GREE ELECTRIC APPLIANCES, INC. of ZHUHAI Annual Report 2020

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GREE ELECTRIC APPLIANCES, INC. of ZHUHAI Annual Report 2020 GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020 GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020 April 2021 GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020 Section I Important Notice, Table of Contents and Paraphrase The Board of Directors, Board of Supervisors, all directors, supervisors and Senior Management Personnel of the Company hereby guarantee that the contents are authentic, accurate and complete, and there are no false records, misleading representations or material omissions in the Annual Report, and shall take all the joint and several legal responsibilities. Dong Mingzhu, the Company's responsible person, Liao Jianxiong, responsible person in charge of accounting work and Liu Yanzi, in-charge person of accounting institution (accounting superintendent) hereby declare and warrant that the financial report in the Report is authentic, accurate and complete. All the directors attended the meeting of the Board of Directors in respect of deliberation of the Report. The forward-looking statements such as future plans and development strategies in the Report do not constitute a substantive commitment of the Company to investors. Investors and relevant persons should therefore be aware of risk factors attendant in investment and understand the differences between plans, forecasts and commitments. The Company's profit distribution proposal passed upon deliberation at the meeting of the Board of Directors is set out as below: Based on the total number of 5,832,851,217 shares of the Company enjoying profit distribution rights as of 28 April, 2021 (the total stock capital of 6,015,730,878 shares excluding the 182,879,661 shares held in the repurchase account of the Company), the Company plans to distribute all shareholders a cash dividend of RMB 30 (tax included) per 10 shares, but does not plan to give any bonus share or use any public reserve funds for capitalization. 1 GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020 Table of Contents Section I Important Notice, Table of Contents and Paraphrase ................................................................................... 1 Section II Company Profile and Main Financial Indices .............................................................................................. 4 Section III Corporate Business Overview ....................................................................................................................... 9 Section IV Discussion and Analysis of Business Operation ......................................................................................... 17 Section V Important Events ........................................................................................................................................... 53 Section VI Changes in Stock Capital & Information of Shareholders ....................................................................... 83 Section VII Related Information of Preferred Stock ................................................................................................... 91 Section VIII Related Information of Convertible Corporate Bonds .......................................................................... 92 Section IX Directors, Supervisors, Senior Management Personnel and Employees ................................................. 93 Section X Corporate Governance ................................................................................................................................ 109 Section XI Related Information of Corporate Bonds .................................................................................................114 Section XII Financial Report ........................................................................................................................................115 Section XIII References ................................................................................................................................................ 274 2 GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020 Paraphrase Items Means Contents Company, the Company, the enterprise, GREE Means GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI ELECTRIC APPLIANCES or GREE GREE GROUP Means Zhuhai Gree Group Co., Ltd. Zhuhai Mingjun Means Zhuhai Mingjun Investment Partnership (Limited Partnership) Finance Company Means Zhuhai Gree Group Finance Company Limited Jinghai Internet Means Jinghai Internet Technology Development Co., Ltd. Yinlong Means Zhuhai Yinlong New Energy Co., Ltd. CSRC Means China Securities Regulatory Commission Report Period Means 1 January, 2020 to 31 December, 2020 3 GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020 Section II Company Profile and Main Financial Indices I. Company information Stock Abbreviation GREE ELECTRIC APPLIANCES Stock Code 000651 Stock Exchange Shenzhen Stock Exchange Name in Chinese 珠海格力电器股份有限公司 Name Abbreviation in Chinese 格力电器 Name in Foreign Language (if GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI any) Name Abbreviation in Foreign GREE Language (if any) Legal Representative Dong Mingzhu Registered Address Jinji West Road, Qianshan, Zhuhai City, Guangdong Province Post Code of Registered 519070 Address Office Address Jinji West Road, Qianshan, Zhuhai City, Guangdong Province Post Code of Office Address 519070 Website http://www.gree.com.cn Email [email protected] II. Contacts and contact information Board Secretary Securities Affairs Representative Name Deng Xiaobo Zhang Zhouhu, Yan Zhangxiang Jinji West Road, Qianshan, Zhuhai City, Jinji West Road, Qianshan, Zhuhai City, Address Guangdong Province Guangdong Province Tel 0756-8669232 0756-8669232 Fax 0756-8614998 0756-8614998 Email [email protected] [email protected] III. Information disclosure and place of the report Media designated by the Company for information China Securities Journal, Securities Times, Shanghai Securities News and disclosure Securities Daily Website specified by CSRC for release of the Annual http://www.cninfo.com.cn 4 GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020 Report Place where the Annual Report is available for Investment Management Department of the Company inspection IV. Alteration of registration Organization code 91440400192548256N Changes (if any) in the main business since No change listing of the Company On 2 December, 2019, Gree Group and Zhuhai Mingjun signed the Share Transfer Agreement. Gree Group planned to transfer 902,359,632 shares of the Company with unlimited sales conditions held by Gree Group to Zhuhai Mingjun at a price of RMB 46.17/share (accounting for 15% of the Company's total equity); On 13 December, 2019, the Zhuhai Municipal People's Government and the State-owned Assets Supervision and Administration Commission of the State Council Changes (if any) in the controlling (SASAC) of Zhuhai City separately approved the share transfer. shareholders Gree Group obtained the Transfer Registration Confirmation issued by China Securities Depository and Clearing Corporation Limited (CSDC) Shenzhen Branch on 3 February, 2020. The share transfer registration procedures for the transfer of this agreement have been completed, and the transfer date is 23 January, 2020. After the completion of the share transfer registration, the Company has neither a controlling shareholder nor an actual controller. V. Other related information Accounting firm engaged by the Company Name of the Accounting Firm Union Power Certified Public Accountants (Special General Partnership) Office Address No. 169 Donghu Road, Wuchang District, Wuhan City Names of Accountants as Han Zhenping, Geng Ting Signatories Sponsor engaged by the Company to perform continuous supervision during the Report Period √ Applicable □ Not applicable Name of the recommended Name of the sponsor Office address of the sponsor Continuous supervision period representative 26F, CTS Tower, No.4011, Huatai United Securities Co., From 26 July, 2019 to 25 July, Shennan Boulevard, Futian Gu Chongxiang, Li Shijing Ltd. 2020 District, Shenzhen Financial adviser engaged by the Company to perform continuous supervision during the Report Period □ Applicable √ Not applicable 5 GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2020 VI. Main accounting data and financial indices Whether the Company has retroactive adjustment or restatement of previous accounting data □ Yes √ No Unit: Yuan Increase/Decrease Item 2020 2019 over the previous 2018 year Operating Revenue (Yuan) 168,199,204,404.53 198,153,027,540.35 -15.12% 198,123,177,056.84 Net profit attributable to shareholders of 22,175,108,137.32 24,696,641,368.84 -10.21% 26,202,787,681.42 listed Company (Yuan) Net profit attributable to shareholders of listed Company less non-recurring gains 20,285,816,036.00 24,171,511,911.32 -16.08% 25,580,865,501.38 and losses (Yuan) Net cash flow generated from operating 19,238,637,309.16 27,893,714,093.59 -31.03% 26,940,791,542.98 activities (Yuan) Basic earnings per share (Yuan per 3.71 4.11 -9.73% 4.36 Share) Diluted earnings per share (Yuan per 3.71 4.11 -9.73% 4.36 Share) Weighted average return on net assets 18.88% 25.72% -6.84% 33.36% Increase/Decrease Item At the end of 2020 At the end of 2019 over the previous At the end of 2018 year Total asset (Yuan) 279,217,923,628.27 282,972,157,415.28 -1.33% 251,234,157,276.81 Net asset attributable to shareholders of 115,190,211,206.76 110,153,573,282.67 4.57% 91,327,095,069.10 listed Company (Yuan) VII. Accounting data differences under domestic and foreign accounting standards 1. Differences in net
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