Midea Group Co., Ltd. Semi-Annual Report 2021
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Midea Group Co., Ltd. Semi-Annual Report 2021 Midea Group Co., Ltd. Semi-Annual Report 2021 August 2021 Midea Group Co., Ltd. Semi-Annual Report 2021 Section I Important Statements, Contents and Definitions The Board of Directors, the Supervisory Committee, directors, supervisors and senior management of Midea Group Co., Ltd. (hereinafter referred to as the “Company”) hereby guarantee that the information presented in this report is free of any misrepresentations, misleading statements or material omissions, and shall together be wholly liable for the truthfulness, accuracy and completeness of its contents. Mr. Fang Hongbo, Chairman of the Board and CEO of the Company, Ms. Zhong Zheng, Director of Finance of the Company, and Ms. Chen Lihong, head of the accounting department of the Company, have represented and warranted that the financial statements in this report are true, accurate and complete. All directors of the Company attended the Board meeting to review this report. The future plans and some forward-looking statements mentioned in this report shall not be considered as virtual promises of the Company to investors. Therefore, investors are kindly reminded to pay attention to possible investment risks. The Company plans not to distribute cash dividends or bonus shares or convert capital reserves into share capital. This report has been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese version shall prevail. 2 Midea Group Co., Ltd. Semi-Annual Report 2021 Contents SECTION I IMPORTANT STATEMENTS, CONTENTS AND DEFINITIONS ............................. 2 SECTION II COMPANY PROFILE AND KEY FINANCIAL RESULTS ........................................ 6 SECTION III MANAGEMENT DISCUSSION AND ANALYSIS ................................................. 10 SECTION IV CORPORATE GOVERNANCE .......................................................................... 80 SECTION V ENVIRONMENTAL AND SOCIAL RESPONSIBILITY ......................................... 92 SECTION VI SIGNIFICANT EVENTS ................................................................................... 126 SECTION VII CHANGES IN SHARES AND INFORMATION ABOUT SHAREHOLDERS ..... 140 SECTION VIII PREFERENCE SHARES ............................................................................... 149 SECTION IX BONDS ............................................................................................................ 150 SECTION X FINANCIAL REPORT ........................................................................................ 153 3 Midea Group Co., Ltd. Semi-Annual Report 2021 Documents Available for Reference 1. The original of The Semi-Annual Report 2021 of Midea Group Co., Ltd. signed by the legal representative; 2. The financial statements signed and stamped by the legal representative, the Director of Finance and the head of the accounting department; 3. The originals of all company documents and announcements that are disclosed to the public via newspaper designated for information disclosure during the Reporting Period; and 4. The electronic version of The Semi-Annual Report 2021 that is released on http://www.cninfo.com.cn. 4 Midea Group Co., Ltd. Semi-Annual Report 2021 Definitions Term Definition The “Company”, “Midea”, “Midea Group” or the Midea Group Co., Ltd. “Group” Midea Holding Midea Holding Co., Ltd. TLSC Toshiba Lifestyle Products & Services Corporation KUKA KUKA Aktiengesellschaft Hiconics Hiconics Eco-energy Technology Co., Ltd. WDM Beijing Wandong Medical Technology Co., Ltd. Swisslog Swisslog Holding AG Servotronix Servotronix Motion Control Ltd. WINONE WINONE Elevator Company Limited Reporting Period 1 January 2021 to 30 June 2021 5 Midea Group Co., Ltd. Semi-Annual Report 2021 Section II Company Profile and Key Financial Results 1. Corporate Information Stock abbreviation Midea Group Stock code 000333 Stock exchange where the shares of the Company are Shenzhen Stock Exchange listed Name of the Company in 美的集团股份有限公司 Chinese Abbr. of the Company name 美的集团 in Chinese Name of the Company in Midea Group Co., Ltd. English (if any) Abbr. of the Company name Midea Group in English (if any) Legal representative Fang Hongbo 2. Contact Us Company Secretary Representative for Securities Affairs Name Jiang Peng You Mingyang Midea Headquarters Building, No. 6 Midea Headquarters Building, No. 6 Midea Avenue, Beijiao Town, Shunde Midea Avenue, Beijiao Town, Shunde Address District, Foshan City, Guangdong District, Foshan City, Guangdong Province, China Province, China Tel. 0757-22607708 0757-23274957 Fax 0757-26605456 E-mail [email protected] 3. Other Information 3.1 Ways to Contact the Company Changes to the registered address, office address and their zip codes, website address and email address of the Company in the Reporting Period: □ Applicable √ N/A 6 Midea Group Co., Ltd. Semi-Annual Report 2021 No such changes in the Reporting Period. The said information can be found in the 2020 Annual Report. 3.2 Information Disclosure and Place Where the Semi-Annual Report Is Kept Changes to the media for information disclosure and the place where materials carrying disclosed information such as this Report were kept in the Reporting Period: □ Applicable √ N/A The newspapers designated by the Company for information disclosure, the website designated by the CSRC for disclosing this Report and the place where materials carrying disclosed information such as this Report were kept did not change in the Reporting Period. The said information can be found in the 2020 Annual Report. 4. Key Accounting Data and Financial Indicators Whether the Company performed a retroactive adjustment to or restatement of accounting data □Yes √No H1 2021 H1 2020 Change (%) Operating revenue (RMB'000) 173,809,565 139,067,022 24.98% Net profit attributable to shareholders of 15,009,046 13,928,295 7.76% the Company (RMB'000) Net profit attributable to shareholders of the Company before non-recurring 14,636,511 13,457,044 8.76% gains and losses (RMB'000) Net cash flows from operating activities 20,176,410 18,405,491 9.62% (RMB'000) Basic earnings per share (RMB/share) 2.17 2.01 7.96% Diluted earnings per share 2.16 2.01 7.46% (RMB/share) Weighted average ROE (%) 12.63% 13.03% -0.40% 30 June 2021 31 December 2020 Change (%) Total assets (RMB'000) 380,211,202 360,382,603 5.50% Net assets attributable to shareholders 113,240,409 117,516,260 -3.64% of the Company (RMB'000) Total share capital of the Company on the last trading session before disclosure: Total share capital of the Company on the last trading 6,981,308,571 session before disclosure (share) 7 Midea Group Co., Ltd. Semi-Annual Report 2021 Fully diluted earnings per share based on the latest 2.15 share capital above (RMB/share) 5. Differences in Accounting Data under Domestic and Overseas Accounting Standards 5.1 Differences in the net profit and net assets disclosed in the financial reports prepared under China Accounting Standards (CAS) and International Financial Reporting Standards (IFRS) □Applicable √N/A No such differences for the Reporting Period. 5.2 Differences in the net profit and net assets disclosed in the financial reports prepared under CAS and foreign accounting standards □Applicable √N/A No such differences for the Reporting Period. 6. Non-recurring Profits and Losses √Applicable □N/A Unit: RMB'000 Item Amount Note Gain or loss from disposal of non-current assets -17,085 Except for effectively hedging business related to normal business operations of the Company, gain or loss arising from the change in the fair value of financial assets held for trading, derivative financial assets, financial liabilities held for trading, derivative financial -101,719 liabilities and other non-current financial assets, as well as investment income or loss produced from the disposal of the aforesaid financial assets and liabilities Other non-operating income and expenses except 544,913 above-mentioned items Less: Corporate income tax 64,272 Minority interests (after tax) -10,698 Total 372,535 -- Explain the reasons if the Company classifies an item as a recurring profit/loss item, which is defined as 8 Midea Group Co., Ltd. Semi-Annual Report 2021 a non-recurring profit/loss according to the definition in the <Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Non-Recurring Profits and Losses>, or is enumerated as a non-recurring profit/loss in the said explanatory announcement □Applicable √N/A No such cases for the Reporting Period. 9 Midea Group Co., Ltd. Semi-Annual Report 2021 Section III Management Discussion and Analysis 1. Business Scope in the Reporting Period 1.1 Summary of business scope Midea is a global technology group comprising five major business divisions: the Smart Home Business Group, the Electromechanical Business Group, the HVAC & Building Technologies Division, the Robotics & Automation Division, and the Digital Innovation Business. Midea offers diversified products and services. Specifically, the Smart Home Business Group, as the main operating entity of smart appliances, smart home and related peripheral industries and ecological chains, undertakes the construction of intelligent scenarios for end users, user operations and data value discovery, and is committed to providing the best experience of whole-house smart home appliances and service. The Electromechanical Business Group is capable of carrying out professional R&D, production, and sales of high-precision