[中报]海尔智家(600690):海尔智家股份有限公司2024年半年度报告（英文版）
原标题:海尔智家:海尔智家股份有限公司2024年半年度报告（英文版） II. All directors have attended the Board meetings. III. The interim report is unaudited. IV. Li Huagang (legal representative of the Company), Gong Wei (chief financial officer of the Company) and Ying Ke (the person in charge of accounting department) hereby certify that the financial report set out in the interim report is true, accurate and complete.V. Proposal of profit distribution or proposal of converting capital reserves into share capital for this reporting period resolved and passed by the Board Not Applicable VI. Disclaimer in respect of forward-looking statements √ Applicable □ Not Applicable Forward-looking statements such as future plans, development strategies as set out in this report do not constitute our substantial commitment to investors. Investors are advised to pay attention to investment risks. VII. Is there any fund occupation by controlling shareholders and other related parties for non-operational purposes No VIII. Is there any provision of external guarantee in violation of prescribed decision-making procedures No IX. Are there more than half of the Directors could not warrant the truthfulness, accuracy and completeness of the interim report disclosed by the Company No X. Important risk warnings For the possible risks which the Company may encounter, please refer to the relevant information set out in the section of “MANAGEMENT DISCUSSION AND ANALYSIS” in this report.XI. Others □ Applicable √ Not Applicable Chairman of the Board: LI Huagang Haier Smart Home Co., Ltd 27 August 2024 — SECTION I DEFINITIONS 4 — SECTION II GENERAL INFORMATION OF THE COMPANY AND KEY FINANCIAL INDICATORS 6— SECTION III MANAGEMENT DISCUSSION AND ANALYSIS 11 — SECTION IV CORPORATE GOVERNANCE 49 — SECTION V ENVIRONMENTAL AND SOCIAL RESPONSIBILITIES 53 — SECTION VI SIGNIFICANT ISSUES 64 — SECTION VII CHANGES IN SHARES AND INFORMATION ABOUT SHAREHOLDERS 78— SECTION VIII RELEVANT INFORMATION OF PREFERRED SHARES 85 — SECTION IX RELEVANT INFORMATION OF CORPORATE BONDS 86 — SECTION X FINANCIAL REPORT 87
DEFINITION OF FREQUENTLY USED TERMS CSRC China Securities Regulatory Commission SSE Shanghai Stock Exchange The Company, Haier Smart Haier Smart Home Co., Ltd, its original name is “Qingdao Haier Co., Ltd.”, Home and the original short name is “Qingdao Haier” Four Major Securities China Securities Journal, Shanghai Securities News, Securities Times, Newspapers Securities Daily Haier Electronics, 1169 Haier Electronics Group Co., Ltd. (a company originally listed in Hong Kong, stock code: 01169.HK), a subsidiary as accounted for in the consolidated statement of the Company. Haier Electronics has been privatized by way of H shares issuance on 23 December 2020 and became a wholly owned subsidiary of the Company since then. GE Appliances Household appliances assets and business of General Electric Group, which are currently owned by the Company. FPA Fisher & Paykel Appliances Holdings Limited (Chinese Name: 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 50 countries/regions across the world. FPA is wholly-owned subsidiary of the Company. Candy Candy Group (Candy S.p.A) is an international professional appliances manufacturer from Italy. Since its establishment in 1945, it has been committed to enabling the global users to enjoy a higher quality of life through innovative technologies and quality services. Candy Group has been prestigious in the global market with users all over the world via its various self-owned professional household appliance brands. In January 2019, Candy became a wholly-owned subsidiary of the Company. CMM China Market Monitor Co., Ltd., as an authoritative market research institute in Chinese home appliances area, was established in 1994 and has been focusing on research of retail sales in China consumption market ever since.Euromonitor Euromonitor, established in 1972, is the leading strategic market information supplier and has over 40-years of experience in respect of publishing market report, commercial reference data and on-line database. They create data and analysis on thousands of products and services around the world.Gfk Gfk Group, the world’s leading market research company. After a long period of development and accumulation, Gfk Group’s global market research business covers consumer durables research, consumer research, media research, healthcare market research and special studies. All View Cloud All View Cloud (AVC) is a big data integrated solution provider to the smart home field, providing enterprises with big data information services, regular data information services and special data services. IEC The International Electrotechnical Commission. Founded in 1906, it is the world’s first organization for the preparation and publication of international electrotechnical standardization and is responsible for international standardization for electrical engineering and electronic engineering. The goals of the commission include: to effectively meet the needs of the global market; to ensure that the standards and conformity assessment programs are applied globally in a prioritized manner and to the greatest extent; to assess and improve the quality of products and services involved in its standards; to create conditions for the common use of complicated systems; to improve the effectiveness of the industrialization process; to improve human health and safety, and to protect the environment. IEEE The Institute of Electrical and Electronics Engineers, an international association of electronic technology and information science engineers, is currently the largest non-profit professional technology society in the world. It is committed to the development and research of electrical, electronic, computer engineering and science-related fields, and has now developed into an international academic organization with great influence in terms of the fields of space, computer, telecommunications, biomedicine, power and consumer electronics. Model of Rendanheyi The concept of “Achieving win-win via Rendanheyi (人單合一)” is the (人單合一) guarantee of Haier’s sustainable operation and the driving force of the Company featuring a self-motivated and empowering corporate culture. “Ren” is an employee who has the spirit of entrepreneurship and innovation; “Dan” is to create value for users. The “Rendanheyi (人單合一)” management model encourages employees to create value for users with an entrepreneurial mindset, and to achieve self-value in line with the those of the Company and its shareholders. Company and Key Financial Indicators I. INFORMATION OF THE COMPANY Chinese name 海尔智家股份有限公司 Chinese short name 海爾智家 English name Haier Smart Home Co., Ltd. English short name Haier Smart Home Legal representative Li Huagang II. CONTACT PERSON AND CONTACT INFORMATION Secretary to Representative of Company Secretary the Board securities affairs (D/H shares) Others Name Liu Xiaomei Liu Tao Ng Chi Yin, Trevor Global Customer Service Hotline Address Department of Department of Rm 1908, 19/F, / Securities of Haier Securities of Haier Harbour Centre, Smart Home Co., Smart Home Co., 25 Harbour Road, Ltd. Haier Science Ltd. Haier Science Wan Chai, and Technology and Technology Hong Kong Innovation Innovation Ecological Park, Ecological Park, No. 1 Haier Road, No. 1 Haier Road, Qingdao City Qingdao City Tel 0532-88931670 0532-88931670 +852 2169 0000 4006 999 999 Fax 0532-88931689 0532-88931689 +852 2169 0880 / Email [email protected] [email protected] [email protected] / III. SUMMARY OF THE CHANGES IN GENERAL INFORMATION Registered address Haier Park, Laoshan District, Qingdao CityHistorical change of the Prior to the Company’s listing in 1993, the registered address of the registered address Company was No.165 Xiaobaigan Road, Sifang District, Qingdao City, Shandong Province, and has changed to the current address since 1994, during which the address name was adjusted in line with the change of name of the industrial park but the actual site remains unchanged Business address Haier Science and Technology Innovation Ecological Park, Laoshan District, Qingdao City Postal code of the 266101 business address Website https://smart-home.haier.com/cn/ Email [email protected] Query index for any Not applicable changes during the reporting period IV. MOVEMENT OF PLACE FOR INFORMATION DISCLOSURE AND DEPOSIT Designated newspaper for Shanghai Securities News, Securities Times, China Securities Journal, information disclosure Securities Daily Website for publishing www.sse.com.cn interim report Other websites for interim https://smart-home.haier.com/cn/, www.xetra.com, www.dgap.de, report disclosure https://www.hkexnews.hk Deposit place of interim Department of Securities of Haier Smart Home Co., Ltd.report Haier Science and Technology Innovation Ecological Park, No. 1 Haier Road, Qingdao City Query index for any Not applicable changes during the reporting period V. SUMMARIZED INFORMATION OF SHARES OF THE COMPANY Stock Short Stock Exchange of Stock Short Name Before Type of Shares Shares Listed Name Stock Code Variation A share Shanghai Stock 海智家 600690 青島海 Exchange D share Frankfurt Stock Haier Smart 690D Qingdao Haier Exchange Home VI. OTHER RELATED INFORMATION □ Applicable √ Not Applicable VII. KEY ACCOUNTING DATA AND FINANCIAL INDICATORS OF THE COMPANY (I) Key accounting data Unit and Currency: RMB The corresponding period of last year Increase/ decrease for the reporting period compared with the For the corresponding reporting period Before period of last Key accounting data (January-June) After adjustment adjustment year (%)Operating revenue 135,622,549,121.01 131,628,595,912.05 131,626,581,506.56 3.03Net profit attributable to shareholders of the listed Company 10,420,218,389.22 8,962,851,469.46 8,963,875,999.84 16.26Net profit after deduction of non-recurring profit or loss attributable to shareholders of the listed Company 10,160,504,902.38 8,603,977,764.58 8,603,977,764.58 18.09Net cash flows from operating activities 7,818,257,937.26 6,790,021,534.62 6,790,530,462.54 15.14As at the end of reporting period of last year Increase/ decrease as at the end of the reporting period As at the end of compared with the reporting Before that of last year period After adjustment adjustment (%) Net assets attributable to shareholders of the listed Company 105,734,300,351.38 103,514,153,535.04 96,681,175,780.71 2.14Total assets 262,251,245,011.55 253,379,859,977.97 246,302,105,777.51 3.50 (II) Key financial indicators The corresponding period of last year Increase/ decrease for the reporting period compared with the For the corresponding reporting period After Before period of last Key financial indicators (January-June) adjustment adjustment year (%)Basic earnings per share (RMB/share) 1.13 0.96 0.97 17.71 Diluted earnings per share (RMB/share) 1.12 0.96 0.96 16.67 Basic earnings per share after deducting non- recurring profit or loss (RMB/share) 1.10 0.93 0.93 18.28 Weighted average return on net assets (%) 9.67 9.16 9.16 0.51Weighted average return on net assets after deducting non-recurring profit or loss (%) 9.43 8.80 8.80 0.63Explanation of the key accounting data and financial indicators of the Company□ Applicable √ Not Applicable VIII. DIFFERENCES IN ACCOUNTING DATA UNDER DOMESTIC AND OVERSEAS ACCOUNTING STANDARDS √ Applicable □ Not Applicable (I) Difference in net profit and net assets attributable to shareholders of the listed company in financial statements as disclosed in accordance with International Accounting Standards and Chinese Accounting Standards □ Applicable √ Not Applicable There is no difference between the net profit and net assets attributable to shareholders of the listed company presented in the consolidated financial statements as disclosed in accordance with International Accounting Standards and Chinese Accounting Standards by the Company. (II) Difference in net profit and net assets attributable to shareholders of the listed company in financial statements as disclosed in accordance with overseas accounting standards and Chinese Accounting Standards □ Applicable √ Not Applicable Apart from the financial statements prepared in accordance with International Accounting Standards, the Company has not prepared financial statements in accordance with other overseas accounting standards. (III) Explanation on difference in domestic and overseas accounting standards.□ Applicable √ Not Applicable IX. NON-RECURRING PROFIT OR LOSS ITEMS AND AMOUNT √ Applicable □ Not Applicable Unit and Currency: RMB Non-recurring profit and loss items Amount Profit or loss from disposal of non-current assets, including the write-off of provision for asset impairment -24,802,715.11 Government subsidies included in current profit or loss, except for government subsidies that are closely related to the Company’s normal business operations, conformed to requirements of state policies and granted according to specific criteria, and have a sustained impact on the Company’s profit or loss 373,800,184.84Profit or loss arising from changes in fair value of financial assets and financial liabilities held by non-financial entities, and profit or loss arising from disposal of financial assets and financial liabilities, except for effective hedging activities related to the Company’s normal business operations -29,489,597.82Other non-operating income and expenses except the aforementioned items -3,829,918.04Less: Effect of income tax 46,231,142.38 Effect of minority equity interest (After Tax) 9,733,324.65 Total 259,713,486.84 For the Company’s recognition of items that are not listed in the “Explanatory Announcement on — Information Disclosure for Companies Offering Their Securities to the Public No.1 Non-recurring Profit or Loss” as non-recurring profit or loss items and the amount of which is significant, and for non-recurring profit or loss items as illustrated in the “Explanatory Announcement on Information — Disclosure for Companies Offering Their Securities to the Public No.1 Non-recurring Profit or Loss” designated as recurring profit or loss items, reasons shall be specified.□ Applicable √ Not Applicable X. OTHERS Analysis I. INTRODUCTION OF THE INDUSTRY WHERE THE COMPANY OPERATES AND ITS MAJOR BUSINESS DURING THE REPORTING PERIOD Founded in 1984, the Company is committed to being an enterprise of the times. Through relentless innovation and iterations, we seize opportunities in the industry by continuously launching innovative products that steer market development. After more than 30 years, the Company has become a global leader in the major home appliance industry, as well as a pioneer in global smart home solutions. — ? Global leader of the major home appliance industry: According to data from Euromonitor an authoritative market researcher, the Company ranked first in terms of sales volume in global major appliance market for 15 consecutive years. The Company has a global portfolio of brands, including Haier, Casarte, Leader, GE Appliances, Candy, Fisher&Paykel and AQUA. From 2008 to 2023, Haier brand refrigerators and washing machines ranked first among global major home appliance brands in sales volume for 16 and 15 consecutive years respectively. ? Pioneer of global smart home solutions: Capitalizing on our full-range home appliances products, the Company is recognized by Euromonitor as one of the first in the industry to introduce smart home solutions. San Yi Niao remained committed to the mission of “providing smart home experience for a better home”, by enhancing three major capabilities in respect of customisation capability, delivery capability and intelligence capability, we have been dedicated to providing customised and specialised smart home appliance solutions for users.Over the years, the Company has established a business layout that includes smart solutions for food storage and cooking, laundry, air and water, the Overseas Home Appliance and Smart Home Business, and Other Business. The Company provides a full range of home appliance products and value-added services in global market through Haier Smart Home APP and San Yi Niao APP, supplemented by our offline experience centres, to cater for users’ needs for different lifestyle scenarios. Smart Home Business comprises Household Food Storage and Cooking Solutions, Household Laundry Management Solutions, Air Solutions (Internet of Air), and Household Water Solutions (Internet of Water).? Household Food Storage and Cooking Solutions: Through selling products such as refrigerators, freezers, kitchen appliances in global market, as well as providing one-stop smart kitchen scenario solutions and ecosystem solutions including smart cooking and nutrition planning, the Company fully addresses users’ need for convenient, healthy and tasteful gourmet experiences.? Household Laundry Management Solutions: Haier’s washing machine focuses on applying original technologies to directly solve users’ pain points in home living scenarios and create new experiences and value for users. With a product lineup of washing machines, tumble dryers, all in-one laundry machines, garment care machines, and heated drying racks, the Company has evolved from selling individual products to providing scenario-based solutions and offering end to-end laundry care services. For example, the Zhongzihemei (中子和美) three-in-one washer combines washing, drying, and fabric care functions into a single unit, and the Essence Wash washing machine reduces washing time and improves cleaning effectiveness by producing a highly concentrated detergent solution that can quickly soak into clothes through detergent pre mixing and high pressure spraying. ? Air Solutions (Internet of Air): Home air conditioners: Through worldwide sales, the Company provides products such as home air-conditioners and fresh air systems, as well as a comprehensive range of full-cycle solutions including coordination of multiple air-conditioners and purifiers, adaptive air flow, air quality monitoring and air disinfection, thereby delivering a healthy and comfortable experience at home and during commute that caters to the user needs in terms of air temperature, humidity and quality. Smart buildings: The Company is committed to becoming a leader in efficient, sustainable and smart building solutions based on the state’s “carbon peaking and carbon neutrality” strategy. Focusing on the business areas of smart control, environment, energy and system integration of buildings, the Company provides green and smart building solutions integrating “technology + experience + space” for government and commercial buildings, railways, schools, and hospitals.? Household Water Solutions (Internet of Water): Through providing worldwide users with electric water heaters, gas water heaters, solar water heaters, air energy heat pump water heaters, POE water purifiers, POU water purifiers, water softening equipment, the Company offers smart water solutions including interactions between water heaters and purifiers, and between heating appliances and water heaters, so as to comprehensively cater to users’ needs for water purification, softening and heating. The Company manufactures and sells a comprehensive portfolio of home appliance products and provides value-added services in more than 200 countries and regions, including North America, Europe, South Asia and Southeast Asia, Australia and New Zealand, Japan, Middle East and Africa.In the overseas markets, the Company has been manufacturing and selling proprietary appliance products catering for local users’ demands for more than 20 years. During the time, a number of acquisitions contributed to our growth including acquisition of Haier Group Corporation’s overseas white goods business (Sanyo Electric Co., Ltd.’s white goods business in Japan and Southeast Asia) in 2015, home appliances of GE in the US in 2016, Fisher&Paykel in 2018, and Candy in 2019. The development of the Company’s overseas businesses has been fuelled by synergies among our self-developed business and our acquired businesses. At present, the overseas business of the Company has entered a stage of promising growth, having achieved a multi-brand, cross-product and cross-regional presence on a global basis. According to Euromonitor, the Company’s share of the global market (retail volume) for major home appliances in key regions market share in 2023 is as follows: ranked first in Asia in terms of retail volume, with a market share of 26%; ranked second in America, with a market share of 15.8%; ranked first in Australia and New Zealand, with a market share of 14.6%. The Company ranked fourth in Europe with a market share of 8.8%. Other Businesses Building on our established smart home businesses, the Company has also developed small home appliances, cleaning robots, channel distribution and other businesses. In particular, the small home appliance business primarily involves small home appliances designed by the Company, produced by outsourced third-party manufacturers and sold under the Company’s brands, which serve to enrich our smart home solutions product mix. The channel distribution business primarily offers distribution services for products such as televisions and user electronics for the Haier Group or third-party brands, which leverages the Company’s sales network. During the reporting period, the Company was once again listed among the Top 500 World’s Companies and named again as the 2024 World’s Most Admired Companies by the Fortune Magazine. We are the only company being selected in Europe and Asia in the home appliances industry and are the only selected company incorporated outside the US. Meanwhile, the Company is also the world’s TM only Internet-of-Things (IoT) ecosystem brand being named again as BrandZ Top 100 Most Valuable Global Brands in 2024. At the same time, the Company was named again among Fortune’s China ESG Impact list. The Company’s ESG effort has also been recognized by external rating agencies, receiving an MSCI ESG rating of A, which is at leading levels within home appliance sector in China. Haier Smart Home was selected into the three major ESG indices of the Hang Seng Index, including the HSI ESG Enhanced Index, the HSI ESG Enhanced Select Index and the HSCEI ESG Enhanced Index. II. ANALYSIS ON CORE COMPETITIVENESS DURING THE REPORTING PERIOD √ Applicable □ Not Applicable The Company has established a solid strategic presence and competitive advantage in global market. In China’s major home appliance market, the Company has long maintained a leading position across all product categories. According to CMM’s report, the Company has established a continued leading market position in key major home appliance categories during the reporting period. In overseas markets, the Company has adhered to its high-end brand creation strategy, building capacity to create leading sustainable growth, which has continuously improved its market share. Building on this foundation, the Company will further consolidate its leadership position in the industry by leveraging integrated synergies of its global unified platforms, through efficiency transformation driven by digitalization, and by leveraging its technological strength and innovative capabilities. As cornerstone for sustainable development, our “Rendanheyi (人單合一)” Model also provided management guidance to the Company and enabled us to replicate successful experiences. It is believed that the following advantages will help the Company to continue to strengthen its leading position:(i) Building up excellent high-end brand operation capabilities and creating a well-recognized high-end brand through forward-looking layout and long-term investment in the global market to achieve a leading market position. To better meet the need of consumers in pursuit of quality life, the Company has started to develop the high-end brand Casarte in the Chinese market more than 10 years ago. The creation of high-end brands requires not only focus, experience and patience, but also continuous innovation of technological standards and differentiated service capabilities to fulfil user demand for high-quality experiences. The Casarte brand combined the Company’s global technological strengths, product development capabilities and manufacturing craftsmanship, as well as privilege marketing and differentiation services, which has won the trust of users in China’s high-end market. According to data from CMM, the Casarte brand has assumed a definitive leading position in China’s high-end major home appliance market in the first half of 2024, ranking first in the retail sales of refrigerator, washing machine and air conditioner categories in the high-end segment. Specifically, in terms of offline retail sales, shares of the Casarte brand of air conditioners reached 32% in the market with product priced above RMB15,000 in China, while its share of refrigerators and drum washing machines priced above RMB10,000 in the China’s market reached 39.5% and 82.3% respectively. In the North American market, the Company owns high-end brands such as Monogram, Café, and GE Profile. In collaboration with the Qingdao headquarters, we enhanced our high-end brand profile through launching leading products including Combo washers and dryers. Through the creation of luxurious, customizable and smart technology-enabled user experience, our high-end brands Monogram, Café and GE Profile have grown rapidly. (ii) Providing users with specialised and customised smart household solutions through the San Yi Niao brand with cross-household design focusing on scenario-based experience to carry out the mission of “providing smart home experience for a better home”.As users continued to demand for higher living quality, with its focus on the mission of “providing smart home experience for a better home”, San Yi Niao has been dedicated to providing customised and specialised smart home appliance solutions for users, strengthening its leadership around “customisation capabilities, delivery capabilities and intelligence capabilities”. In terms of customisation capabilities, San Yi Niao promotes one-stop customisation of the whole process through the digital middle platform to meet the personalized needs of users; in terms of delivery capabilities, San Yi Niao has established mature whole-process delivery standards, which can improve user experience through integrated delivery tools for smart home appliances. In terms of smart capabilities, San Yi Niao relies on Haier Smart Home’s main platform to achieve deep interconnection of the whole household, providing more boundless interaction and more active services. (iii) Extensive and solid global presence with localized operational capabilityIn respect of overseas markets, the Company seeks overseas expansion of its own brands as well as synergies with acquired brands to develop overseas markets. Such business strategy has guided the Company to establish R&D, manufacturing and marketing three-in-one structure across multiple brands, products and regions, as well as the model of self-development, interconnection and synergized operation. The Company’s extensive global presence depends on its localized business teams as well as its flexible and autonomous management mechanisms established in various overseas markets, which have enabled the Company to gain rapid insights and respond swiftly to local user demands. The Company also proactively integrates into local markets and cultures and has established a corporate image that is recognized by local communities in the overseas regions where the Company operates. At present, the Company established 10+N innovative ecosystems, 122 manufacturing centres, and 108 marketing centres around the world, and achieved a coverage of nearly 230,000 points of sales in global markets. (iv) A comprehensive portfolio of proprietary brands recognised by users of all tiersThrough organic growth and acquisitions, the Company has formed seven brand clusters, including Haier, Casarte, Leader, GE Appliances, Candy, Fisher&Paykel and AQUA. To address the needs of users from different tiers in various markets around the world, the Company has adopted a differentiated multi-brand strategy in different regions that centred around users, to achieve an extensive and in-depth user coverage. For example, in the Chinese market: the three brands of Casarte, Haier and Leader achieved the coverage of high-end, mainstream and niche market groups respectively; in the U.S. market, the six major brands such as Monogram, Café, GE Profile, GE, Haier, Hotpoint comprehensively covered all segments of high-end, mid-range and low-end markets, thereby meeting the preferences and needs of different types of users.(v) Cross-border acquisition and synergy realisation capabilitiesThe Company has an excellent track record of acquisition and integration. The Company has acquired Haier Group Corporation’s overseas white goods business, including Sanyo Electric Co., Ltd.’s white goods businesses in Japan and Southeast Asia in 2015, the home appliance business of General Electric in the US in 2016, the New Zealand company Fisher&Paykel (which has been entrusted by the Haier Group since 2015) in 2018, and the Italian company Candy in 2019. The Company’s capability to perform acquisition and integration is reflected in the following: First of all, the Company implements the “Rendanheyi (人單合一)” Model in the acquired companies, which is a value-added sharing mechanism for the whole-process team under a common goal. Such model can motivate the acquired companies and their employees and enable them to generate more value. Secondly, the Company made use of its global platform to empower the acquired companies in terms of strategic planning, R&D and procurement in order to enhance their competitiveness. Thirdly, the Company’s open and inclusive corporate culture can support the acquired companies in establishing a flexible and autonomous management mechanism, which can easily earn recognition from the acquired companies and is conducive to the promotion of integration. (vi) Comprehensive and in-depth global collaborations and empowermentThe Company has made full use of its global collaborative platform, as well as its integrated functions of R&D, product development, procurement, supply chain, sales and brand marketing. It was able to share and expand development experience to various markets around the world. By strengthening the synergies among its global businesses, the Company has created a strong driving force for its future development. ? Global collaborative R&D: The Company has a global collaborative R&D system and has established global technology R&D mechanisms to share common modules, utilize common technologies, and share patents within the scope of compliance. For example, the Company’s R&D team in China joined hands with FPA’s and CANDY’s R&D teams to develop the H20 spray technology, which has been applied to freestanding and built-in dishwashers of Haier, Fisher&Paykel, CANDY and HOOVER, hence strengthening the Company’s product leadership. ? Global collaborative product development: The Company has established a global product development mechanism to facilitate regional collaboration and supplementation across product categories. For example, the R&D teams in South Asia and China embarked on a 10-month collaboration, breaking away from the traditional product development model by innovating on team organisation, quality control, product testing and cost control leveraging complementary local resources, in order to develop the HRT-683 refrigerator which has become a mainstream high-end product in the local market. ? Global collaborative procurement: The Company has established a global procurement committee to coordinate procurement activities. The committee has built a digital sourcing platform that brought together partners across industries and regions to develop an autonomous and controlled global supply chain ecosystem. The committee also created a global database of preferred suppliers and materials to achieve cost reduction by aggregating resources at the Company level. By unifying procurement rules and processes, the Company established a standardised operating system with differentiated procurement strategies to enhance efficiency while lowering risks. We have also developed a Company level digital procurement platform to enhance shared capabilities through connecting “materials, businesses, people and mechanisms” to the platform, thereby improving the resilience of our global supply chain. ? Global collaborative supply chain: The Company has built an end-to-end digital management system for the global supply chain that spanned from marketing to suppliers to production and logistics. Using intelligent algorithms, the system enabled real-time flexible deployment of production capacity, and factories across the globe could share and develop smart manufacturing technologies to boost competitiveness. ? Global collaborative marketing and brand promotion: The Company operates a multi-level brand portfolio with collaborative brand promotions. The Company also promotes and introduces successful marketing strategies among regional markets. For example, the Company successfully replicated its sales and marketing model of China’s third and fourth tier markets to markets such as India, Pakistan, and Thailand, strengthening the company’s brand image and regional market competitiveness. (vii) Industry-leading R&D and technological capabilities Haier Smart Home delves into technological innovation to expedite the development of innovation-driven productivity that aims for high-end, smart and green upgrade. Leveraging on our industry-leading and comprehensive R&D presence, we constantly provide global users with home appliances that meet their needs and customise their smart and convenient way of living, thus enriching users’ life experience as well as cementing our leading position in high-end brands, scenario brands and ecosystem brands. ? Leadership in original technologies: In 2024, Haier Smart Home continued to innovate with a user-oriented approach and has produced a series of scientific and technological innovations. It developed the low-temperature intelligent unmanned retail technology, promoted the market-oriented operation and management of frozen products, led the intelligent unmanned retail industry, and promoted the comprehensive application of refrigerated intelligent unmanned retail equipment. In view of the problems of elution and drying, such as unclean rinsing, high noise of dehydration vibration, and accumulation of linen scraps in the air duct, we have achieved breakthroughs in the research on elution and drying performance, with rinsing capacity increasing by 7% and developing low vibration and low noise washing machines, so as to achieve the effect of maintaining efficient drying for a long time. The industry’s first thermal comfort control technology based on sleep staging has established the thermal comfort equation (SPMV equation) based on sleep process to establish the relationship between sleep and environmental parameters, filling the gap in the industry where there is only the thermal sensation of the waking state but a lack of thermal comfort environmental parameters in the sleep process. ? Certification from authorities: For the first half of 2024, the Company received a total of 17 State Science and Technology Progress Award, more than any other company in the industry. The Company won the Disruptive Technology Innovation Competition of the Ministry of Science and Technology for two consecutive years, the highest accolade in the industry.? Leadership in patent quality: For the first half of 2024, Haier Smart Home has accumulated more than 109,000 patents applications globally, including more than 70,000 invention patents. The Company also accumulated 12 state patent gold awards, ranking first in the domestic market.In the ‘Global Smart Home Invention Patent Ranking’ in the first half of 2024, Haier Smart Home ranked first in the world for the eleventh consecutive times with 3,109 published patent applications. ? Leadership in international standards: For the first half of 2024, Haier Smart Home has cumulatively led and participated in the drafting of 100 international standards and 708 state/industrial standards. We are the only company in the industry to have participated in smart home standards from international organizations including the IEC, ISO, IEEE, OCF and Matter. We are also the only enterprise in the world to serve on both the IEC Board and the IEC Market Strategy Board, which have enabled the Company to stay actively involved in the formulation of international standards. ? Leadership in experience design: Haier won over 600 accolades, including international design awards such as the German IF Design Award and the Red Dot Design Award. The Company won six international design gold awards and won 3 China Excellent Industrial Design Gold Awards from the (viii) Sustainability ? Global ESG governance structure: Haier Smart Home has established a global ESG governance structure, including the ESG Committee of the Board of Directors, the ESG Global Executive Office, and the Global ESG Executive Working Group, which provides organisational support for the in-depth practice of ESG. ? Green development and low-carbon operation: Haier Smart Home has formulated the “6 Green” strategy of green management throughout the entire life cycle, which includes “green design, green manufacturing, green marketing, green recycling, green disposal, and green procurement”, and promotes green actions throughout the entire life cycle. Haier Smart Home has integrated low-carbon, recycling, energy saving and emission reduction into its daily operations to promote green upgrading of the industry.? Social responsibility and charity work: Haier Smart Home actively participates in public welfare projects such as the Hope Project, rural revitalisation, and emergency relief on a global scale, and continues to give back to society through donations and volunteer services.? Leading ESG rating: Haier Smart Home has the leading rating among its peers in China in respect of the ESG ratings issued by three major organizations, namely CSI, MSCI and Wind, which demonstrates its excellent performance in environmental, social responsibility and corporate governance. (ix) Staying committed to the principle of ‘value of people comes first’‘Value of people comes first’ has always been a guiding principle for Haier’s development. From the autonomous operation team at the start of the venture to the current “Rendanheyi (人單合一)” model, Haier encourages every employee to maximize their own values while creating values for users. In Haier’s “Rendanheyi (人單合一)” model, ‘Ren’ refers to creators; ‘Dan’ refers to user value; ‘Heyi’ refers to the integration of values realized by employees and the values created for users. ‘Value of people comes first’ is the highest purpose of the “Rendanheyi (人單合一)” model. Haier Smart Home adheres to the values of recognizing users’ demand as priority and denying our own perceptions and is committed to the ‘two creative spirits’ of entrepreneurship and innovation. We turned employees into creators, implementers into entrepreneurs, and transformed enterprises into open ecosystem platforms, which have supported the Company to become a global leader of smart home in the Internet of Things era. III. DISCUSSION AND ANALYSIS ON OPERATIONS Part 1: Discussion and analysis on overall operations During the reporting period, in response to changing environment, the Company advanced end-to-end digital transformation, improved user experience and operational efficiency, to improve profitability. In the first half of 2024, the Company recorded sales revenue of RMB135.623 billion, a 3.0% increase compared to the same period in 2023. The following factors are contributing to revenue changes.In domestic markets, despite weak momentum in the white goods sector, particularly against a 14.5% drop in air conditioner retail sales, the Company managed to grew revenue by 2.3% in the first half this year, leveraging multi-brand product lineup and innovative new media marketing strategies.The Company’s revenue from overseas markets grew by 3.7% in the first half of the year. In developed markets like the U.S. and Europe, where inflation suppressed demand, the Company increased market share by launching high-end products, optimizing supply chain, and improving operational efficiency. In rapidly growing South Asia, Southeast Asia, and the Middle East & Africa, the Company strengthened supply chain and distribution network, enhanced high-end product lineup and increased price indices to achieve 9.9% revenues growth in South Asia, 12.4% in Southeast Asia and 26.8% in Middle East & Africa in the first half this year. In the first half of 2024, the net profit attributable to the shareholders of the parent company was RMB10.42 billion, representing a 16.3% increase from the same period in 2023. The net profit attributable to the shareholders of the parent company after deducting non-recurring profit or loss amounted to RMB10.161 billion, representing a growth of 18.1% compared to the same period in 2023. In the first half of 2024, the Company’s gross profit margin was 30.6%, up 0.2 percentage points compared to the same period in 2023, leveraging digitalizing procurement, R&D, and manufacturing to coordinate production and sales management systems in domestic market; while we improved cost competitiveness with digital procurement platform and enhanced utilization through global supply chain collaboration. The selling expense ratio in the first half of 2024 was 13.8%, an improvement of 0.5 percentage points compared to the same period in 2023, leveraging digitally enhanced efficiency in marketing resource allocation, logistics network and warehouse management. The administrative expense ratio in the first half of 2024 was 3.8%, an improvement of 0.3 percentage points compared to the same period in 2023, leveraging streamlining business processes, and enhancing organizational efficiency. — The financial expense ratio in the first half of 2024 was 0.04% (“+” as expenses, “ ” as income), an increase of 0.05 percentage points compared to the same period in 2023 as higher interest income from improved capital management could not offset the increase in interest payment.The Company’s net cash flow from operating activities in the first half of 2024 was RMB7.818 billion, an increase of RMB1.028 billion year-on-year, achieved from increased operating profit and enhanced operational efficiency during the period. I. Household Food Storage and Cooking Solutions (I) Refrigeration business In the first half of 2024, the Company maintained technological leadership and accelerated overseas high-end brand transformation to improve product competitiveness and market share. During the reporting period, the Company’s global refrigerator revenue reached RMB41.128 billion, a year-on-year increase of 1.8%. According to Gfk, the Company consolidated leadership with offline retail share of 44.1%, and an online retail share of 39% in China; the Company’s retail volume share also went up by 0.4 percentage points reaching 22.9% overseas. R&D The Company leveraged global technology platforms to accelerate development in integrated appliances & furniture solutions, freshness preservation, and ice-making. MSA oxygen control preservation was also made available on more products, to offer user better value for their purchase. In response to users’ needs for integrated home appliances and furnishings Casarte launched built-in Ultra-realm (致境) 600/601 refrigerator which contributed 98% growth in sales volume of seamless built-in units during the first half of the year.Domestic market The Company focused on creating optimal user experiences by leveraging multi-brand portfolio of Haier, Casarte and Leader, catering to specific user needs with distinct value propositions. Haier refrigerators concentrated on full-space freshness preservation technology and smart features, introduced the world’s first full-space smart preservation compartment. This innovation combined freshness preservation technology with smart interaction for superior food storage and management. Casarte refrigerators pioneered high-end integration of home appliances and furnishings by expanding its built-in range. Leader attracted trendy users through performance and aesthetic design, new launches in the first half including Little European style (小歐) series, featuring light green colour, rounded exterior and drawer-style door design. Overseas markets The Company remained committed to premium building by introducing high-end products tailored to local demands overseas. In Western European market, the Company strengthened leading position in multi-door, large-capacity units and while making breakthrough in side-by-side refrigerators, helping Haier brand price index increase to 147. In South Asian market, the Company tailored high-end products to meet local needs, achieving a year-on-year volume growth of 50%. In the Australia, Fisher & Paykel concentrated on ultra-high-end home appliances integrated with home furnishings, with a brand price index reaching 200, while Haier brand targeted mid to high-end mainstream market, to maintain leadership while elevating its price index to 108.(II) Kitchen appliance business In the first half of 2024, the kitchen appliance business focused on iterating product platforms, expanding product lineup, and enhancing presence in home improvement channels to achieve a global revenue of RMB20.275 billion, a year-on-year increase of 0.3%. According to Gfk, in China, the Company’s ranked the third in the offline market with 8.6% retail share, up 0.2 percentage points year-on-year while online retail share went up by 0.7 percentage reaching 5.1%. Casarte ovens ranked first in the price segment above RMB11,000. In the North America, built-in and microwave products continued to gain market share against headwind. In Europe, Haier continued to grow and ranked amongst Top 4 despite industry downtown.（未完）  |