[年报]海尔智家(600690):海尔智家股份有限公司2022年年度报告（英文版）
原标题:海尔智家:海尔智家股份有限公司2022年年度报告（英文版） I. The Board of Directors, the Board of Supervisors, directors, supervisors and senior management of Haier Smart Home Co., Ltd. (‘the Company’) hereby assure that the content set out in the annual report is true, accurate and complete, and free from any false record, misleading representation or material omission, and are individually and collectively responsible for the content set out therein. II. All Directors of the Company have attended the board meetings.III. Hexin Certified Public Accountants Limited LLP has issued a standard and unqualified audit report for the Company. IV. Li Huagang (legal representative of the Company), Gong Wei (chief financial officer of the Company) and Ying Ke (the person in charge of accounting department) hereby certify that the financial report set out in the annual report is true, accurate and complete.V. Proposal of profit distribution or proposal of capitalizing capital reserves for the reporting period resoluted and adopted by the Board Proposal of profit distribution for the reporting period are examined and reviewed by the Board: to declare a cash dividend of RMB5.66 per 10 shares (tax inclusive) to all shareholders based on the total number of shares held on record date and after deducting the repurchased shares from the repurchase account upon the execution of distribution proposal, with proposed distribution amounting to RMB5,297,529,553.10 (tax inclusive). The proportion of cash distribution is 36.01% of the net profit attributable to shareholder of parent company of the Company for the year. If there is any change in the total share capital of the Company during the period from the date of this report to the record date of the equity distribution, the total distribution amount will be remained unchanged with corresponding adjustment to the proportion of distribution per share.VI. Disclaimer in respect of forward-looking statements √ Applicable □Not Applicable Forward-looking statements such as future plans, development strategies as set out in this report do not constitute the Company’s substantial commitment to investors. Investors are advised to pay attention to investment risks. VII. Is there any fund occupation by controlling shareholders and other related parties for non-operational purposes? No VIII. Is there any provision of external guarantee in violation of the prescribed decision-making procedures? No Important Notice IX. Are there more than half of the Directors who are unable to guarantee the truthfulness, accuracy and completeness of the annual report disclosed by the Company?No X. Important Risk Warnings For the possible risks which the Company may encounter, please refer to the relevant information set out in the section of ‘MANAGEMENT DISCUSSION AND ANALYSIS’ in this report.XI. Others □ Applicable √ Not Applicable Chairman: Li Huagang Haier Smart Home Co., Ltd 30 March 2023 Contents LETTER TO SHAREHOLDERS 4 SECTION I DEFINITIONS 7 SECTION II GENERAL INFORMATION OF THE COMPANY AND KEY FINANCIAL INDICATORS 9SECTION III MANAGEMENT DISCUSSION AND ANALYSIS 16 SECTION IV CORPORATE GOVERNANCE 53 SECTION V ENVIRONMENTAL AND SOCIAL RESPONSIBILITIES 93 SECTION VI SIGNIFICANT EVENTS 108 SECTION VII CHANGES IN SHARES AND INFORMATION ABOUT SHAREHOLDERS 127SECTION VIII RELEVANT INFORMATION OF PREFERRED SHARES 140 SECTION IX RELEVANT INFORMATION OF BONDS 141 SECTION X FINANCIAL REPORT 144
Haier Smart Home delivered another year of record performance in 2022. Our global sales revenue grew 7.2% to RMB243.514 billion, net profit increased by 12.5% to RMB14.711 billion and recurring net profit rose by 18% to RMB13.963 billion under China GAAP. Our products are gaining grounds in almost all markets around the world. As one of the Fortune 500 companies, Haier Smart Home is committed to meeting the expectations of our stakeholders on ESG practices by lowering carbon emissions through the lifetime of our products, advocating diversity and inclusion, implementing responsible sourcing, creating value in the interest of the society, and promoting sustainable corporate governance. Haier Smart Home continued to be named “Most Admired Company” by Fortune in 2022, and our subsidiary GE Appliances was once again certified as Great Place to Work in the US. In 2022, unprecedented inflationary pressure in the US and looming energy crisis in Europe caused retraction in demand for home appliances; while our supply chain, distribution network, logistic operation and fulfilment system in the Company’s biggest market were disrupted by public health emergency in the fourth quarter. What we have achieved in an extraordinary year like 2022 was truly remarkable, and it could only be made possible with winning spirit, shared goal and decisive actions from the entire organization in fulfilling our commitment to always prioritize consumer experience. In taking on the role of Chairman of Haier Smart Home in June 2022, I have spent a great deal of time with our customers, employees, partners as well as Haier Group, amongst other shareholders. What has been reinforced is our stakeholders’ shared expectation for Haier Smart Home to become a long-standing leader with sustainability that transcends the ups and downs in the economy. This requires Haier Smart Home to continue outperforming the industry in the next three years, in order to attract and retain talents, while creating greater value for shareholders and employees. During this time, we must be more efficient and transparent not only in the way we interact with our users, in the product we make and in the service we provide, but also in the business operations and supply chain system; we ought to become the elephant that can dance by being agile and embrace the latest technological development. In the next three years, Haier Smart Home will strengthen the foundation of our sustainable development. As a responsible corporate citizen of global influence, we remain committed to reducing carbon emissions in product design, manufacturing and recycling; building a sustainable and ethical supply chain; creating a workplace for our people to fulfil their dreams and realize individual value; eliminating bureaucracy and avoiding disorientation in processes. Across the globe, we will enhance our commitment to local communities, and strengthen our ties with the places where we operate. Looking ahead, the abrupt reversal in globalisation and increasing financial volatility remain source of uncertainty during Haier Smart Home’s global brand portfolio building. The way to success lies with placing users experience at the heart of our business while transforming ourselves by accelerating digitalisation and innovation. Letter to shareholders The pandemic appears to be over, however lingering aftereffects such as lower labour participation rate and supply chain fragmentation will inevitably impact demand in home appliance and HVAC sectors, against this backdrop, quality growth is only made possible in countries with substantial domestic market, manufacturing scales and ample supply of engineering talents; and businesses that can achieve rapid profit growth are those with engaged workforce, production efficiency and consumer goodwill. Capitalising on our advantages in the world’s largest home appliance market, efficient supply chain and engineering expertise in China, Haier Smart Home is in the best position to strengthen our global competitiveness as long as we drive innovation with technology, redefine experience with digitalization and manage the business with start-up sensibility. The Internet of Things (IoT) and advancements in energy efficiency are two driving forces that will transform the industry. Harnessing these technologies is the focus of Haier Smart Home’s future R&D. IoT technology gives home appliance businesses better consumer insights via interactive experience. After the initial configuration, home appliance businesses can accelerate product upgrades and improve algorithm to enhance user recognition based on feedback on product quality, functionality and scenario applications utilising sensors, user behaviour analysis and big data applications. In addition to the breakthrough in consumer robotics and smart lighting we made in 2022, future IoT development will focus on appliances for elderly, cleaning robots and whole house smart management systems.In January 2023, the Company established a rotary compressor joint venture with Shanghai Highly, a leading manufacturer of residential compressors, to facilitate integrated R&D of our home air conditioning products. In addition, we consolidated leadership with air-sourced heat pump & solar water heater solutions designed to provide efficient alternative heating solutions for hotels, campuses and hospitals. Since 2006, we have been developing magnetic centrifugal chiller in Chinese market since 2006. Compared to MRV systems, this technology could increase COP/IPLV by 100% and we have been number one globally in magnetic chillers for four consecutive years. The Company has also developed air levitation centrifugal chiller and integrated energy management solutions, which will become solid foundation facilitating innovations in our global commercial HVAC business. Aspired to be the global leader like refrigerator and washing machine businesses, our home and central air conditioner businesses ought to become the new pillar of future growth, while investments must continue in small appliance and kitchen appliance to grow R&D and supply chain competitiveness. We have established leadership in the more significant markets of China and the US, but our position and profitability demand further progress in other regions. The way forward is through relentless product innovation and brand building, during which process Haier Smart Home must remain committed to designing high quality and creative appliances that deliver user-centric experience. We must stay attuned to local markets and build a solid reputation with reliable and attentive services. This strategy also requires us to allocate our supply chain and distribution resource to cater for the characteristics of each product category, for instance, we do not necessarily have to make all of the small appliances in our own factories and digital applications online could be playing a more important role in marketing our small appliance.Letter to shareholders The new generation of consumers is demanding personalised and customised scenarios that integrate appliances with home furnishings, thus unlocking significant business opportunities that inspired us to create scenario-based project of Three-Winged Bird, specializing in redefining in-store experience by creating immersive display of smart lighting, smart kitchen, smart air & temperature solution as well as water management, all of which could be mixed & matched to suit personal taste. More importantly, we would like this entire process to be efficient and transparent, and we are committed to being their trustworthy partner in creating the smart home experience right from the beginning.It is rather lamentable that as companies grow bigger, they often lose touch with the latest trends and technological breakthroughs when the organization becomes too entwined with bureaucracy. In order to achieve long-standing prosperity, our next step is to make Haier a place that inspires young generation Z with dreams, to take pride in creating amazing value for our users, instead of burying their passion with frivolous details. Adopting a ‘start-up’ mindset is fundamental to the vitality of our organisation. We have initiated an internal debate trying to encourage practices that lead to operational excellence and eliminate those who don’t. I would like our marketing department to look beyond sales figures, and spend more time with our customers and focus on their future prospects in Haier’s ecosystem. I have tasked our product and scenario designers to better understand what end-users think of our products, and draw inspirations through user engagement. Decisions should be made based on critical consumer insights generated from sharing of market demand in a boundaryless organization. The next three years will see a determined drive to re-engineer the organisation, not only to improve operational efficiency, but to free up financial resources that will fuel investments in talents and technologies for the future.I feel a great sense of responsibility during this turbulent time, a bold transformation is what will position Haier Smart Home better in value creation. Motivated by our winning spirit and guided by our goals, we look forward to embarking upon this exciting journey to a brighter future.Once again, I would like to thank all our shareholders for your trust and support as we embrace a sustainable future together! Section I Definitions I. DEFINITIONS Unless otherwise stated in the context, the following terms should have the following meanings in this report: Definition of frequently used terms CSRC China Securities Regulatory Commission SSE Shanghai Stock Exchange The Company, Haier Smart Home Co., Ltd., its original name is ‘Qingdao Haier Co., Haier Smart Home Ltd.’, and the original short name is ‘Qingdao Haier’.Four Major Securities China Securities Journal, Shanghai Securities News, Securities Times, Newspapers Securities Daily Haier Electrics, 1169 Haier Electronics Group Co., Ltd. (a company originally listed in Hong Kong, stock code: 01169.HK), a subsidiary as accounted for in the consolidated statement of the Company. Haier Electrics has been privatized by way of H shares issuance on 23 December 2020 and became a wholly owned subsidiary of the Company since then. GEA GE Appliances, household appliances assets and business of General Electric Group, have currently been owned by the Company. FPA Fisher & Paykel Appliances Holdings Limited (Chinese name: 斐雪派克), was established in 1934 and is known as the national appliance brand of New Zealand, the global top-level kitchen appliance brand and the famous luxury brand of the world. It has products including ventilator, gas stove, oven, dishwasher, microwave oven, built-in freezer, washing machine, clothes dryer and etc. Its business covers over 50 countries/regions across the world. FPA is a wholly-owned subsidiary of the Company. Candy Candy Group (Candy S.p.A), is an international professional appliances manufacturer from Italy. Since its establishment in 1945, it has been committed to enabling the global users to enjoy a higher quality of life through innovative technologies and quality services. Candy Group has been prestigious in the global market with users all over the world via its ten self-owned professional household appliance brands. In January 2019, Candy became a wholly-owned subsidiary of the Company.CMM China Market Monitor Co., Ltd., as an authoritative market research institute in Chinese household appliances area, was established in 1994 and has been focusing on research of retail sales in China consumption Section I Definitions Euromonitor Euromonitor, established in 1972, is the leading strategic market information supplier and has over 40-years of experience in respect of publishing market report, commercial reference data and on-line database. They create data and analysis on thousands of products and services around the world. All View Cloud All View Cloud (AVC) is a big data integrated solution provider to the smart home field, providing enterprises with big data information services, regular data information services and special data services.GFK GFK Group, the world's leading market research company. After a long period of development and accumulation, GFK Group's global market research business covers consumer durables research, consumer research, media research, healthcare market research and special studies. IEC The International Electrotechnical Commission, founded in 1906, is the world’s first organization for the preparation and publication of international electrotechnical standardization and is responsible for international standardization for electrical engineering and electronic engineering. The goals of the commission include: to effectively meet the needs of the global market; to ensure that the standards and conformity assessment programs are applied globally in a prioritized manner and to the greatest extent; to assess and improve the quality of products and services involved in its standards; to create conditions for the common use of complicated systems; to improve the effectiveness of the industrialization process; to improve human health and safety, and to protect the environment. IEEE The Institute of Electrical and Electronics Engineers, an international association of electronic technology and information science engineers, is currently the largest non-profit professional technology society in the world. It is committed to the development and research of electrical, electronic, computer engineering and science-related fields, and has now developed into an international academic organization with great influence in terms of the fields of space, computer, telecommunications, biomedicine, power and consumer electronics. Model of RenDanHeYi The concept of ‘Achieving win-win via RenDanHeYi’is the guarantee of Haier’s sustainable operation and the driving force of the Company featuring a self-motivated and empowering corporate culture. “Ren” is an employee who has the spirit of entrepreneurship and innovation; “Dan” is to create value for users. The “RenDanHeYi “management model encourages employees to create value for users with an entrepreneurial mindset, and to achieve self-value in line with the those of the Section II General Information of the Company and Key Financial Indicators I. INFORMATION OF THE COMPANY Chinese name 海尔智家股份有限公司 Chinese short name 海尔智家 English name Haier Smart Home Co., Ltd. English short name Haier Smart Home Legal representative Li Huagang II. CONTACT PERSON AND CONTACT INFORMATION Secretary to the Representative of Company Secretary Board securities affairs (D/H shares) Others Name Liu Xiaomei Liu Tao Ng Chi Yin, Trevor Global Customer Service Hotline Address Department of Department of Room 3513, 35th / Securities of Haier Securities of Haier Floor, The Center, Smart Home Co., Smart Home Co., 99 Queen’s Road Ltd., Haier Science Ltd., Haier Science Central, Central, and Technology and Technology Hong Kong Innovation Innovation Ecological Park, Ecological Park, No.1 Haier Road, No.1 Haier Road, Qingdao City Qingdao City – – Tel 0532 88931670 0532 88931670 +852 2169 0000 4006 999 999 – – Fax 0532 88931689 0532 88931689 +852 2169 0880 / Email [email protected] [email protected] [email protected] / Section II General Information of the Company and Key Financial IndicatorsIII. SUMMARY OF THE GENERAL INFORMATION Registered Address Haier Industrial Park, Laoshan District, Qingdao City (now known as Haier Science and Technology Innovation Ecological Park, Laoshan District, Qingdao City) Historical Changes to the Prior to the Company’s listing in 1993, the registered address of the Registered Address Company was No.165 Xiaobaigan Road, Sifang District, Qingdao City, Shandong Province, and has changed to the current address since 1994, during which the address name was adjusted in line with the change of name of the industrial park but the actual site remains unchanged. Business address Haier Science and Technology Innovation Ecological Park, Laoshan District, Qingdao City Postal code of the business 266101 address Website https://smart-home.haier.com/cn/ Email [email protected] IV. PLACE FOR INFORMATION DISCLOSURE AND DEPOSIT Newspapers and websites Shanghai Securities News, Securities Times, China Securities Journal, for annual report Securities Daily disclosure Stock Exchange Website for www.sse.com.cn annual report disclosure as designated by the CSRC Other websites for annual https://smart-home.haier.com/cn/, www.xetra.com, www.dgap.de, report disclosure https://www.hkexnews.hk Deposit place of annual Department of Securities of Haier Smart Home Co., Ltd., report Haier Science and Technology Innovation Ecological Park, No.1 Haier Road, Qingdao City V. SUMMARIZED INFORMATION OF SHARES OF THE COMPANY Summarized information of shares of the Company Stock Short Stock Exchange of Stock Short Name Before Type of Shares Shares Listed Name Stock Code Variation A-shares Shanghai Stock Haier Smart Home 600690 Qingdao HaierExchange D-shares Frankfurt Stock Haier Smart Home 690D Qingdao HaierExchange H-shares Hong Kong Stock Haier Smart Home 6690 / Section II General Information of the Company and Key Financial IndicatorsVI. OTHER RELATED INFORMATION Accounting firm engaged Name Hexin Certified Public Accountants LLPby the Company Business Address 24th Floor, Century Building, (domestic) No.39 Donghai Road West, Qingdao City Name of signing Zhao Bo, Li Xiang Zhi accountant Accounting firm engaged Name HLB Hodgson Impey Cheng Limitedby the Company Business address 31st Floor, Gloucester Tower, The Landmark, (overseas) 11 Pedder Street, Central, Hong Kong Special Administrative Region Name of signing Jack, Tian Sun Kit accountant Note: Accounting firm engaged by the Company (domestic and overseas): Pursuant to the motion for the appointment of an auditor approved at the Company’s 2021 Annual Shareholders‘Meeting, the Company engaged Hexin Certified Public Accountants LLP and HLB Hodgson Impey Cheng Limited to issue the China Accounting Standards and International Accounting Standards auditing report respectively for the Company’s 2022 annual report. VII. KEY ACCOUNTING DATA AND FINANCIAL INDICATORS IN THE RECENT THREE YEARS (I) Key accounting data Unit and Currency: RMB Yoy change Key accounting data 2022 2021 (%) 2020 After adjustment Before adjustment Operating revenue 243,513,563,670.73 227,105,817,641.69 227,556,143,618.17 7.22 209,723,430,081.03Net profit attributable to shareholders of the listed company 14,710,923,491.99 13,078,840,517.10 13,067,038,271.85 12.48 8,883,129,055.16Net profit after deduction of non- recurring profit or loss attributable to shareholders of the listed company 13,962,931,853.78 11,831,272,558.29 11,831,272,558.29 18.02 6,457,813,335.37Net cash flows from – operating activities 20,153,505,783.35 23,235,380,690.95 23,129,640,417.72 13.26 17,609,513,831.64Section II General Information of the Company and Key Financial IndicatorsYoy change At the end of 2022 At the end of 2021 (%) At the end of 2020After adjustment Before adjustment Net assets attributable to shareholders of the listed company 93,422,647,664.43 79,985,092,528.06 79,810,927,325.55 16.80 66,837,525,701.87Total assets 235,842,254,826.77 217,741,133,577.31 217,459,494,212.74 8.31 203,498,169,276.71(II) Key financial indicators Yoy Key financial change indicators 2022 2021 (%) 2020 After adjustment Before adjustment Basic earnings per share(RMB/share) 1.58 1.41 1.41 12.06 1.34 Diluted earnings per share (RMB/share) 1.57 1.40 1.40 12.14 1.31 Basic earnings per share after deducting non-recurring profit or loss (RMB/share) 1.50 1.27 1.27 18.11 0.97 Decreased Weighted average by 0.45 return on net assets percentage (%) 16.81 17.26 17.29 point 17.68 Weighted average return on net assets Increased after deducting by 0.30 non- recurring profit percentage or loss (%) 15.95 15.65 15.65 point 12.85 Explanation of the key accounting data and financial indicators of the Company as at the end of the reporting period for the previous three years □ Applicable √ Not applicable Section II General Information of the Company and Key Financial IndicatorsVIII. DIFFERENCES IN ACCOUNTING DATA UNDER DOMESTIC AND OVERSEAS ACCOUNTING STANDARDS (I) Differences in net profit and net asset attributable to shareholders of listed company in financial report disclosed in accordance with International Accounting Standards and China Accounting Standards □ Applicable √ Not applicable There is no difference between the net profit and net assets attributable to shareholders of the listed company presented in the consolidated financial statements disclosed in accordance with International Accounting Standards and China Accounting Standards.(II) Differences in net profit and net asset attributable to shareholders of the listed company in financial statements disclosed in accordance with overseas accounting standards and China Accounting Standards □ Applicable √ Not applicable Apart from the financial statements prepared in accordance with International Accounting Standards, the Company did not prepared any financial statements in accordance with other overseas accounting standards. (III) Explanation on the difference between the domestic and overseas accounting standards: □ Applicable √ Not applicable IX. KEY FINANCIAL DATA OF 2022 BY QUARTER Unit and Currency: RMB Q4 Q1 Q3 (October- (January-March) Q2 (April-June) (July-September) December) Operating revenue 60,250,997,851.46 61,606,524,610.76 62,891,243,547.88 58,764,797,660.63Net profit attributable to shareholders of the listed Company 3,517,044,899.45 4,432,039,573.25 3,716,522,018.59 3,045,317,000.70Net profit after deduction of non- recurring profit or loss attributable to shareholders of the listed Company 3,190,978,313.06 4,299,715,392.32 3,730,558,477.25 2,741,679,671.15 Net cash flows from operating activities 1,154,796,354.40 4,809,451,302.82 5,240,826,180.55 8,948,431,945.58 Explanation on the difference between quarterly data and disclosed regular reporting data□ Applicable √ Not applicable Section II General Information of the Company and Key Financial IndicatorsX. NON-RECURRING PROFIT AND LOSS ITEMS AND AMOUNT Non-recurring profit and loss items Amount in 2022 Amount in 2021Profit and loss from disposal of non-current assets 209,436,774.95 95,443,538.78Government subsidies included in current profit or loss, except for government subsidies that are closely related to the Company’s normal business operations and gained constantly at a fixed amount or quantity according to certain standard based on state policies 766,426,467.17 717,084,575.78Net profit and loss of subsidiaries arising from business combinations under common control of the current period from the beginning of the period to the date of consolidation 12,934,615.51 10,786,626.61 Profit and loss from fair value changes of financial assets held for trading, derivative financial assets, financial liabilities held for trading and derivative financial liabilities, as well as investment gains arising from disposal of financial assets held for trading, derivative financial assets, financial liabilities held for trading and derivative financial liabilities and other debt investments, except the effective – hedging related to the normal operations of the Company 23,321,060.42 512,402,328.52Other non-operating income and expenses except the – aforementioned items 29,750,173.25 60,282,401.05 reduction: Effect of income tax 167,413,005.22 135,105,480.15Effect of minority equity interest (After Tax) 20,321,980.53 13,326,031.78Total 747,991,638.21 1,247,567,958.81 For the Company’s designation of extraordinary gain or loss items as defined in the”Explanatory — Announcement on Information Disclosure for Companies Offering Their Securities to the Public No.1 Extraordinary Gains or Losses”, and for extraordinary gain or loss items as illustrated in the”Explanatory Announcement on Information Disclosure for Companies Offering Their Securities to the — Public No.1 Extraordinary Gains or Losses“designated as recurring gain or loss items, reasons shall be specified. □ Applicable √ Not applicable Section II General Information of the Company and Key Financial IndicatorsXI. ITEMS MEASURED BY FAIR VALUE √ Applicable □ Not applicable Unit and Currency: RMB Affected amount Changes in the to profit of current Items Opening balance Closing balance current period period – Wealth management products 2,168,622,090.00 14,638,968.26 2,153,983,121.74 92,094,300.47Investment in other equity instruments 4,851,884,944.63 5,851,882,930.20 999,997,985.57 31,607,357.22 Investment in trading equity instruments 330,557,610.82 336,743,065.02 6,185,454.20 106,216,247.55– Investment funds 150,516,274.37 168,430,847.63 17,914,573.26 37,211,579.82– Derivative financial instruments 176,525,574.88 61,674,330.75 114,851,244.13 142,693,890.40– Total 7,678,106,494.70 6,433,370,141.86 1,244,736,352.84 335,400,215.82XII. OTHERS □ Applicable √ Not Applicable Section III Management Discussion and Analysis I. DISCUSSION AND ANALYSIS ON OPERATIONS In 2022, the Company realized sales revenue of RMB243.514 billion, representing an increase of 7.2% from 2021. Revenue growth was driven by: (1) the strengths of high-end brands which enhanced user value, along with the promotion of Three-Winged Bird brand that boosted sales of scenario-based product sets and increased transaction value; (2) overseas market expansions leveraging globalised supply chain and R&D platforms as well as in-depth market network to launch leading products and improve price index; (3) the development of new product categories including tumble dryers, dishwashers, heat pumps and home cleaning robots. In 2022, net profit attributable to the owners of the Company amounted to RMB14.711 billion, representing a growth of 12.5% from 2021; net profit attributable to owners of the Company after non-recurring items reached RMB13.963 billion, up 18.0% from 2021. (1) Gross profit margin remained flat to 2021 at 31.3%, domestic gross margin expansion was driven by product mix upgrade, development of globalised platforms, digitalization in procurement and R&D, as well as lower commodities prices in the second half of the year; the overseas market recorded minor gross margin contraction as the benefits of better product mix and price increases were offset by cost pressure related to rising commodities prices. (2) Selling expense ratio reduced by 0.3 percentage points to 15.9%, attributable to efficiency enhancement from digitalizing marketing, logistics and warehouses. (3) Administrative expense ratio reduced by 0.2 percentage points to 4.5%, achieved by digitally enhanced operational processes and organizational efficiency. (4) Financial expense ratio went down by 0.4 – percentage points to 0.1%, the reduction was attributable to increase in interest income, improved exchange risk management, however this was partially offset by higher interest expense caused by interest rate increase overseas. Net cash flow from operating activities in 2022 was RMB20.154 billion, operations remained solid with net cash flow to net profit ratio reached 1.37, attributable to improved working capital management in China. (I) Smart Home Business in China In 2022, revenue of smart home business in China grew by 4.6% from 2021 reaching RMB126.379 billion, the growth was attributable to ① market share gains from outperforming the industry in refrigerators, washing machines, air conditioners, and water heaters; ② distribution network expansion to capture strong momentum from e-commerce and franchised stores; ③ increased sales of product sets with higher average ticket price from Three-Winged Bird scenario-based solutions; ④ enhanced user engagement and conversions through providing services and design solutions in first and second tier markets, and offering door-to-door services to rural households. 1. Household Food Storage and Cooking Solutions (1) Refrigerator and Freezer Business In 2022, refrigerator business achieved sales revenue of RMB43.199 billion, representing an increase of 3.5% year-on-year. According to CMM, the Company’s retail share of refrigerators went up 2.5 percentage points to 43.9% offline; and increased 0.5 percentage points to 39.2% online. Section III Management Discussion and Analysis The Company spearheaded industry development in food preservation, large-volume products and connectivity. The Company served a variety of user needs through brand portfolio of Casarte, Haier and Leader. (1) Leveraging breakthroughs in built-in design, structural configuration and heat dissipation technology, Casarte was able to introduce seamless built-in range and achieved 180% revenue growth from its built-in refrigerators during the reporting period. (2) Featuring cutting-edge freshness preservation and refrigeration technologies, more than one million units of Haier full-space freshness preservation refrigerator were sold, including Boguan (博觀) series, could maintain humidity level at 90% in the refrigerator zone with zero temperature fluctuations in the freezer, allowing ingredients to stay fresh for 7 and 15 additional days in the chilled and frozen sections compared to ordinary refrigerators, over 50,000 units were sold in its first year on the market at an average price of over RMB15,000. During the reporting period, freezer business achieved a revenue growth of 11% partly driven by the introduction of large-size upright freezers designed for home use. In May 2022, Haier’s upright freezer was awarded the highest honour of recognition by Stiftung Warentest, Germany’s leading consumer testing institution. Meanwhile, revenue of commercial freezers also grew by 19%. Export business The Company focused on brand premiumisation and product innovation featuring large multi-door refrigerators and freshness preservation technology to expand market share overseas. In Europe, Haier ranked first in large multi-door refrigerators with market share of over 40%. In Japan, the Company launched ultra-thin large-volume TZ freezer series, boosting market share of large refrigerators by 4.6 percentage points to 43%. In Vietnam, market share of high-end large refrigerators reached 40%.(2) Kitchen appliance business In 2022, kitchen appliance segment recorded sales revenue of RMB3.763 billion, a year-on-year increase of 7.7% and Casarte’s revenue contribution continued to increase. According to CMM, the Company’s offline retail share of kitchen appliances rose 1.4 percentage points year-on-year to 8.4%, ranking top three in the industry for the first time. The Company launched a series of innovative products that were well-received by the market. Casarte’s constant air volume range hood was equipped with wind pressure sensor and automatic fan adjustment, to provide strong ventilation and efficient extraction, while reducing noise level by 5dB to 43dB. Casarte’s ovens created self-cooking technology at 300oC, a pizza could be cooked within three minutes, and baking is automatically stopped once the food is ready. This product ranked first in market share among ovens priced above RMB11,000. Casarte’s dishwashers featuring drawer-style compartments equipped with large-diameter spray arm that rinsed dishes at 360o to achieve thorough cleaning. During the reporting period, revenue of Casarte’s dishwashers recorded double-digit revenue growth.Section III Management Discussion and Analysis Export business Export revenue grew 25% in 2022. In addition, the Company continued making effort to increase in-house production and improve operational efficiency.2. Household Laundry Management Solutions During the reporting period, the Company’s washing machine business achieved sales revenue of RMB31.614 billion, a year-on-year increase of 3.1%. According to CMM, the Company’s offline retail share of washing machines rose 1.8 percentage points to 46%, and retail share stayed flat at 40.4% online. Retail share of tumble dryers increased 6.4 percentage points to 39.3% offline and 6 percentage points to 31% online.The Company has strengthened high-end washing machine market leadership through product innovation. (1) Casarte’s Zhongzihemei (中子和美) washer & dryer combo integrated washing, drying and clothes caring with real-time data sharing during each process. It was designed to reduce creases, wear & tear, and consume less energy. (2) Haier brand is committed to developing innovative technologies that enhance energy and water efficiency. Its Essence Wash washing machine was equipped with a premix compartment and high-pressure spraying technology to achieve powerful stain removal and reduce wear & tear by pre-mixing detergent. More than 200,000 units have been sold within three months since its launch. The Company also captured new opportunities in tumble dryers with revenue growth of over 80% in 2022. Casarte Xiannuo (纖諾) dryer helped grow the Company’s market share in units above RMB10,000 to 46.6%.Export Business The Company focused on product upgrade and user interaction to enhance experience. Despite industry-wide weakness, IoL data indicates that the Company still managed to grow export revenue by 4%, by capturing energy efficiency market opportunities with swift upgrade of entire washing machine range to energy efficiency Class A in Europe; in Japan, heat pump and front-load washer combo contributed to the 50% revenue growth.3. Air and Energy Solutions During the reporting period, the Company’s air and energy solution business realized sales revenue of RMB33.947 billion, up 5.4% year-on-year. (1) Home air conditioner business During the reporting period, home air conditioner business achieved significant market share increase by consolidating distribution network, boosting distributor and user reputation, increasing in-house components production, and accelerating supply chain integration. According to CMM, offline retail share rose 2.8 percentage points year-on-year to 19.5% in 2022, and retail share increased 0.8 percentage points year-on-year to 14.4% online. In addition, retail share in the high-end market (wall-mounted units priced above RMB4,000 and standing units priced above RMB10,000) grew 3.9 percentage points, reaching 24.2%. Section III Management Discussion and Analysis The Company capitalised on the development of home central air-conditioners by improving design, installation and service standards, while enhancing distributors’ service capabilities through trainings to garner consumer goodwill. According to China IoL, the Company’s market share of home central air-conditioners increased 0.25 percentage points year-on-year to 14.7% in 2022. The Company strived to provide users with healthier, more comfortable, energy-efficient and environmentally friendly air solutions by utilizing IoT technologies. For example, Casarte’s Yunding (雲鼎) deluxe air conditioners could wash and purify air through a 19-layer water curtain, effectively removing seven types of pollutants including formaldehyde and PM2.5. It is also equipped with Smart Home system that could identify users and surrounding environment in order to provide customized and personal temperature settings. The Company created immersive experience to improve store traffic conversion by demonstrating technological strengths in cooling and heating efficiency, ultra-low noise, and health benefits. The Company also increased average contribution of individual models by streamlining SKUs and increasing the volume of each order.The Company strengthened supply chain and optimized design & procurement costs by increasing in-house manufacturing of core components and enhancing management of tier two & three suppliers. In January 2023, the Company formed a compressor joint venture with Shanghai Highly, aiming to secure an integrated supply of compressors, enhance production stability, reduce costs, in order to improve overall profitability and enhance competitiveness through coordinated development of compressors and air-conditioning units. Export business Export revenue rose by over 25% in 2022, ranking number one in the industry according to China IoL. The growth was driven by breakthroughs in new products such as dehumidifiers and strong performance in the US and Europe markets leveraging localized distribution network and product innovation.(2) Commercial air-conditioner business During the reporting period, revenue from commercial air conditioners grew over 20%. According to China IoL, the Company’s share increased 0.9 percentage points year-on-year to 11.1% in the domestic market and 0.7 percentage points to 14.2% in the export market as compared to 2021. During the reporting period, the Company started expanding from commercial HVAC equipment to energy management and smart integrated solutions for buildings. By creating MetaBuilding control system that integrates air conditioners, elevators, lighting, water, electricity and security, the Company aims at offering green and smart building solutions that combine technology, experience and space.Section III Management Discussion and Analysis Drawing on strengths in magnetic centrifugal chillers, the Company won contract of 37 underground lines in 17 cities in 2022, reinforcing number one position in domestic market. In addition, the Company developed air-suspending central air-conditioners and pioneered magnetic & air-centrifugal chillers solutions leveraging air-suspending centrifugal compressor technology to enhance energy efficiency and eliminate frictions in the switch on/off process. During the reporting period, heat pump revenue grew by 26%. The Company – launched 37oC Low Ambient heat pumps with performance above and beyond the scope of China Energy Label grade 1 products by adopting leading R32 refrigerant system. The Company also launched Air to Water heat pump that could provide constant 90oC water under wide temperature, making it an efficient alternative to fossil-fuel boilers in many industrial settings. In 2022, the Company won Tangshan’s Guye District (古冶區) Heating Renovation Project, the largest project of its kind in China. Export business The Company also developed oil-free magnetic centrifugal chillers overseas, with export revenue up by over 40% in 2022. During the reporting period, the Company also won several contracts including Suvarnabhumi Airport in Thailand and the Ministry of Health in Malaysia. 4. Household Water Solutions During the period, water heaters and purifiers revenue grew by 9.1% to RMB13.855 billion. According to CMM, the Company strengthened its leadership in 2022, with market share increase of 1.3 percentage points to 29.8% offline, and online retail share rose 2.4 percentage points to 34.0%. Following the launch of Casarte’s Crystal Tank Galaxy series, the Company expanded dual-tank line-up to capture demand for water heaters with small-size, tasteful appearance and large-capacity. Leveraging gas-electric hybrid technology, the Company was able to consolidate premium leadership in gas water heaters with revenue growth of 16% in 2022; and the Company remained number one in units priced above RMB8,000. During the period, the offline retail share of gas water heaters increased by 1.9 percentage points year-on-year to 22.2%. Air-sourced heat pump water heater accelerated R&D in high water temperature, disinfection, frequency conversion and energy saving. In 2022, its domestic revenue grew by 19% and overseas revenue rose by over 290%. Casarte’s Tianhe (天合) – NC7 air-sourced water heater could rapidly heat up at 15oC and reduce electricity usage by over 76%. Section III Management Discussion and Analysis The water purifier business strengthened competitiveness through product innovation and supply chain optimization. During the period, the Company expanded high-end market share with cutting edge technologies including zinc-strontium mineral spring. Since April 2021, Haier smart water purifier factory has not only been able to produce the entire under-sink range in house, but also its own filter, water circuit board and moulding modules, all of which contributed to increase cost competitiveness.5. Sales Platform in China Despite macro uncertainties during the reporting period, the Company remained committed to enhancing user experience, increasing user recognition and growing average user value via several initiatives to enhance efficiency of franchised network with digital transformation and service innovation; accelerate development in new retail channels and improve user interaction online; increase presence in home improvement channels, establish design, installation & service one-stop stores, as well as establishing partnerships with designers. According to CMM, the Company’s overall retail market share went up 2 percentage points year-on-year to 27.2% in China in 2022. Challenged by declining traffic and store closures in KA channels, the Company accelerated omni channel network expansion, and strengthened its franchised stores with digital tools to improve traffic acquisition and conversion. The Company stimulated replacement demand in the rural market by offering door-to-door appliance cleaning services, while driving the sales of product sets in the urban areas by building showrooms featuring tailored design solutions. Furthermore, the Company actively developed shopping mall channels through scenario-based solutions and integrated offline/online interactions, showcasing quality lifestyle and boosting replacement demand. Increasing number of consumers started to buy appliances online. During the reporting period, the Company expanded product portfolio online, while strengthening the premium Casarte brand by introducing over 70 new units. The Company also made efforts to improve membership management by streamlining online and offline user database utilizing digital tools. In 2022, the Company topped the industry with 20% growth of its aggregated GMV online; user engagement efficiency increased 23%; total number of Haier brand membership surged 41% to over 45 million. The Company made dedicated effort to capture the growth opportunities of live streaming platforms and short video marketing by creating quality content integrating brand stories to increase consumer recognition. In 2022, over 40,000 short videos were released, and daily average live streaming coverage exceeded 16 hours in flagship store online. Streaming related transaction value exceeded RMB10 billion in 2022, ranking first amongst major home appliance businesses online.（未完）  |