[年报]海尔智家(600690):海尔智家股份有限公司2023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2023年年度报告（英文版） 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 RMB8.04 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 RMB7,471,472,992.22 (tax inclusive). The proportion of cash distribution is 45.02% 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 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 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 63 SECTION V ENVIRONMENTAL AND SOCIAL RESPONSIBILITIES 100 SECTION VI SIGNIFICANT EVENTS 113 SECTION VII CHANGES IN SHARES AND INFORMATION ABOUT SHAREHOLDERS 130SECTION VIII RELEVANT INFORMATION OF PREFERENCE SHARES 143 SECTION IX RELEVANT INFORMATION OF BONDS 144 SECTION X FINANCIAL REPORT 145
on demand for appliances in China throughout last year. High interest rate and inflation weighed on sentiment as well as residential construction and remodelling activity in the US and Europe, resulting in more consumers postponing purchases of appliances. Haier Smart Home made resolute effort to implement premium brand strategy and accelerated digital transformation to deliver another year of unprecedented performance amid these challenges. In 2023, Haier Smart Home achieved a global revenue of RMB261.428 billion, marking a year-on-year growth of 7.3%. Our net profit attributable to shareholders grew 12.8% to RMB16.597 billion; the net profit attributable to shareholders deducting non-recurring items under PRC GAAP amounted to RMB15.824 billion, a growth of 13.3% year-on-year. Through the year, our entire management honoured their faith in the founding principle of “RenDanHeYi” (人 單合一), as they went above and beyond to achieve quality growth with innovative product despite macro challenges. On the other hand, our organization has become leaner, more agile, and more efficient with growth in sales revenue and profitability. The management also became more aware of what paves ways towards profitable growth and greater return on investments is user-centric and profit-driven digitalization. Haier Smart Home provides over 100 million units of home appliances in more than two hundred countries and regions in 2023 including major appliances, HVAC products, water heaters, and small appliances. Rather than chasing short-term gains, we prioritise sustainable growth through a relentless focus on stakeholder experiences — be it our distributors, suppliers, consumers, or employees. In the domestic market, we nurture strong bonds with distribution partners, I also spend a great deal of time listening to our distributors who share our inspiration in building a more competitive ecosystem. We started to evaluate sales network using sell-through figures, to minimize inefficient short-term stock piling. In 2023, the Company generated a net cash flow of RMB25.262 billion from operating activities, a growth of 24.7% year-on-year, leveraging digital management system that improves turnovers and enhances transparency in rebate policies to enhance store performance. This year, we have developed a logistics and inventory management system with suppliers, to make delivery schedules more predictable and our distributors’ resource allocation more efficient. Leveraging on digital delivery and service dispatch systems, we minimised waiting time of logistics service providers, thus improving service and installation efficiency, all of which aim at elevating logistics and service experiences while reducing our selling and administrative expense ratios.We are currently undertaking numerous initiatives on R&D, manufacturing and marketing integration and digitalised procurement management. We intend to replicate what we have learned from transforming domestic business to overseas operations soon. I believe our sustainable development will remain intact against macro downturn as long as we focus on improving experience and enhancing profitability, which should better position us in the competition when the market turns around.Haier Smart Home continued to be named as the Most Admired Company by Fortune Magazine in 2023, and GE Appliances, our subsidiary in the US was once again recognised as the Great Place to Work. We strive to build a place that inspires young Gen Z to take pride in generating amazing value for our users without bureaucracy. At Haier Smart Home, employees are listened to, as we believe their satisfaction Looking ahead to 2024, I have full confidence in Haier Smart Home’s positioning and growth potential. Let’s take a closer look at our businesses. Strengthening leadership We have over 40% domestic market share in refrigerators and washing machines. Future growth depends on product innovation. Our built-in refrigerators provide users with a whole new experience by seamlessly blending in with home décor, catalysing a surge in demand for product upgrades. Additionally, our washer- dryer combo disruptively solves users’ pain points and leads the industry in the US. We have made some progress in Europe and Southeast Asia, although we are yet to become one of the top three. Significant potential could be unlocked by leveraging on our global R&D platform with local supply chain.Haier’s dishwasher business is poised to accelerate with growing market penetration, which is only 4% in China. The complementary nature of dryers and washers has laid down solid foundation for the strong momentum to continue leveraging on our strengths in washing machines.In the white goods category, Haier Smart Home has established a leading position with technological platform and innovative system. Starting from 2024, Haier will focus on breaking down organisational barriers and integrating our global planning platforms to introduce more competitive products and implement more efficient market strategy. Gearing up Another important pillar is HVAC and water heaters. Our residential and commercial air conditioning businesses currently rank among second-tier players in domestic market while water heaters have become domestic market leader with little overseas exposure. I believe substantial growth potential could be unlocked in these sectors. In the home air conditioner business, in the past two years, we have been making efforts to address absence and shortage of components. By establishing a compressor joint venture and developing proprietary computer boards, we improved integration efficiency of R&D and manufacturing to increase profitability. We also accelerated MRV units and residential air conditioner business with expansions in distribution network. In commercial air conditioners, we continue to draw inspirations from original technologies that are future- proof and pioneer the industry in high-efficiency magnetic levitation air conditioners. Moreover, we were the industry’s first to adopt air suspension technology, which gives our systems a lifespan of 30 years with little maintenance required. We run a highly profitable water appliance business with the largest share in both gas and electric water heater, and a steadily growing purifiers unit in China. Our next step is to expand into the global arena, particularly in emerging markets with investments committed in HVAC and water heater to grow market share and profitability. Investing in Future Our Company’s strategic vision is to become the number one choice for smart home solutions. In the IoT era, Haier Smart Home is positioned to capitalise on the integration of smart home appliances and furnishing on one hand, and small appliances equipped with smart capabilities on the other hand. Our strategic approach entails providing integrated design solutions leveraging on San Yi Niao’s platform, while promoting smart small appliances supported by brand, ecosystem, and technologies.In 2023, we made the strategic decision to acquire the commercial refrigeration business of Carrier Global Corporation, who is also our joint venture partner in China. The food refrigeration and commercial cold chain sectors present opportunities that could be unlocked by technological advancement and digital transformation. Carrier’s commercial refrigeration business has a strong customer base, established operational systems, leading engineering expertise, and experienced management team. Following the completion of the transaction, we will make further investment to grow cold chain business leveraging on supply chain advantages in China and Haier’s ‘RenDanHeYi (人單合一)’ management approach.Since Haier Smart Home’s IPO, our dividend payout ratio has increased gradually as planned. In the financial year 2023, the cash dividend pay out ratio will reach 45.02%, and a total of RMB1.6 billion were used to buy back A and H shares. Starting from financial year 2024, we will raise dividend payout continuously, and in for financial years 2025 and 2026, the cash dividend payout ratio will not be less than 50%. What we achieved in 2023 was merely a beginning. Our board of directors is committed to enhancing consumer experience and improving profitability by consolidating existing advantages and unlocking new potentials while laying down foundations for long term development. The management and employees are confident that we could take the business to new heights. 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. 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 Euromonitor Euromonitor, established in 1972, is the leading strategic market information supplier and has over 40 years of experience in respect of publishing market report, commercial reference data and on-line database. They create data and analysis on thousands of products and services around the world. Gfk Gfk Group, the world’s leading market research company. After a long period of development and accumulation, Gfk Group’s global market research business covers consumer durables research, consumer research, media research, healthcare market research and special studies. All View Cloud All View Cloud (AVC) is a big data integrated solution provider to the smart home field, providing enterprises with big data information services, regular data information services and special data services.IEC The International Electrotechnical Commission, founded in 1906, is the world’s first organization for the preparation and publication of international electrotechnical standardization and is responsible for international standardization for electrical engineering and electronic engineering. The goals of the commission include: to effectively meet the needs of the global market; to ensure that the standards and conformity assessment programs are applied globally in a prioritized manner and to the greatest extent; to assess and improve the quality of products and services involved in its standards; to create conditions for the common use of complicated systems; to improve the effectiveness of the industrialization process; to improve human health and safety, and to protect the environment. IEEE The Institute of Electrical and Electronics Engineers, an international association of electronic technology and information science engineers, is currently the largest non-profit professional technology society in the world. It is committed to the development and research of electrical, electronic, computer engineering and science-related fields, and has now developed into an international academic organization with great influence in terms of the fields of space, computer, telecommunications, biomedicine, power and consumer electronics. Model of RenDanHeYi The concept of ‘Achieving win-win via RenDanHeYi’is the guarantee of Haier’s sustainable operation and the driving force of the Company featuring a self-motivated and empowering corporate culture. “Ren” is an employee who has the spirit of entrepreneurship and innovation; “Dan” is to create value for users. The “RenDanHeYi “management model encourages employees to create value for users with an entrepreneurial mindset, and to achieve self-value in line with the those of the Company and 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 Unit 1908, 19th / Securities of Haier Securities of Haier Floor, Harbour Smart Home Co., Smart Home Co., Centre, 25 Harbour Ltd., Haier Science Ltd., Haier Science Road, Wan Chai, and Technology and Technology Hong Kong Innovation Innovation Ecological Park, Ecological Park, No.1 Haier Road, No.1 Haier Road, Qingdao City Qingdao City – – Tel 0532 88931670 0532 88931670 +852 2169 0000 4006 999 999 – – Fax 0532 88931689 0532 88931689 +852 2169 0880 / Email [email protected] [email protected] [email protected] / III. SUMMARY OF THE GENERAL INFORMATION Registered Address Haier Industrial Park, Laoshan District, Qingdao City (now known as Haier Science and Technology Innovation Ecological Park, Laoshan District, Qingdao City) Historical Changes to the Prior to the Company’s listing in 1993, the registered address of the Registered Address Company was No.165 Xiaobaigan Road, Sifang District, Qingdao City, Shandong Province, and has changed to the current address since 1994, during which the address name was adjusted in line with the change of name of the industrial park but the actual site remains unchanged. Business address Haier Science and Technology Innovation Ecological Park, Laoshan District, Qingdao City Postal code of the business 266101 address Website https://smart-home.haier.com/cn/ Email [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., Haier Science report 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 Name Before Type of Shares Shares Listed Stock Short Name Stock Code VariationA-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 / VI. 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, Tia 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 2022 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 2023 annual report. VII. KEY ACCOUNTING DATA AND FINANCIAL INDICATORS IN THE RECENT THREE YEARS (I) Key accounting data Unit and Currency: RMB 2023 2022 Yoy change (%) 2021 Key accounting data After adjustment Before adjustment Operating revenue 261,427,783,050.10 243,578,924,958.47 243,513,563,670.73 7.33 227,105,817,641.69Net profit attributable to shareholders of the listed company 16,596,615,045.87 14,712,054,763.24 14,710,923,491.99 12.81 13,078,840,517.10Net profit after deduction of non-recurring profit or loss attributable to shareholders of the listed company 15,824,164,161.43 13,962,931,853.78 13,962,931,853.78 13.33 11,831,272,558.29Net cash flows from operating activities 25,262,376,228.30 20,256,557,145.86 20,153,505,783.35 24.71 23,235,380,690.95At the end of 2023 At the end of 2022 Yoy change (%) At the end of 2021After adjustment Before adjustment Net assets attributable to shareholders of the listed company 103,514,153,535.04 93,459,437,602.44 93,422,647,664.43 10.76 79,985,092,528.06Total assets 253,379,859,977.97 236,017,821,177.50 235,842,254,826.77 7.36 217,741,133,577.31(II) Key financial indicators 2023 2022 Yoy change (%) 2021 Key financial indicators After adjustment Before adjustment Basic earnings per share (RMB/ share) 1.79 1.58 1.58 13.29 1.41 Diluted earnings per share (RMB/ share) 1.78 1.57 1.57 13.38 1.40 Basic earnings per share after deducting non-recurring profit or loss (RMB/share) 1.71 1.50 1.50 14.00 1.27 Weighted average return on net Increased by 0.05 assets (%) 16.85 16.80 16.81 percentage points 17.26 Weighted average return on net assets after deducting Increased by 0.11 non-recurring profit or loss (%) 16.06 15.95 15.95 percentage points 15.65Explanation 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 VIII. DIFFERENCES IN ACCOUNTING DATA UNDER DOMESTIC AND OVERSEAS ACCOUNTING STANDARDS (I) Differences in net profit and net asset attributable to shareholders of listed company in financial report disclosed in accordance with International Accounting Standards and China Accounting Standards □ Applicable √ Not Applicable There is no difference between the net profit and net assets attributable to shareholders of the listed company presented in the consolidated financial statements disclosed in accordance with International Accounting Standards and China Accounting Standards.(II) Differences in net profit and net asset attributable to shareholders of the listed company in financial statements disclosed in accordance with overseas accounting standards and China Accounting Standards □ Applicable √ Not Applicable Apart from the financial statements prepared in accordance with International Accounting Standards, the Company did not prepare 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 2023 BY QUARTER Unit and Currency: RMB Q4 Q1 Q2 Q3 (October- (January-March) (April-June) (July-September) December) Operating revenue 65,066,477,648.79 66,560,103,857.77 67,030,721,048.16 62,770,480,495.38Net profit attributable to shareholders of the listed Company 3,971,103,084.94 4,992,772,914.90 4,185,343,372.78 3,447,395,673.25Net profit after deduction of non- recurring profit or loss attributable to shareholders of the listed Company 3,699,833,649.61 4,904,144,114.97 4,116,766,925.02 3,103,419,471.83 Net cash flows from operating activities 1,354,792,344.20 5,435,738,118.34 6,412,585,338.25 12,059,260,427.51 Explanation on the difference between quarterly data and disclosed regular reporting data□ Applicable √ Not Applicable X. NON-RECURRING PROFIT AND LOSS ITEMS AND AMOUNT Non-recurring profit and loss items Amount in 2023 Amount in 2022Profit or loss from disposal of non- current assets, including the write-off of provision for asset impairment –97,873,276.66 209,436,774.95Government subsidies included in current profit or loss, except for government subsidies that are closely related to the Company’s normal business operations, conformed to requirements of state policies and granted according to specific criteria, and have a sustained impact on the Company’s profit or loss 1,093,584,406.07 766,426,467.17Profit or loss arising from changes in fair value of financial assets and financial liabilities held by non-financial entities, and profit or loss arising from disposal of financial assets and financial liabilities, except for effective hedging activities related to the Company’s normal business operations 20,829,305.37 –23,321,060.42Net profit or 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 –2,581,701.76 14,065,886.76Other non-operating income and expenses apart from the aforesaid items –71,400,519.77 –29,750,173.25 Less: Effect of income tax 150,225,774.23 167,413,005.22 Effect of minority interests (after tax) 19,881,554.58 20,321,980.53Total 772,450,884.44 749,122,909.46 For the Company’s recognition of items that are not listed in the “Explanatory Announcement on — Information Disclosure for Companies Offering Their Securities to the Public No.1 Non-recurring Profit or Loss” as non-recurring profit or loss items and the amount of which is significant, and for non-recurring profit or loss items as illustrated in the “Explanatory Announcement on Information — Disclosure for Companies Offering Their Securities to the Public No.1 Non-recurring Profit or Loss” designated as recurring profit or loss items, reasons shall be specified.□ Applicable √ Not Applicable XI. ITEMS MEASURED BY FAIR VALUE √ Applicable □ Not Applicable Unit and Currency: RMB Affected amount Changes in the to profit of current Items Opening balance Closing balance current period period Wealth management products 14,638,968.26 487,936,101.81 473,297,133.55 52,484,639.54Investment in other equity instruments 5,851,882,930.20 6,403,694,954.77 551,812,024.57 58,671,224.25 – – Investment in trading equity instruments 336,843,065.02 243,224,439.64 93,618,625.38 20,876,582.33Investment funds 168,430,847.63 222,803,002.38 54,372,154.75 38,833,850.27– – Derivative financial instruments 61,674,330.75 101,059,175.53 162,733,506.28 54,086,291.94Total 6,433,470,141.86 7,256,599,323.07 823,129,181.21 183,199,423.67XII. OTHERS □ Applicable √ Not Applicable Analysis I. DISCUSSION AND ANALYSIS ON OPERATIONS The Company’s revenue for the 2023 financial year amounted to RMB261.428 billion, representing an increase of 7.3% from 2022. The growth was driven by: multi-brand strategy and extensive product offerings which captured opportunities in different market segments; enhanced retail capabilities and product premiumization; more competitive water heater, HVAC and kitchen appliances contributed strong revenue growth in China; enhanced user values from San Yi Niao’s improved scenario-based suite products; development of new categories including tumble dryers, dishwashers, home cleaning robots and heat pumps to capture opportunities in quality living and the low-carbon economy.For the financial year ended 31 December, 2023, the net profit attributable to shareholders of the Company was RMB16.597 billion, representing a 12.8% increase from 2022. The net profit attributable to shareholders of the Company after deducting non-recurring items amounted to RMB15.824 billion, representing a growth of 13.3% compared to the same period in 2022.The Company’s gross profit margin reached 31.5% in 2023, up 0.2 percentage points compared to the same period in 2022. Margin improvement in domestic market was driven by lower commodity prices, digitalisation in procurement and R&D, development of a digitalised production and sales coordination system, and improved product mix. In overseas markets, benefits from better product mix and production capacity utilisation were partly offset by intensified competition in key regions, resulting in a year-on-year decline in gross profit margin. The selling expense ratio was 15.7% in 2023, a reduction of 0.2 percentage points compared to the same period in 2022, selling expense ratio has improved resulting from digitally enhanced efficiency in resource allocation, logistics and fulfilment in China. On the other hand, overseas selling expense ratio went up due to intensified competition, increased spending in network expansion, promotions, and store upgrades. The administrative expense ratio went down by 0.1 percentage points to 4.4% in 2023, driven by optimised business processes and improved organisational efficiency through digitalisation.— The finance expense ratio was 0.2% (“+” as expenses, “ ” as income) in 2023, representing an increase of 0.3 percentage points compared to 2022, mainly because increases in interest payment as a result of overseas interest rate hike, offsetting interest income generated from improved capital management. In 2023, the Company’s net cash flow from operating activities was RMB25.262 billion, an increase of RMB5.006 billion year-on-year. I. Household Food Storage and Cooking Solutions (1) Refrigerator business In 2023, the refrigerator business of the Company remained committed to leading the global industry in the IoT era. By constantly innovating freshness preservation and built-in technologies, expanding high-end products, and accelerating retail transformation, the Company was able to strengthen its leadership in the industry. In 2023, sales revenue of the global refrigerator business was RMB81.910 billion, a growth of 5.2% compared to the same period in 2022. According to Gfk, the Company’s share of retail revenue reached 45.2% offline and 40.3% online in China in 2023, up 1.3 and 1.1 percentage points year-on-year, respectively. According to Euromonitor, the Company held a 14.1% share of retail volume overseas.The domestic market The Company has significantly increased its share in the high-end market. Casarte built-in refrigerator achieved a remarkable 120% year-on-year volume growth. Haier refrigerator expanded Boguan (博觀) series with full-space freshness preservation technology and compartmentalised storage design, dominating the market in the price range above RMB20,000 per unit. According to CMM, the share of offline retail with unit price of RMB10,000 and above reached 52.8%, an increase of 4 percentage points year-on-year.Enhancing retail capabilities has been a key focus. By strengthening network coverage in underserved areas, leveraging digital marketing to improve customer acquisition, and upgrading end-user experience, the Company enhanced efficiency in customer engagement and improved conversion by 8%. The Company also prioritised end-to-end cost reduction and efficiency improvement. To scale up production and in-house manufacturing of basic components, the first phase of Shanghe Refrigeration Park was put into operation in 2023, adding 1.5 million units in capacity. Manufacturing efficiency has improved by over 10% via integrating advanced manufacturing technologies and digitalising manufacturing, inspection, and logistics.Overseas markets The Company remained committed to high-end brand strategy and synergising global resources to strengthen product leadership and enhance user experience. In North America, we launched the integrated Built-in French Door refrigerator with Monogram and Café brand, Internal Dispenser Multi-door refrigerator with Profile and Café brand. In Europe, our clean ice-making technology and grade-a silent operation elevated user experiences and captured the largest market share in high-end multi-door refrigerators. Haier also raised price index to 122. In the Japanese market, upgrade in product and brand portfolio contributed to the strong growth of ultra-large refrigerators.On 14 December 2023, the Company announced the acquisition of Carrier Refrigeration Benelux B.V., the commercial refrigeration business of Carrier Global Corporation, for approximately USD 640 million in cash. This move signified the Company’s expansion from residential into commercial refrigeration, opening the door to new growth opportunities. The acquisition will enhance the Company’s foothold in the European market and strengthen global competitiveness, while capturing opportunities in China and Asia Pacific. The transaction is expected to close in 2024.(2) Kitchen appliance business In 2023, the Company focused on becoming the global leader in high-end smart kitchen by enhancing in-store experience of smart product suites and introducing product innovations, built-in technologies, and scenario-based solutions. In 2023, the kitchen appliance business recorded global revenue of RMB41.654 billion, up 6.9% compared to the same period in 2022. According to Gfk, the Company’s offline retail sales accounted for 8.8% of market sales, up 0.5 percentage points year-on-year, ranking third in China, where our share of high-end built-in products reached 17.9%. Online retail sales accounted for 4.3%, up 0.8 percentage points year-on-year. According to Euromonitor, our shares continued to perform well in key markets overseas: we achieved double-digit growth in Europe despite industry downturn; and grew market share by 3 percentage points in Australia through the dual-brand strategy of FPA and Haier. The domestic market Sales revenue grew over 10% with sequential improvement every quarter in 2023 by seizing opportunities in product upgrades, kitchen renovations and property completions, developing partnerships with cabinet and home improvement companies, and increasing presence in home improvement channels. Casarte kitchen appliances focused on increasing product competitiveness. The launch of ultra-slim built-in retractable range hoods, ultra-slim built-in five-ring stoves, and humidity-controlled ovens led to a 30% increase in retail sales, driving high-end market share to 10%. Haier’s smart kitchen appliance factory in Laiyang was the first to win the ROI-EFESO Industry 4.0 Award since 2013, a recognition of our substantial improvement in supply chain competitiveness. The Company enhanced cost competitiveness by increasing in-house component manufacturing from 30% to 54% and establishing a digitalised material cost model. Overseas markets In North American market, in collaboration with eco-partners such as Google Cloud, the Company uses a generative AI platform to help users generate customized recipes based on the food in their kitchens. In Australia and New Zealand, FPA brand elevated retail experience by launching sleek, minimalist oven suites and enhancing in-store product displays. In the commercial sector, the Company focused on providing high-end design solutions, establishing partnerships with designers to drive growth.II. Household Laundry Management Solutions The laundry business aimed to become number one choice globally during the IoT era and strived to maintain leadership through innovations in garment care, integration of home appliances and furnishing, energy efficiency, and eco-friendly technologies, while expanding new categories including tumble dryers. In 2023, the laundry business achieved a global revenue of RMB61.491 billion, representing an increase of 6.2% from 2022.According to Gfk, the Company’s retail market share went up 1.5 percentage points year-on-year to 47.5% offline in China, while remaining unchanged at 40.4% online. Euromonitor ranked us number one in ten countries, including Australia, New Zealand, and Vietnam.The domestic market Consumers’ desire for quality living has created demand for specialized products such as tumble dryers, wall-mounted washing machines, and fabric care cabinets. The Company proactively shifted from selling individual washing machine to providing laundry solutions, encompassing washing machines, tumble dryers, and fabric care cabinets. This upgrade aimed to offer a more refined and professional laundry experience to enhance user value. In 2023, the completion of tumble dryer factory in Shanghai added capacity of 2 million units. Tumble dryer revenue grew 20% year-on-year in 2023. According to Gfk, the Company topped the retail market with 40.4% share offline, and 34% share online. The Company pressed ahead with retail transformation, and enhanced capabilities by directing distributors to focus on improving in-store experiences to improve user acquisition and conversion, while attracting younger consumers and increasing user recognition with innovative content on new social media platforms such douyin and Xiaohongshu.A series of end-to-end cost reduction and efficiency improvements were implemented, including discontinuing low-efficiency models, and increasing the proportion of mid to high-end products to enhance competitiveness. Overseas markets The Company focused on implementing high-end brand strategies, leveraging on local market insights and global R&D strengths to enrich product pipeline and grow market share.In North America, the Company introduced Combo with washer and dryer all-in-one machine, it disruptively solves users’ pain points through one machine by completing a full load of wash and dry within two hours, and leads in the industry. In Western Europe, the launch of Haier’s highly differentiated IPRO helped increase in market share by 4 percentage points for products with unit price above EUR 599. In India, market share in selected channels grew from 4% to 16% with price index increasing from 89 to 101 leveraging on improved in-store display and brand recognition.III. Air Solutions During the reporting period, the Company’s air solution business achieved revenue of RMB46.104 billion, up 13.1% year-on-year. (1) Home air conditioner business In 2023, the home air conditioner business concentrated on implementing smart and healthy air solution strategy via innovating user-centred scenarios, enhancing technological capabilities, developing retail-end capabilities and end-to-end digitalisation, to boost market competitiveness. The domestic market Focusing on providing air solutions with outstanding quality, taste, and performance, the home air conditioner business ramped up R&D investment to attract top talents, deploy technological resources and enhanced competitiveness in core functions. The innovative Variable Shunt Technology has earned the Energy Saving and Emission Reduction Science and Technology Progress Award from China Energy Conservation Association. In 2023, we introduced the Casarte Nebula (星雲) series, the industry’s first integrated high-powered air conditioner, 110,000 units have been sold since their first introduction, driving us to the We continued to enhance network coverage and develop omnichannel retail and marketing capabilities. We prioritised franchised sales networks and increased store count offline, while promoting best-sellers, creating new social media content, and improving monetization online. During the reporting period, we ranked among top 10 best-sellers for the first time. In the commercial channel, we developed an operating framework integrating customer service, technical support, and installation management to improve conversion efficiency, contributing to contract revenue exceeding RMB10 billion. The Company focused on improving supply chain and boosting in-house component manufacturing to strengthen cost competitiveness. In March 2023, our computer board factory in Zhengzhou commenced mass production with an annual capacity of 2 million sets and potential cost savings of over RMB10 million. The Company’s compressor joint venture with Shanghai Highly is expected to begin production in the first quarter of 2024, contributing to overall supply chain capabilities. Overseas markets The home air conditioner business aims to provide health-conscious, smart, and energy-efficient products tailored to meet local demand and promote sustainability in the global market. In the European market, we expanded the lineup of R290 with the use of eco-friendly refrigerant to address growing environment concerns. In Pakistan, our solar-powered air conditioners tackled rising electricity prices by reducing daytime billing to zero, fulfilling demand for affordable energy-efficiency. We also built a new factory in Egypt and enhanced manufacturing capabilities in India, Pakistan, and Thailand, leveraging first-mover advantage in the global supply chain. In 2023, the Company became number one in Pakistan and Thailand, and grew retail market share in Southeast Asia and Western Europe.(2) Smart building business In 2023, the smart building business strategically focused on developing smart low-carbon building solutions. By leveraging existing HVAC business, the Company expanded into heat pumps, energy management, and smart building management, thus seizing the opportunities from energy efficiency standard upgrade and growing demand for clean energy. In 2023, the global revenue of smart building business increased by over 14% compared to the same period in 2022, with revenue in the domestic market exceeding RMB5 billion. According to China IoL, our domestic market share rose 0.8 percentage points to 9.5%, ranking fourth in the industry in 2023. The domestic market Leveraging technological advantages in magnetic levitation, air suspension, and high-efficiency heat exchange, the Company strengthened its leadership in high-speed variable-frequency and smart IoT technologies, while creating efficient HVAC workshop solutions. We were world’s first to implement static pressure air suspension technology on central air conditioning systems that could last for a period of 30 years and require little maintenance while saving up to 50% energy. The MX-super IoT-based multi-split system was the industry’s first smart solution for large spaces, utilizing four units of 24 HP modules running in parallel to maximize output of 96 HP, effectively reducing floor space by 50% while improving energy efficiency. The Company’s heat pump business captured industrial demand for clean energy with expanded product application to achieve sales growth of 20%. The new variable frequency high-temperature heat pump could provide hot water up to 90oC. It has been widely used by clients from electroplating, slaughterhouses, petroleum, food processing, textile printing and dyeing industries, as well as on existing housing renovation projects.To accelerate the transition towards one-stop low-carbon solution provider, the Company completed the acquisition of Tongfang Energy Technology Development Company in September 2023, which is expected to enhance our integrated heating and cooling services, clean energy, and waste heat recycling solutions. Overseas markets The smart building business centred on expanding product portfolio and upgrading product mix. For example, we received over RMB100 million orders from clients in the Middle East for T3 variable frequency series that could operate under high-temperature. In Europe, we focused on the integration of heat pump products with Haier Smart hOn platform of local storage data and energy storage systems, accelerating the transition from single product to multiple energy source solutions to smart energy management.We also accelerated the development of store network integrating consumer experience, product display and marketing, as well as staff training to enhance design and installation capabilities.IV. Household Water Solutions In 2023, the water heater and purifier business strategically focused on becoming the global leader in household water heating, cooling, and purification solutions. We achieved steady growth in water purifiers, softeners and filters leveraging innovations to create health-conscious, high capacity and comfortable experience. In 2023, the global water heater and purifier revenue was RMB15.336 billion, representing an increase of 8.5% from 2022.The domestic market To address concerns of ageing products, water quality and additional demand from families with two children, the Company focused on product iterations and grew sales revenue to over RMB12 billion in 2023. The Company’s Casarte Crystal Tank electric water heater seamlessly moulded aerospace-grade crystal fibres and industrial-grade polymer materials to deliver a mineral spring experience with water that is rich in strontium. Our gas water heaters pioneered the use of gas-electric hybrid constant temperature technology, automatically switching between two energy sources to reduce heating time and stabilize water temperature, sales revenue recorded a compounded annual growth of over 20% from 2021 to 2023.On the market side, we also captured replacement demand by cleaning ageing products in existing neighbourhoods, capturing demands through showcasing solutions in new buildings, while accelerating commercial business with comprehensive water purification and heating/cooling solutions. We promoted end-to-end cost reduction and efficiency improvement by strengthening vertical supply chain integration to grow in-house manufacturing by 10% and reduce cost with additional 19 module components. Meanwhile, we enhanced proportion of shared modules to enhance efficiency in R&D and improve average contribution per SKU. Overseas markets Water heater and purifier business has significant potential in overseas market where the current exposure remains limited. The Company remained committed to meeting consumer demand with improving product offerings to cater for local tastes. We have made several breakthroughs in the more mature markets including North America where we introduced gas storage water heater and in Europe we offered gas water heaters and boilers. The Company also grew revenue by developing comprehensive solutions and enhancing presence in specialists’ channels for building materials, bathroom fixtures and installation.V. China operation: Driving brand transformation, optimising distribution network, and winning recognition from users.（未完）  |