174,299,649
Movements for the current period (45,617) (3,947,578) 6,374,274 (491,414) 159,372 1,277 - (131,548) 66,953 1,985,719
(1) Total comprehensive income - - - (491,414) - - - 20,804,176 76,953 20,389,715
(2) Capital contribution and withdrawal by
shareholders (45,617) (3,951,018) 6,374,274 - - - - - 54,635 2,432,274
1). Ordinary shares invested by
shareholders 25,112 1,479,980 - - - - - - 30,064 1,535,156
2). Business combinations - - - - - - - - - -
3). Share-based payment included in
shareholders’ equity - 399,309 - - - - - - 24,906 424,215
4) Others (70,729) (5,830,307) 6,374,274 - - - - - (335) 472,903
(3) Profit distribution - - - - 159,372 - - (20,935,724) (63,746) (20,840,098)
1). Appropriation to surplus reserve - - - - - - - - - -
2). Appropriation to general risk reserve - - - - 162,738 - - (162,738) - -
3) Reversal of general risk reserve - - - - (3,366) - - 3,366 - -
4). Profit distribution to shareholders - - - - - - - (20,776,352) (63,746) (20,840,098)
(4) Transfer within shareholders’ equity - - - - - - - - - -
1). Transfer from capital surplus to share
capital - - - - - - - - - -
2). Transfer from surplus reserve to share
capital - - - - - - - - - -
3). Surplus reserve used to offset
accumulated losses - - - - - - - - - -
4). Others - - - - - - - - - -
(5) Special reserve - - - - - 1,277 - - 350 1,627
1). Appropriation in the current period - - - - - 4,638 - - 10,445 15,083
2). Use in the current period - - - - - (3,361) - - (10,095) (13,456)
(6) Others - 3,440 - - - - - - (1,239) 2,201
Balance at the end of the current period 6,980,152 17,295,578 (6,497,464) (655,616) 801,897 17,317 10,702,928 136,152,799 11,487,777 176,285,368
Legal representative: Principal in charge of accounting: Head of accounting department:
Fang Hongbo Zhong Zheng Chen Lihong
159
MIDEA GROUP CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (CONT’D)
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
Amount in the prior year
Attributable to equity owners of the Company
Other
Less: Treasury comprehensive General risk Special Surplus Undistributed Minority Total shareholders'
Item Share capital Capital surplus stock income reserve reserve reserve profits interests equity
Balance at the end of the prior year 6,997,273 19,693,139 (14,933,944) 108,289 671,999 16,350 10,702,928 119,679,202 8,988,566 151,923,802
Add: Changes in accounting policies - - - - - - - - - -
Balance at the beginning of the current year 6,997,273 19,693,139 (14,933,944) 108,289 671,999 16,350 10,702,928 119,679,202 8,988,566 151,923,802
Movements for the current year 28,496 1,550,017 2,062,206 (272,491) (29,474) (310) - 16,605,145 2,432,258 22,375,847
(1) Total comprehensive income - - - (272,491) - - - 33,719,935 48,451 33,495,895
(2) Capital contribution and withdrawal by
shareholders 28,496 1,616,143 2,062,206 - - - - - 2,658,982 6,365,827
1). Ordinary shares invested by shareholders 38,490 2,317,783 - - - - - - 45,581 2,401,854
2). Business combinations - - - - - - - - 2,563,374 2,563,374
3). Share-based payment included in
shareholders’ equity - 671,456 - - - - - - 37,361 708,817
4). Others (9,994) (1,373,096) 2,062,206 - - - - - 12,666 691,782
(3) Profit distribution - - - - (29,474) - - (17,114,790) (349,745) (17,494,009)
1). Appropriation to surplus reserve - - - - - - - - - -
2). Appropriation to general risk reserve - - - - 19,678 - - (19,678) - -
3). Reversal of general risk reserve - - - - (49,152) - - 49,152 -
4). Profit distribution to shareholders - - - - - - - (17,144,264) (349,745) (17,494,009)
(4) Transfer within shareholders’ equity - - - - - - - - - -
1). Transfer from capital surplus to share
capital - - - - - - - - - -
2). Transfer from surplus reserve to share
capital - - - - - - - - - -
3). Surplus reserve used to offset
accumulated losses - - - - - - - - - -
4). Others - - - - - - - - - -
(5) Special reserve - - - - - (310) - - 36 (274)
1). Appropriation in the current period - - - - - 7,227 - - 11,500 18,727
2). Use in the current period - - - - - (7,537) - - (11,464) (19,001)
(6) Others - (66,126) - - - - - - 74,534 8,408
Balance at the end of the current year 7,025,769 21,243,156 (12,871,738) (164,202) 642,525 16,040 10,702,928 136,284,347 11,420,824 174,299,649
Legal representative: Principal in charge of accounting: Head of accounting department:
Fang Hongbo Zhong Zheng Chen Lihong
160
MIDEA GROUP CO., LTD.
COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
Amount in the current period
Other
Less: Treasury comprehensive Undistributed Total shareholders'
Item Share capital Capital surplus stock income Special reserve Surplus reserve profits equity
Balance at the end of the prior year 7,025,769 29,479,180 (12,871,738) (6,639) - 10,702,928 27,901,530 62,231,030
Add: Changes in accounting policies - - - - - - - -
Balance at the beginning of the current
year 7,025,769 29,479,180 (12,871,738) (6,639) - 10,702,928 27,901,530 62,231,030
Movements for the current period (45,617) (3,932,138) 6,374,274 5,304 - - (20,048,854) (17,647,031)
(1) Total comprehensive income - - - 5,304 - - 727,498 732,802
(2) Capital contribution and withdrawal by
shareholders (45,617) (3,935,626) 6,374,274 - - - - 2,393,031
1). Ordinary shares invested by
shareholders 25,112 1,479,980 - - - - - 1,505,092
2). Share-based payment included in
owners’ equity - 416,256 - - - - - 416,256
3). Others (70,729) (5,831,862) 6,374,274 - - - - 471,683
(3) Profit distribution - - - - - - (20,776,352) (20,776,352)
1). Appropriation to surplus reserve - - - - - - - -
2). Profit distribution to shareholders - - - - - - (20,776,352) (20,776,352)
3). Others - - - - - - - -
(4) Transfer within shareholders’ equity - - - - - - - -
1). Transfer from capital surplus to share
capital - - - - - - - -
2). Transfer from surplus reserve to share
capital - - - - - - - -
3). Surplus reserve used to offset
accumulated losses - - - - - - - -
4). Others - - - - - - - -
(5) Special reserve - - - - - - - -
1). Appropriation in the current year - - - - - - - -
2). Use in the current year - - - - - - - -
(6) Others - 3,488 - - - - - 3,488
Balance at the end of the current period 6,980,152 25,547,042 (6,497,464) (1,335) - 10,702,928 7,852,676 44,583,999
Legal representative: Principal in charge of accounting: Head of accounting department:
Fang Hongbo Zhong Zheng Chen Lihong
161
MIDEA GROUP CO., LTD.
COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (CONT’D)
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
Amount in the prior year
Other
Less: Treasury comprehensive Undistributed Total shareholders'
Item Share capital Capital surplus stock income Special reserve Surplus reserve profits equity
Balance at the end of the prior year 6,997,273 27,826,208 (14,933,944) (5,679) - 10,702,928 27,719,633 58,306,419
Add: Changes in accounting policies - - - - - - - -
Balance at the beginning of the current year 6,997,273 27,826,208 (14,933,944) (5,679) - 10,702,928 27,719,633 58,306,419
Movements for the current year 28,496 1,652,972 2,062,206 (960) - - 181,897 3,924,611
(1) Total comprehensive income - - - (960) - - 17,326,161 17,325,201
(2) Capital contribution and withdrawal by
shareholders 28,496 1,650,500 2,062,206 - - - - 3,741,202
1). Ordinary shares invested by
shareholders 38,490 2,317,783 - - - - - 2,356,273
2). Share-based payment included in
owners’ equity - 708,290 - - - - - 708,290
3). Others (9,994) (1,375,573) 2,062,206 - - - - 676,639
(3) Profit distribution - - - - - - (17,144,264) (17,144,264)
1). Appropriation to surplus reserve - - - - - - - -
2). Profit distribution to shareholders - - - - - - (17,144,264) (17,144,264)
3). Others - - - - - - - -
(4) Transfer within shareholders’ equity - - - - - - - -
1). Transfer from capital surplus to share
capital - - - - - - - -
2). Transfer from surplus reserve to share
capital - - - - - - - -
3). Surplus reserve used to offset
accumulated losses - - - - - - - -
4). Others - - - - - - - -
(5) Special reserve - - - - - - - -
1). Appropriation in the current year - - - - - - - -
2). Use in the current year - - - - - - - -
(6) Others - 2,472 - - - - - 2,472
Balance at the end of the current year 7,025,769 29,479,180 (12,871,738) (6,639) - 10,702,928 27,901,530 62,231,030
Legal representative: Principal in charge of accounting: Head of accounting department:
Fang Hongbo Zhong Zheng Chen Lihong
162
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
1 General information
The principal business activities of Midea Group Co., Ltd. (hereinafter referred to as “the
Company”) and its subsidiaries (hereinafter collectively referred to as “the Group”) include
residential air-conditioners, central air-conditioners, heating and ventilation systems,
kitchen appliances, refrigerators, washing machines, various small appliances, elevators,
variable frequency drivers, medical imaging products, robotics and automation systems.
Other services include the smart supply chain; sales, wholesale and processing of raw
materials of household electrical appliances; and financial business involving customer
deposits, interbank lendings and borrowings, consumption credits, buyers’ credits and
finance leases.
The Company was set up by the Council of Trade Unions of GD Midea Group Co., Ltd.
and was registered in Market Safety Supervision Bureau of Shunde District, Foshan on 7
April 2000, with its headquarters located in Foshan, Guangdong. On 30 August 2012, the
Company was transformed into a limited liability company. On 29 July 2013, the Company
was approved to merge and acquire Guangdong Midea Electric Co., Ltd., which was listed
on Shenzhen Stock Exchange. On 18 September 2013, the Company’s shares were listed
on Shenzhen Stock Exchange.
As at 30 June 2024, the Company’s share capital was RMB 6,980,151,778, and the total
number of shares in issue was 6,980,151,778, of which 132,377,074 shares were
restricted tradable A shares and 6,847,774,704 shares were unrestricted tradable A
shares.
The detailed information of major subsidiaries included in the consolidation scope in the
current year is set out in Note 5 and Note 6. No subsidiary was included in the
consolidation scope via acquisition in the current year and see Note 5(1) for details;
subsidiaries included in the consolidation scope via establishment in the current year are
detailed in Note 5(2)(a); subsidiaries no longer included in the consolidation scope in the
current year are detailed in Note 5(2)(b).
These financial statements were authorised for issue by the Company’s Board of Directors
on 19 August 2024.
2 Summary of significant accounting policies and accounting estimates
The Group determines specific accounting policies and accounting estimates based on the
features of production and operation, mainly including the measurement of expected credit
loss (“ECL”) on receivables and contract assets (Note 2(9)(a)), valuation method of
inventories (Note 2(10)), depreciation of fixed assets, amortisation of intangible assets and
right-of-use assets (Note 2(13), (16), (28)), impairment of long-term assets (Note 2(18)),
and recognition and measurement of revenue (Note 2(25)).
Key judgements and critical accounting estimates and key assumptions applied by the
Group on the determination of significant accounting policies are set out in Note 2(30).
(1) Basis of preparation
The financial statements are prepared in accordance with the Accounting Standard for
Business Enterprises - Basic Standard, and the specific accounting standards and other
relevant regulations issued by the Ministry of Finance on 15 February 2006 and in
subsequent periods (hereinafter collectively referred to as the “Accounting Standards for
Business Enterprises” or “CASs”) and the disclosure requirements in the Preparation
Convention of Information Disclosure by Companies Offering Securities to the Public No.
15 - General Rules on Financial Reporting issued by the China Securities Regulatory
Commission (“CSRC”).
- 163 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(1) Basis of preparation (Cont’d)
The financial statements are prepared on a going concern basis.
(2) Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements of the Company for the six months ended 30 June 2024 are in
compliance with the Accounting Standards for Business Enterprises, and truly and
completely present the consolidated and company’s financial position of the Company as
at 30 June 2024 and their financial performance, cash flows and other information for the
six months ended.
(3) Accounting period
The Company’s accounting year starts on 1 January and ends on 31 December.
(4) Functional currency
The functional currency of the Company is Renminbi (“RMB”). The subsidiaries determine
their functional currency based on the primary economic environment in which the
business is operated, mainly including EUR, JPY, USD and HKD, etc. The financial
statements are presented in RMB.
(5) Business combinations
(a) Business combinations involving enterprises under common control
The consideration paid and net assets obtained by the Group in a business combination
are measured at the carrying amount. If the absorbed party was bought by the ultimate
controller from a third party in prior years, the value of its assets and liabilities (including
goodwill generated due to the combination) are based on the carrying amount in the
ultimate controller’s consolidated financial statements. The difference between the
carrying amount of the net assets obtained by the Group and the carrying amount of the
consideration paid for the combination is treated as an adjustment to capital surplus (share
premium). If the capital surplus (share premium) is not sufficient to absorb the difference,
the remaining balance is adjusted against retained earnings. Costs directly attributable to
the combination are included in profit or loss in the period in which they are incurred.
Transaction costs associated with the issue of equity or debt securities for the business
combination are included in the initially recognised amounts of the equity or debt
securities.
(b) Business combinations involving enterprises not under common control
The cost of combination and identifiable net assets obtained by the Group in a business
combination are measured at fair value at the acquisition date. Where the cost of the
combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable
net assets, the difference is recognised as goodwill; where the cost of combination is lower
than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the
difference is recognised in profit or loss for the current period. Costs directly attributable to
the combination are included in profit or loss in the period in which they are incurred.
Transaction costs associated with the issue of equity or debt securities for the business
combination are included in the initially recognised amounts of the equity or debt
securities.
- 164 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(5) Business combinations (Cont’d)
(b) Business combinations involving enterprises not under common control (Cont’d)
For business combinations achieved by stages involving enterprises not under common
control, previously-held equity in the acquiree is remeasured at its fair value at the
acquisition dates. For the equity interest held in the acquiree before the acquisition date
under equity method, the difference between its fair value and carrying amount is
recognised as investment income for the current period; for the other comprehensive
income under the equity method and shareholders’ equity changes other than those
arising from the net profit or loss, other comprehensive income and profit distribution, the
related other comprehensive income and other shareholders' equity changes are
transferred into profit or loss for the current period to which the acquisition dates belong,
excluding those arising from changes in the investee's remeasurements of net liability or
net asset related to the defined benefit plan, and those arising from accumulative changes
in fair value of investments in equity instruments not held for trading that are held by
investees and designated as at fair value through other comprehensive income. For
previously-held equity in the acquiree categorised as financial assets at fair value through
profit or loss, the difference between its fair value and carrying amount is transferred to
investment income under the cost method; for previously-held equity in the acquiree
categorised as investments in equity instruments not held for trading at fair value through
other comprehensive income, its accumulative changes in fair value that are originally
recognised in other comprehensive income are directly reclassified to retained earnings.
The excess of the sum of fair value of the previously-held equity and fair value of the
consideration paid at the acquisition date over share of fair value of identifiable net assets
acquired from the subsidiary is recognised as goodwill.
(6) Preparation of consolidated financial statements
The consolidated financial statements comprise the financial statements of the Company
and all of its subsidiaries.
Subsidiaries are consolidated from the date on which the Group obtains control and are
de- consolidated from the date that such control ceases. For a subsidiary that is acquired
in a business combination involving enterprises under common control, it is included in the
consolidated financial statements from the date when it, together with the Company,
comes under common control of the ultimate controlling party. The portion of the net
profits realised before the combination date is presented separately in the consolidated
income statement.
- 165 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(6) Preparation of consolidated financial statements (Cont’d)
In preparing the consolidated financial statements, where the accounting policies and the
accounting periods of the Company and subsidiaries are inconsistent, the financial
statements of the subsidiaries are adjusted in accordance with the accounting policies and
the accounting period of the Company. For subsidiaries acquired from business
combinations involving enterprises not under common control, the individual financial
statements of the subsidiaries are adjusted based on the fair value of the identifiable net
assets at the acquisition date.
All significant intra-group balances, transactions and unrealised profits are eliminated in
the consolidated financial statements. The portion of subsidiaries’ shareholders’ equity and
the portion of subsidiaries’ net profits and losses and comprehensive incomes for the
period not attributable to the Company are recognised as minority interests, net profit
attributed to minority interests and total comprehensive income attributed to minority
interests and presented separately in the consolidated financial statements under
shareholders’ equity, net profit and total comprehensive income respectively. Where the
loss for the current period attributable to the minority shareholders of the subsidiaries
exceeds the share of the minority interests in the opening balance of owners’ equity, the
excess is deducted against minority interests. Unrealised profits and losses resulting from
the sales of assets by the Company to its subsidiaries are fully eliminated against net profit
attributable to shareholders of the parent company. Unrealised profits and losses resulting
from the sales of assets by a subsidiary to the Company are eliminated and allocated
between net profit attributable to shareholders of the parent company and net profit
attributable to minority interests in accordance with the allocation proportion of the parent
company in the subsidiary. Unrealised profits and losses resulting from the sales of assets
by one subsidiary to another are eliminated and allocated between net profit attributable to
shareholders of the parent company and net profit attributable to minority interests in
accordance with the allocation proportion of the parent company in the subsidiary.
If the accounting treatment of a transaction is inconsistent in the financial statements at
the Group level and at the Company or its subsidiary level, adjustment will be made from
the perspective of the Group.
(7) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits that can be readily drawn on
demand, and short-term and highly liquid investments that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value.
(8) Foreign currency translation
(a) Foreign currency transactions
Foreign currency transactions are translated into functional currency using the exchange
rates prevailing at the dates of the transactions.
At the balance sheet date, monetary items denominated in foreign currencies are
translated into functional currency using the spot exchange rates on the balance sheet
date. Exchange differences arising from these translations are recognised in profit or loss
for the current period, except for those attributable to foreign currency borrowings that
have been taken out specifically for acquisition or construction of qualifying assets, which
are capitalised as part of the cost of those assets. Non-monetary items denominated in
foreign currencies that are measured at historical costs are translated at the balance sheet
date using the spot exchange rates at the date of the transactions. The effect of exchange
rate changes on cash is presented separately in the cash flow statement.
- 166 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(8) Foreign currency translation (Cont’d)
(b) Translation of foreign currency financial statements
The asset and liability items in the balance sheets for overseas operations are translated
at the spot exchange rates on the balance sheet date. Among the equity items, the items
other than undistributed profits are translated at the spot exchange rates of the transaction
dates. The income and expense items in the income statements of overseas operations
are translated at the spot exchange rates of the transaction dates. The differences arising
from the above translation are recognised in other comprehensive income. The cash flows
of overseas operations are translated at the spot exchange rates on the dates of the cash
flows. The effect of exchange rate changes on cash is presented separately in the cash
flow statement.
(9) Financial instruments
A financial instrument is 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, a financial liability
or an equity instrument is recognised when the Group becomes a party to the contractual
provisions of the instrument.
(a) Financial assets
(i) Classification and measurement
Based on the Group’s business model for managing the financial assets and the
contractual cash flow characteristics of the financial assets, financial assets are classified
as: (1) financial assets at amortised cost; (2) financial assets at fair value through other
comprehensive income; (3) financial assets at fair value through profit or loss.
The financial assets are measured at fair value at initial recognition. Related transaction
costs that are attributable to the acquisition of the financial assets are included in the
initially recognised amounts, except for the financial assets at fair value through profit or
loss, the related transaction costs of which are recognised directly in profit or loss for the
current period. Accounts receivable or notes receivable arising from sales of products or
rendering of services (excluding or without regard to significant financing components) are
initially recognised at the consideration that is entitled to be charged by the Group as
expected.
(i-1) Debt instruments
The debt instruments held by the Group refer to the instruments that meet the definition of
financial liabilities from the perspective of the issuer, and are measured in the following
three ways:
- 167 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instruments (Cont’d)
(a) Financial assets (Cont’d)
(i) Classification and measurement (Cont’d)
(i-1) Debt instruments (Cont’d)
Measured at amortised cost:
The objective of the Group’s business model is to hold the financial assets to collect the
contractual cash flows, and the contractual cash flow characteristics are consistent with a
basic lending arrangement, which gives rise on specified dates to the contractual cash
flows that are solely payments of principal and interest on the principal amount
outstanding. The interest income of such financial assets is recognised using the effective
interest rate method. Such financial assets mainly comprise cash at bank and on hand,
loan receivables, notes receivable, accounts receivable, other receivables, other current
assets, debt investments, long-term receivables and other non-current assets. Debt
investments and long-term receivables that are due within one year (inclusive) as from the
balance sheet date are included in the current portion of non-current assets; debt
investments with maturities of no more than one year (inclusive) at the time of acquisition
are included in other current assets.
Measured at fair value through other comprehensive income:
The objective of the Group’s business model is to hold the financial assets to both collect
the contractual cash flows and sell such financial assets, and the contractual cash flow
characteristics are consistent with a basic lending arrangement. Such financial assets are
measured at fair value through other comprehensive income, except for the impairment
gains or losses, foreign exchange gains and losses, and interest income calculated using
the effective interest rate method which are recognised in profit or loss for the current
period. Such financial assets mainly include receivables financing and other debt
investments. Other debt investments of the Group that are due within one year (inclusive)
as from the balance sheet date are included in the current portion of non-current assets;
other debt investments with maturities no more than one year (inclusive) at the time of
acquisition are included in other current assets.
Measured at fair value through profit or loss:
Debt instruments held by the Group that are not divided into those at amortised cost, or
those measured at fair value through other comprehensive income, are measured at fair
value through profit or loss. At initial recognition, the Group designates a portion of
financial assets as at fair value through profit or loss to eliminate or significantly reduce an
accounting mismatch. Financial assets that are due over one year as from the balance
sheet date and are expected to be held over one year are included in other non-current
financial assets. Others are included in financial assets held for trading.
- 168 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instruments (Cont’d)
(a) Financial assets (Cont’d)
(i) Classification and measurement (Cont’d)
(i-2) Equity instruments
Investments in equity instruments, over which the Group has no control, joint control or
significant influence, are measured at fair value through profit or loss under financial
assets held for trading; investments in equity instruments expected to be held over one
year as from the balance sheet date are included in other non-current financial assets.
In addition, at initial recognition, a portion of certain investments in equity instruments not
held for trading are designated as financial assets at fair value through other
comprehensive income under investments in other equity instruments. The relevant
dividend income of such financial assets is recognised in profit or loss for the current
period.
(i-3) Derivative financial instruments
The derivative financial instruments held by the Group are mainly used in controlling risk
exposures. Derivative financial instruments are initially recognised at fair value on the day
when derivatives transaction contract was signed, and subsequently measured at fair
value. The derivative financial instruments are recorded as assets when they have a
positive fair value and as liabilities when they have a negative fair value.
The method for recognising changes in fair value of the derivative financial instrument
depends on whether the derivative financial instrument is designated as a hedging
instrument and meets the requirement for it, and if so, the nature of the item being hedged.
For derivative financial instruments that are not designated as hedging instruments and fail
to meet requirements on hedging instruments, including those held for the purpose of
providing hedging against specific risks in interest rate and foreign exchange but not
conforming with requirements of hedge accounting, the changes in fair value are recorded
in gains or losses on changes in fair value in the consolidated income statement.
Cash flow hedge
At the inception of the hedge, the Group has completed relevant hedge documents,
including the relationship between hedged items and hedging instruments, and risk
management objectives and strategies corresponding to various hedging transactions. At
the inception of the hedge and in subsequent periods, the Group continuously records
whether the hedge is effectively evaluated, that is, whether the hedging instruments can
largely offset the changes in the fair value or cash flows of hedged items.
- 169 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instruments (Cont’d)
(a) Financial assets (Cont’d)
(i) Classification and measurement (Cont’d)
(i-3) Derivative financial instruments (Cont’d)
Cash flow hedge (Cont’d)
The effective portion of changes in fair value on hedging instruments is recognised in other
comprehensive income as cash flow hedging reserve, while the gains or losses related to
the ineffective portion of the hedge are recognised in profit or loss for the current period.
Where the hedge is a forecast transaction which subsequently results in the recognition of
a non-financial asset or liability, the amount originally recognised in other comprehensive
income is transferred and included in the initially recognised amount of the asset or
liability. For cash flow hedge beyond the foregoing scope, the amount originally
recognised in other comprehensive income is transferred and included in profit or loss for
the current period during the same time in which the profit or loss is influenced by the
hedged expected cash flow. However, if all or part of net loss recognised directly in other
comprehensive income will not be recovered in future accounting periods, the amount not
expected to be recovered should be transferred to profit or loss for the current period.
When the Group revokes the designation of a hedge, a hedging instrument expires or is
sold, terminated or exercised, or the hedge no longer meets the criteria for hedge
accounting, the Group will discontinue the hedge accounting treatments prospectively.
Where the Group discontinues the hedge accounting treatment for cash flow hedging, for
hedged future cash flows that will still happen, the accumulated gains or losses that have
been recognised in other comprehensive income are retained and subject to accounting
treatment under the subsequent treatment method of aforesaid cash flow hedging reserve;
for hedged future cash flows that the forecast transaction will never happen, the
accumulated gains or losses that have been recognised in other comprehensive income
are transferred immediately and included in profit or loss for the current period.
(ii) Impairment
Loss provision for financial assets at amortised cost, investments in debt instruments at
fair value through other comprehensive income, as well as contract assets and lease
receivables is recognised on the basis of ECL.
Giving consideration to reasonable and supportable information on past events, current
conditions, forecasts of future economic conditions that is available without undue cost or
effort at the balance sheet date, and weighted by the risk of default, the Group recognises
the ECL as the probability-weighted amount of the present value of the difference between
the cash flows receivable from the contract and the cash flows expected to collect.
- 170 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instruments (Cont’d)
(a) Financial assets (Cont’d)
(ii) Impairment (Cont’d)
For notes receivable, accounts receivable, receivables financing, lease receivables and
contract assets arising from sales of goods and rendering of services in the ordinary
course of operating activities, the Group recognises the lifetime ECL provision regardless
of whether there exists a significant financing component. Since contract assets are mainly
related to work on the stage of completion without invoice, essentially, their credit risk
characteristics are similar to the accounts receivable for the same kind of contracts.
Therefore, the ECL rate of the contract assets is an approximation to that of accounts
receivable.
Except for the above notes receivable, accounts receivable, receivables financing, lease
receivables and contract assets, at each balance sheet date, the ECL of financial
instruments at different stages are measured respectively. 12-month ECL provision is
recognised for financial instruments in Stage 1 that have not had a significant increase in
credit risk since initial recognition; lifetime ECL provision is recognised for financial
instruments in Stage 2 that have had a significant increase in credit risk yet without credit
impairment since initial recognition; and lifetime ECL provision is recognised for financial
instruments in Stage 3 that have had credit impairment since initial recognition.
For the financial instruments with lower credit risk on the balance sheet date, the Group
assumes there is no significant increase in credit risk since initial recognition. The Group
treats them as financial instruments in Stage 1 and recognises a 12-month ECL.
For the financial instruments in Stage 1 and Stage 2, the Group calculates the interest
income by applying the effective interest rate to the book balance (before deduction of the
impairment provision). For the financial instruments in Stage 3, the interest income is
calculated by applying the effective interest rate to the amortised cost (after deduction of
the impairment provision from the book balance).
In case the ECL of an individually assessed financial asset cannot be evaluated with
reasonable cost, the Group divides the receivables and contract assets into certain
groupings based on credit risk characteristics, then pursuant to which, calculates the ECL.
Basis and provision method for determining groupings are as follows:
- 171 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instruments (Cont’d)
(a) Financial assets (Cont’d)
(ii) Impairment (Cont’d)
Grouping of notes receivable 1 Bank acceptance notes grouping
Grouping of notes receivable 2 Trade acceptance notes grouping
Grouping of accounts receivable 1 Overseas business grouping
Grouping of accounts receivable 2 Domestic business grouping
Grouping of contract assets 1 Overseas business grouping
Grouping of contract assets 2 Domestic business grouping
Security deposit and guarantee
Grouping of other receivables 1 receivables grouping
Receivables from related parties
Grouping of other receivables 2 grouping
Grouping of other receivables 3 Other receivables grouping
Grouping of long-term receivables Finance lease receivables grouping
Grouping of loan receivables Loans business grouping
The Group, on the basis of the exposure at default and the lifetime ECL rate, calculates
the ECL of notes receivable and receivables financing that are classified into groupings
with consideration to historical credit losses experience, current conditions and forecasts
of future economic conditions.
With consideration to historical credit loss experience, current conditions and forecasts of
future economic conditions, the Group prepares the cross-reference between the number
of overdue days of accounts receivable and the lifetime ECL rate, and calculates the ECL
of accounts receivable that are classified into groupings.
The Group, on the basis of the exposure at default and the 12-month or lifetime ECL rate,
calculates the ECL of other receivables, loan receivables that are classified into groupings
with consideration to historical credit losses experience, the current conditions and
forecasts of future economic conditions.
The Group recognises the loss provision made or reversed into profit or loss for the
current period. For debt instruments held at fair value through other comprehensive
income, the Group adjusts other comprehensive income while the impairment loss or gain
is recognised in profit or loss for the current period.
- 172 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instruments (Cont’d)
(a) Financial assets (Cont’d)
(iii) Derecognition of financial assets
A financial asset is derecognised when: (1) the contractual rights to the cash flows from
the financial asset expire, (2) the financial asset has been transferred and the Group
transfers substantially all the risks and rewards of ownership of the financial asset to the
transferee, or (3) the financial asset has been transferred and the Group has not retained
control of the financial asset, although the Group neither transfers nor retains substantially
all the risks and rewards of ownership of the financial asset.
When a financial asset is derecognised, the difference between the carrying amount and
the sum of the consideration received and the cumulative changes in fair value that are
previously recognised directly in other comprehensive income is recognised in profit or
loss for the current period, except for those as investments in other equity instruments, the
difference aforementioned is recognised in retained earnings instead.
(b) Financial liabilities
Financial liabilities are classified as financial liabilities at amortised cost and financial
liabilities at fair value through profit or loss at initial recognition.
Financial liabilities of the Group mainly comprise financial liabilities at amortised cost,
including notes payable, accounts payable, other payables, borrowings, debentures
payable and short-term financing bonds payable in other current liabilities, customer
deposits and deposits from banks and other financial institutions, borrowings from the
Central Bank, and long-term payables. Such financial liabilities are initially recognised at
fair value, net of transaction costs incurred, and subsequently measured using the
effective interest rate method. Financial liabilities that are due within one year (inclusive)
are classified as current liabilities; those with maturities over one year but are due within
one year (inclusive) as from the balance sheet date are classified as current portion of
non-current liabilities. Others are classified as non-current liabilities.
A financial liability is derecognised or partly derecognised when the underlying present
obligation is discharged or partly discharged. The difference between the carrying amount
of the derecognised part of the financial liability and the consideration paid is recognised in
profit or loss for the current period.
- 173 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instruments (Cont’d)
(c) Determination of fair value of financial instruments
The fair value of a financial instrument that is traded in an active market is determined at
the quoted price in the active market. The fair value of a financial instrument that is not
traded in an active market is determined by using a valuation technique. In valuation, the
Group adopts valuation techniques applicable in the current situation and supported by
adequate available data and other information, selects inputs with the same characteristics
as those of assets or liabilities considered in relevant transactions of assets or liabilities by
market participants, and gives priority to the use of relevant observable inputs. When
relevant observable inputs are not available or feasible, unobservable inputs are adopted.
(10) Inventories
(a) Classification of inventories
Inventories, including finished goods, raw materials, work in progress, consigned
processing materials and low value consumables, are measured at the lower of cost and
net realisable value.
(b) Costing of inventories
Cost is determined using the first-in, first-out method when issued. The cost of finished
goods and work in progress comprises raw materials, direct labour and systematically
allocated production overhead based on the normal production capacity.
(c) Basis for determining net realisable values of inventories and method for making provision
for decline in the value of inventories
Inventories are initially measured at cost. The cost of inventories comprises purchase cost,
processing cost and other expenditures to bring the inventories to current site and
condition.
On the balance sheet date, inventories are measured at the lower of cost and net
realisable value.
Net realisable value is determined based on the estimated selling price in the ordinary
course of business, less the estimated costs to completion and estimated contract
fulfilment costs and costs necessary to make the sale and related taxes.
Provision for decline in the value of inventories is determined at the excess amount of the
cost as calculated based on the classification of inventories over their net realisable value,
and are recognised in profit or loss for the current period.
- 174 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(10) Inventories (Cont'd)
(d) Inventory system
The Group adopts the perpetual inventory system.
(e) Amortisation methods of low value consumables and packaging materials
Low value consumables are expensed in full when issued and recognised in cost of
related assets or in profit or loss for the current period.
(11) Long-term equity investments
Long-term equity investments comprise the Company’s long-term equity investments in its
subsidiaries, and the Group’s long-term equity investments in its associates and joint
ventures.
Subsidiaries are the investees over which the Company is able to exercise control. A joint
venture is a joint arrangement which is structured through a separate vehicle over which
the Group has joint control together with other parties and only has rights to the net assets
of the arrangement based on legal forms, contractual terms and other facts and
circumstances. An associate is an investee that the Group has significant influence on
their financial and operating policies.
Investments in subsidiaries are presented in the Company’s financial statements using the
cost method, and are adjusted to the equity method when preparing the consolidated
financial statements. Investments in joint ventures and associates are accounted for using
the equity method.
(a) Determination of investment cost
For long-term equity investments acquired through a business combination involving
enterprises under common control, the investment cost shall be the absorbing party’s
share of the carrying amount of owners’ equity of the party being absorbed at the
combination date; for long-term equity investment acquired through a business
combination involving enterprises not under common control, the investment cost shall be
the combination cost.
For business combinations achieved by stages involving enterprises not under common
control, the initial investment cost accounted for using the cost method is the sum of
carrying amount of previously-held equity investment and additional investment cost. For
previously-held equity investments accounted for using the equity method, the accounting
treatment of related other comprehensive income from disposal of the equity is carried out
on a same basis with the investee’s direct disposal of related assets or liabilities. Owners’
equity, which is recognised due to changes in investee’s owners’ equity other than those
arising from the net profit or loss, other comprehensive income and profit distribution, is
accordingly transferred into profit or loss for the period in which the investment is
disposed.
- 175 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(11) Long-term equity investments (Cont’d)
(a) Determination of investment cost (Cont’d)
For the investments in previously-held equity without significant influence or common
control that previously recognised as financial assets at fair value through profit or loss,
the difference between the fair value and carrying amount is transferred to investment
income for the current period under cost method; for the investments previously
recognised as investments in equity instruments not held for trading at fair value through
other comprehensive income, the difference between the fair value and carrying amount
and accumulated changes in fair value previously recognised in other comprehensive
income are directly transferred to retained earnings.
For long-term equity investments acquired not through a business combination, the long-
term equity investments acquired by payment in cash, the initial investment cost shall be
the purchase price actually paid; for long-term equity investments acquired by issuing
equity securities, the initial investment cost shall be the fair value of the equity securities
issued.
(b) Subsequent measurement and recognition methods of gains and losses
For long-term equity investments accounted for using the cost method, they are measured
at the initial investment costs, and cash dividends or profit distribution declared by the
investees are recognised as investment income in profit or loss for the current period.
For long-term equity investments accounted for using the equity method, where the initial
investment cost of a long-term equity investment exceeds the Group’s share of the fair
value of the investee’s identifiable net assets at the acquisition date, the long-term equity
investment is measured at the initial investment cost; where the initial investment cost is
less than the Group’s share of the fair value of the investee’s identifiable net assets at the
acquisition date, the difference is included in profit or loss and the cost of the long-term
equity investment is adjusted upwards accordingly.
For long-term equity investments accounted for using the equity method, the Group
recognises the investment income according to its share of net profit or loss of the
investee. The Group discontinues recognising its share of the net losses of an investee
after the carrying amount of the long-term equity investment together with any long-term
interests that in substance form part of the investor’s net investment in the investee are
reduced to zero. However, if the Group has obligations for additional losses and the
criteria with respect to recognition of provisions are satisfied, the Group continues
recognising the investment losses and the provisions at the amount it expects to
undertake. The changes of the Group’s share in investee’s owners’ equity other than those
arising from the net profit or loss, other comprehensive income and profit distribution are
recognised in capital surplus with a corresponding adjustment to the carrying amount of
the long-term equity investment. The carrying amount of the investment is reduced by the
Group’s share of the profit distribution or cash dividends declared by the investees.
- 176 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(11) Long-term equity investments (Cont’d)
(b) Subsequent measurement and recognition methods of gains and losses (Cont’d)
The unrealised profits or losses arising from the transactions between the Group and its
investees are eliminated in proportion to the Group’s equity interest in the investees,
based on which the investment gains or losses of the Company’s financial statements are
recognised. When preparing consolidated financial statements, for the portion of
unrealised profits or losses of internal transactions attributable to the Group arising from
downstream transactions in which the Group invests in or sells assets to the investees, the
Group shall, on the basis of offsetting the Company's financial statements, offset the
portion of unrealised income and costs or asset disposal gains or losses attributable to the
Group, and adjust investment income accordingly; for the unrealised profits or losses of
internal transactions attributable to the Group arising from the upstream transactions in
which the investees invest in or sell assets to the Group, the Group shall, on the basis of
offsetting the Company's financial statements, offset the portion of unrealised profits or
losses of internal transactions attributable to the Group included in the carrying amount of
the relevant assets, and adjust the carrying amount of long-term equity investments
accordingly. Any losses resulting from transactions between the Group and its investees
attributable to asset impairment losses are not eliminated.
(c) Basis for determining existence of control, joint control, significant influence over investees
Control is the power to govern an investee and obtain variable returns from participating
the investee’s activities, and the ability to utilise the power of an investee to affect its
returns.
Joint control is the contractually agreed sharing of control over an arrangement, and
relevant economic activity can be arranged upon the unanimous approval of the Group
and other participants sharing of control rights.
Significant influence is the power to participate in the financial and operating policy
decisions of the investee, but is not control or joint control over those policies.
(d) Impairment of long-term equity investments
The carrying amounts of long-term equity investments in subsidiaries, joint ventures and
associates are reduced to the recoverable amounts when the recoverable amounts are
below their carrying amounts (Note 2(18)).
- 177 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(12) Investment properties
Investment properties, including land use rights that have already been leased out,
buildings that are held for the purpose of leasing and buildings that are being constructed
or developed for future use for leasing, are measured initially at cost. Subsequent
expenditures incurred in relation to an investment property are included in the cost of the
investment property when it is probable that the associated economic benefits will flow to
the Group and their costs can be reliably measured; otherwise, the expenditures are
recognised in profit or loss for the period in which they are incurred.
The Group adopts the cost model for subsequent measurement of investment properties.
Buildings and land use rights are depreciated or amortised to their estimated net residual
values over their estimated useful lives. The estimated useful lives, the estimated net
residual values that are expressed as a percentage of cost and the annual depreciation
(amortisation) rates of investment properties are as follows:
Estimated useful Estimated net Annual depreciation
lives residual values (amortisation) rates
Buildings 20 to 40 years 5% 2.38% to 4.75%
Land use rights 30 to 50 years - 2% to 3.33%
When an investment property is transferred to owner-occupied properties, it is reclassified
as fixed asset or intangible asset at the date of the transfer. When an owner-occupied
property is transferred out for earning rentals or for capital appreciation, the fixed asset or
intangible asset is reclassified as investment properties at the date of the transfer. At the
time of transfer, the property is recognised based on the carrying amount before transfer.
The investment properties’ estimated useful lives, the estimated net residual values and
the depreciation (amortisation) methods applied are reviewed and adjusted as appropriate
at each year-end.
An investment property is derecognised on disposal or when the investment property is
permanently withdrawn from use and no future economic benefits are expected from its
disposal. The net amount of proceeds from sale, transfer, retirement or damage of an
investment property after its carrying amount and related taxes and expenses is
recognised in profit or loss for the current period.
The carrying amount of an investment property is reduced to the recoverable amount if the
recoverable amount is below the carrying amount.
- 178 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(13) Fixed assets
(a) Recognition and initial measurement of fixed assets
Fixed assets comprise buildings, overseas land, machinery and equipment, motor
vehicles, electronic equipment and others.
Fixed assets are recognised when it is probable that the related economic benefits will
flow to the Group and the cost can be reliably measured. The initial cost of purchased
fixed assets include purchase price, related taxes and expenditures that are attributable to
the assets incurred before the assets are ready for their intended use. The initial cost of
self-constructed fixed assets is determined based on Note 2(14).
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed
asset when it is probable that the associated economic benefits will flow to the Group and
the related cost can be reliably measured. The carrying amount of the replaced part is
derecognised. All the other subsequent expenditures are recognised in profit or loss for
the period in which they are incurred.
(b) Depreciation method of fixed assets
Fixed assets are depreciated using the straight-line method to allocate the cost of the
assets to their estimated net residual values over their estimated useful lives. For the fixed
assets that have been provided for impairment loss, the related depreciation charge is
prospectively determined based upon the adjusted carrying amounts over their remaining
useful lives.
- 179 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(13) Fixed assets (Cont’d)
(b) Depreciation method of fixed assets (Cont’d)
The estimated useful lives, the estimated net residual values expressed as a percentage
of cost and the annual depreciation rates of the Group’s fixed assets are as follows:
Estimated useful Estimated net Annual depreciation
Categories lives residual values rates
Buildings 15 to 50 years 0% to 10% 6.7% to 1.8%
Machinery and
equipment 2 to 25 years 0% to 10% 50% to 3.6%
Motor vehicles 2 to 20 years 0% to 10% 50% to 4.5%
Electronic equipment
and others 2 to 20 years 0% to 10% 50% to 4.5%
Overseas land Permanent Not applicable Not applicable
The estimated useful lives and the estimated net residual values of the Group’s fixed
assets and the depreciation methods applied to the assets are reviewed, and adjusted as
appropriate at each year-end.
(c) The carrying amount of a fixed asset is reduced to the recoverable amount when the
recoverable amount is below the carrying amount (Note 2(18)).
(d) Disposal of fixed assets
A fixed asset is derecognised on disposal or when no future economic benefits are
expected from its use or disposal. The amount of proceeds from disposals on sale,
transfer, retirement or damage of a fixed asset net of its carrying amount and related taxes
and expenses is recognised in profit or loss for the current period.
(14) Construction in progress
Construction in progress is measured at actual cost. Actual cost comprises construction
costs, installation costs, borrowing costs that are eligible for capitalisation and other costs
necessary to bring the construction in progress ready for their intended use. Construction
in progress is transferred to fixed assets when the assets are ready for their intended use,
and depreciation begins from the following month. The carrying amount of construction in
progress is reduced to the recoverable amount when the recoverable amount is below its
carrying amount (Note 2(18)).
(15) Borrowing costs
The borrowing costs that are directly attributable to acquisition and construction of a fixed
asset that needs a substantially long period of time for its intended use commence to be
capitalised and recorded as part of the cost of the asset when expenditures for the asset
and borrowing costs have been incurred, and the activities relating to the acquisition and
construction that are necessary to prepare the asset for its intended use have
commenced. The capitalisation of borrowing costs ceases when the asset under
acquisition or construction becomes ready for its intended use and the borrowing costs
incurred thereafter are recognised in profit or loss for the current period. Capitalisation of
borrowing costs is suspended during periods in which the acquisition or construction of an
asset is interrupted abnormally and the interruption lasts for more than 3 months, until the
acquisition or construction is resumed.
- 180 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(15) Borrowing costs (Cont’d)
For the specific borrowings obtained for the acquisition or construction of a fixed asset
qualifying for capitalisation, the amount of borrowing costs eligible for capitalisation is
determined by actual interest expenses deducting any interest income earned from
depositing the unused specific borrowings in the banks or any investment income arising
on the temporary investment of those borrowings during the capitalisation period.
For the general borrowings obtained for the acquisition or construction of a fixed asset
qualifying for capitalisation, the amount of general borrowing costs eligible for
capitalisation is determined by applying the weighted average effective interest rate of
general borrowings, to the weighted average of the excess amount of cumulative
expenditures on the asset over the amount of specific borrowings. The effective interest
rate is the rate at which the future cash flows during the period of expected duration of the
borrowings or applicable shorter period are discounted to the initial amount of the
borrowings.
(16) Intangible assets
Intangible assets include land use rights, patents and non-patent technologies, trademark
rights, trademark use rights and others, are measured at cost.
(a) Land use rights
Land use rights are amortised on the straight-line basis over their approved use period of
30 to 50 years. If the acquisition costs of the land use rights and the buildings located
thereon cannot be reasonably allocated between the land use rights and the buildings, all
of the acquisition costs are recognised as fixed assets.
(b) Patents and non-patent technologies
Patents are amortised on a straight-line basis over the statutory period of validity, the
period as stipulated by contracts or the beneficial period of 2 to 20 years.
(c) Trademark rights
The trademark rights are measured at cost when acquired and are amortised over the
estimated useful life of 4 to 30 years. The cost of trademark rights obtained in the business
combinations involving enterprises not under common control is measured at fair value. As
some of the trademarks are expected to attract net cash inflows injected into the Group,
management considers that these trademarks have an indefinite useful life and are
presented based upon the carrying amount after deducting the provision for impairment
(Note 4(20)).
- 181 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(16) Intangible assets (Cont’d)
(d) Trademark use rights
The trademark use rights are measured at cost when acquired. The cost of trademark use
rights obtained in the business combinations involving enterprises not under common
control is measured at fair value, and is amortised over the estimated useful life of 40
years.
(e) Other intangible assets
Other tangible assets mainly are customers relationships, franchises and software,
measured at cost when acquired or at fair value, and amortised over the estimated useful
life of 2 to 25 years.
(f) Periodical review of useful life and amortisation method
For an intangible asset with a finite useful life, review of its useful life and amortisation
method is performed at each year-end, with adjustment made as appropriate.
(g) Research and development (R&D)
The Group’s expenditure on research and development mainly includes the expenditure
on materials consumed in conducting the Group’s R&D activities, employee benefits in the
R&D department, depreciation and amortisation of assets such as equipment and software
used in R&D, R&D testing expenses, R&D technical service expenses and licensing
expenses.
Expenditure on the planned investigation, evaluation and selection for the research of
production processes or products is categorised as expenditure on the research phase,
and it is recognised in profit or loss when it is incurred. Expenditure on design and test for
the final application of the development of production processes or products before mass
production is categorised as expenditure on the development phase, which is capitalised
only if all of the following conditions are satisfied:
The development of production processes or products has been fully justified by
technical team;
The budget on the development of production processes or products has been
approved by management;
There is market research analysis that demonstrates the product produced by the
production process or product has the ability of marketing;
There are sufficient technical and financial resources to support the development
of production processes or products and subsequent mass production; and
Expenditure attributable to the development of production processes or products
can be reliably measured.
- 182 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(16) Intangible assets (Cont’d)
(g) Research and development (Cont’d)
Other development expenditures that do not meet the conditions above are recognised in
profit or loss in the period in which they are incurred. Development costs previously
recognised as expenses are not recognised as an asset in a subsequent period.
Capitalised expenditure on the development phase is presented as development costs in
the balance sheet and transferred to intangible assets at the date that the asset is ready
for its intended use.
(h) Impairment of intangible assets
The carrying amount of intangible assets is reduced to the recoverable amount when the
recoverable amount is below the carrying amount (Note 2(18)).
(17) Long-term prepaid expenses
Long-term prepaid expenses include the expenditure for improvements to right-of-use
assets, and other expenditures that have been incurred but should be recognised as
expenses over more than one year in the current and subsequent periods. Long- term
prepaid expenses are amortised on the straight-line basis over the expected beneficial
period and are presented at actual expenditure net of accumulated amortisation.
(18) Impairment of long-term assets
Fixed assets, construction in progress, right-of-use assets, intangible assets with finite
useful lives, investment properties measured using the cost model and long-term equity
investments in subsidiaries, joint ventures and associates are tested for impairment if
there is any indication that the assets may be impaired at the balance sheet date.
Intangible assets not ready for their intended use, intangible assets with infinite useful lives
and overseas land are tested at least annually for impairment, irrespective of whether
there is any indication that it may be impaired. If the result of the impairment test indicates
that the recoverable amount of an asset is less than its carrying amount, a provision for
impairment and an impairment loss are recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of
an asset’s fair value less costs to sell and the present value of the future cash flows
expected to be derived from the asset. Provision for asset impairment is determined and
recognised on the individual asset basis. If it is not possible to estimate the recoverable
amount of an individual asset, the recoverable amount of a group of assets to which the
asset belongs is determined. A group of assets is the smallest group of assets that is able
to generate independent cash inflows.
Goodwill that is separately presented in the financial statements is tested at least annually
for impairment, irrespective of whether there is any indication that it may be impaired. In
conducting the test, the carrying value of goodwill is allocated to the related asset group or
groups of asset groups which are expected to benefit from the synergies of the business
combination. If the result of the test indicates that the recoverable amount of an asset
group or a group of asset groups, including the allocated goodwill, is lower than its
carrying amount, the corresponding impairment loss is recognised. The impairment loss is
first deducted from the carrying amount of goodwill that is allocated to the asset group or
group of asset groups, and then deducted from the carrying amounts of other assets within
the asset group or group of asset groups in proportion to the carrying amounts of assets
other than goodwill.
Once the above asset impairment loss is recognised, it will not be reversed for the value
recovered in the subsequent periods.
- 183 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(19) Employee benefits
Employee benefits refer to all forms of consideration or compensation given by the Group
in exchange for service rendered by employees or for termination of employment
relationship, which include short-term employee benefits, post-employment benefits,
termination benefits and other long-term employee benefits.
(a) Short-term employee benefits
Short-term employee benefits include wages and salaries, bonus, allowances and
subsidies, staff welfare, premiums or contributions on medical insurance, work injury
insurance, maternity insurance, housing funds, labour union funds and employee
education funds, and short-term paid absences. The short-term employee benefits actually
occurred are recognised as a liability in the accounting period in which the service is
rendered by the employees, with a corresponding charge to the profit or loss for the
current period or the cost of relevant assets. Non-monetary benefits are measured at fair
value.
(b) Post-employment benefits
The Group classifies post-employment benefit plans as either defined contribution plans or
defined benefit plans. Defined contribution plans are post-employment benefit plans under
which the Group pays fixed contributions into a separate fund and will have no obligation
to pay further contributions; and defined benefit plans are post-employment benefit plans
other than defined contribution plans. During the reporting period, the Group’s defined
contribution plans mainly include basic pensions and unemployment insurance, while the
defined benefit plans are Toshiba Lifestyle Products & Services Corporation (“TLSC”) and
its subsidiaries (“TLSC Group”) and KUKA Aktiengesellschaft (“KUKA”) and its
subsidiaries (“KUKA Group”) provide supplemental retirement benefits beyond the national
regulatory insurance system.
Basic pensions
The Group’s employees participate in the basic pension plan set up and administered by
local authorities of Ministry of Human Resource and Social Security. Monthly payments of
premiums on the basic pensions are calculated according to prescribed bases and
percentage by the relevant local authorities. When employees retire, the relevant local
authorities are obliged to pay the basic pensions to them. The amounts based on the
above calculations are recognised as liabilities in the accounting period in which the
service has been rendered by the employees, with a corresponding charge to the profit or
loss for the current period or the cost of relevant assets.
Supplementary retirement benefits
The liability recognised in the balance sheet in respect of defined benefit pension plans is
the present value of the defined benefit obligations less the fair value of the plan assets.
The defined benefit obligation is calculated annually by independent actuaries using the
projected unit credit method at the interest rate of treasury bonds with similar obligation
term and currency. The charges related to supplementary retirement benefits (including
current service costs, historical service costs and gains or losses on settlement) and net
interest are recognised in profit or loss for the current period or included in the cost of an
asset, and the changes arising from remeasurement in net liabilities or net assets of
defined benefit plans are recognised in other comprehensive income.
- 184 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(19) Employee benefits (Cont’d)
(c) Termination benefits
The Group provides compensation for terminating the employment relationship with
employees before the end of the employment contracts or as an offer to encourage
employees to accept voluntary redundancy before the end of the employment contracts.
The Group recognises a liability arising from compensation for termination of the
employment relationship with employees, with a corresponding charge to profit or loss for
the current period at the earlier of the following dates: 1) when the Group cannot
unilaterally withdraw an employment termination plan or a curtailment proposal; 2) when
the Group recognises costs or expenses related to a restructuring that involves the
payment of termination benefits.
Early retirement benefits
The Group offers early retirement benefits to those employees who accept early retirement
arrangements. The early retirement benefits refer to the salaries and social security
contributions to be paid to and for the employees who accept voluntary retirement before
the normal retirement date prescribed by the State, as approved by management. The
Group pays early retirement benefits to those early retired employees from the early
retirement date until the normal retirement date. The Group accounts for the early
retirement benefits in accordance with the treatment for termination benefits, in which the
salaries and social security contributions to be paid to and for the early retired employees
from the off-duty date to the normal retirement date are recognised as liabilities with a
corresponding charge to the profit or loss for the current period. The differences arising
from the changes in the respective actuarial assumptions of the early retirement benefits
and the adjustments of benefit standards are recognised in profit or loss in the period in
which they occur.
The termination benefits expected to be settled within one year since the balance sheet
date are classified as current liabilities.
(20) General risk reserve
General risk reserve is the reserve appropriated from undistributed profits to cover part of
unidentified potential losses, on the basis of the estimated potential risk value of risk
assets assessed by the standardised approach, which is deducted from recognised
provision for impairment losses on loans. Risk assets include loans receivables, long-term
equity investments, deposits with banks and other financial institutions and other
receivables of subsidiaries engaged in financial business.
(21) Dividend distribution
Cash dividend is recognised as a liability for the period in which the dividend is approved
by the shareholders’ meeting.
- 185 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(22) Provisions
Provisions for product warranties, onerous contracts, etc. are recognised when the Group
has a present obligation, it is probable that an outflow of economic benefits will be required
to settle the obligation, and the amount of the obligation can be measured reliably.
A provision is initially measured at the best estimate of the expenditure required to settle
the related present obligation. Factors surrounding a contingency, such as the risks,
uncertainties and the time value of money, are taken into account as a whole in reaching
the best estimate of a provision. Where the effect of the time value of money is material,
the best estimate is determined by discounting the related future cash outflows. The
increase in the discounted amount of the provision arising from passage of time is
recognised as interest expenses.
The carrying amount of provisions is reviewed at each balance sheet date and adjusted to
reflect the current best estimate.
The provisions expected to be settled within one year since the balance sheet date are
classified as current liabilities.
(23) Share-based payment
(a) Type of share-based payment
Share-based payment is a transaction in which the entity acquires services from
employees as consideration for equity instruments of the entity or by incurring liabilities for
amounts based on the equity instruments. Equity instruments include equity instruments of
the Company, its parent company or other accounting entities of the Group. Share-based
payments are divided into equity-settled and cash-settled payments. The Group’s share-
based payments are equity-settled payments.
Equity-settled share-based payment
The Group’s equity-settled share-based payment contains stock option incentive plan,
restricted share incentive schemes and stock ownership schemes. These plans are
measured at the fair value of the equity instruments at grant date and the equity
instruments are tradable or exercisable when services in vesting period are completed or
specified performance conditions are met. In the vesting period, the services obtained in
the current period are included in relevant cost and expenses at the fair value of the equity
instruments at grant date based on the best estimate of the number of tradable or
exercisable equity instruments, and capital surplus is increased accordingly. If the
subsequent information indicates the number of tradable or exercisable equity instruments
differs from the previous estimate, an adjustment is made and, on the exercise date, the
estimate is revised to equal to the number of actual vested equity instruments.
- 186 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(23) Share-based payment (Cont’d)
(b) Determination of fair value of equity instruments
The Group determines the fair value of stock options using option pricing model, which is
Black - Scholes option pricing model.
The fair value of other equity instruments is based on the share prices, which exclude the
price that incentive objects pay, and the number of the shares on the grant date, taking
into account the effects of clause of the Group’s relevant plans.
(c) Basis for determining best estimate of tradable or exercisable equity instruments
As at each balance sheet date in the vesting period, the Group would make best estimate
in accordance with the newly acquired information such as changes in the number of
employees entitled with exercisable or tradable equity instruments, and amend the
estimated number of exercisable or tradable equity instruments. On the exercise or
desterilisation date, the final number of estimated exercisable or tradable equity
instruments is consistent with the actual number of exercisable or tradable equity
instruments.
(24) Treasury stock
The Group’s treasury stock mainly comes from the repurchase of equity instruments and
the issuance of restricted shares, etc.
Consideration and transaction costs paid by the Group for repurchasing equity instruments
are deducted from owners’ equity and not recognised as financial assets. The
considerations paid by the Group for repurchasing equity instruments are presented as
treasury stock, and the related transaction costs are recognised in owners’ equity.
On the deregistration day of shares, relevant share capital and treasury stock are reversed
with the difference included in capital surplus (share premium) based on actual
deregistration results.
On the grant day of restricted shares, the Group recognises bank deposits when receiving
subscription from the employees and measures the repurchase obligation as liability. On
the day of release of restricted shares, relevant treasury stocks, liabilities and capital
surplus recognised in the vesting period are reversed based on the actual vesting results.
(25) Revenue
The Group recognises revenue at the amount of the consideration which the Group is
expected to receive when the customer obtains control over relevant goods or services.
Revenue is stated net of discounts, rebates and returns.
- 187 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(25) Revenue (Cont’d)
When any of the following conditions is met, the Group is subject to performance
obligations within a period of time; otherwise, at a point in time:
(1) Customers obtain and consume economic benefits coming from the Group’s
performance of contract while the Group performs the contract.
(2) Customers can control goods under construction during the Group’s performance
of contract.
(3) Goods produced during the Group’s performance of contract are irreplaceable.
During the whole contract period, the Group is entitled to collect payments for
those which have been accumulated up to now.
For a contract obligation within a period of time, the Group recognises the revenue based
on the progress of the obligation fulfilment within that period of time, except where the
progress of the obligation fulfilment cannot be determined reasonably.
Where the status of completion cannot be reasonably determined, revenue is recognised
at the amount of cost incurred if it is predicted that the cost can be compensated till the
progress of the obligation fulfilment can be reasonably determined.
For a contract obligation at a point in time, the Group recognises the revenue when a
customer is in control of the underlying goods.
(a) Sales of goods
The Group are principally engaged in the designing, manufacturing and selling residential
air conditioner, central air-conditioner, heating and ventilation systems, kitchen appliances,
refrigerators, washing machines, various small appliances, elevators, variable frequency
drives, robotics, medical imaging equipment, automation system and sales of products
and materials to buyers.
Revenue from domestic sales of goods is recognised when the Group has delivered
products to the location specified in the sales contract and the buyer has confirmed the
acceptance of the products, and the delivery order is signed by both parties. Upon
confirming the acceptance, the buyer has the right to sell the products at its discretion and
takes the risks of any price fluctuations and obsolescence and loss of the products.
Revenue from overseas goods sale is recognised when the products have been declared
to the customs and shipped out of the port in accordance with the sales contract.
- 188 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(25) Revenue (Cont’d)
(a) Sales of goods (Cont’d)
The credit period granted to distributors by the Group is determined based on their credit
risk characteristics, which is consistent with industry practice, and there is no significant
financing component. The Group makes estimates based on past sales returns and takes
into account the type of customer, type of transaction and characteristics of each
arrangement.
The Group provides distributors with sales discount, and the relevant revenue is
recognised at contract consideration net of the discount amount estimated.
The periods and terms of product quality warranty are provided in accordance with the
laws and regulations related to the products. The Group has not provided any additional
services or product quality warranty, so the product quality warranty does not constitute a
separate performance obligation.
The rights to receive considerations for transferring goods to the customer (and such
rights depend on factors other than the passage of time) are recognised as contract
assets. The Group’s obligation to transfer products to customers for consideration
received or receivable is presented as contract liabilities.
(b) Rendering of services
The Group provides robotics and automation system construction service, intelligent
logistics integration solution, storage services, delivery services, installation services and
transportation service, which are recognised in a certain period of time based on the stage
of completion. On the balance sheet date, the Group re-estimates the stage of completion
to reflect the actual status of contract performance.
When the Group recognises revenue based on the stage of completion, the amount with
unconditional collection right obtained by the Group is recognised as accounts receivable,
and the rest is recognised as contract assets. Meanwhile, loss provision for accounts
receivable and contract assets are recognised on the basis of ECL (Note 2(9)). If the
contract price received or receivable exceeds the amount for the completed service, the
excess portion will be recognised as contract liabilities. Contract assets and contract
liabilities under the same contract are presented on a net basis.
- 189 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(25) Revenue (Cont’d)
(b) Rendering of services (Cont’d)
Contract costs include contract performance costs and contract acquisition costs. The
costs incurred by the Group for the provision of services are recognised as contract
performance costs. The recognised revenue is carried forward to the cost of sales from
main operations based on the stage of completion. Incremental costs incurred by the
Group for the acquisition of contract are recognised as the costs to obtain a contract. For
the costs to obtain a contract with the amortisation period within one year, the costs are
charged to profit or loss when incurred. For the costs to obtain a contract with the
amortisation period beyond one year, the costs are charged in the current profit or loss on
the same basis as aforesaid revenue of rendering of services recognised under the
relevant contract. If the carrying amount of the contract costs is higher than the remaining
consideration expected to be obtained by rendering of the service net of the estimated
cost to be incurred, the Group makes provision for impairment on the excess portion and
recognises it as asset impairment losses. As at the balance sheet date, based on whether
the amortisation period of the costs to fulfil a contract is more than one year when initially
recognised, the amount of the Group’s costs to fulfil a contract net of related provision for
asset impairment is presented as inventories or other non-current assets. For costs to
obtain a contract with amortisation period beyond one year at the initial recognition, the
amount net of related provision for asset impairment is presented as other non-current
assets.
(c) Interest income
Interest income from financial instruments is calculated by effective interest rate method
and recognised in profit or loss for the current period. Interest income comprises premiums
or discounts, or the amortisation based on effective rates of other difference between the
initial carrying amount and the due amount of interest-earning assets.
The effective interest rate method is a method of calculating the amortised cost of a
financial asset or liability and the interest income or interest costs based on effective rates.
The effective interest rate is the rate at which the estimated future cash flows during the
period of expected duration of the financial instruments or applicable shorter period are
discounted to the current carrying amount of the financial instruments. When calculating
the effective interest rate, the Group estimates cash flows by considering all contractual
terms of the financial instrument (e.g., early repayment options, similar options, etc.), but
without considering future credit losses. The calculation includes all fees and interest paid
or received that are an integral part of the effective interest rate, transaction costs, and all
other premiums or discounts.
Interest income from impaired financial assets is calculated at the interest rate that is used
for discounting estimated future cash flow when measuring the impairment loss.
(d) Dividend income
Dividend income is recognised when the right to receive dividend payment is established.
(e) Rental income
Rental income from investment prosperities is recognised in the income statement on a
straight-line basis over the lease period.
- 190 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(25) Revenue (Cont’d)
(f) Fee and commission income
Fee and commission income is recognised in profit or loss for the current period when the
service is provided. The Group defers the initial charge income or commitment fee income
arising from the forming or acquisition of financial assets as the adjustment to effective
interest rate. If the loans are not lent when the loan commitment period is expired, related
charges are recognised as fee and commission income.
(26) Government grants
Government grants are transfers of monetary or non-monetary assets from the
government to the Group at nil consideration, including refund of taxes and financial
subsidies.
A government grant is recognised when the conditions attached to it can be complied with
and the government grant can be received. For a government grant in the form of transfer
of monetary assets, the grant is measured at the amount received or receivable. For a
government grant in the form of transfer of non-monetary assets, it is measured at fair
value; if the fair value is not reliably determinable, the grant is measured at nominal
amount.
Government grants related to assets are grants that are acquired by the Group and used
for acquisition, construction or forming long-term assets in other ways. Government grants
related to income refer to the government grants other than those related to assets.
Government grants related to assets are either deducted against the carrying amount of
the assets, or recorded as deferred income and recognised in profit or loss on a systemic
basis over the useful lives of the assets.
For government grants related to income, where the grant is a compensation for related
expenses or losses to be incurred by the Group in the subsequent periods, the grant is
recognised as deferred income, and included in profit or loss over the periods in which the
related costs are recognised; where the grant is a compensation for related expenses or
losses already incurred by the Group, the grant is recognised directly in profit or loss for
the current period.
The same kind of government grants are presented with the same method.
Those related to ordinary activities are recorded into operating profit while the other in
non- operating income and expenses.
Loans to the Group at political preferential rate are recorded at the actual amount
received, and the related loan expenses are calculated based on the principal and the
political preferential rate. Finance discounts directly received offset related loans
expenses.
- 191 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(27) Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are calculated and recognised based on the
differences arising between the tax bases of assets and liabilities and their carrying
amounts (temporary differences). Deferred tax asset is recognised for the deductible
losses that can be carried forward to subsequent years for deduction of the taxable profit
in accordance with the tax laws. No deferred tax liability is recognised for a temporary
difference arising from the initial recognition of goodwill. No deferred tax asset or deferred
tax liability is recognised 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 profit (or deductible losses) and whose initially
recognised assets and liabilities do not result in equal taxable temporary differences and
deductible temporary differences. At the balance sheet date, deferred tax assets and
deferred tax liabilities are measured at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled.
Deferred tax assets are only recognised for deductible temporary differences, deductible
losses and tax credits to the extent that it is probable that taxable profit will be available in
the future against which the deductible temporary differences, deductible losses and tax
credits can be utilised.
Deferred tax liabilities are recognised for temporary differences arising from investments in
subsidiaries, associates and joint ventures, except where the Group is able to control the
timing of reversal of the temporary difference, and it is probable that the temporary
difference will not reverse in the foreseeable future. When it is probable that the temporary
differences arising from investments in subsidiaries, associates and joint ventures will be
reversed in the foreseeable future and that the taxable profit will be available in the future
against which the temporary differences can be utilised, the corresponding deferred tax
assets are recognised.
Deferred tax assets and deferred tax liabilities are offset when:
the deferred tax assets and deferred tax liabilities are related to the same tax
payer within the Group and the same taxation authority; and,
that tax payer within the Group has a legally enforceable right to offset current tax
assets against current tax liabilities.
(28) Leases
A contract is, or contains, a lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration.
- 192 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(28) Leases (Cont’d)
The Group as the lessee
At the lease commencement date, the Group recognises the right-of-use asset and
measures the lease liability at the present value of the lease payments that are not paid at
that date. Lease payments include fixed payments, the exercise price of a purchase option
if the lessee is reasonably certain to exercise that option, and payments of penalties for
terminating the lease if the lessee exercises an option to terminate the lease. Variable
lease payments in proportion to sales are excluded from lease payments and recognised
in profit or loss as incurred. Lease liabilities that are due within one year (inclusive) as from
the balance sheet date are included in the current portion of non-current liabilities.
Right-of-use assets of the Group comprise leased buildings, machinery and equipment,
and motor vehicles. Right-of-use assets are measured initially at cost which comprises the
amount of the initial measurement of lease liabilities, any lease payments made at or
before the commencement date and any initial direct costs, less any lease incentives
received. If there is reasonable certainty that the Group will obtain ownership of the
underlying asset by the end of the lease term, the asset is depreciated over its remaining
useful life; otherwise the asset is depreciated over the shorter of the lease term and its
remaining useful life. The carrying amount of the right-of-use asset is reduced to the
recoverable amount when the recoverable amount is below the carrying amount.
For short-term leases with a term of 12 months or less and leases of an individual asset
(when new) of low value, the Group chooses to include the lease payments in the cost of
the underlying assets or in the profit or loss for the current period on a straight-line basis
over the lease term, instead of recognising right-of-use assets and lease liabilities.
The Group accounts for a lease modification as a separate lease if both: (1) the
modification increases the scope of the lease by adding the right to use one or more
underlying assets; (2) the consideration for the lease increases by an amount
commensurate with the stand-alone price for the increase in scope and any appropriate
adjustments to that stand-alone price to reflect the circumstances of the contract.
For a lease modification that is not accounted for as a separate lease, the Group
redetermines the lease term at the effective date of the lease modification, and
remeasures the lease liability by discounting the revised lease payments using a revised
discount rate, except the contract changes that may apply the practical expedient as
specified by the Ministry of Finance. For a lease modification which decreases the scope
of the lease or shortens the lease term, the Group correspondingly decreases the carrying
amount of the right-of-use asset, and recognises in profit or loss any gain or loss relating
to the partial or full termination of the lease. For other lease modifications which lead to the
remeasurement of lease liabilities, the Group correspondingly adjusts the carrying amount
of the right-of-use asset.
For the qualified rent concessions agreed on existing lease contracts, the Group applies
the practical expedient and records the undiscounted concessions in profit or loss when
the agreement is reached to discharge the original payment obligation with corresponding
adjustment of lease liabilities.
- 193 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(28) Leases (Cont’d)
The Group as the lessor
A lease is classified as a finance lease if it transfers substantially all the risks and rewards
incidental to ownership of an underlying asset. An operating lease is a lease other than a
finance lease.
(a) Operating leases
Where the Group leases out self-owned buildings, machinery and equipment, and motor
vehicles under operating leases, rental income therefrom is recognised on a straight-line
basis over the lease term. Variable rental that is linked to a certain percentage of sales is
recognised in rental income as incurred.
For the qualified rent concessions agreed on existing lease contracts, the Group applies
the practical expedient to account for the concessions as variable lease payments and
record the concessions in profit or loss during the waiving period.
Except the above qualified contract changes that are accounted for by applying the
practical expedient, for a lease modification, the Group accounts for it as a new lease from
the effective date of the modification, and considers any lease payments received in
advance and receivable relating to the lease before modification as receivables of the new
lease.
(b) Finance leases
At the commencement date, the Group recognises the lease payments receivable under a
finance lease and derecognises relevant assets. The lease payments receivable under a
finance lease are presented as long-term receivables; the lease payments receivable
under a finance lease due within one year (inclusive) as from the balance sheet date are
included in the current portion of non-current assets.
(29) Segment information
The Group identifies operating segments based on the internal organisation structure,
management requirements and internal reporting system, and discloses segment
information of reportable segments which is determined on the basis of operating
segments.
An operating segment is a component of the Group that satisfies all of the following
conditions: (1) the component is able to earn revenue and incur expenses from its ordinary
activities; (2) whose operating results are regularly reviewed by the Group’s management
to make decisions about resources to be allocated to the segment and to assess its
performance, and (3) for which the information on financial position, operating results and
cash flows is available to the Group. Two or more operating segments that have similar
economic characteristics and satisfy certain conditions can be aggregated into one single
operating segment.
- 194 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(30) Critical accounting estimates and judgements
The Group continually evaluates the critical accounting estimates and key judgements
applied based on historical experience and other factors, including expectations of future
events that are believed to be reasonable.
The critical accounting estimates and key assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the
next accounting year are outlined below:
(i) Provision for impairment of goodwill
The Group tests at least annually whether goodwill has suffered any impairment. The
recoverable amount of the asset group or group of asset groups that contain the
apportioned goodwill is determined by the higher value between the present value of the
future cash flows and the net value that is calculated by the fair value less the disposal
costs. Accounting estimate is required for the calculation of the recoverable amount. The
impairment testing is performed by assessing the recoverable amount of the asset group
or group of asset groups containing the relevant goodwill, based on the present value of
cash flows forecasts. Key assumptions adopted in the impairment testing of goodwill
included forecast period revenue annual growth rate, gross margin, perpetual annual
growth rate and pre-tax discount rate, which involved critical accounting estimates and
judgement.
If management revises the forecast period revenue annual growth rate and perpetual
annual growth rate that are used in the calculation of the future cash flows of asset groups
or groups of asset groups, and the revised rates are lower than the current rates, the
Group will need to recognise further impairment against goodwill.
If management revises the gross margin that is used in the calculation of the future cash
flows of asset groups or groups of asset groups, and the revised gross margin is lower
than the current one, the Group would need to recognise further impairment against
goodwill.\
If management revises the pre-tax discount rate applied to the discounted cash flows, and
the revised pre-tax discount rate is higher than the one currently applied, the Group will
need to recognise further impairment against goodwill.
If the actual revenue annual growth rate, perpetual annual growth rate and gross margin
are higher or the actual pre-tax discount rate is lower than management’s estimates, the
impairment loss of goodwill previously provided for is not allowed to be reversed by the
Group.
- 195 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(30) Critical accounting estimates and judgements (Cont’d)
(ii) Income tax and deferred income tax
The Group is subject to enterprise income tax in numerous jurisdictions. There are many
transactions and events for which the ultimate tax determination is uncertain during the
ordinary course of business. Significant judgement is required from the Group in
determining the provision for income taxes in each of these jurisdictions. Where the final
tax outcome of these matters is different from the amounts that were initially recorded,
such differences will impact the income tax and deferred tax provisions in the period in
which such determination is made.
As stated in Note 3(1), some subsidiaries of the Group are high-tech enterprises. The
“High-Tech Enterprise Certificate” is effective for three years. Upon expiration, application
for high-tech enterprise assessment should be submitted again to the relevant government
authorities. Based on the past experience of reassessment for high-tech enterprise upon
expiration and the actual condition of the subsidiaries, the Group considers that the
subsidiaries are able to obtain the qualification for high-tech enterprises in future years,
and therefore a preferential tax rate of 15% is used to calculate the corresponding
deferred income tax. If some subsidiaries cannot obtain the qualification for high-tech
enterprise upon expiration, then the subsidiaries are subject to a statutory tax rate of 25%
for the calculation of the income tax, which further influences the recognised deferred tax
assets, deferred tax liabilities and income tax expenses.
Deferred tax assets are recognised for the deductible tax losses that can be carried
forward to subsequent years to the extent that it is probable that taxable profit will be
available in the future against which the deductible tax losses can be utilised. Taxable
profit that will be available in the future includes the taxable profit that will be realised
through normal operations and the taxable profit that will be increased upon the reversal of
taxable temporary differences incurred in prior periods. Judgements and estimates are
required to determine the time and amounts of taxable profit in the future. Any difference
between the reality and the estimate may result in adjustment to the carrying amount of
deferred tax assets.
(iii) Fair value assessment of financial instruments at level 3 fair value hierarchy
Financial instruments subject to Level 3 fair value hierarchy include unlisted equity
investments at fair value of other non-current financial assets, investments in other equity
instruments and trading financial liabilities. The fair value of these financial instruments is
determined using valuation techniques, and the assumptions of valuation model is based
on unobservable inputs, where changes in assumptions and estimates may have an
impact on the fair value of these investments. These valuation techniques, unobservable
inputs and related assumptions are detailed in Note 15.
- 196 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(31) Significant changes in accounting policies
The Ministry of Finance released the Circular on Issuing Interpretation No. 17 of
Accounting Standards for Business Enterprises in 2023, which stipulates the classification
of current and non-current liabilities, the disclosure of supplier financing arrangements and
the accounting for sale-leaseback, and this is effective from 1 January 2024. The financial
statements for the six months ended 30 June 2024 have been prepared by the Group and
the Company in accordance with the above interpretation, which have no significant
impacts on the financial statements of the Group and the Company.
3 Taxation
(1) Main tax category and rate
Category Tax base Tax rate
Enterprise income tax Levied based on taxable income Note (a)
Value-added tax (“VAT”) Taxable value-added amount (Tax payable Note (b)
is calculated using the taxable sales
amount multiplied by the applicable tax
rate less deductible input VAT of the
current period)
City maintenance and The amount of VAT paid 1% or 5% or 7%
construction tax
Educational surcharge The amount of VAT paid 3% or 5%
Local educational The amount of VAT paid 2%
surcharge
Property tax Price-based property is subject to a 1.2% 1.2% or 12%
tax rate after a 30% cut in the original
price of property; rental- based property
is subject to a 12% tax rate for the
rental income.
197
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
3 Taxation (Cont’d)
(1) Main tax category and rate (Cont’d)
(a) Notes to the enterprise income tax rate of the principal tax payers with different tax rates
(a-1) The following subsidiaries of the Group are subject to an enterprise income tax rate of
15% in 2024 as they qualified as high-tech enterprises and obtained the High-tech
Enterprise Certificate:
High-tech Enterprise Certificate acquisition
Taxpayer Certificate number date Validity
Wuhu Midea Kitchen & Bath Appliances Mfg.
Co., Ltd. GR202134003382 18 September 2021 3 years
Changsha Sunye Electric Co., Ltd. GR202143000846 18 September 2021 3 years
Anhui Welling Auto Parts Corporation Limited GR202134002578 18 September 2021 3 years
Hefei Hualing Co., Ltd. GR202134000541 18 September 2021 3 years
Anhui Meizhi Precision Manufacturing Co., Ltd. GR202134004969 18 September 2021 3 years
Hefei Midea Laundry Appliance Co., Ltd. GR202134003561 18 September 2021 3 years
MR Semiconductor Ltd. GR202131000701 9 October 2021 3 years
Reis Robotics (Kunshan) Co., Ltd. GR202132000238 3 November 2021 3 years
Wuxi Filin Electronics Co., Ltd. GR202132000964 3 November 2021 3 years
Welling (Wuhu) Motor Manufacturing Co., Ltd. GR202134003666 18 November 2021 3 years
Beijing Huatairunda Energy Saving Co., Ltd. GR202111004112 17 December 2021 3 years
Guangdong Midea Intelligent Technologies
Co., Ltd. GR202144008039 20 December 2021 3 years
WINONE ELEVATOR COMPANY LIMITED GR202144006432 20 December 2021 3 years
Guangdong Midea Environmental
Technologies Co., Ltd. GR202144004692 20 December 2021 3 years
Meicloud Technology Co., Ltd. GR202144008715 20 December 2021 3 years
Guangdong Midea Kitchen Appliances
Manufacturing Co., Ltd. GR202144008574 20 December 2021 3 years
GD Midea Heating & Ventilating Equipment
Co., Ltd. GR202144001270 20 December 2021 3 years
Guangdong Swisslog Technology Co., Ltd. GR202144005648 20 December 2021 3 years
Toshiba HA Manufacturing (Nanhai) Co., Ltd. GR202144002672 20 December 2021 3 years
Guangdong Meizhi Precision- Manufacturing
Co., Ltd. GR202144003890 20 December 2021 3 years
Shenzhen Hongzhi Software Co., Ltd. GR202144200284 23 December 2021 3 years
Shenzhen CLOU Precision Measurement Co.,
Ltd. GR202144202249 23 December 2021 3 years
Shenzhen CLOU Intelligence Industry Co., Ltd. GR202144200806 23 December 2021 3 years
CLOU Global Technology Co., Ltd. GR202144206543 23 December 2021 3 years
Foshan Shunde Midea Electrical Heating
Appliances Manufacturing Co., Ltd. GR202144012791 31 December 2021 3 years
Foshan Midea Chungho Water Purification
Equipment. Co., Ltd. GR202144010400 31 December 2021 3 years
Hefei Midea Heating & Ventilating Equipment
Co., Ltd. GR202234002343 18 October 2022 3 years
Anhui Meizhi Compressor Co., Ltd. GR202234002700 18 October 2022 3 years
WDM Esaote (Suzhou) Medical Technology
Co., Ltd. GR202232006635 18 November 2022 3 years
Midea Group Wuhan Heating Ventilation
Equipment Co.,Ltd. GR202242004390 29 November 2022 3 years
Wuhan TTium Motor Technology Co., Ltd. GR202242004712 29 November 2022 3 years
Huaian Welling Motor Manufacturing Co., Ltd. GR202232018102 12 December 2022 3 years
KUKA Robotics Manufacturing China Co., Ltd. GR202231004961 14 December 2022 3 years
Shenzhen Midea Payment Technology Co.,
Ltd. GR202244208053 19 December 2022 3 years
Foshan Shunde Midea Electric Science and
Technology Co., Ltd. GR202244002733 19 December 2022 3 years
Guangzhou Midea Hualing Refrigerator Co.,
Ltd. GR202244004828 19 December 2022 3 years
198
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
3 Taxation (Cont’d)
(1) Main tax category and rate (Cont’d)
(a) Notes to the enterprise income tax rate of the principal tax payers with different tax rates
(Cont’d)
(a-1) The following subsidiaries of the Group are subject to an enterprise income tax rate of
15% in 2024 as they qualified as high-tech enterprises and obtained the High-tech
Enterprise Certificate (Cont’d):
High-tech Enterprise Certificate acquisition
Taxpayer Certificate number date Validity
Guangdong Yueyun Industrial Internet Innovation
Technology Co., Ltd. GR202244006484 22 December 2022 3 years
GD Midea Environment Appliances Mfg. Co., Ltd. GR202244008573 22 December 2022 3 years
Wanliyun Medical Information Technology
(Beijing) Co., Ltd. GR202211008024 30 December 2022 3 years
Hubei Midea Laundry Appliance Co., Ltd. GR202342000522 16 October 2023 3 years
Sichuan CLOU Energy Electric Co., Ltd. GR202351003347 16 October 2023 3 years
Hubei Midea Building Technology Co., Ltd. GR202342000405 16 October 2023 3 years
MiSiliconn Semiconductor Technologies Co., Ltd. GR202351100902 16 October 2023 3 years
Handan Midea Air-Conditioning Equipment Co.,
Ltd. GR202313000973 16 October 2023 3 years
Chongqing Midea General Refrigeration
Equipment Co., Ltd. GR202351101572 16 October 2023 3 years
Hubei Midea Refrigerator Co., Ltd. GR202342000311 16 October 2023 3 years
Hiconics Eco-energy Drive Technology Co., Ltd. GR202311003112 26 October 2023 3 years
Wuxi Little Swan Electric Co., Ltd. GR202332003281 6 November 2023 3 years
Suzhou CLOU-MGE Electric Co., Ltd. GR202332003299 6 November 2023 3 years
Jiangsu Midea Cleaning Appliances Co., Ltd. GR202332002439 6 November 2023 3 years
Midea Group Wuhan Refrigeration Equipment
Co., Ltd. GR202342003400 14 November 2023 3 years
Midea Network Information Services (Shenzhen)
Co., Ltd. GR202344206239 15 November 2023 3 years
Kuka Systems (China) Co., Ltd. GR202331002862 15 November 2023 3 years
Shenzhen CLOU Electronics Co., Ltd. GR202344204605 15 November 2023 3 years
Midea Intelligent Lighting & Controls Technology
Co., Ltd. GR202336001435 22 November 2023 3 years
Beijing Wandong Medical Technology Co., Ltd. GR202311003930 30 November 2023 3 years
Wuhu Maty Air-Conditioning Equipment Co., Ltd. GR202334004899 30 November 2023 3 years
Wuhu Midea Smart Kitchen Appliance
Manufacturing Co., Ltd. GR202334006446 30 November 2023 3 years
Shanghai Swisslog Healthcare Technology Co.,
Ltd. GR202331005355 12 December 2023 3 years
Midea Welling Motor Technology (Shanghai) Co.,
Ltd. GR202331003851 12 December 2023 3 years
Guangdong Midea Precision Mould Technology
Co., Ltd. GR202344005048 28 December 2023 3 years
KUKA Robotics Guangdong Co., Ltd. GR202344010905 28 December 2023 3 years
Guangdong Shunkai Switch Co., Ltd. GR202344003261 28 December 2023 3 years
Guangdong Witol Vacuum Electronic
Manufacture Co., Ltd. GR202344003728 28 December 2023 3 years
Foshan Shunde Midea Washing Appliances
Manufacturing Co., Ltd. GR202344017927 28 December 2023 3 years
Guangdong Welling Motor Manufacturing Co.,
Ltd. GR202344008685 28 December 2023 3 years
Foshan Welling Washer Motor Manufacturing
Co., Ltd. GR202344007566 28 December 2023 3 years
GD Midea Air-Conditioning Equipment Co., Ltd. GR202344001853 28 December 2023 3 years
Guangzhou Hualing Refrigerating Equipment
Co., Ltd. GR202344003947 28 December 2023 3 years
Guangdong Meizhi Compressor Limited GR202344005746 28 December 2023 3 years
Guangdong Midea Consumer Electric
Manufacturing Co., Ltd. GR202344008924 28 December 2023 3 years
Foshan Shunde Midea Water Dispenser
Manufacturing Co., Ltd. GR202344017783 28 December 2023 3 years
199
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
3 Taxation (Cont’d)
(1) Main tax category and rate (Cont’d)
(a) Notes to the enterprise income tax rate of the principal tax payers with different tax rates
(Cont’d)
(a-2) According to the Notice of the Ministry of Finance, the State Taxation Administration on
Preferential Enterprise Income Tax Policies for Hainan Free-trade Port (Cai Shui [2020]
No. 31), the Company’s certain subsidiary in Hainan is subject to enterprise income tax at
a rate of 15% from 1 January 2020 to 31 December 2024.
(a-3) Pursuant to the Notice on Extending the Preferential Enterprise Income Tax Policies for
Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone of Shenzhen,
enterprises that meet the notice requirements are subject to a reduced enterprise income
tax rate of 15%. Therefore, Midea Commercial Factoring Co., Ltd., a subsidiary of the
Company, is subject to enterprise income tax at a rate of 15% from 1 January 2021 to 31
December 2025.
(a-4) According to the Announcement on Continuing the Enterprise Income Tax Policies for the
Development of Western China jointly issued by the Ministry of Finance, the State
Taxation Administration and the National Development and Reform Commission on 23
April 2020, Chongqing Midea Air-Conditioning Equipment Co., Ltd., Chongqing Midea
Commercial Factoring Co., Ltd., Chongqing Annto Logistics Technology Co., Ltd. and
Guiyang Annto Logistics Technology Co., Ltd., subsidiaries of the Company, are subject to
enterprise income tax at a rate of 15% from 1 January 2021 to 31 December 2030.
(a-5) According to the Announcement of the Ministry of Finance and the State Administration of
Taxation on Implementing the Preferential Income Tax Policies for the Development of
Small and Micro Enterprises (Announcement [2022], No. 13) and the Announcement of
the Ministry of Finance and the State Administration of Taxation on Implementing the
Preferential Income Tax Policies for Micro and Small Enterprises and Individual Industrial
and Commercial Households (Announcement [2023], No. 6) and Announcement of the
General Administration of Taxation of the Ministry of Finance on Further Supporting the
Development of Small and Micro Enterprises and Individual Industrial and Commercial
Households (Announcement [2023], No. 12) jointly issued by the Ministry of Finance and
the State Taxation Administration, for Shenzhen Midea Capital Corporation Limited,
Shenzhen Annto Intelligent Technology Co., Ltd., Jingzhou Meian Storage and
Transportation Co., Ltd., Chongqing Wanxiang Medical Equipment Co., Ltd, Shanghai
Wandong Yingrui Medical Technology Co., Ltd, and Suzhou Wanying Medical Technology
Co., Ltd, subsidiaries of the Company and qualified as small low-profit enterprises, in
2024, EIT is based on a 20% rate applied to 25% of its taxable income amount.
(a-6) The Company’s subsidiaries in the Chinese mainland other than those mentioned in (a-1)
to (a-5) are subject to enterprise income tax at the rate of 25%.
(a-7) In August 2008, Midea Electric Trading (Singapore) Co., Pte Ltd., the Company’s
subsidiary, was awarded with the Certificate of Honour for Development and Expansion
(No. 587) by the Singapore Economic Development Board and is subject to the applicable
preferential income tax rate of 6% for 2024. Lifestyle Orchestra Co.Pte.Ltd. and Little
Swan International (Singapore) Co., Pte. LTD., the Company’s subsidiaries, are subject to
enterprise income tax at the rate of 17%.
- 200 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
3 Taxation (Cont’d)
(1) Main tax category and rate (Cont’d)
(a) Notes to the enterprise income tax rate of the principal tax payers with different tax rates
(Cont’d)
(a-8) The Company’s subsidiaries in Hong Kong are subject to Hong Kong profits tax at the rate
of 16.5%. Such subsidiaries include Midea International Trading Company Limited, Midea
International Corporation Company Limited, Midea Home Appliances Investments (Hong
Kong) Co., Limited, Century Carrier Residential Air-conditioning Equipment Co., Limited,
Midea Refrigeration (Hong Kong) Limited, Welling Holding Limited, Welling International
Hong Kong Ltd., Chairing Holding Limited and Midea Investment (Asia) Company Limited.
(a-9) The Company’s subsidiaries in BVI and Cayman Islands are exempted from enterprise
income tax. Such subsidiaries include Mecca International (BVI) Limited, Titoni
Investments Development Ltd., Midea Investment Holding (BVI) Limited, Midea Electric
Investment (BVI) Limited, Welling Holding (BVI) Ltd., Midea Holding (Cayman Islands)
Limited and Midea Investment Development Company Limited.
(a-10) Springer Carrier Ltda., the Company’s subsidiary in Brazil, is subject to Brazil enterprise
income tax at the rate of 34%.
(a-11) Some subsidiaries of TLSC, the Company’s subsidiary in Japan, are subject to Japan
enterprise income tax at the rate of 34.01%.
(a-12) Clivet S.P.A (“Clivet”), the Company’s subsidiaries in Italy, are subject to Italy enterprise
income tax at the rate 24%.
(a-13) KUKA Group, the Company’s subsidiary in Germany, is subject to Germany enterprise
income tax at the rate of 32%.
(a-14) Servotronix Motion Control Ltd. (“SMC”), the Company’s subsidiary in Israel, is subject to
Israel enterprise income tax at the rate of 23%.
(a-15) Misr Refrigeration and Air Conditioning Manufacturing Company, S.A.E., the Company’s
subsidiary in Egypt, is subject to Egypt enterprise income tax at the rate of 22.5%.
(a-16) Midea America Corp., the Company’s subsidiary in the USA, is subject to USA enterprise
income tax at the rate of 21%.
(a-17) Midea Consumer Electric (Vietnam) CO., LTD., the Company’s subsidiary in Vietnam, is
subject to Vietnam enterprise income tax at the rate of 20%.
(a-18) Midea Refrigeration Equipment (Thailand) Co., Ltd., GMCC and Welling Appliance
Component (Thailand) Co., Ltd.， Toshiba Consumer Products (Thailand) Co., Ltd., and
Thai Toshiba Electric Industries Co., Ltd., the Company’s subsidiary in Thailand, qualified
profits are exempt from enterprise income tax under the investment promotion policy of the
Thailand Board of Investment.
- 201 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
3 Taxation (Cont’d)
(1) Main tax category and rate (Cont’d)
(b) Notes to the VAT rate of the principal tax payers with different tax rates
(b-1) Pursuant to relevant provisions of the Announcement on Relevant Policies for Deepening
Value-Added Tax Reform (Announcement [2019] No. 39) jointly issued by the Ministry of
Finance, the State Taxation Administration and the General Administration of Customs
and relevant regulations, the applicable tax rate of revenue arising from sales of goods
and rendering of repairing and replacement services of the Company’s certain subsidiaries
is 13% from 1 April 2019, and that of revenue arising from real estate leasing and
transportation services of the Company’s certain subsidiaries is 9%.
(b-2) Financial services, consulting services and storage services provided by the Company and
certain subsidiaries are subject to VAT at the rate of 6%.
(b-3) Rental revenue of the Company’s certain subsidiaries is subject to easy levy of VAT at the
rate of 5%.
(b-4) Pursuant to relevant provisions of the Announcement on Relevant Tax Policies for Further
Supporting the Business Startup and Employment of Priority Groups (Announcement
[2023] No. 15) issued by the Ministry of Finance, the State Taxation Administration, the
Ministry of Human Resources and Social Security and the Ministry of Agriculture and Rural
Affairs, for certain subsidiaries of the Company that employ the people who have been
lifted out of poverty and those who have been registered as unemployed for more than half
a year and hold the Certificate of Employment and Start-up or the Registration Certificate
of Employment and Unemployment (stating “tax policy for business absorption”), since the
month of signing the labour contracts of more than 1 year and paying the social security
contributions, their VAT, city maintenance and construction tax, educational surcharge,
local educational surcharge and enterprise income tax will be deducted in sequence and
based on quota in accordance with the actual number of employees in 3 years from 1
January 2023 to 31 December 2027.
- 202 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
3 Taxation (Cont’d)
(1) Main tax category and rate (Cont’d)
(b) Notes to the VAT rate of the principal tax payers with different tax rates (Cont’d)
(b-5) Pursuant to the Notice on the Additional Value-added Tax Credit Policy for Advanced
Manufacturing Enterprises (Announcement [2023] No. 43) issued by the Ministry of
Finance and the State Taxation Administration, advanced manufacturing enterprises are
eligible for a 5% additional VAT deduction based on deductible input VAT in the current
period from 1 January 2023 to 31 December 2027. The following subsidiaries of the Group
can enjoy the above policy:
KUKA Robotics Guangdong Co., Ltd. Handan Midea Air-Conditioning Equipment Co., Ltd.
Midea Group Wuhan Refrigeration Equipment Co.,
Guangdong Swisslog Technology Co., Ltd. Ltd.
Midea Group Wuhan Heating Ventilation Equipment
KUKA Robotics Manufacturing China Co., Ltd. Co.,Ltd.
Guangzhou Hualing Refrigerating Equipment Co.,
Reis Robotics (Kunshan) Co., Ltd. Ltd.
Hefei Hualing Co., Ltd. GD Midea Air-Conditioning Equipment Co., Ltd.
Hefei Midea Heating & Ventilating Equipment Co.,
Hubei Midea Refrigerator Co., Ltd. Ltd.
Guangzhou Midea Hualing Refrigerator Co., Ltd. WINONE ELEVATOR COMPANY LIMITED
GD Midea Heating & Ventilating Equipment Co.,
Toshiba HA Manufacturing (Nanhai) Co., Ltd. Ltd.
Wuhu Midea Kitchen & Bath Appliances Mfg. Co., Chongqing Midea General Refrigeration Equipment
Ltd. Co., Ltd.
Foshan Shunde Midea Washing Appliances Guangdong Midea Consumer Electric
Manufacturing Co., Ltd. Manufacturing Co., Ltd.
Foshan Shunde Midea Water Dispenser Foshan Shunde Midea Electrical Heating
Manufacturing Co., Ltd. Appliances Manufacturing Co., Ltd.
Foshan Midea Chungho Water Purification
Equipment. Co., Ltd. GD Midea Environment Appliances Mfg. Co.,Ltd.
Hiconics Eco-energy Drive Technology Co., Ltd. Jiangsu Midea Cleaning Appliances Co., Ltd.
Guangdong Witol Vacuum Electronic Manufacture
Huaian Welling Motor Manufacturing Co., Ltd. Co., Ltd.
Guangdong Midea Kitchen Appliances
Anhui Meizhi Compressor Co., Ltd. Manufacturing Co., Ltd.
Anhui Welling Auto Parts Corporation Limited Wuxi Filin Electronics Co., Ltd.
Anhui Meizhi Precision Manufacturing Co., Ltd. Wuxi Little Swan Electric Co., Ltd.
Welling (Wuhu) Motor Manufacturing Co., Ltd. Hefei Midea Laundry Appliance Co., Ltd.
Guangdong Meizhi Compressor Limited Hubei Midea Laundry Appliance Co., Ltd.
Guangdong Welling Motor Manufacturing Co.,
Ltd. Shenzhen CLOU Electronics Co., Ltd.
Foshan Welling Washer Motor Manufacturing Co.,
Ltd. Shenzhen CLOU Precision Measurement Co., Ltd.
Guangdong Meizhi Precision- Manufacturing Co.,
Ltd. Shenzhen CLOU Intelligence Industry Co., Ltd.
Guangdong Midea Intelligent Technologies Co.,
Ltd. CLOU Global Technology Co., Ltd.
Guangdong Midea Environmental Technologies
Co., Ltd. Guangdong Shunkai Switch Co., Ltd.
Changsha Sunye Electric Co., Ltd. Hubei Midea Building Technology Co., Ltd.
Wuhan TTium Motor Technology Co., Ltd. MiSiliconn SemiConductor Technologies Co., Ltd.
Wuhu Midea Smart Kitchen Appliance
Manufacturing Co., Ltd. Kuka Systems (China) Co., Ltd.
Guangdong Midea Precision Mould Technology
Co., Ltd. Wuhu Maty Air-Conditioning Equipment Co., Ltd.
Midea Intelligent Lighting & Controls Technology
Co., Ltd.
- 203 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements
(1) Cash at bank and on hand
Item Ending balance Opening balance
Cash on hand 1,378 1,603
Cash at bank (a) 62,388,111 44,521,913
Other cash balances (b) 2,445,616 4,072,963
Statutory reserve with the Central Bank (c) 1,008,560 415,070
Surplus reserve with the Central Bank (d) 77,463 147,971
Deposits with banks and other financial
institutions (e) 35,518,068 32,064,267
Accrued interest 510,738 450,059
Total 101,949,934 81,673,846
Including: Total amounts deposited with
banks overseas (including
Hong Kong, China, Macau,
China, Singapore, Japan, Italy,
Brazil and Germany) 11,313,975 11,058,467
(a) As at 30 June 2024, cash at bank included fixed deposits with the term of over 3 months
and due within 1 year, amounting to RMB 41,484,306,000 (31 December 2023: RMB
16,848,494,000).
(b) Other cash balances mainly include letters of guarantee, bank acceptance notes and
letters of credit.
(c) Statutory reserve with the Central Bank represents the statutory reserve deposited in
People’s Bank of China by the financial enterprise in accordance with relevant regulations.
They are not available for use in the Group’s daily operations.
(d) Surplus reserve with the Central Bank represents the excess over the required statutory
reserve paid by financial institutions in the Central Bank, and it is bank deposit that can be
readily drawn on demand.
(e) As at 30 June 2024, fixed deposits with banks and other financial institutions with the term
of over 3 months (inclusive) amounted to RMB 5,000,000,000 (31 December 2023: Nil).
(2) Financial assets held for trading
Item Ending balance Opening balance
Structural deposits (a) 425,937 53,750
Investments in equity instrument held for
trading (b) 2,258,780 1,726,584
Others 60,374 10,254
Total 2,745,091 1,790,588
(a) As at 30 June 2024, structural deposits were deposits with financial institutions due within
1 year, which were measured at fair value through profit or loss.
(b) As at 30 June 2024, investments in equity instrument held for trading referred to equity
investments in listed companies, which were measured at fair value through profit or loss.
- 204 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(3) Notes receivable
Item Ending balance Opening balance
Bank acceptance notes 5,893,804 5,477,291
Trade acceptance notes 104,357 110,271
Less: Provision for bad debts (a) (58,312) (65,602)
Total 5,939,849 5,521,960
(a) Provision for bad debts
The Group’s notes receivable are generated from the sale of goods, provision of services
and other daily business activities, regardless of whether there is a significant financing
component, the Group measures the loss provision based on the lifetime ECL. As at 30
June 2024, the Group considered that there was no significant credit risk associated with
its bank acceptance notes and did not expect that there would be any significant losses
from non-performance by these banks.
(b) As at 30 June 2024, notes receivable endorsed or discounted but unmatured are as
follows:
Item Derecognised Not derecognised
Bank acceptance notes 113,953 3,459,904
Trade acceptance notes - 42,598
(4) Accounts receivable
Item Ending balance Opening balance
Accounts receivable 45,356,052 34,367,460
Less: Provision for bad debts (1,496,825) (1,482,721)
Total 43,859,227 32,884,739
(a) The ageing of accounts receivable is analysed as follows:
Ageing Ending balance Opening balance
Within 1 year 43,679,548 32,609,034
1 to 2 years 992,616 1,114,153
2 to 3 years 434,451 326,815
3 to 5 years 177,883 188,085
Over 5 years 71,554 129,373
Sub-total 45,356,052 34,367,460
As at 30 June 2024, the Group had no significant overdue accounts receivable.
- 205 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(4) Accounts receivable (Cont’d)
(b) Under the new financial instruments standards, the Group measures the loss provision for
accounts receivable based on the lifetime ECL.
As at 30 June 2024, accounts receivable for which the related provision for bad debts was
provided on an individual basis are analysed as follows:
Ending balance
Lifetime ECL Provision for bad
Category Book balance rate debts Reason
The debtor
encountered financial
Domestic customers 693,945 92.39% (641,160) distress, etc.
The debtor
encountered financial
Foreign customers 77,154 40.02% (30,880) distress, etc.
Total 771,099 (672,040)
As at 30 June 2024, accounts receivable for which the related provision for bad debts was
provided on a grouping basis are analysed as follows:
Ending balance
Book balance Provision for bad debts
Category Amount Lifetime ECL rate Amount
Domestic business grouping 22,877,338 2.35% (538,416)
Overseas business grouping 21,707,615 1.32% (286,369)
Total 44,584,953 (824,785)
(c) For the six months ended 30 June 2024, the provision for bad debts reversed amounted to
RMB 131,922,000.
For the six months ended 30 June 2024, the accounts receivable written off by the Group
were arising from transactions with third parties and no accounts receivable with
significant amounts were written off.
(d) As at 30 June 2024, the five largest accounts receivable and contract assets aggregated
by debtor are summarised and analysed as follows:
Provision for bad % of total
Item Amount debts balance
Total amount of the five largest accounts
receivable and contract assets 3,288,691 (40,299) 6.70%
(5) Other receivables
Item Ending balance Opening balance
Other receivables 1,906,339 2,233,595
Less: Provision for bad debts (58,584) (51,717)
Total 1, 847,755 2,181,878
The Group does not have amounts that are aggregated to other parties and reported in
other receivables as a result of centralised fund management.
- 206 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(5) Other receivables (Cont’d)
(a) Other receivables mainly include security deposit and guarantee, receivables related to
stock options, current accounts and petty cash to staff.
The ageing of other receivables is analysed as follows:
Ageing Ending balance Opening balance
Within 1 year 1,358,734 1,688,987
1 to 2 years 233,988 208,857
2 to 3 years 120,441 162,943
3 to 5 years 113,060 98,851
Over 5 years 80,116 73,957
Total 1, 906,339 2,233,595
(b) Provision for bad debts and changes in book balance statement
Stage 1 Stage 3
12-month ECL 12-month ECL Lifetime ECL
(Grouping) (Individual) (Credit impaired) Sub-total
Book Provision for Book Provision for Book Provision for Provision for
Item balance bad debts balance bad debts balance bad debts bad debts
1 January 2024 2,074,507 45,385 152,756 - 6,332 6,332 51,717
Transfer to Stage 3 (530) (53) - - 530 53 -
Net (decrease)/increase in the
current year (187,372) 11,575 (136,793) - (3,091) (2,705) 8,870
Including: Written-off in the
current period - - - - (3,091) (3,091) (3,091)
Derecognition - - - - - - -
Differences on translation of
foreign currency financial
statements - (2,094) - - - 91 (2,003)
30 June 2024 1,886,605 54,813 15,963 - 3,771 3,771 58,584
(i) As at 30 June 2024, other receivables for which the related provision for bad debts was
provided on an individual basis are analysed as follows:
Book balance 12-month ECL rate Provision for bad debts Reason
Stage 1 15,963 0% - Relatively low bad debt risks
Book balance 12-month ECL rate Provision for bad debts Reason
The debtor encountered financial
Stage 3 3,771 100% (3,771) distress, etc.
ii) As at 30 June 2024, other receivables for which the related provision for bad debts was
provided on a grouping basis were all at Stage 1, which are analysed as follows:
Ending balance Opening balance
Book balance Provision for bad debts Book balance Provision for bad debts
Stage 1 Amount Amount Provision ratio Amount Amount Provision ratio
Security deposit, guarantee
and others grouping 1,886,605 (54,813) 2.91% 2,074,507 (45,385) 2.19%
(c) For the six months ended 30 June 2024, the provision for bad debts reversed amounted
to RMB 26,187,000.
For the six months ended 30 June 2024, no other receivables with significant amounts
were written off.
(d) As at 30 June 2024, the five largest other receivables aggregated by debtor are
summarised and analysed as follows:
Item Amount Provision for bad debts % of total balance
Total amount of the five largest other receivables 318,255 (29,649) 16.69%
(e) As at 30 June 2024, the Group had no significant government grants recognised at
amounts receivable.
- 207 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(6) Receivables financing
Item Ending balance Opening balance
Receivables financing 19,892,103 13,330,008
The Group’s receivables financing were mainly accounts receivable and bank acceptance
notes transferred, discounted and endorsed for the purpose of daily treasury management
and were qualified for derecognition.
As at 30 June 2024 and 31 December 2023, the Group measured provision for bad debts
based on the lifetime ECL. As the credit risk characteristics of these bank acceptance
notes were similar, no provision for impairment was made individually. In addition, the
Group considered that there was no significant credit risk associated with its bank
acceptance notes and did not expect that there would be any significant losses from non-
performance by these banks.
As at 30 June 2024, the Group’s receivables financing endorsed or discounted but not
matured are as follows:
Item Derecognised Not derecognised
Receivables financing 12,872,361 -
For the six months ended 30 June 2024, no significant receivables financing of the Group
were written off (For the six months ended 30 June 2023: Nil).
(7) Advances to suppliers
Item Ending balance Opening balance
Prepayments for raw materials and others 4,075,935 3,316,194
(a) The ageing of advances to suppliers is analysed below:
Ending balance Opening balance
% of total % of total
Ageing Amount balance Amount balance
Within 1 year 3,981,436 97.68% 3,175,857 95.76%
1 to 2 years 49,256 1.21% 94,533 2.85%
2 to 3 years 18,060 0.44% 21,058 0.64%
Over 3 years 27,183 0.67% 24,746 0.75%
Total 4,075,935 100.00% 3,316,194 100.00%
As at 30 June 2024, advances to suppliers with ageing over 1 year with a carrying amount
of RMB 94,499,000 (31 December 2023: RMB 140,337,000) were mainly unsettled
prepayments for raw materials.
As at 30 June 2024, the five largest advances to suppliers aggregated by debtor are
summarised and analysed as follows:
Item Amount % of total balance
Total amount of the five largest advances to
suppliers 768,199 18.85%
- 208 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(8) Contract assets
Item Ending balance Opening balance
Contract assets 3,726,090 4,163,267
Less: Provision for impairment of
contract assets (108,519) (117,342)
Total 3,617,571 4,045,925
For contract assets, the Group measures the loss provision based on the lifetime ECL
regardless of whether there exists a significant financing component.
As at 30 June 2024, contract assets for which the related provision for bad debts was
provided on an individual basis are analysed as follows:
Ending balance
Provision for bad
Grouping Book balance Lifetime ECL rate debts
Domestic business 67,498 73.42% (49,560)
As at 30 June 2024, contract assets for which the related provision for bad debts was
provided on a grouping basis are analysed as follows:
Ending balance
Provision for bad
Grouping Book balance Lifetime ECL rate debts
Domestic business grouping 1,327,725 2.42% (32,086)
Overseas business grouping 2,330,867 1.15% (26,873)
Total 3,658,592 (58,959)
(9) Loan receivables
(a) By individual and corporation:
Item Ending balance Opening balance
Loan receivables measured at
amortised cost
Loan receivables to individuals 1,228,100 1,555,477
Loan receivables to corporations 13,606,455 14,073,508
Including: Loans 11,210,728 10,939,505
Note discounting 2,395,727 3,134,003
Sub-total 14,834,555 15,628,985
Less: Provision for loan losses (310,969) (356,755)
Total 14,523,586 15,272,230
As at 30 June 2024, loan receivables over 1 year amounted to RMB 564,901,000 (31
December 2023: RMB 975,272,000).
- 209 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(9) Loan receivables (Cont’d)
(b) By type of collateral held:
Item Ending balance Opening balance
Unsecured loans 1,224,871 1,553,285
Guaranteed loans 416,680 481,542
Pledged loans 13,193,004 13,594,158
Sub-total 14,834,555 15,628,985
Less: Provision for loan losses (310,969) (356,755)
Total 14,523,586 15,272,230
(c) For the six months ended 30 June 2024, the Group did not make any provision for bad
debts (for the six months ended 30 June 2023: Nil), wrote off bad debt provisions of RMB
422,000 (for the six months ended 30 June 2023: none), and reversed bad debt
provisions of RMB 46,254,000 (for the six months ended 30 June 2023: RMB 1,907,000)
(Note 4 (25)).
(d) As at June 30 2024, the original value of loan which the related provision for bad debts
was provided on an individual basis was RMB 2,314,200,000(31 December 2023: RMB
3,083,537,000), and the amount of bad debt provision was RMB 50,957,000(31
December 2023: RMB 62,293,000).
(e) As at 30 June 2024 and 31 December 2023, the majority of loan receivables will be
included in Stage 1, and impairment provisions will be measured based on expected
credit losses over the next 12 months.
(10) Inventories
(a) Inventories are summarised by category as follows:
Ending balance Opening balance
Provision for Provision for
decline in the decline in the
value of Carrying value of Carrying
Item Book balance inventories amount Book balance inventories amount
Finished goods 28,841,855 (388,001) 28,453,854 35,291,863 (353,307) 34,938,556
Raw materials 9,076,934 (352,411) 8,724,523 8,572,689 (344,224) 8,228,465
Work in progress 2,230,292 - 2,230,292 3,170,699 - 3,170,699
Consigned
processing
materials 487,216 - 487,216 444,995 - 444,995
Contract fulfilment
costs 433,345 - 433,345 556,540 - 556,540
Total 41,069,642 (740,412) 40,329,230 48,036,786 (697,531) 47,339,255
(b) Analysis of provision for decline in the value of inventories is as follows:
Differences on
Increase in translation of foreign
Opening provision for the Reversal or write-off currency financial Ending
Item balance current period for the current period statements balance
Finished goods 353,307 303,677 (238,616) (30,367) 388,001
Raw materials 344,224 30,197 (10,176) (11,834) 352,411
Total 697,531 333,874 (248,792) (42,201) 740,412
- 210 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(10) Inventories (Cont’d)
(c) Provision for decline in the value of inventories is as follows:
Basis for provision for decline in the value of Reason for write-off of provision for decline in the
Item inventories value of inventories in the current period
Stated at the lower of cost and net realisable
Finished goods value Sales
Stated at the lower of cost and net realisable
Raw materials, etc. value Requisition for production
(11) Current portion of non-current assets
Item Ending balance Opening balance
Long-term receivables due within 1
year 687,636 678,587
Other debt investments due within 1
year 1,287,344 4,664,429
Current portion of other non-current
assets 11,942,502 5,417,561
Total 13,917,482 10,760,577
(12) Other current assets
Item Ending balance Opening balance
Fixed-income products (a) 40,198,719 53,858,011
Input VAT to be deducted 5,023,914 5,852,464
Prepaid expenses 1,065,480 1,047,492
Others 2,399,998 2,142,924
Total 48,688,111 62,900,891
(a) Fixed-income products were monetary investment products and certificate of deposit
deposited in financial institutions with maturities of no more than 1 year at the time of
acquisition, which were subsequently measured at amortised cost.
As at 30 June 2024 and 31 December 2023, the Group considered that there was no
significant increase in credit risk of fixed-income products since initial recognition, and
made provision for loss based on 12-month ECL. The Group considered that there was no
significant credit risk associated with them, and did not expect that there would be any
significant losses from non-performance by these financial institutions.
- 211 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(13) Other debt investments
Item Ending balance Opening balance
Fair value through other comprehensive
income
- Transferable certificate of deposit 6,424,870 10,983,476
Less: Other debt investments due within 1
year (1,287,344) (4,664,429)
Total 5,137,526 6,319,047
As at 30 June 2024 and 31 December 2023, the cost of the Group’s transferable certificate
of deposit was not materially different from its fair value.
As at 30 June 2024 and 31 December 2023, the Group considered that there was no
significant increase in credit risk of transferable certificate of deposit since initial
recognition, and made provision for loss based on 12-month ECL. The Group considered
that there was no significant credit risk associated with transferable certificate of deposit,
and did not expect that there would be any significant losses from non-performance by
these banks.
(14) Long-term receivables
Item Ending balance Opening balance
Long-term receivables 940,680 1,050,627
Less: Provision for bad debts (117,755) (121,521)
Total 822,925 929,106
Less: Long-term receivables due within 1
year (687,636) (678,587)
Total 135,289 250,519
The Group’s long-term receivables are mainly presented in net amount of finance lease
receivables after offsetting the unrealised financing income.
- 212 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(15) Long-term equity investments
Long-term equity investments are classified as follows:
Item Ending balance Opening balance
Investments in associates and joint
ventures (a) 4,840,550 4,976,109
Less: Provision for impairment of long-
term equity investments - -
Total 4,840,550 4,976,109
(a) Investments in associates and joint ventures mainly refer to the investments in Guangdong
Shunde Rural Commercial Bank Co., Ltd. (Shunde Rural Commercial Bank), Carrier
Midea North America LLC., Hefei Royalstar Motor Co., Ltd., Foshan Micro Midea Filter
Mfg. Co., Ltd., Concepcion Midea Inc., TWENTYTHREEC LLC, Shenzhen CEGN Co.,
Ltd., T. G. BATTERY CO. (HONG KONG) LIMITED, and other enterprises by the Group.
(b) For the six months ended 30 June 2024, the Group's revenue from sales or rendering of
services to associates and joint ventures was RMB1,758,820,000, with the ending balance
of receivables from associates and joint ventures at RMB808,212,000. The amount due to
associates and joint ventures for goods or services was RMB459,963,000, with the ending
balance of payables to associates and joint ventures at RMB 264,982,000. These
transactions are negotiated on normal commercial terms with reference to market prices.
(c) As at 30 June 2024, the Group’s cash deposited in Shunde Rural Commercial Bank
amounted to approximately RMB4,891,067,000, and other non-current assets amounted
to approximately RMB6,000,260,000. For the six months ended 30 June 2024, the interest
income obtained by the Group from Shunde Rural Commercial Bank was
RMB167,993,000.
(16) Other non-current financial assets
Item Ending balance Opening balance
Measured at fair value
- Equity of unlisted companies, etc. 4,304,815 5,687,591
- Derivative financial instruments (a) 2,931,156 2,082,347
Total 7,235,971 7,769,938
(a) As at 30 June 2024, the main information of the Group’s unmatured cross-currency
interest rate swaps were set out in Note 4(36).
- 213 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(17) Fixed assets
Electronic
Overseas Machinery and Motor equipment and
Item Buildings land equipment vehicles others Total
Original carrying amount
Opening balance 26,431,255 1,387,628 26,110,126 890,849 7,352,388 62,172,246
Increase in the current period 1,440,591 108,902 1,518,448 46,862 622,153 3,736,956
1) Purchase 164,530 107,850 1,387,008 46,862 582,934 2,289,184
2) Transfer from construction in
progress 1,254,862 - 97,060 - 34,563 1,386,485
3) Others 21,199 1,052 34,380 - 4,656 61,287
Decrease in the current period (296,071) - (1,039,373) (53,620) (196,013) (1,585,077)
1) Disposal, retirement and
others (296,071) - (1,039,373) (53,620) (196,013) (1,585,077)
Differences on translation of
foreign currency financial
statements (234,766) (78,449) (229,012) (4,370) (67,110) (613,707)
Ending balance 27,341,009 1,418,081 26,360,189 879,721 7,711,418 63,710,418
Accumulated depreciation
Opening balance 11,021,688 - 14,392,577 621,224 5,113,872 31,149,361
Increase in the current period 606,686 - 869,623 26,319 517,974 2,020,602
1) Provision 598,635 - 848,626 26,319 517,866 1,991,446
2) Others 8,051 - 20,997 - 108 29,156
Decrease in the current period (81,883) - (613,345) (22,444) (141,391) (859,063)
1) Disposal, retirement and
others (81,883) - (613,345) (22,444) (141,391) (859,063)
Differences on translation of
foreign currency financial
statements (57,771) - (111,507) (2,533) (37,319) (209,130)
Ending balance 11,488,720 - 14,537,348 622,566 5,453,136 32,101,770
Provision for impairment
Opening balance 19,309 5,218 30,337 20,888 9,170 84,922
Increase in the current period - - - - - -
1) Provision - - - - - -
Decrease in the current period (388) - (8,226) - (1,099) (9,713)
1) Disposal, retirement and
others (388) - (8,226) - (1,099) (9,713)
Differences on translation of
foreign currency financial
statements (633) (573) (151) (27) (608) (1,992)
Ending balance 18,288 4,645 21,960 20,861 7,463 73,217
Carrying amount at the end of
the period 15,834,001 1,413,436 11,800,881 236,294 2,250,819 31,535,431
Carrying amount at the
beginning of the period 15,390,258 1,382,410 11,687,212 248,737 2,229,346 30,937,963
(a) For the six months ended 30 June 2024, the depreciation of fixed assets amounted to
RMB1,991,446,000 (for the six months ended 30 June 2023: RMB1,826,805,000) and was
included in the income statement in full amount.
(b) As at 30 June 2024, the Company was still in the course of obtaining the ownership
certificate for the fixed asset with a carrying amount of RMB394,740,000 (31 December
2023: RMB854,217,000).
(c) Certain fixed assets were pledged as securities for bank loan facilities, as at 30 June
2024.
- 214 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(18) Construction in progress
Ending balance Opening balance
Book Provision for Carrying Book Provision for Carrying
Project name balance impairment amount balance impairment amount
Shanghai Global
Innovation
Centre Project 2,574,268 - 2,574,268 2,009,875 - 2,009,875
Midea Xingtan
Industrial Park
Project 451,936 - 451,936 352,830 - 352,830
Innovation and
Technology
Park Project 216,946 - 216,946 147,670 - 147,670
Brazil MIDB
Factory
Project 196,142 - 196,142 53,010 - 53,010
Gui’an Midea
Cloud Project 193,545 - 193,545 150,126 - 150,126
Xiaotang New
Base Project 131,972 - 131,972 118,677 - 118,677
Midea
Headquarters
A08 Land
Parcel Project 50,539 - 50,539 749,805 - 749,805
Midea Digital
Factory
Project - - - 358,801 - 358,801
Other projects 1,012,636 (53,671) 958,965 795,005 (54,579) 740,426
Total 4,827,984 (53,671) 4,774,313 4,735,799 (54,579) 4,681,220
- 215 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(18) Construction in progress (Cont’d)
(a) Movements of significant projects of construction in progress
Translation of
foreign currency
Opening Increase in the Transfer to Other financial Ending
Project name balance current period fixed assets decreases statements balance Source of funds
Shanghai Global Innovation
Centre Project 2,009,875 564,393 - - - 2,574,268 Self-financing
Midea Xingtan Industrial
Park Project 352,830 99,106 - - - 451,936 Self-financing
Innovation and Technology
Park Project 147,670 69,276 - - - 216,946 Self-financing
Brazil MIDB Factory Project 53,010 161,357 - - (18,225) 196,142 Self-financing
Gui’an Midea Cloud Project 150,126 43,419 - - - 193,545 Self-financing
Xiaotang New Base Project 118,677 13,295 - - - 131,972 Self-financing
Midea Headquarters A08
Land Parcel Project 749,805 118,267 (817,533) - - 50,539 Self-financing
Midea Digital Factory Borrowings/
Project 358,801 19,792 (378,593) - - - Self-financing
Other projects 795,005 497,412 (190,359) (67,903) (21,519) 1,012,636 Self-financing
Total 4,735,799 1,586,317 (1,386,485) (67,903) (39,744) 4,827,984
(i) For the six months ended 30 June 2024, no significant borrowing costs were capitalised.
(ii) As at 30 June 2024, the cost of construction in progress matched the budget amount, and the projects were carried out on schedule.
- 216 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(19) Right-of-use assets
Machinery and Land use rights
Item Buildings equipment and others Total
Original carrying amount
Opening balance 4,623,541 357,750 146,513 5,127,804
Increase in the current
period 650,626 72,744 2,381 725,751
1) New lease contracts 578,014 67,844 2,157 648,015
2) Lease modifications and
others 72,612 4,900 224 77,736
Decrease in the current
period (582,840) (52,836) (24,829) (660,505)
1) Expiration of lease
contract (376,023) (46,492) (24,383) (446,898)
2) Lease modifications and
others (206,817) (6,344) (446) (213,607)
Differences on translation
of foreign currency
financial statements (51,795) (8,346) (3,085) (63,226)
Ending balance 4,639,532 369,312 120,980 5,129,824
Accumulated
depreciation
Opening balance 1,817,065 199,063 62,891 2,079,019
Increase in the current
period 589,994 51,303 21,069 662,366
1) Provision 589,994 51,303 21,069 662,366
Decrease in the current
period (389,265) (49,064) (24,584) (462,913)
1) Expiration of lease
contract (376,023) (46,492) (24,383) (446,898)
2) Lease modifications and
others (13,242) (2,572) (201) (16,015)
Differences on translation
of foreign currency
financial statements (23,464) (4,705) (1,772) (29,941)
Ending balance 1,994,330 196,597 57,604 2,248,531
Carrying amount at the end
of the period 2,645,202 172,715 63,376 2,881,293
Carrying amount at the
beginning of the period 2,806,476 158,687 83,622 3,048,785
- 217 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(20) Intangible assets
Patents and
Land use non-patent Trademark Trademark
Item rights technologies rights use rights Others Total
Original carrying amount
Opening balance 8,195,231 4,415,503 5,116,437 2,125,406 6,408,543 26,261,120
Increase in the current
period 5,494 14,357 - - 138,370 158,221
1) Purchase 5,494 14,357 - - 14,923 34,774
2) Others - - - - 123,447 123,447
Decrease in the current
period (22,151) (15,423) - - (140,054) (177,628)
1) Disposal and others (22,151) (15,423) - - (140,054) (177,628)
Differences on translation of
foreign currency financial
statements (8,384) (47,930) (118,931) (228,054) (274,782) (678,081)
Ending balance 8,170,190 4,366,507 4,997,506 1,897,352 6,132,077 25,563,632
Accumulated amortisation
Opening balance 1,434,933 1,493,486 288,537 430,428 3,897,111 7,544,495
Increase in the current
period 87,547 154,189 34,922 22,640 305,059 604,357
1) Provision 87,547 154,189 34,922 22,640 304,745 604,043
2) Others - - - - 314 314
Decrease in the current
period (10,919) (14,874) - - (139,279) (165,072)
1) Disposal and others (10,919) (14,874) - - (139,279) (165,072)
Differences on translation of
foreign currency financial
statements (1,090) (36,630) (3,987) (40,786) (143,272) (225,765)
Ending balance 1,510,471 1,596,171 319,472 412,282 3,919,619 7,758,015
Provision for impairment
Opening balance - 107,022 - - 151,867 258,889
Increase in the current
period - - - - - -
1) Provision - - - - - -
Decrease in the current
period - - - - - -
1) Disposal and others - - - - - -
Differences on translation of
foreign currency financial
statements - (227) - - (3,943) (4,170)
Ending balance - 106,795 - - 147,924 254,719
Carrying amount at the end
of the period 6,659,719 2,663,541 4,678,034 1,485,070 2,064,534 17,550,898
Carrying amount at the
beginning of the period 6,760,298 2,814,995 4,827,900 1,694,978 2,359,565 18,457,736
(a) For the six months ended 30 June 2024, the amortisation of intangible assets amounted to
RMB 604,043,000 (for the six months ended 30 June 2023: RMB 509,594,000) and was
included in the income statement in full amount.
(b) As at 30 June 2024, the Group had no significant intangible assets which were still in the
course of obtaining the land use rights certificate (31 December 2023: Nil).
(c) Certain intangible assets were pledged as securities for bank loan facilities, as at 30 June 2024.
- 218 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(21) Goodwill
The Group’s goodwill had been allocated to the relevant cash generating unit or cash
generating units at the acquisition date, and the allocation is as follows:
Name of investee Ending balance Opening balance
KUKA Group 21,802,472 22,364,486
TLSC Group 2,083,108 2,338,037
Little Swan 1,361,306 1,361,306
Others 5,286,310 5,327,237
Sub-total 30,533,196 31,391,066
Less: Provision for impairment (546,299) (532,829)
Total 29,986,897 30,858,237
(22) Long-term prepaid expenses
Long-term prepaid expenses mainly include expenses prepaid for software and project
reconstruction.
(23) Deferred tax assets and deferred tax liabilities
(a) Deferred tax assets before offsetting
Ending balance Opening balance
Deductible Deductible
temporary temporary
differences and Deferred tax differences and Deferred tax
Item deductible losses assets deductible losses assets
Deductible losses 10,037,846 1,989,229 10,350,251 2,126,566
Provision for asset impairment 5,039,016 1,085,957 4,706,740 1,038,938
Employee benefits payable 943,882 198,584 1,065,764 213,045
Other current liabilities 48,215,282 8,782,549 41,533,600 7,386,896
Others 15,538,930 3,438,235 16,388,482 3,915,192
Total 79,774,956 15,494,554 74,044,837 14,680,637
(b) Deferred tax liabilities before offsetting
Ending balance Opening balance
Taxable Taxable
temporary Deferred tax temporary Deferred tax
Deferred tax liabilities differences liabilities differences liabilities
Changes in fair value 1,568,129 281,230 982,749 202,257
Business combinations
involving enterprises not
under common control 11,898,898 2,940,356 12,819,515 3,124,747
Others 19,821,755 3,378,559 21,591,963 3,680,763
Total 33,288,782 6,600,145 35,394,227 7,007,767
- 219 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(23) Deferred tax assets and deferred tax liabilities (Cont’d)
(c) The net balances of deferred tax assets and deferred tax liabilities after offsetting are as follows:
Balance after offsetting at the Balance after offsetting at the
Item end of the period beginning of the period
Deferred tax assets 13,806,344 12,771,150
Deferred tax liabilities 4,911,935 5,098,280
(24) Other non-current assets
Item Ending balance Opening balance
Fixed-income products (a) 93,538,570 84,538,948
Less: Fixed-income products
due within 1 year (11,942,502) (5,417,561)
Sub-total 81,596,068 79,121,387
Others 1,817,894 1,482,139
Total 83,413,962 80,603,526
(a) As at 30 June 2024 and 31 December 2023, fixed-income products were fixed deposits,
monetary investment products and certificate of deposit deposited in financial institutions with
maturities of more than 1 year at the time of acquisition, which were subsequently measured at
amortised cost.
(b) Certain fixed-income products were pledged for bank loan facilities as at 30 June 2024 and 31
December 2023.
- 220 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(25) Asset impairment and provision for loss
Decrease in the current period Differences on
translation of foreign
currency financial
Increase in the current statements and
Item 1 January 2024 period Reversal Write-off others 30 June 2024
Provision for bad debts 2,078,316 264,324 (222,051) (53,354) (24,790) 2,042,445
Less: Provision for bad debts of accounts receivable 1,482,721 219,956 (131,922) (49,841) (24,089) 1,496,825
Provision for losses of loan receivables 356,755 - (46,254) (422) 890 310,969
Provision for bad debts of notes receivable 65,602 6,112 (13,402) - - 58,312
Provision for bad debts of other receivables 51,717 38,148 (26,187) (3,091) (2,003) 58,584
Provision for bad debts of long-term receivables 121,521 108 (4,286) - 412 117,755
Provision for decline in the value of inventories 697,531 333,874 (5,022) (243,770) (42,201) 740,412
Provision for impairment of fixed assets 84,922 - - (9,713) (1,992) 73,217
Provision for impairment of intangible assets 258,889 - - - (4,170) 254,719
Provision for impairment of contract assets 117,342 9,741 (16,806) - (1,758) 108,519
Provision for impairment of investment properties 12,576 3,584 - - - 16,160
Provision for impairment of construction in progress 54,579 - - - (908) 53,671
Provision for impairment of goodwill 532,829 - - - 13,470 546,299
Total 3,836,984 611,523 (243,879) (306,837) (62,349) 3,835,442
- 221 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(26) Assets with use rights restricted
As at 30 June 2024 and 31 December 2023, assets with use rights restricted were mainly as
follows:
Item Ending balance Opening balance
Cash at bank and on hand
Including: Cash at bank (Note 4(1)) 41,484,306 16,848,494
Other cash balances (Note 4(1)) 2,445,616 4,072,963
Statutory reserve with the Central Bank
(Note 4(1)) 1,008,560 415,070
Deposits with banks and other financial
institutions (Note 4(1)) 5,000,000 -
Total 49,938,482 21,336,527
(27) Short-term borrowings
Item Ending balance Opening balance
Unsecured borrowings 2,259,390 4,681,574
Guaranteed borrowings 5,980,570 1,083,216
Pledged and mortgage borrowings 10,305,167 3,054,386
Total 18,545,127 8,819,176
As at 30 June 2024, annual interest rates of short-term borrowings ranged from 1.20% to
6.29% (31 December 2023: 2.20% to 7.04%).
(28) Notes payable
Item Ending balance Opening balance
Bank acceptance notes 23,157,345 21,626,514
Trade acceptance notes 79,464 81,094
Total 23,236,809 21,707,608
(29) Accounts payable
Item Ending balance Opening balance
Payables for purchase of goods and
services 78,517,420 67,091,595
Others 6,448,927 5,438,870
Total 84,966,347 72,530,465
As at 30 June 2024, accounts payable with ageing over 1 year and a carrying amount of
RMB 1,544,800,000 (31 December 2023: RMB 1,672,797,000) were mainly unsettled
accounts payable for materials.
- 222 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(30) Contract liabilities
Item Ending balance Opening balance
Advances for sales and services, etc. 31,482,850 38,549,278
Advances for construction projects 3,200,919 3,216,197
Total 34,683,769 41,765,475
(31) Employee benefits payable
Item Ending balance Opening balance
Short-term employee benefits
payable (a) 6,462,635 8,972,512
Others 107,552 103,515
Total 6,570,187 9,076,027
(a) Short-term employee benefits
Opening Increase in the Decrease in the Ending
Item balance current period current period balance
Wages and salaries, bonus,
allowances and subsidies 8,335,118 16,657,892 (19,120,990) 5,872,020
Staff welfare 416,535 1,046,479 (1,086,930) 376,084
Social security contributions 87,676 1,158,438 (1,165,734) 80,380
Including: Medical insurance 86,761 1,112,903 (1,120,520) 79,144
Work injury insurance 382 33,985 (33,485) 882
Maternity insurance 533 11,550 (11,729) 354
Housing funds 19,018 442,851 (443,120) 18,749
Labour union funds and
employee education funds 24,938 78,831 (75,641) 28,128
Other short-term employee
benefits 89,227 456,528 (458,481) 87,274
Sub-total 8,972,512 19,841,019 (22,350,896) 6,462,635
(32) Taxes payable
Item Ending balance Opening balance
Enterprise income tax payable 3,785,921 3,477,253
Unpaid VAT 2,214,005 1,082,424
Others 858,065 895,425
Total 6,857,991 5,455,102
- 223 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(33) Other payables
Item Ending balance Opening balance
Other payables 4,031,055 4,442,928
(a) Other payables are mainly restricted share repurchase obligation, deposit and security deposit
payable and reimbursed logistics expense.
(b) As at 30 June 2024, other payables with ageing over 1 year and a carrying amount of RMB
1,006,435,000 (31 December 2023: RMB 1,305,955,000) were mainly those recognised for
performing equity incentive plan and security deposit and deposit payable, which were
unsettled since related projects were uncompleted.
(34) Current portion of non-current liabilities
Item Ending balance Opening balance
Current portion of long-term borrowings 9,137,852 13,290,809
Current portion of lease liabilities 1,130,176 1,166,901
Total 10,268,028 14,457,710
(35) Other current liabilities
Item Ending balance Opening balance
Accrued sale rebates 59,921,101 48,311,934
Others 25,491,214 22,985,994
Total 85,412,315 71,297,928
(36) Long-term borrowings
Item Ending balance Opening balance
Guaranteed, mortgage and pledged
borrowings (a) 32,367,385 36,205,989
Unsecured borrowings 16,602,892 23,223,556
Total 48,970,277 59,429,545
Less: Current portion of guaranteed,
mortgage and pledged borrowings (5,137,852) (6,670,909)
Current portion of unsecured
borrowings (4,000,000) (6,619,900)
Total 39,832,425 46,138,736
- 224 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(36) Long-term borrowings (Cont’d)
(a) As at 30 June 2024, bank guaranteed borrowings mainly included: (i) guaranteed borrowings
equivalent to RMB 3,830,850,000 guaranteed by the Company, interest is calculated at a
fixed rate with interest paid every quarter, which will be due in May 2025; (ii) guaranteed
borrowings equivalent to RMB 1,193,026,000 guaranteed by the Company, interest is
calculated at a floating rate with interest paid every month, which will be due in June 2025;
(iii) guaranteed borrowings of RMB 2,750,000,000 guaranteed by the Company, interest is
calculated at a fixed rate with interest paid every quarter, which will be due in April 2027; (iv)
After deducting the bank fee, guaranteed borrowings equivalent to RMB 24,326,232,000
guaranteed by the Company, interest is calculated at a floating rate with interest paid every
quarter, which will be due in August 2025.
As at 31 December 2023, bank guaranteed borrowings mainly included: (i) guaranteed
borrowings equivalent to RMB 2,129,843,000 guaranteed by the Company, interest is
calculated at a fixed rate with interest paid every quarter, which will be due in April 2024; (ii)
guaranteed borrowings equivalent to RMB 4,490,432,000 guaranteed by the Company,
interest is calculated at a floating rate with interest paid every month, which will be due in
May 2024; (iii) guaranteed borrowings equivalent to RMB 1,185,644,000 guaranteed by the
Company, interest is calculated at a floating rate with interest paid every month, which will
be due in June 2025; (iv) After deducting the bank fee, guaranteed borrowings equivalent to
RMB 24,157,339,000 guaranteed by the Company, interest is calculated at a floating rate
with interest paid every quarter, which will be due in August 2025; and (v) guaranteed
borrowings equivalent to RMB 3,929,600,000 guaranteed by the Company, interest is
calculated at a fixed rate with interest paid every quarter, which will be due in May 2025.
(b) As at 30 June 2024, annual interest rates of long-term borrowings ranged from 0.33% to
4.50% (31 December 2023: 0.30% to 4.50%).
(c) In 2022, the Group purchased cross-currency interest rate swap to mitigate the cash flow
risk associated with the above-mentioned guaranteed borrowings ((a)(iv)) equivalent to USD
3,419,058,000 of principal. Under the swap, a nominal amount of USD 3,419,058,000 was
converted into EUR at an agreed exchange rate, and the USD floating rate (SOFR+0.55%
p.a.) was converted into the agreed EUR fixed rate. The agreed swap period was scheduled
to start in August 2022 and end in August 2025. The Group designated such borrowings as
the hedged item, and the change in the value of cross-currency interest rate swap (after
excluding the foreign currency basis spread) as the hedging instrument for cash flow hedge.
There was an economic relationship between the hedging instrument and the hedged item.
The cross-currency interest rate swap matched the currency, amount and other major terms
of financial liabilities denominated in USD.
For the six months ended 30 June 2024, the Group included the effective part of the
changes in fair value of the cross-currency interest rate swap (after excluding the foreign
exchange basis spread) in “Other comprehensive income - cash flow hedges”, and
transferred them from other comprehensive income to financial expenses in the period in
which the hedging relationship affected profit or loss, in a bid to offset the effect of hedged
item on profit or loss for the current period. The changes in fair value of foreign currency
basis spread were recorded in “Other comprehensive income - others”, and the foreign
currency basis spread was transferred from other comprehensive income to financial
expenses in the period in which the hedging relationship affected profit or loss.
- 225 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(37) Debentures payable
Issuance Nominal Opening Ending
Name of debentures Par value Value date Maturity amount interest rate balance balance
Debentures
denominated in
USD (a) 2,848,500 2022/2/24 5 years 2,848,500 2.88% 3,217,969 3,237,884
(a) The Group issued 5-year USD corporate debentures guaranteed by the Company on 16
February 2022 amounting to USD 450,000,000 (equivalent to RMB 2,848,500,000) with a
fixed nominal interest rate of 2.88%, and the interest is paid semi-annually.
(38) Lease liabilities
Item Ending balance Opening balance
Lease liabilities 3,041,614 3,214,220
Less: Current portion of lease liabilities (1,130,176) (1,166,901)
1,911,438 2,047,319
(39) Deferred income
Opening Increase in the Decrease in the Ending
Item balance current period current period balance
Government grants 1,734,932 195,445 (189,804) 1,740,573
Opening Increase in the Decrease in the Ending Asset related/
Item balance current period current period balance Income related
Government grants related
to industrial upgrading 1,399,293 193,905 (177,771) 1,415,427 Asset related
Asset related/
Other government grants 335,639 1,540 (12,033) 325,146 Income related
1,734,932 195,445 (189,804) 1,740,573
(40) Long-term employee benefits payable
Item Ending balance Opening balance
Supplementary retirement benefits 1,136,280 1,302,495
Others 146,162 131,379
Total 1,282,442 1,433,874
- 226 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(41) Share capital
Movements in the current period
Opening Share-based payment Repurchases Ending
Item balance incentive plan Desterilisation and write-offs Sub-total balance
RMB-denominated ordinary shares -
RMB-denominated ordinary shares
subject to trading restriction 133,563 - (265) (921) (1,186) 132,377
RMB-denominated ordinary shares
not subject to trading restriction 6,892,206 25,112 265 (69,808) (44,431) 6,847,775
Total 7,025,769 25,112 - (70,729) (45,617) 6,980,152
(a) For the six months ended 30 June 2024, the share-based payment incentive plan increased
the share capital by 25,112,000 shares.
(42) Treasury stock
Movements in the current period
Increase in the Decrease in the Ending
Item Opening balance current period current period balance
Treasury stock used for share-based
payment incentive plan 12,871,738 - (6,374,274) 6,497,464
Total 12,871,738 - (6,374,274) 6,497,464
For the six months ended 30 June 2024, the stock ownership schemes granted were
approximately RMB 1,486,057,000. The decrease in treasury stock mainly arose from the
change of purpose and cancellation of the repurchased shares, which amounted to
approximately RMB 5,159,408,000, and a decrease of approximately RMB 1,214,866,000 for
the unlocking of restricted shares and dividend deductions. As at 30 June 2024, treasury stock
mainly comprised treasury stock of approximately RMB 2,102,866,000 used for share-based
payment incentive plan, as well as restricted shares and stock ownership schemes amounting
to approximately RMB 4,394,598,000 that have not met unlock condition, amounting to
approximately RMB 6,497,464,000 in total.
(43) Capital surplus
Opening Increase in the Decrease in the Ending
Item balance current period current period balance
Share premium (a) 17,382,223 1,968,675 (5,831,862) 13,519,036
Share-based payment
incentive plan (b) 2,020,605 780,439 (868,270) 1,932,774
Others 1,840,328 3,488 (48) 1,843,768
Total 21,243,156 2,752,602 (6,700,180) 17,295,578
(a) The increase in share premium arose from the exercise of share options with the amount of
approximately RMB 1,479,980,000, the unlocking of restricted shares with the amount of
approximately RMB 488,695,000; the decrease in share premium arose from the repurchase
and cancellation of treasury stock with the amount of approximately RMB 5,089,600,000,
repurchase and cancellation of restricted shares and the unlocking of restricted shares with
the amount of approximately RMB 742,262,000.
(b) The increase of share-based payment incentive plan arose from expenses attributable to
shareholders’ equity of the parent company in the share-based payment incentive plan with
the amount of approximately RMB 780,439,000, while the decrease arose from the transfer of
approximately RMB 868,270,000 to share premium due to exercise of share-based payment
incentive plan.
- 227 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(44) Other comprehensive income
Other comprehensive income in the balance sheet Other comprehensive income in the income statement
Less:
Other Reclassification
Attributable to comprehensive Amount arising of previous other Attributable to Attributable to
the parent income before income comprehensive the parent minority
Opening company after transferred to Ending tax for the income to profit Less: Income company after shareholders
Item balance tax retained earnings balance current period or loss tax expenses tax after tax
Other comprehensive income items which
will not be reclassified to profit or loss
Changes arising from remeasurement
of defined benefit plan 133,107 15,515 - 148,622 21,006 - (5,491) 15,515 -
Changes in fair value of investments in
other equity instruments 26 (38) - (12) 48 - - (38) 86
Other comprehensive income items which
will be reclassified to profit or loss
Other comprehensive income that will
be transferred subsequently to
profit or loss under the equity
method (64,071) 12,565 - (51,506) 12,565 - - 12,565 -
Effective portion of gains or losses on
hedging instruments in a cash flow
hedge (Note 4(36)) 564,757 (208,372) - 356,385 1,126,938 (1, 363,168) 22,086 (208,372) (5,772)
Differences on translation of foreign
currency financial statements (892,936) (288,336) - (1,181,272) (542,776) - - (288,336) (254,440)
Others (Note 4(36)) 94,915 (22,748) - 72,167 32,711 (55,459) - (22,748) -
Total (164,202) (491,414) - (655,616) 650,492 (1, 418,627) 16,595 (491,414) (260,126)
- 228 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(45) Surplus reserve
Opening Increase in the Decrease in the Ending
Item balance current period current period balance
Statutory surplus reserve 10,702,928 - - 10,702,928
(46) Undistributed profits
Same period of prior
Item Current period year
Undistributed profits at the beginning of the current
period 136,284,347 119,679,202
Add: Net profit attributable to equity owners of the
parent company for the current period 20,804,176 18,232,291
Less: Ordinary share dividends payable (a) (20,776,352) (17,181,616)
Appropriation to general risk reserve (162,738) (5,972)
Reversal of general risk reserve 3,366 -
Undistributed profits at the end of the current period 136,152,799 120,723,905
(a) Ordinary share dividends distributed in the current year
In accordance with the resolution at the Board of Shareholders’ meeting, dated 19 April 2024,
the Company distributed a cash dividend to the shareholders at RMB 3.0 per share,
amounting to approximately RMB 20,780,278,000 calculated by 6,926,759,000 issued shares
less those repurchased; 921,000 repurchased incentive shares in the restricted shares
incentive plan were written off (Note 4(41)), and cash dividend amounting to approximately
RMB 3,926,000 was cancelled. The ordinary share dividend distributed in the current year
amounted to approximately RMB 20,776,352,000.
(47) Operating revenue and cost of sales
Item Current period Same period of prior year
Revenue from main operations 200,982,562 182,685,148
Revenue from other operations 16,291,524 14,303,254
Sub-total 217,274,086 196,988,402
Item Current period Same period of prior year
Cost of sales from main operations 144,395,678 134,877,274
Cost of sales from other operations 14,011,919 12,399,084
Sub-total 158,407,597 147,276,358
(a) Revenue and cost of sales from main operations
Current period Same period of prior year
Products or business type Revenue Cost of sales Revenue Cost of sales
HVAC 101,461,115 74,725,772 92,006,787 70,500,436
Consumer appliances 75,138,372 50,052,891 68,136,204 46,339,869
Robotics and automation
system 15,730,966 12,120,506 16,240,463 12,457,600
Others 8,652,109 7,496,509 6,301,694 5,579,369
Sub-total 200,982,562 144,395,678 182,685,148 134,877,274
- 229 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(a) Revenue and cost of sales from main operations (Cont’d)
For the six months ended 30 June 2024, cost of sales was mainly material costs and labour
costs, which accounted for over 80% of total cost of sales from main operations (for the six
months ended 30 June 2023: over 80%).
(b) Revenue and cost of sales from other operations
Current period Same period of prior year
Item Revenue Cost of sales Revenue Cost of sales
Revenue from sales of materials 14,179,436 13,589,851 12,589,004 11,883,071
Others 2,112,088 422,068 1,714,250 516,013
Sub-total 16,291,524 14,011,919 14,303,254 12,399,084
For the six months ended 30 June 2024, cost of sales from other operations was mainly
material costs, which accounted for over 80% of total cost of sales from other operations (for
the six months ended 30 June 2023: over 80%).
(c) For the six months ended 30 June 2024, above 90% of the total amount of the Group’s
revenue from main operations was recognised at a point in time, and the amount recognised
within a certain period of time mainly included revenue from main operations of robotics and
automation system segment. The Group’s revenue from other operations was recognised at a
point in time.
(48) Interest income and interest costs
The Group’s interest income and expenses arising from financial business are presented as
follows:
Item Current period Same period of prior year
Interest income from loan receivables 653,601 706,004
Including: Interest income from loan receivables to
corporations and individuals 653,601 659,331
Interest income from note discounting - 46,673
Interest income from deposits with banks, other
financial institutions and the Central Bank 193,908 100,887
Interest income 847,509 806,891
Interest costs (1,781) (19,681)
(49) Taxes and surcharges
Item Current period Same period of prior year
City maintenance and construction tax 406,183 379,949
Educational surcharge 296,793 283,215
Others 397,827 377,212
Total 1,100,803 1,040,376
(50) Selling and distribution expenses
Item Current period Same period of prior year
Selling and distribution expenses 21,455,838 17,133,216
For the six months ended 30 June 2024, selling and distribution expenses were mainly
advertisement and promotion fee, after-sales service fee, employee benefits, E-commerce
service fee, storage service fee and property management expenses, which accounted for
over 80% of total selling and distribution expenses (for the six months ended 30 June 2023:
over 80%).
- 230 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(51) General and administrative expenses
Item Current period Same period of prior year
General and administrative expenses 6,693,799 5,670,400
For the six months ended 30 June 2024, general and administrative expenses were mainly
employee benefits, depreciation and amortisation expenses, technical maintenance expenses
and administrative office expenses, which accounted for over 80% of total general and
administrative expenses (for the six months ended 30 June 2023: over 80%).
(52) R&D expenses
Item Current period Same period of prior year
R&D expenses 7,662,534 6,610,954
For the six months ended 30 June 2024, R&D expenses were mainly employee benefits,
depreciation and amortisation expenses, technical development expenses, trial products and
material inputs expenses, which accounted for over 90% of total R&D expenses (for the six
months ended 30 June 2023: over 90%).
(54) Financial income
The Group’s financial income, other than those arising from financial business (Note 4(48)),
are presented as follows:
Item Current period Same period of prior year
Interest expenses (1,064,685) (1,525,683)
Less: Interest income 3,684,635 3,280,782
Add: Exchange gains or losses (2,010,508) (384,103)
Add: Others (2,549) (7,335)
Total 606,893 1,363,661
(54) Asset impairment losses
Item Current period Same period of prior year
Losses on decline in the value of inventories
(Note 4(10)) 328,852 183,782
Impairment losses on contract assets (Note
4(8)) (7,065) (2,212)
Impairment losses on fixed assets (Note
4(17)) - 4,501
Impairment losses on intangible assets
(Note 4(20)) - 2,989
Impairment losses on investment properties 3,584 -
Total 325,371 189,060
- 231 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(55) Credit impairment losses
Item Current period Same period of prior year
Losses on bad debts of accounts receivable (Note
4(4)) 88,034 222,958
Losses on bad debts of other receivables (Note
4(5)) 11,961 7,473
Impairment losses on notes receivable (Note 4(3)) (7,290) (7,545)
Impairment losses on loan receivables (Note 4(9)) (46,254) (1,907)
Losses on impairment of long-term receivables
(Note 4(14)) (4,178) 445
Total 42,273 221,424
(56) Gains/(Losses) on changes in fair value
Item Current period Same period of prior year
Derivative financial instruments 192,641 (170,550)
Investments in equity instruments 55,412 6,370
Others 924 60,477
Total 248,977 (103,703)
(57) Investment income
Item Current period Same period of prior year
Share of profit of associates and joint ventures 431,939 348,545
Investment income from holding of financial assets
held for trading 3,538 27,261
Investment income from disposal of derivative
financial assets and liabilities 25,874 70,165
Others 83,941 (35,817)
Total 545,292 410,154
There is no significant restriction on recovery of investment income of the Group.
(58) Losses on disposal of assets
Item Current period Same period of prior year
Gains on disposal of non-current assets 183,322 38,188
Losses on disposal of non-current assets (69,315) (29,663)
Total 114,007 8,525
(59) Other income
Item Current period Same period of prior year
Special subsidy 670,754 772,764
Additional deduction of input VAT 696,254 -
Total 1,367,008 772,764
- 232 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(60) Income tax expenses
Item Current period Same period of prior year
Current income tax calculated based on tax law and
related regulations 5,625,048 5,274,130
Deferred income tax (1,314,746) (1,695,639)
Total 4,310,302 3,578,491
The reconciliation from income tax calculated based on the applicable tax rates and total profit
presented in the consolidated income statement to the income tax expenses is listed below:
Item Current period Same period of prior year
Total profit 25,451,557 22,107,307
Income tax calculated at tax rate of 25% 6,362,889 5,526,827
Effect of different tax rates applicable to subsidiaries (1,971,643) (1,306,414)
Effect of income tax annual filing for prior periods 193,189 82,378
Income not subject to tax (175,822) (174,666)
Costs, expenses and losses not deductible for tax
purposes 319,461 283,154
Utilisation of previous temporary differences or
deductible losses for which no deferred tax assets
were recognised in prior periods (112,031) (73,589)
Others (305,741) (759,199)
Income tax expenses 4,310,302 3,578,491
(61) Calculation of basic and diluted earnings per share
(a) Basic earnings per share
Basic earnings per share is calculated by dividing consolidated net profit attributable to
ordinary shareholders of the Company by the weighted average number of outstanding
ordinary shares:
Item Unit Current period Same period of prior year
Consolidated net profit attributable to ordinary
shareholders of the parent company RMB’000 20,804,176 18,232,291
Less: Dividends affected by the share-based
payment incentive plan RMB’000 (105,952) (78,122)
Consolidated net profit attributable to ordinary
shareholders of the parent company (net of
dividends affected by the share-based
payment incentive plan) RMB’000 20,698,224 18,154,169
Weighted average number of outstanding
ordinary shares Thousand shares 6,863,659 6,802,764
Basic earnings per share Yuan/share 3.02 2.67
(b) Diluted earnings per share
Diluted earnings per share are calculated by dividing consolidated net profit attributable to
ordinary shareholders of the parent company by the weighted average number of diluted
outstanding ordinary shares:
Item Unit Current period Same period of prior year
Adjusted consolidated net profit attributable to
ordinary shareholders of the parent company RMB’000 20,722,750 18,163,579
Weighted average number of outstanding
ordinary shares Thousand shares 6,863,659 6,802,764
Weighted average number of ordinary shares
increased from share-based payment Thousand shares 21,075 13,202
Weighted average number of diluted
outstanding ordinary shares Thousand shares 6,884,734 6,815,966
Diluted earnings per share Yuan/share 3.01 2.66
- 233 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ‘000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(62) Notes to the cash flow statement
(a) Cash received relating to other operating activities
Item Current period Same period of prior year
Non-operating income 171,480 117,370
Other income 940,469 1,039,322
Revenue from other operations 1,999,567 1,639,020
Financial interest income 608,981 288,732
Others 2,824,854 207,406
Total 6,545,351 3,291,850
(b) Cash paid relating to other operating activities
Item Current period Same period of prior year
General and administrative
expenses and R&D expenses
(excluding employee benefits and
taxes and surcharges) 4,177,055 4,104,482
Selling and distribution expenses
(excluding employee benefits and
taxes and surcharges) 16,068,004 11,919,414
Others 201,676 2,455,242
Total 20,446,735 18,479,138
- 234 -
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(62) Notes to the cash flow statement (Cont’d)
(c) Supplementary information to the cash flow statement
Reconciliation of net profit to cash flows from operating activities is as follows:
Supplementary information Current period Same period of prior year
1) Reconciliation of net profit to cash flows
from operating activities:
Net profit 21,141,255 18,528,816
Add: Asset impairment losses 325,371 189,060
Credit impairment losses 42,273 221,424
Depreciation and amortisation 3,836,068 3,300,549
Losses on disposal of assets (114,007) (8,525)
Gains or losses on changes in
fair value (248,977) 103,703
Financial expenses (1,789,154) (1,653,898)
Investment income (545,292) (410,154)
Decrease in deferred tax assets (1,112,692) (1,561,223)
Increase in deferred tax
liabilities (20,078) (99,937)
Decrease in inventories 6,703,865 14,200,052
Decrease in operating
receivables (16,195,393) (13,908,092)
Increase in operating payables 20,659,223 10,301,904
Share-based payments and
others 805,708 580,995
Net cash flows from operating
activities 33,488,170 29,784,674
2) Net increase/(decrease) in cash and
cash equivalents:
Cash and cash equivalents at the
end of the period 51,500,714 47,560,795
Less: Cash and cash equivalents at
the beginning of the period (59,887,260) (51,131,968)
Net increase in cash and cash
equivalents (8,386,546) (3,571,173)
(d) Composition of cash and cash equivalents
Item Current period Same period of prior year
Cash on hand 1,378 3,894
Cash at bank that can be readily
drawn on demand 20,903,805 20,028,555
Deposits with the Central Bank that can
be readily drawn on demand 77,463 179,898
Deposits with banks and other financial
institutions 30,518,068 27,348,448
Cash and cash equivalents at the end of
the year 51,500,714 47,560,795
235
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(63) Monetary items denominated in foreign currencies
30 June 2024
Foreign currency
Item balance Exchange rate RMB balance
Cash at bank and
on hand
USD 2,608,799 7.1268 18,592,391
JPY 323,251,866 0.0447 14,461,642
HKD 3,530,585 0.9127 3,222,294
EUR 995,676 7.6617 7,628,568
BRL 226,085 1.2821 289,853
VND 713,692,857 0.0003 199,834
Other currencies Not applicable Not applicable 5,056,282
Sub-total 49,450,864
Accounts
receivable
USD 2,388,085 7.1268 17,019,403
JPY 20,696,053 0.0447 925,900
HKD 103,772 0.9127 94,711
EUR 685,546 7.6617 5,252,445
BRL 1,583,602 1.2821 2,030,260
VND 1,093,910,714 0.0003 306,295
Other currencies Not applicable Not applicable 3,246,331
Sub-total 28,875,345
Other receivables
USD 11,105 7.1268 79,140
JPY 1,354,732 0.0447 60,608
HKD 5,433 0.9127 4,959
EUR 13,446 7.6617 103,017
BRL 56,190 1.2821 72,038
Other currencies Not applicable Not applicable 292,148
Sub-total 611,910
236
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(63) Monetary items denominated in foreign currencies (Cont’d)
30 June 2024
Foreign currency
Item balance Exchange rate RMB balance
Short-term borrowings
USD 619,796 7.1268 4,417,165
EUR 154,111 7.6617 1,180,753
Other currencies Not applicable Not applicable 732,119
Sub-total 6,330,037
Accounts payable
USD 278,576 7.1268 1,985,353
JPY 4,310,050 0.0447 192,823
HKD 22,493 0.9127 20,529
EUR 233,875 7.6617 1,791,883
BRL 162,624 1.2821 208,492
Other currencies Not applicable Not applicable 1,880,198
Sub-total 6,079,278
Other payables
USD 9,486 7.1268 67,604
JPY 6,949,528 0.0447 310,908
HKD 1,542 0.9127 1,407
EUR 6,871 7.6617 52,642
Other currencies Not applicable Not applicable 246,680
Sub-total 679,241
Current portion of
non-current liabilities
EUR 538,209 7.6617 4,123,594
Other currencies Not applicable Not applicable 1,336,247
Sub-total 5,459,841
Long-term borrowings
USD 3,413,346 7.1268 24,326,232
Other currencies Not applicable Not applicable 2,891
Sub-total 24,329,123
Debentures payable
USD 454,325 7.1268 3,237,884
Sub-total 3,237,884
Lease liabilities
EUR 90,281 7.6617 691,705
JPY 789,530 0.0447 35,322
Other currencies Not applicable Not applicable 359,425
Sub-total 1,086,452
237
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(63) Monetary items denominated in foreign currencies (Cont’d)
31 December 2023
Foreign currency
Item balance Exchange rate RMB balance
Cash at bank and on
hand
USD 1,807,580 7.0827 12,802,549
JPY 67,585,697 0.0502 3,392,802
HKD 4,708,629 0.9062 4,266,960
EUR 125,066 7.8592 982,921
BRL 123,194 1.4630 180,233
VND 525,993,333 0.0003 157,798
Other currencies Not applicable Not applicable 4,167,818
Sub-total 25,951,081
Accounts receivable
USD 1,438,670 7.0827 10,189,665
JPY 13,985,060 0.0502 702,050
HKD 58,968 0.9062 53,437
EUR 552,957 7.8592 4,345,803
BRL 1,201,854 1.4630 1,758,313
VND 1,553,600,000 0.0003 466,080
Other currencies Not applicable Not applicable 2,811,931
Sub-total 20,327,279
Other receivables
USD 20,097 7.0827 142,344
JPY 1,357,410 0.0502 68,142
HKD 2,224 0.9062 2,015
EUR 19,016 7.8592 149,454
BRL 75,956 1.4630 111,123
Other currencies Not applicable Not applicable 272,520
Sub-total 745,598
238
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(63) Monetary items denominated in foreign currencies (Cont’d)
31 December 2023
Foreign currency
Item balance Exchange rate RMB balance
Short-term borrowings
USD 149,915 7.0827 1,061,802
EUR 264,869 7.8592 2,081,659
HKD 738,351 0.9062 669,094
Other currencies Not applicable Not applicable 74,093
Sub-total 3,886,648
Accounts payable
USD 263,926 7.0827 1,869,310
JPY 5,454,183 0.0502 273,800
HKD 21,812 0.9062 19,766
EUR 221,088 7.8592 1,737,572
BRL 191,699 1.4630 280,456
Other currencies Not applicable Not applicable 2,031,534
Sub-total 6,212,438
Other payables
USD 5,773 7.0827 40,892
JPY 5,429,602 0.0502 272,566
HKD 2,249 0.9062 2,038
EUR 7,696 7.8592 60,485
Other currencies Not applicable Not applicable 247,037
Sub-total 623,018
Current portion of
non-current liabilities
EUR 314,039 7.8592 2,468,095
Other currencies Not applicable Not applicable 4,626,072
Sub-total 7,094,167
Long-term borrowings
USD 3,410,753 7.0827 24,157,339
Other currencies Not applicable Not applicable 5,118,109
Sub-total 29,275,448
Debentures payable
USD 454,342 7.0827 3,217,969
Lease liabilities
EUR 102,338 7.8592 804,298
JPY 974,661 0.0502 48,928
Other currencies Not applicable Not applicable 281,608
Sub-total 1,134,834
239
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
5 Changes of consolidation scope
(1) Business combinations involving enterprises not under common control
(a) Business combinations involving enterprises not under common control in the current year
Nil.
(2) Changes of consolidation scope due to other reasons
(a) Increase of consolidation scope
In January 2024, the Company’s wholly-owned subsidiary GD Midea Heating & Ventilating
Equipment Co., Ltd. and the third-party company SIIX HONG KONG LIMITED jointly
established Jingzhou Midea-SIIX Electronics Co., Ltd., holding 60% and 40% of the shares
respectively.
In February 2024, the Company’s wholly-owned subsidiary Midea America (Canada) Corp.
set up MIDEA COLOMBIA EQUIPMENTS SAS, holding 100% of the shares.
In February 2024, Hiconics Eco-energy Technology Co., Ltd., a wholly-owned subsidiary of
the Company, established Anqing Midea Hiconics Energy Technology Co., Ltd., holding 100%
of the shares.
In February 2024, Midea Electrics Netherlands B.V. and Midea Electric Trading (Singapore)
Co. Pte. Ltd., wholly-owned subsidiaries of the Company, established Midea Peru S.A.C.,
holding 99% and 1% of the shares respectively.
In February 2024, the Company’s wholly-owned subsidiary Midea Electrics Netherlands B.V.
set up GMCC WELLING TURKEY, holding 100% of the shares.
In April 2024, the Company’s wholly-owned subsidiary Midea Electrics Netherlands B.V.
founded Midea Electrics Arabia, holding 100% of the shares.
In April 2024, Swisslog Holding AG, a wholly-owned subsidiary of the Company, established
Swisslog Lithuania UAB, holding 100% of the shares.
In May 2024, Midea (Hainan) Cross-Border E-Commerce Co., Ltd. founded Midea
Refrigerator Manufacturing Co., Ltd., holding 100% of the shares.
In June 2024, Meicloud Technology Co., Ltd., a wholly-owned subsidiary of the Company,
established Meicloud (Shenzhen) Technology Co., Ltd., holding 100% of the shares.
240
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
5 Changes of consolidation scope (Cont’d)
(2) Changes of consolidation scope due to other reasons (Cont’d)
(b) Decrease of consolidation scope
Decrease of consolidation scope mainly includes the deregistration and disposal of subsidiaries.
Details are as follows:
Disposal method of Disposal time-point of
Name of entity the equity the equity
Xinjiang CLOU Guangrun Electronics Co.,
Ltd. Deregistration January 2024
CLOU ENERGY LLC Deregistration February 2024
CLOU Global Holdings (Hong Kong) Co.,
Limited Deregistration March 2024
Zhejiang Meiqin Mother and Baby Products
Co., Ltd. Deregistration March 2024
Shanghai Swisslog Healthcare Technology
Co., Ltd. Deregistration April 2024
Wuhu Xinhe Technology Co., Ltd. Deregistration May 2024
Hainan Qichu Electric Appliances Co., Ltd. Deregistration May 2024
Hebei Fenglong Photovoltaic Power
Generation Co., Ltd. Deregistration May 2024
Jiangxi Nanchang Public Transportation
Group New Energy Co., Ltd. (Formally
known as: Nanchang CLOU Public
Transportation New Energy Co., Ltd.) Change of equity June 2024
Yongxiu County CLOU Public Transportation
New Energy Co., Ltd. Change of equity June 2024
Foshan Shunde Midea Petty Loan Co., Ltd. Change of equity June 2024
241
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
6 Interests in other entities
(1) Interests in subsidiaries
(a) Composition of principal subsidiaries
Major business Place of Shareholding (%)
Subsidiaries location registration Nature of business Direct Indirect Acquisition method
Manufacture and sales of household Business combinations involving
GD Midea Air-Conditioning Equipment Co., Ltd. Foshan, PRC Foshan, PRC air conditioner 73% 7% enterprises not under common control
GD Midea Group Wuhu Air-Conditioning Equipment Manufacture and sales of household Business combinations involving
Co., Ltd. Wuhu, PRC Wuhu, PRC air conditioner 93% 7% enterprises not under common control
Wuhu Maty Air-Conditioning Equipment Co., Ltd. Wuhu, PRC Wuhu, PRC Manufacture of air conditioner 87% 13% Establishment
Manufacture and sales of household
Chongqing Midea Air-Conditioning Equipment Co., Ltd. Chongqing, PRC Chongqing, PRC air conditioner 95% 5% Establishment
GD Midea Heating & Ventilating Equipment Co., Ltd. Foshan, PRC Foshan, PRC Manufacture of air conditioner 90% 10% Establishment
Manufacture and sales of air
Zhejiang Meizhi Compressor Co., Ltd. Ningbo, PRC Ningbo, PRC conditioner parts 100% - Establishment
Business combinations involving
Hefei Midea Refrigerator Co., Ltd. Hefei, PRC Hefei, PRC Manufacture of refrigerator 75% 25% enterprises not under common control
Guangdong Midea Kitchen Appliances Manufacturing Manufacture of small household
Co., Ltd. Foshan, PRC Foshan, PRC appliances - 100% Establishment
Foshan Shunde Midea Washing Appliances Manufacture of small household
Manufacturing Co., Ltd. Foshan, PRC Foshan, PRC appliances 75% 25% Establishment
Foshan Shunde Midea Electrical Heating Appliances Manufacture of small household
Manufacturing Co., Ltd. Foshan, PRC Foshan, PRC appliances - 100% Establishment
Manufacture of small household Business combinations involving
Wuhu Midea Kitchen & Bath Appliances Mfg. Co., Ltd. Wuhu, PRC Wuhu, PRC appliances 90% 10% enterprises under common control
Wuxi Little Swan Electric Co., Ltd. Wuxi, PRC Wuxi, PRC Manufacture of laundry appliance 100% - Establishment
Manufacture and sales of air
Hefei Midea Heating & Ventilating Equipment Co., Ltd. Hefei, PRC Hefei, PRC conditioner 99% 1% Establishment
Manufacture and sales of household
Guangzhou Hualing Refrigerating Equipment Co., Ltd. Guangzhou, PRC Guangzhou, PRC air conditioner 75% 25% Establishment
Manufacture of small household
Wuhu Midea Life Appliances Mfg Co., Ltd. Wuhu, PRC Wuhu, PRC appliances 100% - Establishment
Midea Electric Trading (Singapore) Co., Pte. Ltd. Singapore Singapore Export trade - 100% Establishment
Midea Group Finance Co., Ltd. Foshan, PRC Foshan, PRC Financial industry 95% 5% Establishment
Foshan Shunde Midea Household Appliances Industry
Co., Ltd. Foshan, PRC Foshan, PRC Investment holding 100% - Establishment
Midea International Corporation Company Limited Hong Kong Hong Kong Investment holding 100% - Establishment
Midea Electric Netherlands (I) B.V. Netherlands Netherlands Investment holding - 100% Establishment
242
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
6 Interests in other entities (Cont’d)
(1) Interests in subsidiaries (Cont’d)
(a) Composition of principal subsidiaries (Cont’d)
Major business Shareholding (%)
Subsidiaries location Place of registration Nature of business Direct Indirect Acquisition method
Toshiba Consumer Marketing Manufacture of household Business combinations involving
Corporation Japan Japan appliances - 100% enterprises not under common control
Manufacture of household Business combinations involving
TLSC Japan Japan appliances - 100% enterprises not under common control
Manufacture and sales of Business combinations involving
KUKA Germany Germany robots - 100% enterprises not under common control
Ningbo Midea United Materials
Supply Co., Ltd. Ningbo, PRC Ningbo, PRC Wholesale and retail 100% - Establishment
Annto Logistics Supply Chain
Technology Co., Ltd. Wuhu, PRC Wuhu, PRC Logistics - 74% Establishment
Midea Capital Corporation Business combinations involving
Limited. Foshan, PRC Foshan, PRC Investment 95% 5% enterprises not under common control
Midea Innovation Investment
Co., Ltd. Shenzhen, PRC Shenzhen, PRC Investment 85% 15% Establishment
Manufacture and sales of
Midea Group (Shanghai) intelligent household
Co. Ltd. Shanghai, PRC Shanghai, PRC appliances 90% 10% Establishment
Midea Investment Development
Company Limited British Virgin Islands British Virgin Islands Investment - 100% Establishment
Anhui Meizhi Precision Manufacture and sales of air
Manufacturing Co., Ltd. Wuhu, PRC Wuhu, PRC conditioner parts 95% 5% Establishment
Hubei Midea Refrigerator
Co., Ltd. Jingzhou, PRC Jingzhou, PRC Manufacture of refrigerator 97% 3% Establishment
243
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
6 Interests in other entities (Cont’d)
(2) Interests in associates
The Group’s associates have no significant influence on the Group and are summarised as
follows:
Item Current period Same period of prior year
Aggregated carrying amount
of investments 4,840,550 4,731,210
Aggregate of the following
items in proportion
Net profit (i) 431,939 348,545
Other comprehensive income
(i) 12,565 36,188
Total comprehensive income 444,504 384,733
(i) The net profit and other comprehensive income have taken into account the impacts of both
the fair value of the identifiable assets and liabilities upon the acquisition of investment in
associates and the unification of accounting policies adopted by the associates to those
adopted by the Company.
(3) Unconsolidated structured entities
The Group has no significant unconsolidated structured entities.
7 Segment information
The reportable segments of the Group are the business units that provide different products
or services, or operate in different areas. Different businesses or areas require different
technologies and marketing strategies, the Group, therefore, separately manages the
production and operation of each reportable segment and evaluates their operating results
respectively, in order to make decisions about resources to be allocated to these segments
and to assess their performance.
The Group identified 4 reportable segments as follows:
- Heating & ventilation, as well as air-conditioner
- Consumer appliances
- Robotics and automation system
- Others
Inter-segment transfer prices are determined by reference to selling prices to third parties.
The assets are allocated based on the operations of the segments and the physical locations
of the assets. The liabilities are allocated based on the operations of the segments. Expenses
indirectly attributable to the segments are allocated based on the proportion of each
segment’s revenue.
Operating expenses include cost of sales, interest costs, fee and commission expenses,
taxes and surcharges, selling and distribution expenses, general and administrative expenses,
R&D expenses and financial income.
244
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
8 Segment reporting
(a) Information on the profit or loss, assets and liabilities of reported segment
Segment information as at and for the six months ended 30 June 2024 is as follows:
Current period
Robotics and
Item HVAC Consumer appliances automation system segments and unallocated Offsetting Total
Revenue from external customers 111,400,967 81,564,415 16,016,279 9,140,178 - 218,121,839
Inter-segment revenue 2,226,979 450,163 316,178 4,851,504 (7,844,824) -
Operating expenses (100,223,325) (72,827,225) (16,131,918) (13,089,375) 7,555,413 (194,716,430)
Segment profit 13,404,621 9,187,353 200,539 902,307 (289,411) 23,405,409
Other profit or loss 2,046,148
Total profit 25,451,557
Total assets 227,909,429 193,793,682 51,374,621 253,560,340 (220,006,163) 506,631,909
Total liabilities 162,792,725 141,948,835 34,297,072 258,616,299 (267,308,390) 330,346,541
Long-term equity investments in
associates and joint ventures 490,991 124,297 43,698 4,181,564 - 4,840,550
Share of profit of associates and joint ventures 279,988 1,871 (244) 150,324 - 431,939
Increase in non-current assets
(excluding long-term equity investments,
financial assets, goodwill and deferred tax
assets) 2,063,255 1,175,975 530,341 1,496,335 - 5,265,906
Losses on/(Reversal of) asset
impairment 56,629 238,752 23,880 6,110 - 325,371
Losses on/(Reversal of) credit
impairment 6,262 (33,927) 11,412 109,672 (51,146) 42,273
Depreciation and amortisation
expenses 1,238,644 942,080 718,340 941,477 (4,473) 3,836,068
245
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
8 Segment reporting (Cont’d)
(a) Information on the profit or loss, assets and liabilities of reported segment (Cont’d)
Segment information as at and for the six months ended 30 June 2023 is as follows:
Same period of prior year
Consumer Robotics and Other segments
Item HVAC appliances automation system and unallocated Offsetting Total
Revenue from external customers 102,081,554 72,090,725 16,415,970 7,207,365 - 197,795,614
Inter-segment revenue 1,700,542 431,191 207,239 3,143,282 (5,482,254) -
Operating expenses (91,806,494) (64,098,118) (16,569,793) (9,179,710) 5,266,038 (176,388,077)
Segment profit 11,975,602 8,423,798 53,416 1,170,937 (216,216) 21,407,537
Other profit or loss 699,770
Total profit 22,107,307
Total assets 206,653,458 174,772,080 42,413,492 238,278,221 (199,377,616) 462,739,635
Total liabilities 145,053,148 131,067,029 35,217,226 232,764,048 (239,604,331) 304,497,120
Long-term equity investments in
associates and joint ventures 372,493 121,024 6,675 4,231,018 - 4,731,210
Share of profit of associates and joint
ventures 176,833 1,860 1,014 168,838 - 348,545
Increase in non-current assets (excluding
long-term equity investments, financial
assets, goodwill and deferred tax
assets) 2,614,762 1,018,190 445,409 6,309,441 - 10,387,802
Losses on/(Reversal of) asset impairment 127,243 (50,654) 102,331 10,140 - 189,060
Losses on/(Reversal of) credit impairment 109,005 73,334 (14,215) 19,570 33,730 221,424
Depreciation and amortisation expenses 1,106,209 992,394 619,592 553,473 28,881 3,300,549
246
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
8 Segment reporting (Cont’d)
(b) Geographical area information
The Group’s revenue from external customers domestically and in foreign countries and
geographical areas, and the total non-current assets other than long-term equity investments,
financial assets, goodwill and deferred tax assets located domestically and in foreign
countries or geographical areas (including Germany, Japan, Hong Kong and Macao of China,
Singapore, and Brazil) are as follows:
Revenue from external customers Current period Same period of prior year
Domestic 127,045,708 117,259,490
In other countries/geographical areas 91,076,131 80,536,124
Total 218,121,839 197,795,614
Total non-current assets Current period Same period of prior year
Domestic 42,292,745 41,274,102
In other countries/geographical areas 17,406,219 18,255,385
Total 59,698,964 59,529,487
9 Related parties and significant related party transactions
(1) Information of the parent company
(a) General information of the parent company
Name of the
parent company Relationship Place of registration Nature of business
Midea Holding Shunde District,
Co., Ltd. Controlling shareholder Foshan Commercial
The Company’s ultimate controlling person is Mr. He Xiangjian.
(b) Registered capital and changes in registered capital of the parent company
Name of the parent company Registered capital
Midea Holding Co., Ltd. 330,000
(c) The percentages of shareholding and voting rights in the Company held by the parent
company
At the end of the period At the beginning of the period
Name of the Shareholding (%) Voting rights Shareholding (%) Voting
parent company Direct Indirect (%) Direct Indirect rights (%)
Midea Holding
Co., Ltd. 31.08% - 31.08% 30.87% - 30.87%
(2) Information of the Company’s subsidiaries
Please refer to Note 6(1) for the information of the Company’s principal subsidiaries.
247
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
9 Related parties and significant related party transactions (Cont’d)
(3) Information of other related parties
Name of other related parties Relationship
Controlled by direct relatives of the Company’s
Orinko Advanced Plastics Co., Ltd. ultimate controlling shareholder
Guangdong Ruizhu Intelligent Controlled by the Company’s ultimate controlling
Technology Co., Ltd. shareholder
Guangdong Hekang Medical Controlled by the Company’s ultimate controlling
Management Co., Ltd. shareholder
(4) Information of related party transactions
Other significant related party transactions of the Group other than those already mentioned
in this report are as follows
The following primary related party transactions are conducted in accordance with normal
commercial terms at agreed price by reference to the market price.
(a) Purchase of goods
Content of related Current Same period of prior
Related parties party transactions period year
Orinko Advanced Plastics
Co., Ltd. Purchase of goods 627,324 658,784
(b) Sales of goods:
Content of related Current Same period of
Related parties party transactions period prior year
Guangdong Ruizhu Intelligent
Technology Co., Ltd. Sales of goods 58,307 90,344
Guangdong Hekang Medical
Management Co., Ltd. Sales of goods 101,246 95,974
Total 159,553 186,318
(4) Balances with related parties
Other significant related party transactions of the Group other than those already mentioned
in this report are as follows:
Ending Opening
Item Related parties balance balance
Orinko Advanced Plastics
Accounts payable Co., Ltd. 41,831 181,281
248
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
10 Share-based payment
(1) Stock option incentive plan
(a) Movements in stock options during the six months
For the six months ended 30
Item June 2024 (’000)
Stock options issued at the beginning of the year 188,158
Stock options granted during the period -
Stock options exercised during the period (25,111)
Stock options lapsed during the period (24,354)
Stock options issued at the end of the period 138,693
As at 30 June 2024, the residual contractual maturity date of the Fifth Reserved Stock Option
Incentive Plan is on 10 March 2025. The residual contractual maturity date of the Sixth Stock
Option Incentive Plan is on 29 May 2025. The residual contractual maturity date of the
Seventh Stock Option Incentive Plan is on 4 June 2024. The residual contractual maturity date
of the Eighth Stock Option Incentive Plan is on 3 June 2026. The residual contractual maturity
date of the Ninth Stock Option Incentive Plan is on 7 June 2027.
(2) Restricted stock schemes
(a) Movements in restricted shares during the six months
For the six months ended 30
Item June 2024 (’000)
Restricted shares at the beginning of the year 39,903
Restricted shares granted during the period -
Restricted shares unlocked during the period (16,709)
Restricted shares lapsed during the period (2,766)
Restricted shares at the end of the period 20,428
(3) Stock ownership schemes
Pursuant to the Midea Group stock ownership schemes for 2024 (the “stock ownership
schemes for 2024”) approved at the 2023 annual shareholders’ meeting in 2024, the
Company granted 20,106,662 shares to employees, and the exercise periods of the granted
shares are two years, three years and four years from the date of grant. Based on the
Company’s performance appraisal and individual performance appraisal, 40%, 30% and 30%
of the stock ownership schemes will be granted, respectively.
249
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
10 Share-based payment (Cont’d)
(4) For the six months ended 30 June 2024, the total expenses recognised under the share-
based payment incentive plan was RMB 805,345,000. As at 30 June 2024, the balance
relating to the share-based payment incentive plan and accrued from capital surplus was RMB
1,932,773,000.
11 Contingencies
As at 30 June 2024, the amount in tax disputes involving Brazilian subsidiary with 51%
interests held by the Company was about BRL 697 million (equivalent to RMB 894 million)
(Some cases have lasted for more than 10 years. The above amount included the principal
and interest). As at 30 June 2024, relevant cases were still at court. Original shareholders of
the Brazilian subsidiary have agreed to compensate the Company according to verdict results
of the above tax disputes. The maximum compensation amount is about BRL 157 million
(equivalent to RMB 202 million). With reference to judgements of third-party attorneys,
management believes that the probability of losing lawsuits and making compensation is low,
and expects no significant risk of tax violations.
12 Commitments
(1) Capital commitments
Capital expenditures contracted for by the Group but are not yet necessary to be recognised
on the balance sheet as at the balance sheet date are as follows:
Item Ending balance Opening balance
Buildings, machinery and
equipment 3,867,051 4,005,911
In April 2024, the Company reached an agreement with Arbonia AG to acquire all the equity
interest of its climate division. The purchase consideration for this transaction was
approximately EUR 648,800,000. In June 2024, the Company reached an agreement with
HERITAGE B to acquire 97.38% equity interest of Teka Industrial, S.A. The purchase
consideration for this transaction was approximately EUR 175,000,000. As of the reporting
date, these considerations still needs to meet transaction conditions including regulatory
approval, the transactions have not been completed, the payment consideration have not
been finalized and have not been paid yet.
13 Events after the balance sheet date
Nil
14 Financial risks
The Group is exposed to various financial risks in the ordinary course of business, mainly
including:
Market risk (mainly including foreign exchange risk, interest rate risk and other price
risk)
Credit risk
Liquidity risk
250
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
14 Financial risks (Cont’d)
The following mainly relates to the above risk exposures and relevant causes, objectives,
policies and process of risk management, method of risk measurement, etc.
The objective of the Group's risk management is to seek balance between risk and income,
minimising the adverse impact of financial risks on the Group’s financial performance.
Pursuant to the risk management objective, the Group has made risk management policies to
identify and analyse the risks it is exposed to and set appropriate risk resistant level and
design relevant internal control procedures to monitor the Group’s risk level. The Group
reviews regularly these risk management policies and relevant internal control systems to
adapt to changes in market condition or its operating activities.
(1) Market risk
(a) Foreign exchange risk
The Group mainly operates in China, Europe, the USA, Asia, South America and Africa for the
manufacturing, sales, investments and financing activities. Any foreign currency denominated
monetary assets and liabilities other than in RMB would subject the Group to the risk arising
from fluctuation of exchange rate.
The Group’s finance department has a professional team to manage the risk arising from
fluctuation of exchange rate, with approach of the natural hedge for settling currencies,
signing forward foreign exchange hedging contracts and controlling the scale of foreign
currency assets and liabilities, to minimise foreign exchange risk, and to reduce the impact of
exchange rate fluctuations on business performance.
(b) Interest rate risk
The Group’s interest rate risk mainly arises from interest bearing borrowings including long-
term bank borrowings and debentures payable. Financial liabilities issued at floating rates
expose the Group to cash flow interest rate risk. Financial liabilities issued at fixed rates
expose the Group to fair value interest rate risk. The Group determines the relative
proportions of its fixed rate and floating rate contracts depending on the prevailing market
conditions. As at 30 June 2024, the Group’s long-term borrowings with floating rates were part
of its long-term borrowings.
The Group’s finance department at its headquarters continuously monitors the interest rate
position of the Group. Increases in interest rates will increase the cost of new borrowing and
the interest costs with respect to the Group’s outstanding floating rate borrowings, and
therefore could have a material adverse effect on the Group’s financial performance.
Management makes adjustments timely with reference to the latest market conditions and
may enter into interest rate swap agreements to mitigate its exposure to interest rate risk.
(c) Other price risk
The Group’s other price risk mainly arises from the Group’s financial instruments measured at
fair value. As at 30 June 2024, if expected price of the investments held by the Group
fluctuated, the Group’s gains or losses on changes in fair value would be affected accordingly.
251
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
14 Financial risks (Cont’d)
(2) Credit risk
Credit risk is managed on a grouping basis. Credit risk mainly arises from cash at bank and
on hand, deposits with the Central Bank, deposits with banks and other financial institutions,
notes receivable, accounts receivable, receivables financing, loan receivables, other
receivables, contract assets, lease receivables, other debt investments, other current assets,
other non-current assets and derivative financial assets at fair value through profit or loss that
are not included in the impairment assessment scope.
The Group expects that there is no significant credit risk associated with cash at bank,
deposits with the Central Bank and deposits with banks and other financial institutions since
they are deposited at state-owned banks and other medium or large size listed banks with
good reputation and high credit rating. Management does not expect that there will be any
significant losses from non-performance by these banks.
The Group has policies to limit the credit exposure on notes receivable, accounts receivable,
contract assets, loan receivables, other receivables, lease receivables, fixed-income products
in other current assets, other debt investments and fixed-income products in other non-current
assets. The Group assesses the credit quality of and sets credit limits on its customers by
taking into account their financial position, the availability of guarantee from third parties, their
credit history and other factors such as current market conditions. The credit history of the
customers is regularly monitored by the Group. In respect of customers with a poor credit
history, the Group will use written payment reminders, or shorten or cancel credit periods, to
ensure the overall credit risk of the Group is limited to a controllable extent.
In addition, the amount and type of collateral required for loan receivables depend on an
assessment of the credit risk of the counterparty. The collaterals pledged for pledged loans
are mainly receivables and inventories. The Group monitors the market value of the
collaterals, requests additional collaterals according to relevant agreements and monitors the
market value of collaterals when reviewing the adequacy of provision for impairment. As at 30
June 2024, the Group had no significant collateral or other credit enhancements held as a
result of the debtor’s mortgage.
(3) Liquidity risk
Cash flow forecasting is performed by each subsidiary of the Group and aggregated by the
Group’s finance department in its headquarters. The Group’s finance department at its
headquarters monitors rolling forecasts of the Group's short-term and long-term liquidity
requirements to ensure it has sufficient cash and securities that are readily convertible to cash
to meet operational needs, while maintaining sufficient headroom on its undrawn committed
borrowing facilities from major financial institutions so that the Group does not breach
borrowing limits or covenants on any of its borrowing facilities to meet the short-term and
long-term liquidity requirements.
252
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
14 Financial risks (Cont’d)
(3) Liquidity risk (Cont’d)
At the balance sheet date, the Group’s undiscounted contractual cash flows are consistent
with its carrying amount and financial liabilities within one year include notes payable,
accounts payable, other payables, financial liabilities held for trading, derivative financial
liabilities and other current liabilities. The remaining financial liabilities are presented as
undiscounted contract cash flows by maturity date as follows:
As at 30 June 2024:
On demand or Over 5
Item within a year 1 to 2 years 2 to 5 years years Total
Short-term borrowings
(including interest) 18,637,887 - - - 18,637,887
Customer deposits and deposits
from banks and other financial
institutions (including interest) 59,974 - - - 59,974
Current portion of non-current
liabilities (including interest) 10,390,302 - - - 10,390,302
Long-term borrowings
(including interest) 482,422 28,276,529 10,304,545 151,786 39,215,282
Debentures payable (including
interest) 92,363 92,363 3,299,423 - 3,484,149
Lease liabilities (including
interest) - 814,624 936,645 424,235 2,175,504
Other non-current liabilities - 2,424 42,731 - 45,155
Sub-total 29,662,948 29,185,940 14,583,344 576,021 74,008,253
As at 31 December 2023:
On demand or Over 5
Ending balance within a year 1 to 2 years 2 to 5 years years Total
Short-term borrowings
(including interest) 8,870,346 - - - 8,870,346
Customer deposits and deposits
from banks and other financial
institutions (including interest) 89,022 - - - 89,022
Current portion of non-current
liabilities (including interest) 13,549,559 - - - 13,549,559
Long-term borrowings
(including interest) 611,563 38,259,251 7,812,923 154,216 46,837,953
Debentures payable (including
interest) 91,792 91,792 3,324,903 - 3,508,487
Lease liabilities (including
interest) - 815,583 1,069,277 446,468 2,331,328
Other non-current liabilities - 2,218 36,947 - 39,165
Sub-total 23,212,282 39,168,844 12,244,050 600,684 75,225,860
253
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
15 Fair value estimates
The level in which fair value measurement is categorised is determined by the level of the fair
value hierarchy of the lowest level input that is significant to the entire fair value measurement:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
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.
(1) Assets and liabilities measured at fair value on a recurring basis
As at 30 June 2024, the financial assets and liabilities measured at fair value on a recurring
basis by the above three levels are analysed below:
Fair value at the end of the period
Level 1 Level 2 Level 3 Total
Financial assets measured at
fair value -
Financial assets held for
trading 2,258,780 486,311 - 2,745,091
Derivative financial assets - 966,625 - 966,625
Receivables financing - 19,892,103 - 19,892,103
Other current assets -
hedging instruments and
transferable certificate of
deposit - 590,216 - 590,216
Other debt investments
(including the current
portion) - 6,424,870 - 6,424,870
Investments in other equity
instruments - - 37,710 37,710
Other non-current financial
assets - 2,931,156 4,304,815 7,235,971
Total assets 2,258,780 31,291,281 4,342,525 37,892,586
Financial liabilities measured at
fair value -
Financial liabilities held for
trading - - 1,075,388 1,075,388
Derivative financial liabilities - 658,694 - 658,694
Other current liabilities –
hedging instruments - 40,782 - 40,782
Other non-current liabilities - 2,798 - 2.798
Total liabilities - 702,274 1,075,388 1,777,662
254
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
15 Fair value estimates (Cont’d)
(1) Assets and liabilities measured at fair value on a recurring basis (Cont’d)
As at 31 December 2023, the financial assets and liabilities measured at fair value on a
recurring basis by the above three levels are analysed below:
Fair value at the end of the year
Item Level 1 Level 2 Level 3 Total
Financial assets measured at fair value -
Financial assets held for trading 1,726,584 64,004 - 1,790,588
Derivative financial assets - 1,278,161 - 1,278,161
Receivables financing - 13,330,008 - 13,330,008
Other current assets - hedging
instruments and transferable certificate of
deposit - 422,593 - 422,593
Other debt investments (including the current
portion) - 10,983,476 - 10,983,476
Investments in other equity instruments - - 37,874 37,874
Other non-current financial assets - 2,082,347 5,687,591 7,769,938
Total assets 1,726,584 28,160,589 5,725,465 35,612,638
Financial liabilities measured at fair value -
Financial liabilities held for trading - - 1,346,674 1,346,674
Derivative financial liabilities - 257,668 - 257,668
Other current liabilities - hedging
instruments - 155,554 - 155,554
Other non-current liabilities - 2,282 - 2,282
Total liabilities - 415,504 1,346,674 1,762,178
The Group takes the date on which events causing the transfers between the levels take place
as the timing specific for recognising the transfers. There was no significant transfer of fair
value measurement level of the above financial instruments.
The fair value of financial instruments traded in an active market is determined at the quoted
market price; and the fair value of those not traded in an active market is determined by the
Group using valuation technique. The valuation models used mainly comprise discounted
cash flow model and market comparable corporate model. The inputs of the valuation
technique mainly include risk-free interest rate, projected exchange rate and estimated annual
yield.
There were no changes in the valuation technique for the fair value of the Group’s financial
instruments in the current year.
The changes in Level 3 assets and liabilities are analysed below:
Investments in other equity
instruments and other non-current Financial liabilities held for
Item financial assets trading
1 January 2024 5,725,465 (1,346,674)
Increase - -
Decrease (67,227) 63,870
Transfer out of Level 3 (1,345,172) -
Total gains for the current period
(Losses)/Income recognised in the
income statement 22,922 207,416
Gains recognised in other
comprehensive income 6,537 -
30 June 2024 4,342,525 (1,075,388)
255
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
15 Fair value estimates (Cont’d)
(1) Assets and liabilities measured at fair value on a recurring basis (Cont’d)
Investments in other equity
instruments and other non- Financial liabilities held
Item current financial assets for trading
1 January 2023 6,389,915 (1,580,771)
Increase 172,008 -
Decrease (282,046) 364,272
Transfer into Level 3 (375,466) -
Total gains for the current period
Income recognised in the income
statement (199,037) (130,175)
Losses recognised in other comprehensive
income 20,091 -
31 December 2023 5,725,465 (1,346,674)
(a) The fair value of this part of other non-current financial assets, investments in other equity
instruments and financial liabilities held for trading is measured using discounted cash flows
approach and market comparable companies approach. The judgement of Level 3 of the fair
value hierarchy is based on the materiality of unobservable inputs towards calculation of
whole fair value. Significant unobservable inputs mainly include the financial data of targeted
company, market multiple of comparable companies and risk adjusted discount rates.
Assets and liabilities subject to Level 2 fair value measurement are mainly receivables
financing, structural deposits, transferable certificates of deposit and cross-currency interest
rate swaps, and are evaluated by discounted cash flows approach, market approach and
income approach.
(2) Assets and liabilities not measured at fair value but for which the fair value is disclosed
The Group’s financial assets and financial liabilities measured at amortised cost mainly
include: cash at bank and on hand, deposits with the Central Bank, deposits with banks and
other financial institutions, notes receivable, accounts receivable, contract assets, loan
receivables, other receivables, lease receivables, current portion of non-current assets
(excluding other debt investments due within one year mentioned in Note 4(11)), other current
assets (excluding those mentioned in Note 15(1)), notes payable, accounts payable, contract
liabilities, short-term borrowings, lease liabilities, long-term borrowings, debentures payable,
current portion of non-current liabilities, customer deposits and deposits from banks and other
financial institutions, other payables and other current liabilities.
Carrying amounts of the Group’s financial assets and financial liabilities measured at
amortised cost as at 30 June 2024 and 31 December 2023 approximated to their fair value.
16 Capital management
The Group’s capital management policies aim to safeguard the Group’s ability to continue as a
going concern in order to provide returns for shareholders and benefits for other stakeholders,
and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of
dividends paid to shareholders, refund capital to shareholders, issue new shares or sell assets
to reduce debts.
256
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
16 Capital management (Cont’d)
The Group is not subject to external mandatory capital requirements, and monitors capital
structure on the basis of debt-to-asset ratio (total liabilities divide total assets).
As at 30 June 2024 and 31 December 2023, the Group’s debt-to-asset ratio is as follows:
Item Ending balance Opening balance
Total liabilities 330,346,541 311,738,535
Total assets 506,631,909 486,038,184
Debt-to-asset ratio 65.20% 64.14%
17 Notes to the Company’s financial statements
(1) Other receivables
Item Ending balance Opening balance
Other receivables 23,972,416 19,621,009
Less: Provision for bad debts (7,996) (6,650)
Total 23,964,420 19,614,359
(a) Other receivables are analysed by ageing as follows:
Ageing Ending balance Opening balance
Within 1 year 23,604,805 19,277,501
1 to 2 years 364,748 340,449
Over 2 years 2,863 3,059
Total 23,972,416 19,621,009
(b) Provision for bad debts and changes in book balance statement
Stage 1 Sub-total
12-month ECL (Grouping) 12-month ECL (Individual)
Book Provision for Provision for bad Provision for bad
Item balance bad debts Book balance debts debts
1 January 2024 19,468,253 6,650 152,756 - 6,650
Transfer to Stage 3 in the
current year - - - - -
Net increase in the current
period 4,488,200 1,346 (136,793) - 1,346
Including: Write-off in the
current period - - - - -
Derecognition - - - - -
30 June 2024 23,956,453 7,996 15,963 - 7,996
(c) As at 30 June 2024, other receivables of the Company at Stage 1 are analysed as follows:
(i) As at 30 June 2024, other receivables at Stage 1 for which the related provision for bad debts
was provided on an individual basis are analysed as follows:
Ending balance
12-month ECL Provision for
Category Book balance rate bad debts Reason
Expected risk
Stage 1 15,963 0% - loss is low
257
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
17 Notes to the Company’s financial statements (Cont’d)
(1) Other receivables (Cont’d)
(c) As at 30 June 2024, other receivables of the Company at Stage 1 are analysed as follows
(Cont’d)
(ii) As at 30 June 2024, other receivables for which the related provision for bad debts was
provided on a grouping basis were all at Stage 1, which are analysed as follows:
Ending balance Opening balance
Book Provision for bad Book Provision for bad
balance debts balance debts
Provision Provision
Stage 1 Amount Amount ratio Amount Amount ratio
Related parties and
security
deposit/guarantee
payables grouping 23,956,453 (7,996) 0.03% 19,468,253 (6,650) 0.03%
(d) As at 30 June 2024, the five largest other receivables aggregated by debtor are summarised
and analysed as follows:
Book % of total Provision for
Unit Nature balance Ageing balance bad debts
Company A Current accounts 21,201,391 Within 1 year 88.44% (6,360)
Company B Current accounts 1,071,000 Within 1 year 4.47% (321)
Company C Current accounts 339,700 Within 1 year 1.42% (102)
Company D Current accounts 339,172 Within 1 year 1.41% (102)
Company E Current accounts 172,620 Within 1 year 0.72% (52)
Sub-total 23,123,883 96.46% (6,937)
(2) Long-term equity investments
Long-term equity investments are classified as follows:
Item Ending balance Opening balance
Subsidiaries (a) 82,170,763 72,398,113
Associates (b) 3,593,119 3,559,731
Sub-total 85,763,882 75,957,844
Less: Provision for impairment - -
Total 85,763,882 75,957,844
258
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
17 Notes to the Company’s financial statements (Cont’d)
(2) Long-term equity investments (Cont’d)
(a) Subsidiaries
Movements in the current period
Increase in Decrease in Cash dividends attributable to the parent
Name of investee Opening balance investment investment Others Ending balance company declared in the current period
Wuxi Little Swan Electric Co., Ltd. 20,375,731 - - 34,487 20,410,218 -
Foshan Shunde Midea Household Appliances Industry Co., Ltd. 5,952,052 - - 380 5,952,432 -
Guangdong Midea Electric Co., Ltd. 5,003,142 10,000,000 - - 15,003,142 -
Beijing Wandong Medical Technology Co., Ltd. 4,353,202 - - - 4,353,202 41,545
Midea Group Finance Co., Ltd. 3,365,323 - - 1,046 3,366,369 -
Midea Innovation Investment Co., Ltd. 2,135,000 - - - 2,135,000 -
GD Midea Air-Conditioning Equipment Co., Ltd. 2,085,575 - - 53,894 2,139,469 -
Guangdong Midea Microwave Oven Manufacturing Co., Ltd. 1,880,041 - - - 1,880,041 -
Guangdong Midea Intelligent Technologies Co., Ltd. 1,862,211 - - 636 1,862,847 -
Shenzhen CLOU Electronics Co., Ltd. 1,661,674 - - - 1,661,674 -
Guangdong Meizhi Compressor Limited 1,953,745 - - 20,482 1,974,227 -
Guangdong Midea Consumer Electric Manufacturing Co., Ltd. 1,221,741 - - 11,903 1,233,644 -
Hefei Midea Heating & Ventilating Equipment Co., Ltd. 1,087,616 - - 2,017 1,089,633 -
Hainan Midea Building Technology Co., Ltd. 921,500 - - - 921,500 -
Midea Group (Shanghai) Co. Ltd. 946,605 - - 20,206 966,811 -
GD Midea Heating & Ventilating Equipment Co., Ltd. 954,417 - - 29,092 983,509 -
Hubei Midea Refrigerator Co., Ltd. 913,180 - - 17,969 931,149 -
Anhui Meizhi Precision Manufacturing Co., Ltd. 838,718 - - 1,971 840,689 -
Wuhu Maty Air-Conditioning Equipment Co., Ltd. 780,781 - - 1,895 782,676 -
Guangdong Midea Building Technology Co., Ltd. 769,430 - - - 769,430 -
Wuhu Xinhe Technology Co., Ltd. 742,684 - (742,684) - - -
Guangdong Meizhi Precision- Manufacturing Co., Ltd. 640,730 - - 8,353 649,083 -
Foshan Shunde Midea Washing Appliances Manufacturing Co., Ltd. 626,681 - - 17,007 643,688 -
Hefei Midea Refrigerator Co., Ltd. 562,678 - - 3,067 565,745 -
Guangzhou Hualing Refrigerating Equipment Co., Ltd. 542,852 - - 7,070 549,922 -
Ningbo Midea United Materials Supply Co., Ltd. 505,985 - - 1,553 507,538 -
GD Midea Group Wuhu Air-Conditioning Equipment Co., Ltd. 481,769 - - - 481,769 -
Guangzhou Midea Hualing Refrigerator Co., Ltd. 464,888 - - 13,913 478,801 -
GD Midea Environment Appliances Mfg. Co.,Ltd. 428,061 - - 7,090 435,151 -
Others 8,340,101 - (74,188) 335,491 8,601,404 18,208
Total 72,398,113 10,000,000 (816,872) 589,522 82,170,763 59,753
259
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
(All amounts in RMB ’000 Yuan unless otherwise stated)
[English translation for reference only]
17 Notes to the Company’s financial statements (Cont’d)
(2) Long-term equity investments (Cont’d)
(b) Associates
Investments in associates mainly refer to the investments in Guangdong Shunde Rural
Commercial Bank Co., Ltd., Hefei Royalstar Motor Co., Ltd. and other companies by the
Company.
(3) Operating revenue
Operating revenue mainly comprises revenue from other operations, including the trademark
royalty income, rental income and management fee income, obtained by the Company from
the subsidiaries.
(4) Investment income
Item Current period Same period of prior year
Income from long-term equity investments
under cost method 59,753 56,350
Investment income from holding of financial
assets held for trading - 7,389
Income from long-term equity investments
under equity method 160,639 124,458
Others 238,994 1,242
Total 459,386 189,439
There is no significant restriction on repatriation of the Company’s investment income.
260
1 Statement of non-recurring profit or loss
Item Current period
Gains or losses on disposal of non-current assets 99,217
Except for the effective hedging activities related to the Group’s
ordinary activities, gains or losses on changes in fair value arising from
financial assets held for trading, derivative financial assets, financial
liabilities held for trading, derivative financial liabilities, other non-current
financial assets, and investment income from disposal of financial assets
held for trading, derivative financial assets, financial liabilities held for
trading, derivative financial liabilities, other non-current financial assets. 364,409
Others (mainly including government grants, reversal of provision
for impairment of receivables tested for impairment on an individual basis,
compensation income, penalty income and other non-operating income
and expenses) 683,733
Sub-total 1,147,359
Less: Effect of income tax (367,479)
Effect of minority interests (after tax) (156,582)
Net non-recurring profit or loss attributable to equity owners of the parent
company 623,298
Basis for preparation of statement of non-recurring profit or loss
Under the requirements in Explanatory Announcement No. 1 on Information Disclosure for
Companies Offering Their Securities to the Public - Non-recurring Profit or Loss (Revised in
2023) issued by the China Security Regulatory Commission (“CSRC”), non-recurring profit or
loss refers to those arises from transactions and events that are not directly relevant to
ordinary activities, or that are relevant to ordinary activities, but are extraordinary and not
expected to happen frequently that would have an influence to the financial statements users’
making economic decisions based on the financial performance and profitability of an
enterprise.
2 Return on net assets and earnings per share
The Group's return on net asset and earnings per share calculated pursuant to the
Compilation Rules for Information Disclosure of Companies Offering Securities to the Public
No. 9 - Calculation and Disclosure of Return on Net Asset and Earnings per Share (revised in
2010) issued by CSRC and relevant requirements of accounting standards are as follows:
Earnings per share (in RMB Yuan)
Weighted average Basic earnings Diluted earnings
return on net assets (%) per share per share
Current Same period of Current Same period Current Same period of
Item period prior year period of prior year period prior year
Net profit attributable to
ordinary shareholders of
the Company 12.20% 12.14% 3.02 2.67 3.01 2.66
Net profit attributable to
ordinary shareholders of
the Company, net of
non-recurring profit or
loss 11.83% 11.76% 2.92 2.58 2.92 2.58
261
3 Differences in accounting data under domestic and overseas accounting standards
(1) Differences in the net profit and net assets disclosed in the financial reports prepared under
China Accounting Standards (CAS) and International Accounting Standards (IAS)
□ Applicable √ Not applicable
(2) Differences in the net profit and net assets disclosed in the financial reports prepared under
CAS and foreign accounting standards
□ Applicable √ Not applicable
Midea Group Co., Ltd.
Legal representative: Fang Hongbo
19 August 2024
262
