Company Code: 600690.SH, 690D.DE Short Name: Haier Smart Home

Haier Smart Home Co., Ltd.

2025 Interim Report

Important Notice

I. The Board of Directors, directors and senior management of Haier Smart Home Co., Ltd. (the“Company”) are individually and collectively responsible for the content set out therein andhereby assure that the content set out in the interim report is true, accurate and complete,and free from any false record, misleading representation or material omission.II. All directors attend the Board of Directors.III. The interim report is unaudited.IV. Li Huagang (legal representative of the Company), Sun Jiacheng (chief financial officer of theCompany) and Ying Ke (the person in charge of accounting department) hereby certify thatthe 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 forthis reporting period resolved and passed by the BoardProposal of profit distribution for the reporting period are examined and reviewed by the Board: todeclare a cash dividend of RMB2.69 per 10 shares (tax inclusive) to all shareholders based on the totalnumber of shares held on record date and after deducting the repurchased shares from therepurchase account upon the execution of distribution proposal, with proposed distribution amountingto RMB2,506,684,210.62 (tax inclusive). The proportion of cash distribution is 20.83% of the net profitattributable to shareholder of parent company of the Company for the current half-year. If there is anychange in the total share capital of the Company during the period from the date of this report to therecord date of the equity distribution, the total distribution amount will be remained unchanged withcorresponding 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 donot constitute our substantial commitment to investors. Investors are advised to pay attention toinvestment risks.VII. Is there any fund occupation by controlling shareholders and other related parties fornon-operational purposesNoVIII. Is there any provision of external guarantee in violation of prescribed decision-makingproceduresNoIX. Are there more than half of the Directors could not warrant the truthfulness, accuracy andcompleteness of the interim report disclosed by the CompanyNo

Important Notice

X. Important risk warnings

For the possible risks which the Company may encounter, please refer to the relevant information setout 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

28 August 2025

Contents

SECTION I— DEFINITIONSSECTION II—GENERAL INFORMATION OF THE COMPANY AND KEY FINANCIAL INDICATORSSECTION III— MANAGEMENT DISCUSSION AND ANALYSISSECTION IV— CORPORATE GOVERNANCE, ENVIRONMENTAL AND SOCIALSECTION V— SIGNIFICANT ISSUESSECTION VI—CHANGES IN SHARES AND INFORMATION ABOUT SHAREHOLDERSSECTION VII— RELEVANT INFORMATION OF CORPORATE BONDSSECTION VIII— FINANCIAL REPORT

Documents Availablefor Inspection

I.2025 Interim Report of Haier Smart Home Co., Ltd. with signature of thelegal representative.II.Financial statements with signatures or seals of the person in charge of theentity, chief accountant and person in charge of accounting department.III.All documents publicly disclosed in China Securities Journal, Shanghai

Securities News, Securities Daily, Securities Times and on the website ofthe Shanghai Stock Exchange (www.sse.com.cn) during the reportingperiod.

Section I Definitions

Unless otherwise stated in context, the following terms should have the following meanings in this report:

DEFINITION OF FREQUENTLY USED TERMSCSRCChina Securities Regulatory CommissionSSEShanghai Stock ExchangeThe Company, Haier SmartHome

Haier Smart Home Co., Ltd, its original name is “Qingdao Haier Co., Ltd.”,and the original short name is “Qingdao Haier”Four Major SecuritiesNewspapers

China Securities Journal, Shanghai Securities News, Securities Times,Securities DailyHaier Electronics, 1169Haier Electronics Group Co., Ltd. (a company originally listed in Hong Kong,

stock code: 01169.HK), a subsidiary as accounted for in the consolidatedstatement of the Company. Haier Electronics has been privatized by way of Hshares issuance on 23 December 2020 and became a wholly-ownedsubsidiary of the Company since then.GE AppliancesHousehold appliances assets and business of General Electric Group, which

are currently owned by the Company.FPAFisher & Paykel Appliances Holdings Limited (Chinese Name: ) 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 wholly-owned subsidiary of the Company.CandyCandy 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.EuromonitorEuromonitor, 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.

Section I Definitions

GfKGfK Group, the world’s leading market research company. After a long period

of development and accumulation, GfK Group’s global market researchbusiness covers consumer durables research, consumer research, mediaresearch, healthcare market research and special studies.All View CloudAll View Cloud (AVC) is a big data integrated solution provider to the smart

home field, providing enterprises with big data information services, regulardata information services and special data services.IECThe International Electrotechnical Commission. Founded in 1906, it is the

world’s first organization for the preparation and publication of internationalelectrotechnical standardization and is responsible for internationalstandardization for electrical engineering and electronic engineering. The goalsof the commission include: to effectively meet the needs of the global market;to ensure that the standards and conformity assessment programs areapplied globally in a prioritized manner and to the greatest extent; to assessand improve the quality of products and services involved in its standards; tocreate conditions for the common use of complicated systems; to improve theeffectiveness of the industrialization process; to improve human health andsafety, and to protect the environment.IEEEThe Institute of Electrical and Electronics Engineers, an international

association of electronic technology and information science engineers, iscurrently the largest non-profit professional technology society in the world. Itis committed to the development and research of electrical, electronic,computer engineering and science-related fields, and has now developed intoan international academic organization with great influence in terms of thefields of space, computer, telecommunications, biomedicine, power andconsumer electronics.Model ofRendanheyi

(人單合一)

The concept of “Achieving win-win via Rendanheyi (人單合一) “is theguarantee of Haier’s sustainable operation and the driving force of theCompany 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 modelencourages employees to create value for users with an entrepreneurialmindset, and to achieve self-value in line with the those of the Company andits shareholders.APFAnnual Performance Factor: a core indicator of air conditioner energy

efficiency as stipulated by national standards. It is calculated by simulatingoperating conditions across different seasons and temperature conditionsthroughout the year, calculating the ratio of total cooling/heating capacity tototal power consumption. A higher APF value indicates that the airconditioner consumes less power for the same output, reflecting higherenergy efficiency.

Section II General Information of theCompany 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 nameHaier Smart Home Co., Ltd.English short nameHaier Smart HomeLegal representativeLi Huagang

II. CONTACT PERSON AND CONTACT INFORMATION

Secretary tothe Board

Representative ofsecurities affairs

Company Secretary(D/H shares)OthersNameLiu XiaomeiLiu TaoNg Chi Yin, TrevorGlobal Customer

Service HotlineAddressDepartment of

Securities of HaierSmart Home Co.,Ltd. Haier Scienceand TechnologyInnovationEcological Park,No. 1 Haier Road,Qingdao City

Department of

Securities of HaierSmart Home Co.,Ltd. Haier Scienceand TechnologyInnovationEcological Park,No. 1 Haier Road,Qingdao City

Room 1908, 19/F,Harbour Centre,25 Harbour Road,Wan Chai,Hong Kong

/

Tel0532-8893 16700532-8893 1670+852 2169 00004006 999 999Fax0532-8893 16890532-8893 1689+852 2169 0880/Emailfinance@haier.comfinance@haier.comir@haier.hk/

Section II General Information of the Company and Key Financial Indicators

III. SUMMARY OF THE CHANGES IN GENERAL INFORMATION

Registered addressHaier Industrial Park, Laoshan District, Qingdao City (now known as

Haier Science and Technology Innovation Ecological Park, LaoshanDistrict, Qingdao City)Historical change of theregistered address

Prior to the Company’s listing in 1993, the registered address of the

Company was No.165 Xiaobaigan Road, Sifang District, Qingdao City,Shandong Province, and has changed to the current address since1994, during which the address name was adjusted in line with thechange of name of the industrial park but the actual site remainsunchanged.Business addressHaier Science and Technology Innovation Ecological Park,

Laoshan District, Qingdao CityPostal code of thebusiness address

266101Websitehttps://smart-home.haier.com/cn/Email9999@haier.comQuery index for anychanges during thereporting period

Not applicable

IV. MOVEMENT OF PLACE FOR INFORMATION DISCLOSURE ANDDEPOSITDesignated newspaper forinformation disclosure

Shanghai Securities News, Securities Times, China Securities Journal,Securities DailyWebsite for publishing

interim report

www.sse.com.cn; https://smart-home.haier.com/cn/; www.xetra.com,www.dgap.de; https://www.hkexnews.hkDeposit place of interim

report

Department of Securities of Haier Smart Home Co., Ltd.

Haier Science and Technology Innovation Ecological Park,

No. 1 Haier Road, Qingdao CityQuery index for any

changes during thereporting period

Not applicableV. SUMMARIZED INFORMATION OF SHARES OF THE COMPANY

Type of Shares

Stock Exchange ofShares Listed

Stock ShortNameStock Code

Stock ShortName BeforeVariationA shareShanghai Stock

Exchange

Haier Smart

Home

600690Qingdao HaierD shareFrankfurt Stock

Exchange

Haier Smart

Home

690DQingdao HaierH ShareHong Kong Stock

Exchange

Haier Smart

Home

6690/

Section II General Information of the Company and Key Financial Indicators

VI. OTHER RELATED INFORMATION

Applicable √ Not ApplicableVII. KEY ACCOUNTING DATA AND FINANCIAL INDICATORS OF THE

COMPANY (I) Key accounting data

Unit and Currency: RMB

Key accounting data

For the reporting

period(January-June)

The corresponding periodof last year

Increase/decrease

for the reportingperiod compared

with thecorrespondingperiod of last year

(%)AfteradjustmentBefore adjustmentOperating revenue156,494,034,448.85141,982,482,605.75135,622,549,121.0110.22Total profit14,997,056,148.1112,980,773,371.7612,739,064,636.6115.53Net profit attributable to shareholders

of the listed Company12,032,995,820.2710,409,642,540.6310,420,218,389.2215.59Net profit after deduction of non-recurring profit or loss attributableto shareholders of the listedCompany11,702,408,556.7010,160,504,902.3810,160,504,902.3815.18Net cash flows from operatingactivities11,139,045,781.348,424,060,603.437,818,257,937.2632.23

As at the end ofthe reporting

period

As at the end of last year

Increase/decrease asat the end ofthe reporting

period

comparedwith the end

of last year

(%)After

adjustment

BeforeadjustmentNet assets attributable to shareholders

of the listed Company114,894,291,018.55111,778,874,767.22111,366,118,999.172.79Total assets301,700,068,337.08290,736,357,978.75290,113,822,824.613.77

Section II General Information of the Company and Key Financial Indicators

(II) Key financial indicators

Key financial indicators

For the reporting

period(January-June)

The corresponding periodof last year

Increase/decrease for thereporting periodcompared withthe correspondingperiod of last year

(%)Afteradjustment

BeforeadjustmentBasic earnings per share (RMB/share)

1.301.131.1315.04

Diluted earnings per share (RMB/share)

1.291.121.1215.18Basic earnings per share after deducting

non-recurring profit or loss(RMB/share)

1.271.101.1015.45

Weighted average return on net assets (%)

10.349.829.67

Increased by 0.52percentage points

Weighted average return on net assets after

deducting non-recurring profit or loss (%)

10.059.439.43

Increased by 0.62percentage pointsExplanation of the key accounting data and financial indicators of the Company

√ Applicable Not Applicable

In December 2024, the Company realised control over Youjin (Shanghai) Corporate ManagementCo., Ltd. by way of entrustment of voting rights. In March 2025, the Company completed theacquisition of equity interests in COSMOPlat Mould (Qingdao) Co., Ltd. The transaction wasaccounted for as a business combination under common control in accordance with relevantaccounting standards and accordingly, the comparative figures for the corresponding period wererestated.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 InternationalAccounting Standards and Chinese Accounting Standards

Applicable √ Not ApplicableThere is no difference between the net profit and net assets attributable to shareholders of thelisted company presented in the consolidated financial statements as disclosed in accordancewith International Accounting Standards and Chinese Accounting Standards by the Company.

Section II General Information of the Company and Key Financial Indicators

(II) Difference in net profit and net assets attributable to shareholders of the listed

company in financial statements as disclosed in accordance with overseasaccounting standards and Chinese Accounting Standards Applicable √ Not ApplicableApart from the financial statements prepared in accordance with International AccountingStandards, the Company has not prepared financial statements in accordance with otheroverseas accounting standards.

(III) Explanation on difference in domestic and overseas accounting standards

Applicable √ Not ApplicableIX. NON-RECURRING PROFIT OR LOSS ITEMS AND AMOUNT

√ Applicable Not Applicable

Unit and Currency: RMBNon-recurring profit and loss itemsAmountProfit or loss from disposal of non-current assets, including the write-off ofprovision for asset impairment–25,721,740.02Government subsidies included in current profit or loss, except for government

subsidies that are closely related to the Company’s normal businessoperations, conformed to requirements of state policies and grantedaccording to specific criteria, and have a sustained impact on the Company’sprofit or loss511,165,290.49Profit 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 disposalof financial assets and financial liabilities, except for effective hedging activitiesrelated to the Company’s normal business operations57,589,058.88Net profit or loss of subsidiaries arising from business combinations under

common control of the current period from the beginning of the period to thedate of consolidation3,593,306.97Other non-operating income and expenses except the aforementioned items–121,916,440.93Less: Effect of income tax–70,186,916.68Effect of minority equity interest (After Tax)–23,935,295.14Total330,587,263.57

Section II General Information of the Company and Key Financial Indicators

For the Company’s recognition of items that are not listed in the “Explanatory Announcement onInformation Disclosure for Companies Offering Their Securities to the Public No.1—Non-recurringProfit or Loss” as non-recurring profit or loss items and the amount of which is significant, and fornon-recurring profit or loss items as illustrated in the “Explanatory Announcement on InformationDisclosure 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 ApplicableX. COMPANIES WITH EQUITY INCENTIVES AND EMPLOYEE STOCKOWNERSHIP PLANS MAY CHOOSE TO DISCLOSE NET PROFITSAFTER DEDUCTION OF THE IMPACT OF SHARE-BASED PAYMENTS

√ Applicable Not Applicable

Unit and Currency: RMB

Key accounting data

For thereportingperiod(January-June)

The corresponding period

of last year

Increase/decrease forthe reporting

period

compared

with thecorresponding

period of last

year (%)Afteradjustment

BeforeadjustmentNet profit after deduction of the

impact of share-based payment12,264,041,860.0510,572,191,979.5610,405,917,567.1916.00

XI. OTHERS

Applicable √ Not Applicable

Section III Management Discussion andAnalysis

I. INTRODUCTION OF THE INDUSTRY WHERE THE COMPANY OPERATESAND ITS MAJOR BUSINESS DURING THE REPORTING PERIODIndustry Overview of the First Half of 2025

1. China Market

The nationwide rollout of the home appliance trade-in programs stimulated demand. According toAVC omni-channel data, China’s home appliance market (excluding 3C products) recordedRMB453.7 billion in retail sales in H1 2025, up 9.2% year-on-year.Air ConditionersMarket demand was boosted by hotter-than-usual summer temperatures and expandedhousehold subsidies (from one unit in 2024 to three units in 2025). Retail sales volume rose

15.6% to 38.45 million units, with sales value up 12.4% to RMB126.3 billion (AVC). Upgrades

were driven by health and comfort features such as multi-outlet airflow, fresh air, andsterilization, with fresh air penetration in offline channels nearing 10%. Specialized products suchas “air-washing” ACs gained traction. High airflow and ultra-high APF efficiency became keyselling points, with Level 1 energy-efficiency models accounting for 98% of online and 95% ofoffline sales.RefrigeratorsThe trade-in program supported steady growth. In H1 2025, retail sales reached RMB67.28billion, up 3.5%, with sales volume of 19.889 million units, up 2.7% (AVC). The product mixcontinued shifting toward French-door and cross-door models, which represented over 60% ofonline sales and nearly 80% of offline sales. Flush-mount refrigerators expanded rapidly, with theshare rising to 52.1% in the first half.

Washing MachinesThe segment grew steadily, supported by essential demand and rising adoption of dryers, miniwashers, and garment care appliances. Zone-washing models and Leader’s innovative triple-drum

Lazy Wash() washing machines drove product mix upgrades and consumer demand.According to AVC, retail sales reached RMB47.6 billion, up 11.5%, with sales volume of 21.03million units, up 10.1% year-on-year. Dryers recorded RMB7.6 billion in sales (+13.7%) on 1.39million units (+16.3%).

Kitchen AppliancesDriven by continued subsidies, the segment maintained steady growth. According to AVC, retailsales of kitchen and bathroom products grew 3.9% and volumes rose 5.4% year-on-year.Lifestyle-driven categories such as dishwashers and built-in microwave-steam-oven combosperformed well, with sales up 6.1% year-on-year, supported by policy expansion and productupgrades. In contrast, integrated stoves declined 27.6% due to weak demand and a sluggishproperty market.Key trends included larger capacity (18-place dishwashers, 70L+ steam ovens), greaterprofessional functionality (integration and specialization), higher efficiency in washing, cooking,disinfection, and ventilation, and more lifestyle-oriented designs.

Section III Management Discussion and Analysis

Water Heater Industry

Both electric storage and gas water heaters remained under pressure. In H1 2025, electricstorage heaters posted sales of RMB10.6 billion (–

1.0%), with volume down 1.6% to 8.13 million

units. Gas heaters reached RMB13.1 billion (+2.3%), with volume up 0.7% to 6.05 million units(AVC). Demand for Level 1 energy efficiency and health-focused models—such as innovativeinner tank designs and mineral-enriched water heaters—continued to rise. Large-capacity andpremium models also grew in importance. Innovation in superconductivity and energy storagespurred breakthroughs in electric heaters, while gas heaters gained recognition for improveddesign, faster heating, and enhanced comfort.Industry TrendsThe home appliance industry is growing steadily with ongoing product upgrades, while consumerdemand is increasingly polarized between premium and value-for-money segments, putting themid-range under pressure. Diversified sales channels such as Douyin and Xiaohongshu, togetherwith more transparent information, are accelerating the shift from channel-driven (B2B) todirect-to-consumer (D2C) models. Rising health awareness is driving specialized demand and theemergence of niche categories such as beauty refrigerators, sideboard refrigerators,zone-washing machines, and kitchen air conditioners. Content-driven e-commerce andprofessional reviews are shaping consumer decisions, while price convergence is makinglow-price strategies less effective and increasing the pressure on retail capabilities. Short videosand live streaming have become key touchpoints, with content marketing, social sharing, andcross-brand collaborations emerging as new growth drivers. As the younger generation emergesas the core consumer segment, demand for emotional value is rising, prompting companies tostrengthen brand building, expand new media engagement, and launch trend-setting products toimprove conversion and sustain growth.

2. Overseas Markets

In the first half of 2025, global home appliance markets showed a clear divergence. Developed

markets were weighed down by high interest rates and persistent inflation, keeping demandsubdued with only modest signs of stabilization, while parts of the emerging worldcontinued to grow. U.S. tariff hikes further reshaped global supply chains and acceleratedthe trend toward nearshoring, pushing companies to add capacity closer to end markets.North America: The market remained under pressure from high interest rates, inflation, and aweak housing sector. In H1 2025, large home appliance shipments fell 0.8% year-on-year, whileretail sales value inched up 0.5%.Europe: The market showed signs of gradual recovery. According to GfK, in Italy, the UK,France, and Spain, the sales volume of major appliances reached 17.4 million units, up 2.0%year-on-year, while retail sales value rose 0.4% to EUR 7.7 billion. The average unit price wasEUR 443, down EUR 7.1 year-on-year.South Asia: India’s market grew about 2.4% in retail sales value, though sales of airconditioners and refrigerators fell in April—May due to weather conditions. In Pakistan, salesvolume rebounded strongly, rising 25% year-on-year, with high-efficiency products gainingsignificant traction—inverter refrigerators accounted for 75% of sales and inverter airconditioners for 94%.

Section III Management Discussion and Analysis

Southeast Asia: Overall demand softened. In the Philippines, both sales volume and retailsales value posted slight growth, remaining stable. In contrast, Thailand, Indonesia, andMalaysia saw volume declines of 7.4%, 6.6%, and 6% respectively, while Vietnam’s salesvolume fell nearly 10%, pressured by weaker-than-expected summer temperatures and subduedconsumer spending.Middle East and Africa: Regional markets maintained growth. In Egypt, retail sales valuereached USD 2.3 billion, up 3% year-on-year. In the Gulf states, value rose 9% to USD 1.8billion. In Saudi Arabia, value stood at USD 3.0 billion, down 3% year-on-year due to demandvolatility.Australia and New Zealand:

o Australia: Consumer spending remained cautious under high interest rates and risinginflation. Sales volume of major home appliances grew 0.8% year-on-year, while retailsales value fell 2.0%. Currency fluctuations and higher living costs led to priceadjustments, with consumers increasingly focused on value for money.o New Zealand: The economy grew slowly and inflation stayed elevated, weighing on

discretionary spending. While sales of high-efficiency products increased, overall demandwas mixed. Traditional retailers remained stable, while new retail entrants intensifiedcompetition, creating a more diversified market landscape.Japan: The refrigerator, freezer, and washer markets contracted slightly. Overall sales volumedeclined 1.4% year-on-year, while sales value dropped 1.3%. Refrigerator sales volume fell

2.5%, washer sales volume fell 0.9%, while freezer sales volume grew 2.6%. Structural shifts

driven by an aging population are supporting demand for high-value, user-friendly products, butdeclining real wages and rising prices are constraining overall consumption.Industry Outlook for the Second Half of 2025

1. China Market

Home appliances have become indispensable to modern living, covering food, clothing care,housing, and bathing. High-quality products enhance daily life, and as AI and smart-homeintegration advance, appliances are becoming more embedded in everyday routines.China is already one of the world’s largest consumer markets for home appliances, with asubstantial installed base. According to AVC, total demand (excluding 3C) reached 647.2 millionunits in 2024, of which major appliances accounted for 279.82 million units. On average,households purchase about 0.6 large appliances annually, equivalent to RMB1,827 in spending.As categories expand and premiumization and smart features accelerate, per-household spendingis expected to continue rising, supporting steady growth for the industry.

2. Overseas Markets

Developed markets are likely to recover only gradually under the weight of higher rates andinflation, but demand will continue to gravitate toward energy-efficient, smart, and premiumproducts, with online channels gaining further share. Cost headwinds, including U.S. tariffs, will

Section III Management Discussion and Analysis

remain a challenge. Emerging markets should continue to benefit from urbanization, favorabledemographics, and consumption upgrades, with penetration still rising and strong growth indemand for smart and green appliances.Explanation of the company’s new material non-core business during the reporting period Applicable √ Not ApplicableII. DISCUSSION AND ANALYSIS ON OPERATIONSFounded in 1984, the Company is committed to being an enterprise of its time. Through relentlessinnovation and iterations, we seize opportunities in the industry by continuously launching innovativeproducts that steer market development. After more than 40 years, the Company has become a globalleader in the major home appliance industry, as well as a pioneer in global smart home solutions.Market Position? Global leader of the major home appliance industry: According to data from Euromonitor—anauthoritative market researcher, the Company ranked first in terms of sales volume in globalmajor appliance market for 16 consecutive years. The Company has a global portfolio of brands,including Haier, Casarte, Leader, GE Appliances, Candy, Fisher & Paykel and AQUA. From 2008to 2024, Haier brand refrigerators and washing machines ranked first among global major homeappliance brands in sales volume for 17 and 16 consecutive years respectively.? Pioneer of global smart home solutions: Capitalizing on our full-range home appliances products,

the Company is recognised by Euromonitor as one of the first in the industry to introduce smarthome solutions. San Yi Niao remained committed to the mission of “providing smart homeexperience for a better home”, by establishing the three core capabilities of innovations in smarthome scenario solutions, experiential scenario stores, and breakthroughs in Smart Home’s mainplatform, we have been dedicated to providing proactive, professional, in-depth, and customisedsmart home solutions for users.Business Layout

Over the years, the Company has established a business layout that includes smart solutions for,amongst others, food storage and cooking, laundry, air and water, the Overseas Home Appliance andSmart Home Business, and Other Business.? 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 kitchenscenario solutions and ecosystem solutions including smart cooking and nutrition planning, theCompany fully addresses users’ need for convenient, healthy and tasteful gourmet experiences.For exampleCasarte developed its proprietary AI Eye Refrigerator, which accurately recognisesover 210 types of ingredients, enabling automatic management of inventory and shelf life. Its AInitrogen-oxygen intelligent control and fast and deep-freezing technology ensure freshness islocked in for 7 days and tenderness preserved for 30 days. The flush-mounted design combinedwith customised multi-material finishes seamlessly integrates into the kitchen décor.

Section III Management Discussion and Analysis

? Household laundry management solutions: Haier’s washing machine focuses on applying originaltechnologies to directly address users’ pain points in home living scenarios and create newexperiences 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 hasevolved from selling individual products to providing scenario-based solutions and offering end-to-end laundry care services. For example, the Casarte AI Eye Washing Machine accuratelyidentifies fabric types using AI, automatically matching optimal washing and care programmeswhile providing early warnings of colour transfer risks. The synergy of AI direct algorithms andtechnology equips the washing machine with “Smart Home” features capable of instantlyadjusting drum speed within 0.01 seconds and precisely performing rapid stops at specific levels,achieving gentler and scientifically optimised tumbling that prevents fibre damage caused byexcessive agitation.? Air solutions (Internet of air):

Home air-conditioners: Through the double drivers of “technology and scenarios”, the Companysells our products (such as home air-conditioners and fresh air systems) to markets worldwide,and provides full-cycle air-conditioning solutions that include design, installation and services, withproducts featuring smart system based inter-connectivity, we have, for example, formulatedall-spaces, all-scenarios intelligent air-conditioning solutions consist of multiple air-conditioner andpurifier coordination, adaptive air flow, air quality monitoring and air disinfection, therebydelivering a healthy and comfortable experience at home and during commuting that caters tousers’ needs in terms of air temperature, humidity and quality. One notable example is Casarte’sdynamic five-constant system, a high-end whole-house air solution designed for villas and largeapartments. It limits temperature fluctuations across the entire space to ≤0.5?C and maintainshumidity levels between 40% and 60%. Employing multi-layer filtration alongside segregated cleanand dirty zones, it provides forest-grade fresh air, operating at noise levels below 30 decibels.Smart buildings: The Company is committed to becoming a leader in efficient, sustainable andsmart building solutions based on China’s “carbon peaking and carbon neutrality” strategy.Focusing on business segments such as smart control, environment, energy and systemintegration of buildings, the Company provides green and smart building solutions integrating“technology + experience + space” for government and public buildings, commercial uses,railways, schools, and hospitals. In areas such as magnetic levitation centrifugal chillers, IoT-based multi-split system, and air-to-water heat pump, not only have Haier occupied a pivotalmarket position in China, but also have achieved remarkable success globally.

Section III Management Discussion and Analysis

? Household water solutions (Internet of water): Through providing worldwide users with electric waterheaters, gas water heaters, solar water heaters, air energy heat pump water heaters, POE waterpurifiers, POU water purifiers, water softening equipment, Haier offers smart water solutionsincluding interactions between water heaters and purifiers, and between heating appliances andwater heaters, so as to comprehensively cater to users’ needs for water purification, softeningand heating. One example is the industry’s pioneering AI dual-cycle constant temperaturetechnology, which utilise “heat storage constant temperature chamber + secondary heatexchange internal circulation” to achieve zero temperature difference when turning the water offand on again, maintaining water temperature fluctuations within ≤0.1?C. Equipped with steplessfrequency conversion water servo technology, it dynamically balances water pressure fluctuations,ensuring stable water temperature even when multiple devices use water simultaneously.Additionally, the 56?C high-temperature sterilisation mode, paired with bipolar ion sterilisation,effectively eliminates 99.9% of Escherichia coli and Staphylococcus aureus, making it thepreferred choice for households with mothers and infants.In 2024, the Company acquired Kwikot, an established water heater brand in South Africa. Withits strong market reputation and well-established sales channels, the acquisition enables theCompany to rapidly expand its water heater business in South Africa market, boosting brandawareness and market share. This acquisition has further strengthened Haier Smart Home’sbusiness presence in the overseas water heater segment.

Global Market Presence

The Company manufactures and sells a comprehensive portfolio of home appliance products andprovides value-added services in more than 200 countries and regions, including North America,Europe, South Asia, Southeast Asia, Australia, New Zealand, Japan, Middle East and Africa.To overseas markets, the Company has been manufacturing and selling proprietary appliance productscatering for local users’ demands for more than 20 years. During the time, a number of acquisitionscontributed to our growth including acquisitions of Haier Group Corporation’s overseas white goodsbusiness (which included Sanyo Electric Co., Ltd.’s white goods business in Japan and SoutheastAsia) in 2015, home appliances of GE in the US in 2016, Fisher & Paykel in 2018, and Candy in2019.In 2024, Haier Smart Home added another two brands, namely CCR and Kwikot, under its beltthrough mergers and acquisitions. The CCR acquisition has enabled Haier Smart Home to pushforward its comprehensive refrigeration chain strategy and broadened its business reach to thecommercial refrigeration segment, providing strong support for the Company’s development in theEuropean market while further promoting the development of the commercial refrigeration sector inAsia-Pacific and other regions. The acquisition of Kwikot, a century-old water heater brand in SouthAfrica, has strengthened Haier Smart Home’s business presence in the water heater sector and furtherfacilitated the rapid penetration of white goods business into the South African market.

Section III Management Discussion and Analysis

At present, the overseas business of the Company has entered a stage of healthy growth, havingachieved a multi-brand, cross-product and cross-regional presence on a global basis. According toEuromonitor, the Company’s market shares (by retail volume) for major home appliances in key regionsaround the globe in 2024 were as follows: ranked 1st in Asia in terms of retail volume with a marketshare of 25.9%; ranked 1st in North America with a market share of 24.5%; ranked 1st in Australiaand New Zealand with a market share of 15.9%; and ranked 3rd in Western Europe with a marketshare of 8%.Other Businesses

Building on our established smart home businesses, the Company has also developed small homeappliances, cleaning robots, RRS Logistics, channel distribution and other businesses. In particular, thesmall 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. It serves toenrich our smart home solutions product mix. RRS Logistics primarily engaged in the provision ofintegrated supply chain management solutions for clients in the home appliance and home furnishingindustries. The channel distribution business primarily offers distribution services for products such astelevisions and consumer electronics for Haier Group or third-party brands, leveraging the Company’ssales network.Honours and Recognitions

During the period, Haier Smart Home once again secured a place on the Fortune Global 500 list,rising 17 positions compared to 2024 and marking its seventh consecutive year on the list,demonstrating robust global competitiveness. Additionally, the Company has been named one ofFortune magazine’s “World’s Most Admired Companies” for seven consecutive years, standing as theonly company from the home appliance and home furnishing sector across Eurasia and outside the USto be included. Moreover, Haier Smart Home has ranked among BrandZ? 2025’s Top 100 MostValuable Global Brands for seven consecutive years, solidifying its position as the world’s only IoTecosystem brand.In terms of corporate social responsibility and sustainable development, Haier Smart Home hasdelivered outstanding performance. The Company has topped the Fortune China ESG Impact list in itsindustry for four consecutive years and has been successfully included in three Hang Seng ESGindices: the HSI ESG Enhanced Index, the HSI ESG Enhanced Select Index and the HSCEI ESGEnhanced Index. It has also received an AA rating from MSCI, placing it at the forefront of thedomestic home appliance industry. Furthermore, the Company was listed on Forbes 2025 Global BestEmployers and was honoured with the 2024–2025 Forbes China “Sustainable Development IndustrialEnterprise” award, reflecting widespread recognition of its ESG efforts.

Discussion and Analysis on Overall Operations for the First Half of 2025

During the reporting period, amid increasing external volatilities, the Company strengthened businessmodel, advanced organizational transformation while fully embracing digitalization and AI technologies.By applying AI tools across the entire value chain, we strengthened operational resilience andimproved market responsiveness, user experience, operational efficiency, and cost competitiveness inorder to enhance profitability.

Section III Management Discussion and Analysis

In the first half of 2025, the Company achieved revenue of RMB156.494 billion, up 10.2% compared tothe same period in 2024. The growth was driven by:

(1) Domestic market. Domestic revenue grew 8.8% in the first half of the year. Despite intensifying

market competition, we leveraged advantages in R&D, manufacturing, distribution, and services tocreate value for users. We launched industry leading products such as the Haier Mailang ()refrigerator and Leader triple-drumLazy Wash() washing machine. We implementedinitiatives including digital inventory and digital marketing to expand touchpoints, accelerateproduct turnover and improve user conversion. Leveraging multi-brand collaborations, Casarterevenue grew by over 20%, and Leader revenue grew by over 15%.

(2) Overseas markets. Overseas revenue grew 11.7% in the first half of the year. During the reporting

period, we advanced premium brand strategy to consolidate market leadership. Throughenhanced collaboration between each product unit and marketing team, we accelerated productlocalization and improved retail capabilities. We strengthened marketing, logistics, service, anddigital platforms to drive growth. In the first half of 2025, white goods and HVAC businessescontinued to outperform the industry in the U.S. and Europe. Emerging markets grew rapidly withrevenue up 33% in South Asia, 18% in Southeast Asia, and 65% in Middle East & Africa. TheCompany continued to implement the integration of CCR and Kwikot in product synergy, marketexpansion, and technology development, establishing a solid foundation for sustained futuregrowth.In the first half of 2025, net profit attributable to shareholders of the parent company reachedRMB12.033 billion, representing a 15.6% increase compared to the same period in 2024. Net profitattributable to shareholders of the parent company after deducting non-recurring profit or loss reachedRMB11.702 billion, up 15.2% year-on-year compared to 2024.

(1) In the first half of 2025, the Company’s gross profit margin reached 26.9%, up 0.1 percentage

points compared to the same period in 2024. In the domestic market, we focused onimplementing ‘low cost, high efficiency’ strategy to enhance end-to-end cost competitivenesswhile committing to premium brand strategy overseas to improve user experience, strengtheningglobal supply chain coordination to optimize manufacturing cost, and establishing digitalprocurement platform as well as cross-border logistics platform.

(2) In the first half of 2025, the Company’s selling expense ratio was 10.1%, an optimization of 0.1

percentage points compared to the same period in 2024. The Company accelerated digitalizationto improve marketing, logistics and warehouse management in domestic market while focusingon building retail capabilities and coordinating global resources to improve operational efficiencyoverseas.

(3) In the first half of 2025, the Company’s administrative expense ratio was 3.8%, flat as compared

with the same period in 2024.

(4) In the first half of 2024, the Company’s financial expense ratio decreased by 0.2 percentage points

to–

0.2% (“+” as expenses, “

—” as income), as a result of exchange gains caused by strongcurrencies including the Euro.

Section III Management Discussion and Analysis

In the first half of 2025, the Company’s net cash flow from operating activities amounted toRMB11.139 billion, an increase of RMB2.715 billion compared to the same period in 2024, attributableto increased operating profits and improved operational efficiency.I. Household Food Storage and Cooking Solutions(I) Refrigeration BusinessThe refrigeration segment reported global revenue of RMB42.853 billion in H1 2025, up

4.2% year-on-year. Overseas emerging markets remained strong, with revenues in

Southeast Asia and South Asia up over 25% year-on-year. According to GfK, theCompany’s retail market share in China reached 46.4% offline, up 2.3 percentage pointsyear-on-year, and 39.4% online, up 0.4 percentage points.China MarketIn China, the Company enhanced consumer experience in healthy food preservation,integrated flush-mount design, smart scenarios, and energy efficiency, with several productsemerging as market bestsellers. In the premium segment, Casarte’sZhiJingseries,equipped with proprietary flush-mount design, MSA nitrogen—oxygen preservation, andbottom-mounted air curtain cooling, achieved sales of 320,000 units, doubling year-on-year.This drove Casarte’s offline market share in the RMB20,000+ segment to exceed 70%,while its online market share in the high-end segment expanded rapidly, rising by 1.7percentage points. In the mid-to-high-end segment, Haier’sHeyueandMailangseries—

featuring full-space preservation and ultra-thin zero-clearance design—delivered over350,000 units in H1, tripling year-on-year, and cumulative sales of 1.5 million units. TheHeyue 625remained the industry’s top-selling single model. In the entry segment, Leadergained share with large-capacity, energy-efficient, and low-noise products. ItsYuejiseries,with a unique corner design and 594mm zero-clearance installation, lifted its share in theRMB2,999–4,999 range by 3 percentage points.Overseas MarketsThe Company advanced localized product designs tailored to climate, power conditions,and space constraints. In South Asia, theT-door LUMI?REseries met demand for largecapacity and categorized storage, while improving cooling stability and efficiency under hotand humid conditions with unstable power. Regional retail volume share rose 0.9percentage points, with revenue up 27% year-on-year. The Company remained No.1 inPakistan and achieved double-digit growth in other major markets. In Southeast Asia, smartice-making andSPACE FITseries refrigerators captured rising mid-to-high-end demand,taking the Company to No.1 in the region. Market share reached 17%, up 3 percentagepoints, with Vietnam and Thailand posting the fastest growth.

Section III Management Discussion and Analysis

Technology and InnovationThe Company introduced theAI Visionfood recognition system (trained on 5 million+images, backed by 100+ patents, identifying 200+ ingredients with mobile tracking),premium flush-mount installation technology (custom panels, six-way adjustment, hydrauliclevelling, 30-minute installation), and upgradedAI nitrogen— oxygen preservation. Thesetechnologies will be applied in new premium models to be launched in H2 and areexpected to expand share in the RMB10,000+ segment while improving margins.

(II) Kitchen Appliance BusinessIn H1 2025, kitchen appliances delivered global revenue of RMB20.672 billion, up 2.0%year-on-year, with sales exceeding 8 million units. According to GfK, the Company’smarket share in China reached 9.2% offline (+1.8ppts) and 6.7% online (+0.5ppts).

China MarketAmid a weak housing market, the Company focused on trade-in demand and consumptionupgrades, launching the constant-airflow silent hood (for low-noise open kitchens), adaptivecooktops (adjusting heat to cookware and cooking method), space-saving steam-ovencombos, along with AI Vision recognition and smart lift hood functions. By partnering withleading renovation companies to bundle full-suite built-in kitchens into renovation packagesand carrying out community renovation campaigns in key cities, the Company acceleratedpenetration in the stock housing market. Casarte kitchen appliances grew revenue over40% year-on-year, retaining leadership in the RMB10,000+ segment.

Section III Management Discussion and Analysis

Overseas Markets

The Company executed localized strategies adapted to space, cooking habits, andefficiency standards. In North America, despite slower housing starts and increasedpromotional activity, the Company leveraged local manufacturing to ensure a stable supply.The launch of theProfilebuilt-in steam-oven combo and theAJEXfreestanding inductionrange secured 4,000 prime displays in key retailers, including The Home Depot, boostingproduct visibility and consumer reach. In Southeast Asia, compact and efficient kitchensuites for small homes drove the Philippines into the top three market positions. In SouthAsia, sales in Pakistan rose 23% year-on-year, consolidating leadership in premiumbuilt-ins. In Middle East & Africa, sales of premium built-in suites nearly doubled as a shareof the business.

II. Household Laundry SolutionsIn the first half of 2025, the washing machine business achieved global revenue of RMB32.006billion, up 7.6% year-on-year, by deepening three core strategies: technological innovation,omni-channel marketing, and comprehensive cost optimization. According to GfK, the Companycontinued to lead the domestic industry with an offline retail share of 46.4%, up 1.5 percentagepoints year-on-year, and an online retail share of 38.8%, up 0.9 percentage points year-on-year.Euromonitor ranked the Company number one in market shares in Australia, New Zealand, Italy,Spain, Pakistan, and Vietnam.China MarketWashing machine business is committed to providing users with outstanding laundry experienceand leading the industry upgrade by leveraging product innovation and technologicaladvancement. In response to user demands for integrated washing and drying, efficient drying,and large capacity, the Company launched the Casarte Languang () Pro washer-dryer suite.This product features a variable frequency motor with full-time 1:1 forward and reverse rotation,preventing tangling and ensuring thorough drying. It includes gentle care functions for washingprecious fabrics like wool. The wash-dry feature automatically starts preheating 15 minutes beforethe wash cycle ends, enhancing wash-dry efficiency. The 580mm ultra-thin design can be fittedseamlessly with cabinet. 12kg Casarte washing machines and washer-dryer combo contributed toover 30% revenue growth, driving market share in price segment above RMB15,000 to over90%.

Section III Management Discussion and Analysis

The Company launched the Casarte Zhongzi Ronglang (?) wash-dry-care all-in-one machineequipped with AI Vision, which manages water levels and detergent ratios, enhancing washingeffectiveness. The AI Smart Eye effectively prevents laundry from getting caught and small items frombeing missing, while detecting residual washing foam and automatically commanding second-roundrinsing. This product helped achieve over 95% market share in the price segment above RMB20,000only two months since its launch.Addressing consumer demand for separate laundry, Leader brand launched the “Lazy WashWashingMachine ()” featuring triple-drum design with independent water circulation that enablessimultaneous washing, while addressing vibration challenges and ensuring stability using an integratedsteel frame and three coordinated direct-drive motors. This washing machine has become aphenomenal hit as it precisely meets young consumer needs.As online shopping penetration continued to rise, our washing machine business increased investmentsin mainstream platforms to enhance page design and create immersive shopping experiences. Tocapture opportunities from the rise of social commerce, we established official accounts on Douyin,Kuaishou, and Xiaohongshu, creating engaging short videos showcasing product features to promoteuser interaction. In the first half of 2025, sales through e-commerce channels accounted for over 40%of total domestic laundry sales.Overseas MarketsWe increased market share through highly differentiated and competitive products with retail-orientedgo-to market strategies. In Europe, we launched ultra-slim built-in front-load washing machines with

0.8-meter depth to fit premium kitchen designs. In emerging markets, we maintained our commitment

to high-end brand development by transitioning product mix from twin-tub to front-load washingmachines while pursuing growth opportunities through differentiated products like the X Series and L+models. During the reporting period, revenue grew by over 40% in South Asian and the Middle East &African markets, while Southeast Asian revenue increased by more than 30%.

Section III Management Discussion and Analysis

III. Air SolutionsDuring the reporting period, the Company’s air solution business realized revenue of RMB32.978billion, up 12.8% year-on-year.(I) Home Air Conditioner Business

Driven by continuous improvement in product competitiveness, further expansion of POPchannel touchpoints, and enhanced e-commerce platform capabilities in the domesticmarket, along with strengthened end-to-end competitiveness in overseas markets, the homeair conditioner business achieved revenue growth of over 10% in the first half of 2025.Market share performance: (1) In the domestic market, according to GfK, our offline andonline retail market share for air conditioners reached 19.7% and 11.3% in the first half of2025, up 1.17 and 0.9 percentage points year-on-year, respectively. (2) In overseasmarkets, according to GfK data, the Company ranked first in both the ITS channel share inItaly and the retail market share in Spain; in Egypt, the Company broke into the top three;in Pakistan, the Company maintained its leading industry position with 45% market share.We strengthened innovation leadership with a focus on leading industry trends for highenergy efficiency, healthy, and comfort features. We leveraged in-house manufacturing ofcore components such as compressors and PCBs, along with supply chain efficiencyimprovements, to enhance cost competitiveness and strengthen retail competitiveadvantages. (1) Our newly launched Haier Energy-Saving series air conditioners feature anAPF value of 6.12, utilizing AI smart energy-saving technology to reduce daily powerconsumption to just 2 kWh in cooling mode, and equipped with bipolar ion sterilization andself-cleansing technology to ensure clean airflow. Sales reached 1 million units in the firsthalf of the year, ranking among the top 10 for sales volume on e-commerce platformsduring the 618-shopping festival. (2) The Haier Smart-Wind series air conditioners featureinnovative Reuleaux triangular wind deflection technology, using mechanical arms toprecisely control deflector angles, completely solving the direct airflow pain point for users.Sales exceeded 410,000 units within six months of launch, driving year-on-year volumegrowth of over 140% in high-end air conditioner sales priced above RMB3,000 per unit.China Market

The Company effectively enhanced our competitiveness in POP and e-commerce channelsthrough digital inventory and marketing transformation, driving rapid business development.

(1) POP channels: we helped distributors establish an asset-light operating model where

inventory is shared across all channels and online bestsellers are also sold in physicalstores, thereby accelerating touchpoint expansion and improving retail efficiency. In the firsthalf of 2025, our POP channel retail sales grew by over 100% and distributor inventoryturnover efficiency improved by more than 30%. (2) E-commerce channels: by establishingan end-to-end conversion system from “brand awareness to user traffic to product sales”,and developing an industry-leading portfolio of energy efficiency products, we improvedoperational efficiency and achieved nearly 50% revenue growth among e-commercechannels during the first half of the year. Our share in emerging e-commerce channels suchas Douyin and Kuaishou rose rapidly, with over 5-percentage-point year-on-year increasesrespectively.

Section III Management Discussion and Analysis

Overseas MarketsThe Company strengthened multi-brand synergies, expanded solution-based products, andfurther localized supply chain, achieving revenue growth of over 15% year-on-year.In the European market, leveraging the “Haier+Candy+HEC” multi-brand portfolio strategy,we continuously improved channel penetration and user coverage. According to GfK data,Haier air conditioner sales volume share in Italy’s ITS channel reached 20.8%, ranking firstin the industry; retail channel share in Spain reached 8.7%, also ranking first. Weaccelerated solution-based product deployment, and launched Haier SENSE product serieswhich have won the German Red Dot Design Award.In emerging markets, we focused on building end-to-end capabilities for the Haier brand,creating optimal user experiences and building market reputation. In Egypt, we launchedthe industry’s first R32 cooling-only inverter air conditioner to address local pain points ofhigh temperatures and expensive electricity. By leveraging our local factory’s agile supplyadvantage and strengthening brand store development, we increased our market share to16%, breaking into the top three. In Pakistan, we launched solar-powered airconditioners that provide cooling in high-temperature conditions with zero grid powerconsumption, allowing users to recoup purchase costs within two years, helping usincrease market share by 2 percentage points to reach 45%.

(II) Smart Building BusinessIn the first half of 2025, we deepened our core technology deployment in magnetic and airbearing, accelerated the implementation of innovative products and solutions in thedomestic market, and continued to enhance our localized operations and professionalcapabilities in overseas markets, achieving sustained and healthy development. Our marketshare expanded both domestically and internationally: according to China IOL data, fromJanuary to June 2025, our domestic central air conditioning market share increased by 0.4percentage points year-on-year to 10.5%, ranking among the top three in the industry; ourexport market share rose by 0.7 percentage points year-on-year to 16.2%, ranking secondin the industry.

Section III Management Discussion and Analysis

We continued to focus on core technology R&D in magnetic and air bearing, AI, andhigh-efficiency energy conservation, using breakthrough innovations to enhance productperformance and user experience, establishing industry standards, and consolidating ourmarket leadership position. (1) Building on our deep technical expertise accumulated over20 years in magnetic and air bearing technologies, we led the development of China’s firstnational standard for magnetic and air bearing central air conditioning—the “Oil-freeBearing Centrifugal Chiller (Heat Pump) Units” national standard. This filled a technicalstandards gap and promoted green transformation across the industry through high energyefficiency thresholds. (2) During the reporting period, our proprietary static pressure airbearing technology filled the gap in large-capacity magnetic and air bearing technology inthe domestic market. Our 600RT air bearing centrifugal chiller equipped with thistechnology achieves oil-free operation and ultra-long service life design, with energyefficiency improved by 50%, providing green and efficient solutions for high-capacity,high-reliability scenario application such as data centers and large hospitals. We enhancedthe innovative integration of AI technology with hardware, which enabled our multi-splitsystems to reach 192HP by combining single 48HP modules. This resulted in the industry’slargest single-unit capacity, with 30% energy savings and 10% reduction in equipmentusage, and this product won the “Innovation Product Award” at China Refrigeration Expo.In the Yancheng Xifu River Green and Low-Carbon Science and Technology Innovation Parkproject, Haier Smart Building provided solutions for centralized management and smartoperations of 12 buildings in the park through IoT multi-split systems and HCM03 localcontrol systems, saving nearly 1 million kWh of electricity annually.

China MarketThe Company strengthened our foundation for long-term development through deepeningour networks, enhancing professional capabilities, and diversifying our brand portfolio. (1)Deepening local networks and improving response efficiency: We expandedoperations in regional markets to precisely cover key touchpoints and strengthen localizedservice capabilities and market responsiveness. Our regional network coverage rateincreased to 78%, and average service response time has been reduced to 24 hours. (2)Strengthening professional capabilities to ensure user experience: We focused onbuilding professional capabilities of our frontline teams through systematic training andstandardized processes, improving professional standards across sales consultation,installation, and after-sales services. In the first half of 2025, we offered specialized trainingto over 12,000 participants, only 0.97% of work orders remained unresolved over one day.

(3) Introducing the PROFROID brand to target high-end market: During the reporting

period, we strategically introduced PROFROID, a global leading brand in CO2 refrigerantapplications and HVAC refrigeration from CCR, to the Chinese market. PROFROID willintegrate CCR’s leading patents and technology in CO2 application with Haier HVAC’s coretechnological advantages. In alignment with China’s “carbon peaking and carbon neutrality”strategic policies, we will progressively introduce low-GWP, highly efficient, reliable, andtechnologically advanced HVAC refrigeration solutions using R410a/R32/R290/R740 (CO2)refrigerants to turbocharge our development in the high-end market.

Section III Management Discussion and Analysis

Overseas Markets

The Company focused on enhancing localized competitiveness in product solutions,professional channels, and supply chains to drive rapid business growth. (1) Buildingdifferentiated competitive product solutions: We deeply integrated domestic andinternational product platforms to systematically optimize cost structures. Through in-depthinsights into local demands, we created comprehensive product solutions tailored for localmarkets that combine cost competitiveness with high compatibility. For example, in MiddleEast and Africa, our cabinet units dedicated to living rooms were integrated with ourdomestic platform, increasing parts commonality by over 15% and reducing overall costsby 6%. (2) Implementing in-depth country-specific development: We adopted a marketsegmentation strategy. In mature markets, we built on our professional expertise to solidifyour leading market position. Our goal was to achieve number one in market share bymaking progress across dimensions of product lines, regions, and sales channels. In lesspenetrated markets, we accelerated channel coverage, achieving breakthroughimprovements in both coverage rate and market share. During the reporting period, weexpedited development in Europe by acquiring KLIMA KFT, Hungary’s leading HVACchannel, which helped us establish a strong distribution network and professional solutioncapabilities that extend throughout Central and Eastern Europe.IV. Household Water Solutions

During the reporting period, the water solution business achieved global revenue of RMB9.793billion through product innovation, deepened market segmentation, and cost initiatives, up 20.8%year-on-year. In China market, according to GfK data, our market share continued to lead theindustry, with offline and online retail share reaching 31.4% and 43.0% respectively, up 2.4 and

0.8 percentage points year-on-year. Overseas water heater doubled sales revenue, benefiting

from differentiated product innovation and accelerated expansion of sales channels.China MarketIn response to users’ upgraded demand for water quality, electric water heaters launchedmagnesium rod-free solutions to address water quality issues caused by magnesium rod heating.Gas water heaters introduced the new Casarte Boundless () series to solve the challenge ofcondensed water drainage, utilizing aerospace-grade atomization technology to achieve 100%discharge. This product achieved sales of over 10,000 units within one month of launch. Thewater solution business also focused on upgrading its offerings from single products tocomprehensive solutions, driving product mix enhancement. Specifically, Casarte water heatersand water purifiers both maintained revenue growth above 20%, while heating boiler revenueachieved year-on-year growth of 32%.

Section III Management Discussion and Analysis

Overseas Markets

We strengthened regional product differentiation and innovation. In North America, we launchedan industry-leading mixed-water valve heat pump product featuring 1234YF eco-friendlyrefrigerant with high energy efficiency, superior performance, low noise, and reduced carbonemissions, contributing to overall 40% water heater revenue growth. In Australia, we introduced330L heat pump water heater with rapid heating, large capacity, energy efficiency, and low noiselevel, driving overall water heater business revenue growth of over 50%. To improveresponsiveness in emerging regions, we established dedicated overseas teams in Southeast Asia,Middle East and Africa, resulting in water heater revenue growth of over 80% in Southeast Asianmarkets. Driven by the acquisition of South Africa’s Kwikot water heater business anddevelopment in the UAE, our water heater business achieved breakthroughs in Middle East andAfrican markets.

V. China OperationDuring the reporting period, we deepened digital transformation in both inventory andmarketing, while strengthening our multi-brand strategy. Through building a digitaloperating system across channels, we improved efficiency and enhanced customer andconsumer experience.Digital Inventory: Streamlined Operations and Faster FulfillmentBy introducing shared digital inventory in POP channels and a One-inventory TC model infranchised stores, the Company eased distributors’ capital and warehousing pressure, enablingthem to focus more on retail execution. In the first half of the year, the POP channel added over100 new distributors, while the sales contribution of bestselling models increased by 6percentage points. In franchised stores, the share of orders delivered directly through theOne-inventory system rose from 29% to 55%, driving a 22% increase in retail sales forparticipating distributors.Logistics and service capabilities were upgraded in parallel. Coverage for 24/48-hour deliveryexpanded to 298 additional counties, while 12-hour delivery was extended to 30 counties.Integrated delivery-and-installation services now reach 99.9% of the network. Meanwhile, bysharing inventory across online and offline channels and applying AI-based demand forecastingfor warehouse allocation, product turnover improved significantly. In the air-conditioning category,for instance, inventory turnover days were reduced by 17%.

Section III Management Discussion and Analysis

Digital Marketing: Enhancing User Reach and Conversion Efficiency, and BrandPresenceLeveraging our self-developed digital marketing model, the Company achieved more efficient usertargeting, conversion, and retention. From January to June, we generated 526,400 leads,translating into RMB1.49 billion in retail sales. By building CTC (Content-to-Consumer), OTO(Online-to-Offline), and OMO (Online-Merge-Offline) capabilities, the Company strengthened trafficacquisition and conversion, creating an end-to-end monetization pipeline. On Douyin,high-engagement A3-tier users grew 52% year-on-year, while user-initiated searches onXiaohongshu increased 26%, gradually establishing a competitive moat in brand influence.At the same time, the Company developed a three-tier communication matrix of KOL—KOE—

KOS, and introduced an AI-powered influencer selection tool on Xiaohongshu. These initiativesimproved account operation efficiency by 15% and increased quality content exposure by 16%year-on-year.Strengthening Multi-Brand Synergy to Broaden Consumer Reach and ConsolidateHigh-End LeadershipCasarte focused on blockbuster products in core price bands and integrated suite solutions,while advancing new media operations and upgrading its digital store system. In the first half of2025, revenue grew by more than 20% year-on-year, with market share reaching 12.3%, up 0.9percentage points (GfK). By expanding new media presence and enhancing online offerings, thebrand improved traffic acquisition and conversion efficiency, driving a higher share of onlinesales.Haier, under the theme ofAI for Home, accelerated its transformation toward youthfulness,globalization, and technology leadership. Retail sales rose 18% in the first half, with membershipsurpassing 130 million. For young consumers, the “Little Red Flower” suite exceeded 1.2 millionunits in retail sales, while the “Mailang” suite targeted middle-class households with AI-poweredhealth-focused and smart home experiences. Meanwhile, 166 new experience centers andflagship stores were opened across tier-1 and tier-2 cities, enhancing product showcases andshopping experiences.Leader continued to target young consumers with innovative offerings designed aroundpersonalization, aesthetics, and efficiency needs, such as the triple-tub washing machines,shaping a differentiated brand identity. Revenue grew more than 15% in the first half of 2025.Fisher & Paykel, positioned as a super-premium brand under the themeLuxury Living, launchedthe new Series 11 lineup featuring top-tier aesthetics with 3mm seamless built-in and fullyconcealed designs, which were well received by consumers. Seventeen new experience centerswere added, further reinforcing brand presence.

Section III Management Discussion and Analysis

Sanyiniao focused on its smart-home strategy, introducing integrated solutions for HVAC,kitchen, and balcony spaces. HVAC leveraged an AI-driven air model for self-sensing,self-judgment, and self-adjustment, enhancing all-season smart operations. In partnership withBoloni, it rolled out suite-based kitchen solutions—including the Zhijing Max, Conductor PRO,and Connoisseur series—strengthening customization and bundled sales. On the AI front, theCompany launched the “Xiaoyou” intelligent agent powered by the Uhome foundation model,enabling vertical AI applications such as AI freshness and AI air in refrigerators and airconditioners—making products more responsive to user needs. Monthly active users of theSmart Home App surpassed 11 million, up 35% year-on-year.VI. Overseas MarketsIn the first half of 2025, the Company delivered revenue of RMB79.079 billion, up 11.66%year-on-year. We strengthened our technology edge through global R&D collaboration,accelerating innovation and enhancing product competitiveness. We optimized our marketpresence by expanding into HVAC and small appliances, enriching the mid—to entry-levelportfolio, and improving channel efficiency in both emerging and developed markets. Weadvanced our global footprint with deeper local engagement, faster organizational response, andsupply chain expansion in Belt and Road countries, capturing new growth opportunities.North AmericaDuring the reporting period, GE Appliances delivered positive year-over-year sales growth, whilepremium and mass premium brand sales achieved double-digit increases.The company continued to expand its portfolio of industry-leading appliance solutions withinnovations rooted in technology to help users streamline everyday tasks. CAF? SmartCounter-Depth 4-Door French-Door Refrigerator with Dual-Dispense AutoFill Pitcher combines aseamless built-in look that fits with cabinets and counters for a clean design offering unmatchedstyle and functionality. GE Profile made its innovative induction cooking technology moreaccessible with the launch of an induction range model. This GE Profile? ENERGY STAR? 30”Smart Slide-In Induction and Convection Range gives consumers access to the speed, precision,responsiveness, easy-to-clean surface and efficiency of induction at price points accessible to abroader range of households. The Company also expanded our portfolio of room air conditionersto include new, powerful solutions across its GE Profile? and GE? brands just in time forsummer months. Air and Water Solutions continued to revolutionize residential water heatersolutions with the all-new GE Profile? GEOSPRING? Smart Hybrid Heat Pump Water Heater,which utilizes advanced heat pump technology to provide up to 4.7 times more energy efficiencythan standard electric water heaters and is up to 20% more energy efficient compared to otherheat pump water heaters, it is also selected by Green Builder Media as Sustainable Product ofthe Year.

Section III Management Discussion and Analysis

EuropeIn the first half of 2025, the Company recorded sales revenue of RMB17.995 billion, up 24.07%compared with the same period in 2024.During the reporting period, Candy brand celebrated 80 years of history with a forward-lookingspirit. The top innovations include a brand-new washing machine with a groundbreaking design,created to offer maximum flexibility in garment care and the Active Scent System of the Pro Dry700 tumble dryer, which releases a delicate fragrance through tablets integrated in the filter. Inthe kitchen, the most innovative techs take centre stage. Candy ovens stand out for their NoPreheat and FullMenu features. In the cooling segment, Panorama Light and Circle Fresh havebeen extended to the built-in range. Fresco fridges now come in modern colours. I-Master Series7 Kettle, Toaster and Blender received iF Design Award. In May, the Candy Bake 800 oven andthe Candy Fresco 500 refrigerator, to the Hoover HF2 vacuum cleaner, and the Haier I-MasterSeries 7 small kitchen appliances line received our prestigious Red Dot Awards. All of theseaward-winning products were created at Milan Experience Design Center, the creative hubopened in late 2020 to merge the concepts of design, connectivity, and user experience in thedevelopment of appliance solutions.The deal between Haier, ATP Tour, and the French Tennis Federation (FFT), which began in2023, includes some of the world’s biggest tournaments such as the Roland Garros, MutuaMadrid Open, Hamburg Open, HSBC Championships, European Open Antwerp, Rolex ParisMasters. The Company received over 3 billion mentions during Roland Garros tournament thisyear.During the reporting period, we actively advanced the post-acquisition integration of CCR andimplemented headquarters synergy initiatives, while maintaining steady business growth. (1) Initialintegration benefits emerged as our headquarters and CCR completed collaborative projectsacross R&D, technology, procurement, and brand expansion, such as the launch of ourfourth-generation CDU in the second half of the year, while organizational optimization andintegration of our micro-enterprise mechanisms further ignited team initiative. (2) Our coreEuropean business returned to growth. While we maintained stability with high-end core clientsand expanded our customer base in food retail, we doubled down on regional customerdevelopment efforts. (3) Our Asia-Pacific business sustained rapid growth with further expansioninto industrial applications, particularly in biopharmaceuticals, food processing, and specializedcold storage. (4) In North America, we focused on accelerating expansion into the industrialequipment market of leading local supermarket chains.South Asia

During the period, revenue from South Asia grew 32.47% year-on-year to RMB8.666 billion.

Section III Management Discussion and Analysis

IndiaDuring the period, the Indian market maintained strong growth, with revenue increasing by over20% year-on-year. This performance was driven by deep consumer insights and enhancedproduct differentiation. In response to Indian households’ growing focus on energy consumptionand vegetarian food refrigeration needs, we launched variable-temperature side-by-siderefrigerators with up to 83% of their capacity configurable as refrigeration space. Thevariable-temperature feature enables flexible food storage and more efficient space utilization. Wealso launched the Gravity series inverter ACs—India’s first fabric-clad AI self-learning airconditioners. Available in seven premium colors such as Morning Mist, Moonstone Gray, andMidnight Dream, the series combines smart cooling technology with fabric aesthetics, enhancingboth comfort and the premium look of modern homes. We also strengthened our retail networkand improved store performance: while online channels maintained rapid growth, we expandedcoverage in national retail chains and traditional offline channels, reaching 65% coverage.Pakistan

In Pakistan, we drove growth through localized product innovation, upgraded touchpoints, andimproved store efficiency. By accelerating in-house supply chain development to enhance costcompetitiveness, we increased our high-end market share and price index, achieving over 40%revenue growth and further strengthening our market leadership.

Australia & New ZealandDuring the reporting period, sales revenue grew 1.02% to RMB3.258 billion.The growth was achieved leveraging upgrading product strategy and solution packages such asHaier W790 refrigerator featuring industry leading 5.5/5-star energy efficiency, 7:3 fridge—

freezer split with Humidity Zone? drawer and separate storage bins for more fresh foodflexibility; Haier H500-H600 oven with steam-assist function and AI assistant; X11 washer, theindustry’s first “breathable” product, with Air Cruise technology to address bacterial growth andX11 dryer with dual-engine heat pump technology and 3D perspective drying technology toprevent clothes from tangling. FPA upgraded built-in products including Columns seriesrefrigerators and 90cm Oven while invested in design interactions and strengthened social mediapresence. The Company also completed 119 cost initiatives, enhanced the efficiency of freighttransportation and warehouse operations, increased the prediction accuracy to 60%, andreduced the inventory turnover from 71 days to 63 days.

Section III Management Discussion and Analysis

Southeast AsiaDuring the period, the Southeast Asian market generated revenue of RMB4.130 billion,representing a year-on-year increase of 18.29%. Market share expanded across the regions. InThailand, our white goods retail volume share increased by 4.1 percentage points to 14.5%,securing the No.1 position. In Vietnam, volume share increased by 2.2 percentage points to

14.9%. In Malaysia, we entered the top three in the white goods market share.

In terms of products, each market drove growth through differentiated innovations. In Thailand,we launched our first smart voice-controlled air conditioner, enabling voice commands for power,temperature, and airflow adjustment; sales exceeded 1,000 units within three months. In Vietnam,Haier brand washing machines were officially launched, including three premium, highlydifferentiated products—the L+ high-efficiency heat pump washer-dryer, the Zhongzi ()all-in-one washer-dryer-care machine, and the X Series equipped with Air Cruise technology—

driving the washing machine share to 21%, up 1.7 percentage points year-on-year. In Indonesia,we launched large-capacity two-door refrigerators with dual independent variable-temperaturecompartments, dual storage boxes, and a built-in water dispenser, further strengthening ourcompetitiveness.In terms of the supply chain, we further developed our local capability to reinforce our marketposition. In Thailand, construction of a new air conditioner plant progressed, optimizing leadtimes and reducing costs. In Indonesia, we focused on boosting manufacturing efficiency andshortening production cycles. We also implemented direct-from-factory delivery, reducing logisticscosts and improving distribution efficiency.

Middle East & AfricaDuring the reporting period, the Middle East and African market generated revenue of RMB2.439billion, representing a year-on-year increase of 65.42%.During the period, we further enhanced our localized manufacturing base layout and drove rapidbusiness growth through key regional partnerships and channel system reforms. (1) Phase I ofour Egypt eco-park has achieved localized manufacturing of air conditioners, washing machines,and televisions, while Phase II production lines for refrigerators and other categories are underconstruction. Our industry-leading localization rate ensured cost advantages in the Egyptianmarket, with plans to export to neighboring markets in the Middle East and North Africa. (2)Following our acquisition and integration of Electrolux’s water heater business in the SouthAfrican market, we leveraged our global network to enhance Kwikot water heater productsacross procurement, R&D, and manufacturing, while actively utilizing Kwikot’s local channeladvantages and logistics network to expand sales of Haier brand water purifiers, refrigerators,washing machines, and other white goods in South Africa and surrounding markets. (3) Wefurther optimized channel incentive mechanisms in Saudi Arabia and the Gulf region whileadvancing digital transformation to stimulate sales team motivation and overall operationefficiency. (4) Additionally, we continued promoting brand and product mix upgrades in keyregions, increasing the proportion of mid to high-end product sales to uplift our premium brandpositioning and unify brand image.

Section III Management Discussion and Analysis

JapanDuring the reporting period, the Company recorded sales revenue of RMB1.958 billion, up 7.17%year-on-year, ranking 2

nd with 14.8% volume market share in refrigerator, 1

stin freezer with

40.4% and 2

nd in washing machine with 18.0%.The Company introduced a collection of innovative products including AQUA NewDelie andFreezia refrigerator series; new heat pump washing machine that ranked 1

stin 10kg range andhelped grow total market share by 1.2 percentage points, Haier MX high-end air conditionerswith self-cleansing, WIFI control and AI energy saving functions. The Company continued to workwith Yuzuru Hanyu as the brand Ambassador to launch several campaigns across multipleplatforms to capture maximum attention.VII. Digital Transformation

During the reporting period, the Company accelerated the deployment of AI across all processesand established a data-driven, intelligent decision-making, and closed-loop optimizationsystem, strengthening its advantages in product innovation, cost efficiency, and operationalexcellence.In product innovation, the Company introduced an AI-driven demand insight system andstandardized data platform, enabling precise identification of user needs and faster discovery ofnew opportunities. Supported by intelligent decision-making models, product portfolio efficiencyimproved by 13% in the first half.In cost management, the Company advanced full-chain digital restructuring. In R&D, the digitalBOM system and intelligent costing models reduced design costs by 5.98% and streamlinedmaterial codes by 18%. In procurement, a transparent digital platform enhanced supplieronboarding efficiency by 28%, while new technology solutions unlocked potential savingsexceeding RMB1 billion. In overseas operations, a pilot program in Thailand achieved end-to-enddigital management of suppliers, materials, orders, and operations, driving a 20% improvementin efficiency and generating over USD 40 million in collaborative value.In supply chain and logistics, the Company established an integrated digital system coveringforecasting, production planning, inventory, and order management. Daily output at domesticmanufacturing bases rose by 14%, planning accuracy improved by 9.7 percentage points, andproduction scheduling time was reduced from 2 hours to 0.5 hours. Order response cyclesshortened to 8.9 days. In logistics, AI-enabled warehousing, intelligent dispatch, and upgradedservice assistants reduced logistics costs by 0.5%, enhanced labor productivity by 11%, andimproved raw material VMI unit cost by 14%, with retail logistics success rates up by 5.35%.

Section III Management Discussion and Analysis

Development Plan for the Second Half of the YearLooking ahead to the second half of 2025, faced with changing user demand and competitivelandscape, we will drive steady growth through systematic innovation to accelerate market shareexpansion and consolidate global leadership.In the domestic market, we will continue to deepen digital inventory and marketing transformation tostay ahead. We will strengthen multi-brand synergies, with Casarte brand focusing on innovation andexperience to create value for users, so as to strengthen high-end market leadership.In overseas markets, we will focus on strategic upgrade and efficiency improvement to drivebreakthroughs. We will continue upgrading global brand portfolio while strengthening localizationcapabilities and refining operations across all business processes. We will prioritize retail transition toexpand market capacity through optimizing distributor and user experiences. At the operational level,we will integrate global platforms in quality control, logistics, services and digitalization to optimizeresource allocation, improve market responsiveness, reduce cost and enhance efficiency, thus drivingsteady growth.Significant changes in the Company’s operating conditions during the reporting period, andmatters occurring during the reporting period that have and expected to have a significantimpact on the Company’s operating conditions

Applicable √ Not Applicable

Section III Management Discussion and Analysis

III. ANALYSIS ON CORE COMPETITIVENESS DURING THE REPORTINGPERIOD

√ 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 acrossall product categories. According to GfK’s report, the Company has established a continued leadingmarket position in key major home appliance categories during the period. In overseas markets, theCompany has adhered to its high-end brand creation strategy. Coupling with the two newly acquiredbrands, namely CCR and Kwikot, this has served us well in building capacity to create globalsustainable growth and continuously gaining market share. Building on this foundation and byleveraging on the consolidation and synergy of our global unified platform, efficiency transformationdriven by digitalisation, technological strength and innovative capabilities, the Company will furtherconsolidate its leading position in the industry. As cornerstone for sustainable development, our“Rendanheyi” (人單合一) Model also provided management guidance to the Company and enabled usto replicate successful experiences. It is believed that the following advantages will help the Companyto continue to strengthen its leading position:

(i) Building up excellent high-end brand operation capabilities and creating a well- recognised high-end

brand through forward-looking layout and long-term investment in the global market to achieve aleading market position.To better meet the need of consumers in pursuit of quality life, the Company has started todevelop the high-end brand Casarte in the Chinese market more than 10 years ago. The creationof high-end brands requires not only focus, experience and patience, but also continuousinnovation of technological standards and differentiated service capabilities to fulfil user demandfor high-quality experiences. The Casarte brand combined the Company’s global technologicalstrengths, product development capabilities and manufacturing craftsmanship, as well as privilegemarketing and differentiation services, which has won the trust of users in China’s high-endmarket. According to data from GfK, the Casarte brand has assumed a definitive leading positionin China’s high-end major home appliance market during the period, ranking first in the retailsales of refrigerator, washing machine and air-conditioner categories in the high-end segment. Inparticular, market shares (in terms of offline retail sales) of the Casarte brand of refrigerators, air-conditioners and washing machines reached 59.2%, 49.2% and 90.4% respectively in the marketwith product priced above RMB15,000 in China.

Section III Management Discussion and Analysis

(ii) Providing users with specialised and customised smart household solutions through the San YiNiao brand with cross-household design focusing on scenario-based experience to carry out themission of “providing smart home experience for a better home”.As users continued to demand for higher living quality, coupled with the development oftechnologies such as Internet of Things and big data, the industry has shown a smart and high-end development trend that prioritised product suites, based upon scenarios, and homeappliances integrated with home furnishings. With leading user insights, extensive productcoverage and technological accumulation from algorithms, big data models and IoT equipmenttechnology, the Company established its three major capabilities in respect of innovations insmart home scenario solutions, experiential scenario stores, and breakthroughs in Smart Home’smain platform to create a new home appliances sales method with cross-household designfocusing on scenario-based experience, and develop high-end, package, and front-end salescapabilities.(iii) Extensive and solid global presence with localised operational capabilityIn respect of overseas markets, the Company seeks overseas expansion of its own brands aswell as synergies with acquired brands to develop overseas markets. Such business strategy hasguided the Company to establish R&D, manufacturing and marketing three-in-one structureacross multiple brands, products and regions, as well as the model of self-development,interconnection and synergised operation.The Company’s extensive global presence depends on its localised business teams as well as itsflexible and autonomous management mechanisms established in various overseas markets,which have enabled the Company to gain rapid insights and respond swiftly to local userdemands. The Company also proactively integrates into local markets and cultures and hasestablished a corporate image that is recognised by local communities in the overseas regionswhere the Company operates.In the first half of 2025, the Company established 10+N innovative ecosystems, 163manufacturing centres, and 126 marketing centres around the world, and achieved a coverage ofnearly 230,000 points of sales in global markets.(iv) A comprehensive portfolio of proprietary brands recognised by users of all tiers

Through organic growth and acquisitions, the Company has formed seven brand clusters,including Haier, Casarte, Leader, GE Appliances, Candy, Fisher & Paykel and AQUA. To addressthe needs of users from different tiers in various markets around the world, the Company hasadopted a differentiated multi-brand strategy in different regions that centred around users, toachieve an extensive and in-depth user coverage. For example, in the Chinese market: the threebrands of Casarte, Haier and Leader achieved the coverage of high-end, mainstream and nichemarket 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-rangeand low-end markets, thereby meeting the preferences and needs of different types of users.

Section III Management Discussion and Analysis

(v) Cross-border acquisition and synergy realisation capabilities

The Company has an excellent track record of acquisition and integration. The Company hasacquired 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 appliancebusiness 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 companyCandy in 2019. In addition, the Company successfully acquired CCR, a commercial refrigerationbrand, in 2024, which has expedited the Company’s comprehensive refrigeration chain strategyand strengthened the development of its commercial refrigeration segment. The acquisition ofKwikot, a century-old water heater brand in South Africa, has expanded the Company’s businessfootprint in the African market and strengthened its market competitiveness in the region.Capitalising on the local resources and technological strengths of CCR and Kwikot, Haier SmartHome has rapidly increased its brand awareness and market share in the region.The Company’s capability to perform acquisition and integration is reflected in the following: Firstof 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 togenerate more value. Secondly, the Company made use of its global platform to empower theacquired companies in terms of strategic planning, R&D and procurement in order to enhancetheir competitiveness. Thirdly, the Company’s open and inclusive corporate culture can supportthe acquired companies in establishing a flexible and autonomous management mechanism,which can easily earn recognition from the acquired companies and is conducive to thepromotion of integration.(vi) Comprehensive and in-depth global collaborations and empowerment

The Company has made full use of its global collaborative platform, as well as its integratedfunctions 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 strongdriving force for its future development.? Global product collaboration: Focusing on the needs of overseas users and customers, we

leverage global R&D resources to ensure close collaboration across all stages, includinguser demand analysis, product planning, technical solution design, development testing andtrial production, and have launched top-selling products in various regions around theworld. For example, the only caravan air-conditioner in North America with a heat pumpthat operates at temperatures as low as–5 degrees Celsius, the first-ever 8.0 Energy Starrefrigerator in the Australian market (which is 40% more energy-efficient than its rivals), abrand-new washing machine platform that meets the needs of both the China-US andEurope-Australia markets, and the global micro-vaporisation and roasting platform thatintegrates the R&D capabilities of Haier from, among others, China, Italy, New Zealand,America, and Japan. Through global product collaboration, overseas brands such as Haier,Fisher & Paykel, Candy, and GE have significantly expanded their product portfolios.

Section III Management Discussion and Analysis

? Global capability collaboration: Development of high-caliber young engineers is conducted inaccordance with the unified training model at both the Qingdao headquarters and GEAppliances in the U.S., which has yielded further progress. In Qingdao, young engineerstrained through the Global Engineer Development Programme (GEDP) are continuouslyjoining industrial R&D teams and becoming key players in product development. Meanwhile,driven by digital transformation, various global regions are progressively adopting advanceddevelopment tools and design methodologies from the automotive industry, significantlyenhancing development accuracy and product quality.? Global design collaboration: An industrial design collaboration system for global top-sellingproducts centred on user experience and branding has been established. Throughcollaboration with global designers, design quality has been greatly improved. For example,the headquarters design team collaborated with the CANDY design team to complete thecreation of Haier’s Titanium Series 2/4/6 ovens under the global platform oven, which havebeen successively launched in markets included Europe and Australia. Meanwhile, theheadquarters design centre supported Candy’s brand transformation and realised Candy’sprice index improvement.? Global procurement collaboration: The Company has established a global procurement

committee to coordinate procurement activities. The committee has built a digital sourcingplatform that brought together partners across industries and regions to develop anautonomous and controlled global supply chain ecosystem. The committee also created aglobal database of preferred suppliers and materials to achieve cost reduction byaggregating resources at the Company level. By unifying procurement rules and processes,the Company established a standardised operating system with differentiated procurementstrategies 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 theresilience of our global supply chain.? Global supply chain collaboration: The Company has built an end-to-end digital management

system for the global supply chain that spanned from marketing to suppliers to productionand logistics. Using intelligent algorithms, the system enabled real-time flexible deploymentof production capacity, and factories across the globe could share and develop smartmanufacturing technologies to boost competitiveness.? Global marketing and brand promotion collaboration: The Company operates a global,

multi-tier brand portfolio and carries out coordinated brand promotion worldwide. It alsopromotes the sharing and replication of successful marketing strategies across regionalmarkets. For example, in Thailand, the Company drew on the online—offline integrationstrategy used in the Chinese market, leveraging social media platforms to deliver targetedadvertising for home appliance products tailored to local household scenarios, successfullycapturing consumer attention.

Section III Management Discussion and Analysis

(vii) Industry-leading R&D and technological capabilitiesHaier Smart Home delves into technological innovation to expedite the development ofinnovation-driven productivity that aims for high-end, smart and green upgrade. Leveraging onour industry-leading and comprehensive R&D presence, we constantly provide global users withhome 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-endbrands, scenario brands and ecosystem brands.? Leadership in original technologies:

Haier Smart Home has launched a magnetically controlled full-space freshness refrigerator,addressing the challenge of frozen food preservation by keeping frozen fish fresh for 60days and chilled meat red, tender, and fresh for 10 days, with nutrients retained asoriginally stored. The fully built-in range hood equipped with AI Eye enables intelligentinteraction with the hob and introduces the industry’s first anti-overflow technology,allowing real-time monitoring during cooking and intelligent flame adjustment to preventspillover. Haier also launched the world’s first integrated triple-drum “lazy” washingmachine, meeting users’ needs for zoned washing and care. It introduced the industry’sfirst air conditioner capable of achieving 110% cooling capacity at 53?C and stableoperation at 70?C. To address the issue of condensate in gas water heaters with top-ratedenergy efficiency, Haier uses aerospace-grade atomisation and centrifugal technology toachieve 100% external discharge of condensate water, rejecting its reuse after purification.It also launched the industry’s first magnesium rod-free water heater with a metal innertank, upgrading to an AI cleaning system that replaces the magnesium rod, truly achieving“no magnesium rod, no scale.”? Certification from authorities:

As of the end of June 2025, the Company received a total of 17 State Science andTechnology Progress Award, more than any other company in the industry. The Companywon the highest accolade of the Disruptive Technology Innovation Competition (WinnerAward), and is the only company to have won the highest accolade in the industry for 3times.? Leadership in patent quality:

As of the end of June 2025, Haier Smart Home has accumulated more than 116,000patents applications globally, including more than 75,000 invention patents. The Companyalso 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 2025, Haier Smart Homeonce again topped the list with 2,208 published patent applications, ranking 1st in theworld for 13 consecutive times.

Section III Management Discussion and Analysis

? Leadership in international standards:

As of the end of June 2025, Haier Smart Home has cumulatively led and participated in thedrafting of 116 international standards and 840 state/industrial standards. We are the onlycompany in the industry to have participated in smart home standards from internationalorganisations including the IEC, ISO, IEEE, OCF and Matter. We are also the onlyenterprise 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 internationalstandards.? Leadership in experience design:

Haier won over 600 accolades, including international design awards such as the GermanIF Design Award and the Red Dot Design Award. The Company won the most internationaldesign gold awards in the industry with six in total and won 3 China Excellent IndustrialDesign Gold Awards from the Ministry of Industry and Information Technology, which is theonly enterprise in China that have earned three consecutive gold awards.(viii) Leading logistics and delivery capabilities in the PRCHaier RRS Logistics has demonstrated strong competitiveness, particularly in its supply chainmanagement solutions, which cover the entire process and various scenarios, as well as adelivery-loading synchronised logistics service network. By leveraging its digital operation andmanagement capabilities, Haier RRS Logistics has integrated resources such as warehouses,transportation, and service outlets. As a result, it has built a nationwide logistics network thatextends to villages and households, offering services that cover the entire process fromprocurement and factory manufacturing to end consumers. Additionally, Haier RRS Logistics hasacquired strong capability in provision of customized services, boasting its strength incustomising supply chain solutions according to individual customer needs, catering to a diverserange of needs of various clients. The Company also excels in cross-border supply chainmanagement, addressing client needs in cross-border logistics through air, marine, railway, andmulti-modal transportation.(ix) Sustainability

Global ESG governance structure: To advance the implementation of ESG initiatives, Haier

Smart Home has further strengthened its organisational structure framework, building on its3-tier global ESG governance structure (the ESG Committee of the Board of Directors, theESG Global Executive Office and the Global ESG Executive Working Group). At theexecutive level, the structure has been expanded to include sub-clusters in areas such asenvironmental management, sustainable risk management, corporate governance, andsupply chain management, providing organisational support for the effective advancement ofESG management.

Section III Management Discussion and Analysis

Green development and low-carbon operation: Haier Smart Home has formulated the “6Green” strategy of green management throughout the entire life cycle, which includes“green design, green manufacturing, green marketing, green recycling, green disposal, andgreen procurement”, and promotes green actions throughout the entire life cycle. HaierSmart Home has integrated low-carbon, recycling, energy saving and emission reductioninto its daily operations to promote green upgrading of the industry.Social responsibility and charity work: Haier Smart Home actively participates in public welfareprojects such as the Hope Project, rural revitalisation, and emergency relief on a globalscale, 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 inrespect of the ESG ratings issued by three major organisations, namely CSI, MSCI andWind. Among which, its MSCI rating has been upgraded to an AA level. This demonstratesits excellent performance in environmental, social responsibility and corporate governance.(x) 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. Fromthe autonomous operation team at the start of the venture to the current “Rendanheyi” (人單合一) model, Haier encourages every employee to maximise their own values while creating valuesfor users. In Haier’s “Rendanheyi” (人單合一) model, “Ren” refers to creators; “Dan” refers to uservalue; “Heyi” refers to the integration of values realised by employees and the values created forusers. “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 recognising users’ demand as priority and denyingour own perceptions and is committed to the “two creative spirits” of entrepreneurship andinnovation. We turned employees into creators, implementers into entrepreneurs, and transformedenterprises into open ecosystem platforms, which have supported the Company to become aglobal leader of smart home in the Internet of Things era.

Section III Management Discussion and Analysis

IV. MAJOR OPERATIONS DURING THE REPORTING PERIOD(I) Analysis of principal business

1. Table of movement analysis on the related items in financial statements

Unit and Currency: RMB

ItemsCurrent period

Correspondingperiod of

last yearChange (%)Operating revenue156,494,034,448.85141,982,482,605.7510.22Operating cost114,437,933,108.76103,945,159,570.6310.09Selling expenses15,816,814,510.0714,517,816,334.588.95Administrative expenses5,891,046,898.485,382,166,653.059.45Financial expenses—350,857,561.4753,045,789.57–

761.42

R&D expenses5,790,436,804.105,182,598,681.2011.73Net cash flow generated from

operating activities11,139,045,781.348,424,060,603.4332.23Net cash flow generated from

investing activities—10,021,560,348.60–9,191,602,063.95–

9.03

Net cash flow generated from

financing activities—2,065,226,988.46–502,661,934.85–

310.86

Other gains775,214,508.42585,424,373.3432.42Gain on changes in fair value34,753,540.63–29,565,597.82217.55Gain on disposal of assets–7,368,037.54–1,569,698.49–

369.39

Non-operating income121,855,656.1476,490,746.4759.31Non-operating expenses257,738,776.0696,898,224.12165.99Reasons for significant changes in certain indicators:

(1). Reasons for the changes in financial expenses: the decrease of 761.42% over the

corresponding period was mainly due to the increase in foreign exchange gains andlosses resulting from the appreciation of foreign currencies during the current period.

(2). Reasons for the changes in net cash flow from operating activities: the increase of

32.23% over the corresponding period was mainly due to improved profitability and

operational efficiency.

(3). Reasons for the changes in net cash flow from financing activities: the increase of

310.86% over the corresponding period was mainly due to the increase in cash

outflows for the repurchase of minority interests.

(4). Reasons for the changes in other gains: the increase of 32.42% over the corresponding

period was mainly due to the increase in government subsidies over thecorresponding period.

Section III Management Discussion and Analysis

(5). Reasons for the changes in the gains on changes in fair value: the increase of 217.55%

over the corresponding period was mainly due to the increase in changes in fair valueof equity investments over the corresponding period

(6). Reasons for the changes in gain on disposal of assets: the decrease of 369.39% over

the corresponding period was mainly due to the year-on-year increase in losses fromthe disposal of non-current assets during the current period.

(7). Reasons for the changes in non-operating income: the increase of 59.31% over the

corresponding period was mainly due to the year-on-year increase in incomesgenerated during the current period that were not directly related to the Company’sordinary operation.

(8). Reasons for the changes in non-operating expenses: the increase of 165.99% over the

corresponding period was mainly due to the year-on-year increase in expensesgenerated during the current period that were not directly related to the Company’sordinary operation.

2. Detailed explanation on significant changes in the operation types and the

components of profit or sources of profit of the Company during the period Applicable √ Not Applicable(II) Explanations on the major changes in profits caused by non-principal businesses

Applicable √ Not Applicable

Section III Management Discussion and Analysis

(III) Analysis of assets and liabilities

√ Applicable Not Applicable

1. Assets and liabilities

Unit: RMB’0,000

Name of Item

Amount at the endof Current Period

Percentage ofAmount at the Endof Current Period toTotal Assets (%)

Amount at the End

of theCorrespondingPeriod of Last Year

Percentage ofAmount at the End

of the

CorrespondingPeriod of Last Yearto Total Assets (%)

Percentage ofChange in Amountfrom the End of the

CorrespondingPeriod of Last Year

to Current Period

(%)Monetary funds5,535,710.2518.355,559,755.4619.12–

0.43

Account receivables3,112,579.6710.322,649,484.559.1117.48Inventories4,351,727.2714.424,318,985.5714.860.76Contract assets149,615.940.5099,796.370.3449.92Investment properties66,537.740.2224,616.130.08170.30Long-term equity investments2,141,390.027.102,093,243.937.202.30Fixed assets3,873,335.1512.843,761,321.5812.942.98Construction in progress567,744.331.88568,605.101.96–

0.15

Right-of-use assets632,438.492.10584,186.962.018.26Short-term borrowings1,612,761.465.351,378,436.744.7417.00Contract liabilities571,060.371.891,086,533.783.74–

47.44

Long-term borrowings1,059,561.663.51966,507.433.329.63Lease liabilities491,625.261.63448,089.601.549.72Other ExplanationsFinancial assets held for

trading

881,544.832.92123,601.780.43613.21Derivative financial assets7,936.510.0314,270.970.05–

44.39

Bills receivable690,761.192.291,217,985.694.19–

43.29

Financing receivables124,819.740.4141,292.260.14202.28Non-current assets due within

one year

230,757.400.76143,975.870.5060.28Long-term receivables13,902.220.0522,472.410.08–

38.14

Derivative financial liabilities44,009.640.157,101.130.02519.76Other payables3,024,054.7410.022,174,613.587.4839.06Non-current liabilities due

within one year

1,114,878.503.701,653,004.055.69–

32.55

Other comprehensive income228,070.060.7682,550.290.28176.28

Reasons for significant changes in certain indicators

(1). The increase in financial assets held for trading of 613.21% from the beginning of the

period was mainly due to an increase in short-term wealth management products;

(2). The decrease in derivative financial assets of 44.39% from the beginning of the period

was mainly due to fluctuations in the fair value of forward foreign exchangecontracts;

Section III Management Discussion and Analysis

(3). The decrease in bills receivable of 43.29% from the beginning of the period was mainly

due to the discounting of bills;

(4). The increase in financing receivables of 202.28% from the beginning of the period was

mainly due to the increase in bills expected to be discounted and endorsed fortransfer;

(5). The increase in contract assets of 49.92% from the beginning of the period was mainly

due to the increase in accounts receivable with performance obligations;

(6). The increase in non-current assets due within one year of 60.28% was mainly due to

the increase in time deposits due within one year;

(7). The decrease in long-term receivables of 38.14% was mainly due to the recovery of

previous payments;

(8). The increase in investment properties of 170.30% was mainly due to the increase in

leases during the current period;

(9). The increase in derivative financial liabilities of 519.76% was mainly due to fluctuations

in the fair value of forward foreign exchange contracts;

(10). The decrease in contract liabilities of 47.44% from the beginning of the period was

mainly due to the decrease in advance payment with performance obligations;

(11). The increase in other payables of 39.06% was mainly due to the increase in dividend

payable;

(12). The decrease in non-current liabilities due within one year of 32.55% was mainly due

to the decrease in long-term borrowings due within one year;

(13). The increase in other comprehensive income of 176.28% was mainly due to changes

in exchange differences on translation of financial statement.

2. Overseas Assets

√ Applicable Not Applicable

(1) Scope of assets

Among the assets, overseas assets amounted to 14,812,771 (unit andcurrency:RMB’0,000), representing 49.1% of the total assets.

Section III Management Discussion and Analysis

(2) Explanation of high percentage of overseas assets

√ Applicable Not Applicable

Unit and Currency: RMBName of overseas assetReason for formationOperating mode

Operating revenueduring the reporting

period

Net profit of thereporting periodOverseas Home Appliance and

Smart Home Business

Overseas mergers &acquisitions and theCompany’s owndevelopment

Localized Operations with theintegration of R&D,manufacturing and marketing

79,078,994,7574,720,998,499Note: Net profit stated in the above table represents operating profit.

3. Restrictions on major assets as of the end of reporting period

Applicable √ Not Applicable

4. Other Explanations

Applicable √ Not Applicable(IV) Analysis of investment

1. Overall analysis on external equity investment

√ Applicable Not Applicable

(1). Significant equity investment

√ Applicable Not Applicable

Unit and Currency: RMB’00,000,000

Name ofinvestedcompanyMain business

Whether thesubject isprincipallyengaged

in theinvestmentbusiness

Investmentmethod

Investment

amount

Percentage

ofshareholding

Whether toconsolidate

Statementaccount

(ifapplicable)

Source offunds

Partner(if applicable)

Investmentperiod (if any)

Progress asof the balancesheet date

Estimatedrevenue

(if any)

Impact onprofit andloss for thecurrentperiod

Whetherinvolved inlitigation

Disclosuredate (if any)Disclosure index

(if any)Haier Group

Finance

Co., Ltd.Enterprise groupfinancialcompanyservices

NoOther12.642%No/Converting

undistributedprofits intoregisteredcapital

/Incomplete//No28 March

2025

Announcement on the

Capital Increase inthe Investee, HaierGroup Finance Co.,Ltd., by ConvertingUndistributed Profitsinto RegisteredCapital inProportion, and theRelated-PartyTransaction of HaierSmart Home Co.,Ltd. (Announcementno.: Lin 2025–008).Total///12.6////////////

Section III Management Discussion and Analysis

(2). Significant non-equity investment

√ Applicable Not Applicable

During the reporting period, the 13th meeting of the 11th session of the Board ofDirectors of the Company considered and approved a new construction project of 3million units of washing machines in the SCO Economic Demonstration Zone,Jiaozhou, Qingdao, with an estimated total investment of RMB1.784 billion. It alsoconsidered and approved the proposed purchase of real estate for Haier WhiteGoods R&D Center for RMB267 million. For details, please refer to the Announcementon Investing in Construction of a New Washing Machine Production Plant with anAnnual Capacity of 3 Million Units of Haier Smart Home Co., Ltd. (Announcement no.:

Lin 2025–016) and the Announcement on the Acquisition of the Real Estate of HaierWhite Goods R&D Centre and the Related-party Transaction of Haier Smart HomeCo., Ltd. (Announcement no.: Lin 2025–015) disclosed by the Company on 28 March2025. For details of other non-equity investment, please refer to “Section VIII FinancialReport” for relevant information of items such as construction in progress.

(3). Items measured at fair value

Asset TypeOpening Balance

Profits or Lossesof Changes inFair Value duringthe Period

CumulativeChanges in FairValue Included in

Equity

Provision forImpairment ofduring the Period

Purchases duringthe Period

Sold/RedeemedAmount duringthe PeriodOther ChangesClosing BalanceWealth management products746,436,121.4012,840,207.0122,851,173,000.0015,292,938,000.008,317,511,328.41Investment in other equity instruments6,073,680,870.82—–374,242,839.4649,238.1687,115,207.3637,784,189.095,650,156,251.25Investment in trading equity instruments195,177,368.7718,929,447.5831,001,704.19183,105,112.16Investment funds294,404,349.3625,935,689.858,196,533.6512,404,953.39–1,299,744.42314,831,875.05Financing receivables412,922,615.2517,123,799,299.2416,288,524,466.151,248,197,448.34Derivative financial instruments71,698,406.90–267,552,013.91–149,398,586.76–15,479,086.92–360,731,280.69Total7,794,319,732.50–209,846,669.47–523,641,426.2239,983,218,071.0531,711,984,331.0921,005,357.7515,353,070,734.52Note: As of 30 June 2025, the aggregate balance of the Company’s foreign exchange derivative transactionamounted to approximately US$2.634 billion.

Section III Management Discussion and Analysis

Investment in securities

√ Applicable Not Applicable

Unit and Currency: RMB

Type ofSecurities

Securities

CodeSecurities Abbreviation

InitialinvestmentcostSources of

funding

Carryingamount at thebeginning ofthe PeriodProfit and lossarising fromchanges in fairvalue duringthe PeriodAccumulatedfair valuechangesincluded inequityPurchasesduring thePeriodDisposalsduring thePeriodInvestmentprofit or lossduring theperiodCarryingamount at the

end of the

PeriodAccounting itemsStock601328Bank of Communications1,803,769.50Self-funding10,584,698.04117,494.1210,702,192.16Investments in other equity instrumentsStock600827Bailian Group154,770.00Self-funding430,510.84—430,510.84Investments in other equity instrumentsStock300183Neusoft Carrier18,713,562.84Self-funding15,125,624.1015,125,624.10Investments in other equity instrumentsStock688455KENGIC13,820,053.00Self-funding86,936,035.20–4,275,003.3429,611,302.7523,204,450.9276,254,180.03Trading financial assetsTotal//34,492,155.34/113,076,868.18–4,275,003.34117,494.1229,611,302.7523,204,450.92102,512,507.13/

Explanation of investment in securities

Applicable √ Not ApplicablePrivate equity investment

√ Applicable Not Applicable

By the end of the reporting period, the Company has historically invested in privateequity funds as follows: the Company invested 63.13% share in Qingdao Haier SAIFSmart Home Industry Investment Center (Limited Partnership) (青島海爾賽富智慧家庭創業投資中心(有限合伙)); Qingdao RRS Huitong Investment Management Co., Ltd.(青島日日順匯通投資管理有限公司), a subsidiary of the Company, invested 49%share in Guangzhou Heying Investment Partnership (Limited Partnership) (廣州合贏投資合夥企業(有限合伙)); Qingdao Haishang Chuangzhi Investment Co., Ltd. (青島海尚創智投資有限公司), a subsidiary of the Company, invested 30% share inHuizhixiangshun Equity Investment Fund (Qingdao) Partnership (Limited Partnership)(匯智翔順股權投資基金（青島）合夥企業(有限合伙)), a private equity fund, and 50%equity of Qingdao Ririshun Huizhi Investment Co., Ltd. (青島日日順匯智投資有限責任公司), a managing partner of the fund; Qingdao Haier Technology Investment Co.,Ltd. (青島海爾科技投資有限公司), a subsidiary of the Company, invested in privateequity funds: 1.265% share in Beijing-Tianjin-Hebei Industrial CoordinatedDevelopment Investment Fund (Limited Partnership) (京津冀產業協同發展投資基金(有限合伙)), 14.85% share in Shenzhen TopoScend Capital Phase I Fund (LimitedPartnership) (深圳市投控東海一期基金 (有限合伙)), 24% share in Qingdao HaimuSmart Home Investment Partnership (Limited Partnership) (青島海慕智家投資合夥企業有限合伙)), and invested in fund management companies: 5.01% equity of CMG-SDIC Capital Co., Ltd. (國投招商投資管理有限公司), 15% equity of ShenzhenTopoScend Capital Co., Ltd. (深圳市投控東海投資有限公司), 49% equity of QingdaoHaimu Investment Management Co., Ltd. (青島海慕投資管理有限公司).

Section III Management Discussion and Analysis

Derivative investment

√ Applicable Not Applicable

(1). Derivatives investments for hedging purposes during the reporting period

√ Applicable Not Applicable

Unit and Currency: RMB’0,000

Type ofderivativesinvestment

InitialinvestmentamountCarrying amountat the beginningof the Period

Gains or losseson fair valuechanges for thecurrent period

Accumulativechanges in fairvalue included in

equity

Amountpurchasedduring thereporting period

Amount soldduring thereporting period

Carrying amountat the end of thePeriod

Proportion ofcarrying amountto net assets ofthe Company atthe end of thereporting period

(%)Forward foreign

exchangecontracts

1,014,344.001,014,344.00–26,903.00–14,940.001,885,518.0016.41Forward

commoditycontracts

4,213.004,213.001473,816.000.03Total1,018,557.001,018,557.00–26,756.00–14,940.001,889,334.0016.44Explanation on any significantchanges in the accounting policiesand specific accounting andauditing principles for the hedgingbusiness during the reporting periodas compared to the last reportingperiod

Accounting principles are based on the Accounting Standards for Business Enterprises. The Company carried out the accountingtreatment for its business in accordance with the relevant regulations of “Accounting Standards for Business Enterprises No. 22—Recognition and Measurement of Financial Instruments”, “Accounting Standards for Business Enterprises No. 24—HedgeAccounting”, “Accounting Standards for Business Enterprises No. 37—Presentation of Financial Instruments” and “AccountingStandards for Business Enterprises No. 39—Fair Value Measurement” published by the Ministry of Finance and its guidance, toreflect the relevant items in the balance sheet and the statement of profit or loss, which are consistent with those of the previousreporting period.Explanation on actual profit or lossduring the reporting period

The actual profit and loss for the reporting period amounted to RMB–

95.3522 million.

Explanation on the effect ofhedging

Under the premise of ensuring normal production and operation, the Company carried out hedging business to reduce the impactof exchange rate fluctuations on the Company’s production and operation and to realize the Company’s long-term stabledevelopment.Source of funds for derivativeinvestments

Self-owned fundsRisk analysis and explanations onrisk control measures for positionsin derivatives during the reportingperiod (including but not limited tomarket risk, liquidity risk, credit risk,operational risk, legal risk, etc.)

I. Foreign exchange hedging business

1. Risk Analysis

The Company and its holding subsidiaries conduct foreign exchange derivatives business in accordance with the principle of

stability, and do not conduct the foreign exchange transaction for speculative purposes. All foreign exchange funds businesses

are based on normal production and operation and rely on specific business operations to avoid and prevent exchange rate risks.

However, there are also certain risks in conducting foreign exchange funds business:

Section III Management Discussion and Analysis

(1) Market risk: Forward settlement of foreign exchange: the Company will determine whether to sign a forward contract based

on the cost of the product (basically consisting of RMB) and market risk. Signing the contract equals to fixing the price ofcurrency exchange. It is effective to resist market fluctuation risk and ensure a reasonable and stable profit level of theCompany through forward settlement of foreign exchange. Forward purchase of foreign exchange: according to the importcontract entered with the customer and exchange rate risk, the future currency exchange cost will be fixed through theunilateral forward purchase of foreign exchange. Although there is a certain risk of loss, the forward purchase of foreignexchange will effectively reduce the market fluctuation risk and fix procurement costs. Other NDF and options businesses aremainly carried out when failed to sign the ordinary forward settlement/purchase of foreign exchange or the costs are toohigh, only serving as the supplement of the above businesses. Exchange rate fluctuation risk in currency swap business isavoided by adjusting the currency of assets and liabilities in order to match the currency of the assets with the currency ofliabilities. Interest rate fluctuation risk in interest rate swap business is avoided by transfer the floating-rate business to fix-ratebusiness or transfer the fixed-rate business to floating-rate business when the rate is going downward to reduce the costs.All of the above businesses have a real business background and there is no speculation.

(2) Exchange rate fluctuation risk: After the Company fixing the forward exchange rate according to the foreign exchange

management strategy, if the actual trend of the foreign exchange rate deviates significantly from the direction of theCompany’s fixed exchange rate fluctuation, the cost of the Company after fixing the exchange rate expenditure may exceedsthe cost of not fixing the exchange rate, thus forming a loss of the Company. When the foreign exchange rate changesgreatly, if the fluctuating direction of the Company’s fixed foreign exchange hedging contract is inconsistent with that of theforeign exchange rate, the foreign exchange loss will be formed; if the exchange rate does not fluctuate in the future, thevast deviation from the foreign exchange hedging contract will also form a foreign exchange loss.

(3) Internal control risk: The foreign exchange derivatives business is highly specialized and complex so it may cause risks due

to imperfect internal control systems.

(4) Transaction default risk: In the event of a default in the counterparty of foreign exchange derivative transaction, the Company

would not be able to obtain hedging profits as agreed to hedge the Company’s actual exchange losses, resulting in a loss ofthe Company.

(5) Customer default risk: The overdue of customer’s accounts receivable and the customer’s order adjustment will make the

actual payment inconsistent with the expected payment, which may result in the actual cash flow could not match the carriedout foreign exchange derivative business term or amount completely, leading to a loss of the Company.

2. Risk Control Measures Taken by the Company

(1) The Company may not engage in any foreign exchange derivative transactions except those carried out for the purpose of

avoiding exchange rate risks, and only for foreign exchange operations related to the Company’s import and export businessand overseas asset/liability management.

(2) The Company implemented approval process in strict compliance with the Foreign Exchange Risk Management Policy and the

Foreign Exchange Derivatives Transaction Management Rules. The general meeting of shareholders of the Company and theBoard of Directors delegate the President/President Office to take responsibility for the operation and management of theforeign exchange derivatives business, the Treasury Department shall act as the handling department, and financedepartment shall act as the daily review department.

(3) The Company conducts foreign exchange derivatives business with financial institutions such as large banks with legal

qualifications. The financial department timely tracks the changes in the transaction and strictly controls the occurrence ofclosing default risk.

(4) The Company conducts foreign exchange derivatives business must base on the Company’s cautious forecast on the foreign

currency receipts and payments and actual business exposure. The delivery date of the foreign exchange derivativesbusiness must match with the Company’s predicted receipt time, deposit time or payment time of the foreign currency, ormatch with the corresponding redemption term of the foreign currency bank borrowing.II. Bulk Hedging Business

1. Risk Analysis

(1) Market risk: The futures and derivatives market itself has certain systematic risks, while hedging requires certain level of price

trend prediction. If the price prediction is directionally incorrect, it may cause losses to the Company.

Section III Management Discussion and Analysis

(2) Policy risk: Significant changes in laws and regulations of the futures and derivatives markets may cause market fluctuations

or make trading impossible, which may result in risks.

(3) Funding risk: Due to the strict margin system and daily mark-to-market system in the futures market, there may be corresponding

funding floating loss risks. The Company will reasonably allocate its own funds for hedging business, control the scale offunds, and conduct funding projections while formulating trading plans to ensure sufficient funds. In the process of businessoperations, the Company will plan and utilize margins reasonably, and adjust funds appropriately to avoid risks.

(4) Operational risk: There may be cases in which suppliers violate their agreements and cancel or delay deliveries, resulting in a

mismatch between the actual hedging quantity and period, causing losses to the Company.

(5) Internal control risk: Futures and derivatives transactions are more specialized and complex, which may give rise to risks caused

by inadequate internal control systems or human errors in operations. The Company has formulated the ManagementMeasures for Hedging Business of Bulk Raw Materials, which contains clear provisions on the authorization scope, approvalprocedures, risk management and other aspects of hedging transactions. The Company shall strengthen internal controlmanagement and improve professionalism, implement risk prevention measures and improve the management standard ofhedging business.

2. Risk control measures adopted by the Company

(1) Matching hedging business with the Company’s production and operation to maximize hedging against the risk of market

fluctuations.

(2) Strictly control the scale of hedging funds and reasonably plan and use margins. The Company will reasonably allocate its own

funds for hedging business, and will not use raised funds directly or indirectly for hedging.

(3) The Company has formulated the Management Measures for Hedging Business of Bulk Raw Materials, which contains clear

provisions on the organizational structure and its responsibilities, business processes, risk management, file management, etc.The Company will strictly follow the provisions of the internal control system to control all aspects of the business, and willimplement the Management Measures in accordance with the established regulations.

(4) The Company will strengthen the training of relevant personnel to enhance their professionalism and overall quality; strengthen

research on the futures and derivatives market to grasp market changes and design specific operational plans for tradingbusiness.

(5) The internal audit department of the Company will conduct regular and irregular inspections of hedging trading business,

supervise hedging trading business personnel in the implementation of the risk management system and risk managementprocedures, and prevent operational risks in the business in a timely manner.Changes in market price or fairvalue of invested derivatives duringthe reporting period, where specificmethodology used and the settingsof relevant assumptions andparameters should be disclosed inthe fair value analysis of derivatives

In respect of changes in market prices or fair value of products, gains or losses actually realized from the invested derivativesamounted to RMB–

95.3522 million during the reporting period. As for the specific methodology used and the related assumptions

and parameter settings: Foreign exchange and interest rate swap forward quotations from financial institutions were used.Litigation case (if applicable)N/ADisclosure date of announcement inrelation to the consideration andapproval of derivatives investmentby the Board (if any)

28 March 2025Disclosure date of announcement inrelation to the consideration and theapproval of derivatives investmentby shareholders’ general meeting (ifany)

29 May 2025

(2). Derivatives investments for investment purposes during the reporting period

Applicable √ Not Applicable

Section III Management Discussion and Analysis

(V) Sale of material assets and equity

Applicable √ Not Applicable(VI) Analysis on major subsidiaries and Investees

√ Applicable Not Applicable

Major subsidiaries and investees with an impact of more than 10% on the Company’snet profit

Applicable √ Not ApplicableAcquisition and disposal of subsidiaries during the reporting period

Applicable √ Not ApplicableThere were no acquisitions or disposals of subsidiaries that had a material impact during thereporting period. For details of other changes, please refer to the relevant contents of sectionsheaded “CHANGES OF CONSOLIDATION SCOPE” in “Section VIII Financial Report” of thisreport.Other explanations

Applicable √ Not Applicable(VII) Structured entities controlled by the Company

Applicable √ Not ApplicableV. OTHER DISCLOSURES

(I) Potential risks

√ Applicable Not Applicable

1. Risk of decreasing market demand due to macroeconomic slowdown. Sales of white goods

and home appliances exhibits inherent cyclicality tied to discretionary consumer spendingpatterns and their expectations of future disposable income growth. Economic slowdownwill reduce consumer spending and cause headwinds to industry growth. In addition, thepersistent sluggish property market will also indirectly affect market demand for homeappliances in a negative way.

Section III Management Discussion and Analysis

2. Risk of price war caused by intensified industry competitions. As industry concentration level

continues to increase in recent years, the white goods industry is highly competitive withpersistent commoditization pressures across core product categories. However, theincrease in inventory level in certain verticals due to demand-supply imbalance may lead toprice wars. Furthermore, rapid technological development, scarcity of talents in theindustry, shortened product life cycles and relative easiness of copycat increase thedifficulty to maintain margin levels. Nevertheless, new products, services and technologiesare often associated with higher selling prices. The Company will actively invest more inR&D to sustain the product roll-out, attract more users through continuous innovation, andmaintain our brand awareness.

3. Risk of fluctuations in raw material prices. The Company’s products and core components

use metals such as steel, aluminum, and copper, as well as commodities such as plasticsand foams. If raw material prices continue to increase, it will put certain pressures on theproduction and operations. In addition, the Company relies on third party manufacturersand suppliers for selected raw materials, components, and manufacturing equipment. Anydisruption in supply chain or significant price increases will have a negative impact on theCompany’s business. As a leader in the industry, the Company will take actions and havecontingency plans including volume and price adjustment mechanism and hedging toreduce the volatility of raw material prices.

4. Operational risks in overseas markets. As manifested by the increasing percentage of revenue

from overseas markets, the Company has developed our global business to a certain extentand established production bases, R&D centers, and marketing centers in key regions ofthe world. Overseas markets are subject to political and economic events (including eventssuch as military conflicts and wars), different legal systems and regulatory regimes of thosecountries and regions. Significant changes in these factors will pose certain risks to theCompany’s local operations. The Company has taken various measures to mitigate therelevant impacts, including collaborating with suppliers and distributors, improvingproduction efficiency to offset the selling expenses, potentially expanding the Company’ssupply resources to other countries, and adopting safety measures to protect ouremployees and assets.

5. Risk of tariff increases. Potential tariff policies implemented and/or to be introduced by the

U.S. and other major economies could negatively impact the existing supply chains of theindustry and the global home appliance players. Higher tariffs would incur extra costs forexport and import, reduce profit margins, weaken the consumer sentiment and demand,and intensify market competition in target markets. The increasing uncertainties regardingtariff policies would force home appliance players to reevaluate their supply chain strategiesand footprints, increase operational complexities and management costs. To cope with thepotential tariff shocks, the Company will actively leverage our localized supply chainresources in respective markets, further optimize supply chain management, enhanceproduction flexibilities, and strengthen regional manufacturing and collaboration capabilities.

Section III Management Discussion and Analysis

6. Risk of exchange rate fluctuations. In conjunction with the Company’s ongoing expansion of

global business operations, a material portion of its import/export transactions andcross-border settlements are denominated in foreign currencies including but not limited tothe US Dollar (USD), Euro (EUR), and Japanese Yen (JPY). If the exchange rates of thesecurrencies fluctuate to a certain extent, it will impact the Company’s financial performanceand potentially increase the financial costs. In addition, the Company’s consolidatedfinancial statements are denominated in Renminbi, while subsidiaries’ financial statementsare measured and reported in the local currencies where they operate. To mitigate theseexposures, the Company maintains a structured currency risk management programutilizing authorized hedging instruments.

7. Risk of relevant policy changes. The home appliance industry is closely related to the

consumer market and property market. Changes in macroeconomic policies, consumptionand investment policies, property policies and relevant laws and regulations will affect theproduct demands, and in turn the sales of the Company. The Company will closely monitorchanges in the relevant policies, laws, and regulations, and make forecasts of marketchanges, in order to ensure further development of the Company.

8. Credit risk. There are possibilities that either the Company may be unable to collect all trade

receivables from its distributors, or the distributors are unable to settle the Company’s alltrade receivables in a timely manner. If that is the case, the Company’s business, financialstatus, and operation performance may be affected negatively. To mitigate this risk, theCompany will maintain flexibilities by offering credit period of 30 to 90 days to certaindistributors based on their credit history and transaction amount.

9. Inventory risk. Excess inventory might occur as the Company may not accurately predict

trends and events at all times and maintain optimal inventory levels. Therefore, theCompany may be forced to offer discounts or promotions to accelerate the slow-movinginventory in these extreme cases. On the other hand, inventory shortage may lead to lossof revenues. The Company will actively manage its inventory and adjust levels according tomarket demand movements, in addition to the regular impairment tests.

10. Capital expenditure risk. In the current macroeconomic environment characterized by slowing

global economy and declining consumer demand, the existing production capacities mayoverwhelm the market in extreme case. This could lead to low utilization rate across theindustry, lower down profitability and ROEs. The Company will actively manage thechanges in the macroeconomic environment by forecasting and recalibrating marketdemand trends, optimizing capacity footprint, and improving existing utilization rate, in orderto minimize capital expenditure risks.

(II) Other disclosures

Applicable √ Not Applicable

Section IV Corporate Governance,Environmental and Social

I. CHANGES IN DIRECTORS AND SENIOR MANAGEMENT OF THECOMPANY

√ Applicable Not Applicable

NamePosition HeldDescription of ChangeLi HuagangChairman, Chief Executive

Officer

ElectedKevin NolanDirector, vice presidentElectedSun DanfengDirector, vice president, Chief

Digital Officer

ElectedGong WeiVice ChairmanElectedLI ShaohuaDirectorElectedYu Hon To, DavidDirectorElectedChien Da-chunDirectorElectedWong Hak KunIndependent directorElectedLi ShipengIndependent directorElectedWu QiIndependent directorElectedWang HuaIndependent directorElectedShao XinzhiVice ChairmanResignedLi Kam FunDirectorResignedLiu DalinChairman of the Board of

Supervisors

ResignedYu MiaoEmployee supervisorResignedLiu YongfeiSupervisorResignedXie JuzhiVice presidentResignedLi PanVice presidentAppointedZhao YanfengVice presidentAppointedLi YangVice presidentAppointedSong YujunVice presidentAppointedGuan JiangyongVice presidentAppointedWu YongVice presidentAppointedFu SonghuiVice presidentAppointedHuang DechengVice presidentAppointedSun JiachengVice president, Chief Financial

Officer

AppointedJAMES QUN LIUVice president, Chief

Compliance Officer

AppointedHuang XiaoyuVice president, Chief Sustainable

Development Officer

AppointedLiu XiaomeiSecretary to the Board of

Directors

Appointed

Section IV Corporate Governance, Environmental and Social

Explanation of changes in Directors, Supervisors and senior management of the Company

√ Applicable Not Applicable

During the reporting period, due to the expiration of terms of office and re-election of the Company’sBoard of Directors and senior management, and the repeal of the Board of Supervisors in accordancewith the regulations, there were changes in the Company’s Directors, Supervisors and seniormanagement.II. PROPOSAL OF PROFIT DISTRIBUTION OR CAPITALIZATION OFCAPITAL RESERVEProposal for interim profit distribution and proposal for conversion of capital reserve

into share capitalWhether distributed or convertedYesNumber of bonus shares for every 10 shares (shares)0Dividend per every10 shares (RMB) (tax inclusive)2.69Number of shares converted for every 10 shares (shares)0Description of the proposal of profit distribution or capitalization of capital reserveProposal of profit distribution for the reporting period are examined and reviewed by the Board: todeclare a cash dividend of RMB2.69 per 10 shares (tax inclusive) to all shareholders based on the totalnumber of shares held on record date and after deducting the repurchased shares from therepurchase account upon the execution of distribution proposal, with proposed distribution amountingto RMB2,506,684,210.62 (tax inclusive). The proportion of cash distribution is 20.83% of the net profitattributable to shareholder of parent company of the Company for the half year. If there is any changein the total share capital of the Company during the period from the date of this report to the recorddate of the equity distribution, the total distribution amount will be remained unchanged withcorresponding adjustment to the proportion of distribution per share.

Section IV Corporate Governance, Environmental and Social

III. EQUITY INCENTIVE PLAN, EMPLOYEE STOCK OWNERSHIP PLAN OROTHER EMPLOYEE INCENTIVES AND EFFECTS THEREOF(I) Relevant incentive events disclosed in temporary announcements and without

any subsequent progress or change

√ Applicable Not Applicable

Summary of MattersQuery IndexCancellation of certain 2021 and 2022 equity incentiveoptions: In view of the fact that the fourth exerciseperiod of the first/reserved grant portion of the 2021A Share Option Incentive Scheme and the thirdexercise period of the 2022 A Share Option IncentiveScheme of the Company did not meet the exerciseconditions, and due to the resignation orredesignation of some of the incentive recipients, theCompany cancelled the corresponding 9,652,135share options and 25,262,727 share options that hadbeen granted but had not yet been exercised.

For details, please refer to theAnnouncement of Haier SmartHome Co., Ltd on theCancellation of Certain ShareOptions in the 2021 A ShareOption Incentive Scheme, the2022 A Share Option IncentiveScheme disclosed by theCompany on 30 April 2025, theAnnouncement of Haier SmartHome Co., Ltd on theCompletion of Cancellation ofCertain Share Options in the2021 A Share Option IncentiveScheme, the 2022 A ShareOption Incentive Scheme andrelevant contents disclosed bythe Company on 10 May 2025.Introduction of New Phase of A Share and H ShareEmployee Stock Ownership Plan: In order to furtherimprove the governance mechanism of the Company,create shareholder value and promote thecomprehensive implementation of the Company’s IoTsmart home ecological brand strategy, the Companyconsidered and introduced the 2025 H Share CoreEmployee Stock Ownership Plan of Haier SmartHome Co., Ltd (Draft) and the 2025 A Share CoreEmployee Stock Ownership Plan of Haier SmartHome Co., Ltd (Draft) at the 14th meeting of the11th session of the Board of Directors held by theCompany on 29 April 2025 and the 2024 AnnualGeneral Meeting held by the Company on 28 May2025. During the reporting period, the establishmentof positions for 2025 A Share Employee StockOwnership Plan has been completed, while theestablishment of positions for 2025 H ShareEmployee Stock Ownership Plan is still in progress.

For details, please refer to the

2025 A Share Core EmployeeStock Ownership Plan of HaierSmart Home Co., Ltd (Draft),the 2025 H Share CoreEmployee Stock Ownership Planof Haier Smart Home Co., Ltd(Draft), the Announcement ofResolutions at the GeneralMeeting disclosed on 29 May2025, the Announcement of theCompletion of the Establishmentof Positions for A ShareEmployee Stock Ownership Plandisclosed on 21 June 2025 andrelevant contents.

Section IV Corporate Governance, Environmental and Social

(II) Incentive events not disclosed in provisional announcements or with subsequent

developmentEquity incentive

Applicable √ Not ApplicableOther explanations

Applicable √ Not ApplicableEmployee stock ownership plan

Applicable √ Not ApplicableOther Incentives

Applicable √ Not Applicable

Section IV Corporate Governance, Environmental and Social

IV. ENVIRONMENTAL INFORMATION OF LISTED COMPANIES AND THEIRMAJOR SUBSIDIARIES INCLUDED IN THE LIST OF ENTERPRISESTHAT DISCLOSE ENVIRONMENTAL INFORMATION IN ACCORDANCEWITH THE LAW

√ Applicable Not Applicable

Number of enterprises included in the list of enterprisesthat disclose environmental information in accordancewith the law (unit)6No.Name of enterprise

Query index for reports on legal disclosure ofenvironmental information

Hefei Haier Refrigerator Co., Ltd.https://39.145.37.16:8081/zhhb/yfplpub_html/#/home

Qingdao Haier Special Refrigerator Co., Ltd.http://221.214.62.226:8090/EnvironmentDisclosure/

Qingdao Haier Washing Appliance Co., Ltd.http://221.214.62.226:8090/EnvironmentDisclosure/

Qingdao Economic and Technological

Development Zone Haier Water HeaterCo., Ltd.

http://221.214.62.226:8090/EnvironmentDisclosure/

Qingdao Haier Smart ElectricsEquipment Co.Ltd.

http://221.214.62.226:8090/EnvironmentDisclosure/

Zhengzhou Haier Air-conditioning Co., Ltd.http://222.143.24.250:8247/home/home

Other explanations Applicable √ Not Applicable

Section IV Corporate Governance, Environmental and Social

V. PARTICULARS ON THE EFFORTS TO CONSOLIDATE AND EXPAND ITSACHIEVEMENTS IN POVERTY ALLEVIATION AND RURAL AREAINVIGORATION

√ Applicable Not Applicable

The Company attaches importance to the work of poverty alleviation and rural revitalization. Inaccordance with the series of national planning and filing requirements and within the scope ofauthorization of the general meeting on donations and other matters, the Company has providedtargeted support to support technology development and rural revitalization. In the first half of 2025,the Company’s capital expenditure on targeted poverty alleviation amounted to approximatelyRMB6,780,000, which was mainly used for supporting technology development, educational povertyalleviation, etc. The Company has actively responded to the call of the government to fulfill its socialresponsibilities.During the reporting period, an earthquake struck Tingri, Shigatse, the Tibet Autonomous Region,leaving residents in urgent need of essential cold-weather supplies and food, sparking widespreadconcern. Haier immediately responded to develop relevant relief initiatives, partnering with the TibetKezong Technology* (西藏科棕科技) Haier store to provide assistance to the disaster area. We donatedelectric water heaters and daily necessities to the Shigatse Red Cross Society, working against time toprovide assistance to the affected people and help residents of Tingri, Shigatse, quickly resume theirlives and rebuild their homes.

Section V Significant Issues

I. FULFILLMENT STATUS OF UNDERTAKINGS(I) The undertakings made by the ultimate controllers, shareholders, related parties,

acquirer as well as the Company and other relevant parties during or up to thereporting period

√ Applicable Not Applicable

Background ofundertakings

Type ofundertakingsCovenanterContents of undertakings

Date ofundertakings

Anydeadline forperformance

Term ofundertakings

Whetherperformed ina timely andstrict wayUndertaking related to

significantreorganization ofassets

Eliminate theproperty rightdefects in landetc.

Haier Group

Corporation

During the period from September 2006 to May 2007, theCompany issued shares to Haier Group Corporation (“HaierGroup”) to purchase the controlling equity in its foursubsidiaries, namely Qingdao Haier Air-ConditionerElectronics Co., Ltd. (青島海爾空調電子有限公司), HefeiHaier Air-conditioning Co., Limited (合肥海爾空調器有限公司), Wuhan Haier Electronics Co., Ltd. (武漢海爾電器股份有限公司), Guizhou Haier Electronics Co., Ltd. (貴州海爾電器有限公司). With regard to the land and property requiredin the operation of Qingdao Haier Air-Conditioner ElectronicsCo., Ltd. (青島海爾空調電子有限公司), Hefei HaierAir-conditioning Co., Limited (合肥海爾空調器有限公司),Wuhan Haier Electronics Co., Ltd. (武漢海爾電器股份有限公司) (the “Covenantees”), Haier Group made anundertaking (the “2006 Undertaking”). According to thecontent of 2006 Undertaking and then condition of eachCovenantee, Haier Group will constantly assure thatCovenantees will lease the land and property owned byHaier Group for free. Haier Group will make compensationin the event that the Covenantees suffer loss due to theunavailability of such land and property.

27 September

2006

YesLong-termYes

Address peer

competition

Haier Smart Home

Co., Ltd.

Prior to the Transaction (hereinafter “the Transaction” refers to

the transaction in relation to the privatisation of HaierElectronics by Haier Smart Home), Haier Electric was acontrolling subsidiary of the Company and did not competewith the Company; after the completion of the Transaction,Haier Electric became a wholly-owned or controllingsubsidiary of the Company and no new competition with theCompany existed or will arise. There is no new peercompetition or potential competition between the Companyand other related parties controlled by the controllingshareholders or the de facto controllers of the Company.

31 July 2020YesLong-termYes

Section V Significant Issues

Background ofundertakings

Type ofundertakingsCovenanterContents of undertakings

Date ofundertakings

Anydeadline forperformance

Term ofundertakings

Whetherperformed ina timely andstrict wayAddress

connectedtransactions

Haier GroupCorporation

1. The Transaction constitutes a connected transaction and

the connected transaction procedures performed under theTransaction are in compliance with the relevant regulations.The pricing of the connected transaction is fair and thereare no circumstances under which the interests of the listedcompany and the non-connected shareholders areprejudiced. 2. Upon completion of the Transaction, theCompany and its affiliates will take lawful and effectivemeasures to minimize and regulate the connectedtransactions with the listed company, take the initiative tosafeguard the interests of the listed company and allshareholders, and refrain from taking advantages ofconnected transactions for improper benefits. 3. Providedthat there is no conflict with laws and regulations, ifconnected transactions between the Company and itsaffiliates and the listed company occur or exist whichcannot be avoided or for which there are reasonablereasons, the Company and its affiliates will legally enter intoa transaction agreement with the listed company to ensurestrict compliance with the procedures of connectedtransactions required by the laws, regulations, regulatorydocuments and the articles of association of the Company,conduct transactions in accordance with the principles ofmarketability and fair prices to ensure the fairness andcompliance of connected transactions, and refrain fromtaking advantages of such connected transactions toengage in any acts that are detrimental to the interests ofthe listed company or its minority shareholders, and at thesame time, comply with the information disclosureobligations in accordance with relevant regulations.

29 July 2020YesLong-termYes

Address peer

competition

Haier Group

Corporation

1. The Company and its controlling subsidiary, Haier COSMO

Co., Ltd., were principally engaged in investment businessduring the reporting period, and the Company and itscontrolling subsidiary, Haier COSMO Co., Ltd. (including itssubsidiaries and entities with more than 30% shareholding),have no real or potential competition with Haier SmartHome; 2. the domestic and overseas white goodsbusinesses and assets held by the Company (including theCompany’s subsidiaries and entities with more than 30%shareholding) have been injected into Haier Smart Homethrough asset consolidation and equity transfer inaccordance with the commitments made by the Company inJanuary 2011 and the requirements for adjusting suchcommitments as considered and approved by Haier SmartHome at its 2014 annual general meeting; 3, Since theacquisition of 100% of Haier New Zealand InvestmentHolding Company Limited (which holds 100% of the sharesin Fisher & Paykel Appliances Holdings Limited) by HaierSmart Home’s offshore subsidiary, Haier SingaporeInvestment Holding Co., Ltd., following the completion inJuly 2018, the Company (including the Company’ssubsidiaries and entities with more than 30% shareholding)and Haier Smart Home do not have any competingrelationship in any business areas both within and outsidethe PRC. During the reporting period, the Company(including the Company’s subsidiaries and entities with morethan 30% shareholding) did not have any new peercompetition with Haier Smart Home; 4. Upon completion ofthe Transaction, the Company (including the Company’ssubsidiaries and entities with more than 30% shareholding)and its affiliates do not have any new or potential peercompetition with Haier Smart Home; 5. During the periodwhen the Company is the controlling shareholder of HaierSmart Home and the shares of Haier Smart Home are listedon the Hong Kong Stock Exchange, the Company and itsother subsidiaries and entities with more than 30%shareholding will not operate any business that competeswith the business engaged by Haier Smart Home and willnot engage in real or potential competition with Haier SmartHome.

29 July 2020YesLong-termYes

Section V Significant Issues

Background ofundertakings

Type ofundertakingsCovenanterContents of undertakings

Date ofundertakings

Anydeadline forperformance

Term ofundertakings

Whetherperformed ina timely andstrict wayOthersHaier Group

Corporation

Upon completion of the Transaction, the Company will strictlycomply with the Company Law, the Securities Law, therelevant regulations of the China Securities RegulatoryCommission, the Shanghai Stock Exchange and the articlesof association of Haier Smart Home, etc., fairly exerciseshareholders’ rights and fulfill shareholders’ obligations,refrain from taking advantage of its shareholding position forimproper benefits, ensure the listed company will continueto be completely separate from the Company and otherenterprises on which the Company exercises control andexerts significant influence in terms of management,personnel, assets, finance, organization and businessoperations, and maintain the continued independence of thelisted company in terms of management, personnel, assets,finance, organization and business operations. Uponcompletion of the Transaction, the Company will complywith the provisions of the Notice on Several Issuesconcerning Regulating Fund Transactions between ListedCompanies and Their Affiliates and the External Guaranteeof Listed Companies and the Circular of China SecuritiesRegulatory Commission and China Banking RegulatoryCommission on Regulating the External Guaranties Providedby Listed Companies to regulate the external guarantees bylisted companies and their subsidiaries, and will notmisappropriate the funds of the listed company and theirsubsidiaries. The Company undertakes to strictly fulfill theabove commitments. In the event that the interests of thelisted company are damaged as a result of any breach ofthe above commitments by the Company and otherenterprises on which the Company exercises control andexerts significant influence, the Company will legally bear thecorresponding liability for damage.

29 July 2020YesLong-termYes

Address

connectedtransactions

HCH (HK)

INVESTMENTMANAGEMENTCO., LIMITED

1. The Transaction constitutes a connected transaction and

the connected transaction procedures performed under theTransaction are in compliance with the relevant regulations.The pricing of the connected transaction is fair and thereare no circumstances under which the interests of the listedcompany and the non-connected shareholders areprejudiced. 2. Upon completion of the Transaction, theCompany and other enterprises on which the Companyexercises control will take lawful and effective measures tominimize and regulate the connected transactions with thelisted company, take the initiative to safeguard the interestsof the listed company and all shareholders, and refrain fromtaking advantages of connected transactions for improperbenefits. 3. Provided that there is no conflict with laws andregulations, if connected transactions between the Companyand other enterprises on which the Company exercisecontrol and the listed company occur or exist which cannotbe avoided or for which there are reasonable reasons, theCompany and other enterprises on which the Companyexercises control will legally enter into a transactionagreement with the listed company to ensure strictcompliance with the procedures of connected transactionsrequired by the laws, regulations, regulatory documents andthe articles of association of the Company, conducttransactions in accordance with the principles ofmarketability and fair prices, and refrain from takingadvantages of such connected transactions to engage inany acts that are detrimental to the interests of the listedcompany or its minority shareholders, and at the same time,comply with the information disclosure obligations inaccordance with relevant regulations. 4. Any covenants andarrangements between the Company and other enterpriseson which the Company exercise control and the listedcompany in relation to connected transactions shall notprevent the other party from conducting business or dealingwith any third party for its own benefit and on equalcompetitive terms in the market.

29 July 2020YesLong-termYes

Section V Significant Issues

Background ofundertakings

Type ofundertakingsCovenanterContents of undertakings

Date ofundertakings

Anydeadline forperformance

Term ofundertakings

Whetherperformed ina timely andstrict wayUndertaking related torefinancing

Eliminate theproperty rightdefects in landetc.

Haier GroupCorporation

Haier Group Corporation undertakes that it will assure HaierSmart Home and its subsidiaries of the constant, stable andunobstructed use of the leased property. In the event thatHaier Smart Home or any of its subsidiaries suffers anyeconomic loss due to the fact that leased property has norelevant ownership certificate, Haier Group Corporation willmake compensation to impaired party in a timely andsufficient way and take all reasonable and practicablemeasures to support the impaired party to recover tonormal operation before the occurrence of loss. Upon theexpiration of relevant leasing period, Haier GroupCorporation will grant or take practicable measures toassure Haier Smart Home and its subsidiaries of priority tocontinue to lease the property at a price not higher than therent in comparable market at that time. Haier GroupCorporation will assure Haier Smart Home and itssubsidiaries of the constant, stable, free and unobstructeduse of self-built property and land of the Group. In theevent that Haier Smart Home or any of its subsidiaries failsto continue to use self-built property according to its ownwill or in original way due to the fact that self-built propertyhas no relevant ownership certificate, Haier GroupCorporation will take all reasonable and practicablemeasures to eliminate obstruction and impact, or willsupport Haier Smart Home or its affected subsidiary toobtain alternative property as soon as possible, if HaierGroup Corporation anticipates it is unable to cope with oreliminate the external obstruction and impact with itsreasonable effort. For details, please refer to theAnnouncement of Qingdao Haier Co., Ltd. on theFormation, Current Situation of the Defective Property, theInfluence on Operation of Issuer Caused by Uncertainty ofOwnership, Solution for the Defect and Guarantee Measures(L2014–005) published by the Company on the four majorsecurities newspapers and the website of Shanghai StockExchange on 29 March 2014.

24 December2013

YesLong-termYes

Undertakings related to

equity incentive

OthersHaier Smart Home

Co., Ltd

The Company will not provide loans or any other forms of

financial assistance, including guaranteeing their loans, toany incentive recipient for acquiring relevant stock optionsunder this incentive plan.

15 September

2021/28June 2022

YesThe completion of

equity incentiveimplementation

YesOther undertakingsAsset injectionHaier Group

Corporation

Inject the assets of Haier Photoelectric to the Company or

dispose such assets through other ways according to therequirements of the domestic supervision before June 2030.For more details, please refer to the Announcement of HaierSmart Home Co., Ltd. on the Changes in Commitments ofCertain Asset Injection (L2025–013) published by theCompany on the four major securities newspapers and thewebsite of Shanghai Stock Exchange on 28 March 2025,the Announcement of relevant general meeting resolutionsdisclosed on 29 May 2025.

December2015/March2025

Yes30 June 2030Yes

Section V Significant Issues

II. NON-OPERATING UTILIZATION OF FUNDS BY CONTROLLINGSHAREHOLDERS AND OTHER RELATED PARTIES DURING THEREPORTING PERIOD. Applicable √ Not ApplicableIII. INFORMATION ON NON-COMPLIANCE GUARANTEES

Applicable √ Not ApplicableIV. INFORMATION ON INTERIM AUDIT

Applicable √ Not ApplicableV. CHANGES IN MATTERS COVERED BY THE NON-STANDARD AUDIT

OPINION ON THE PREVIOUS YEAR’S ANNUAL REPORT AND ITSHANDLING

Applicable √ Not ApplicableVI. MATTERS RELATING TO BANKRUPTCY AND RESTRUCTURING

Applicable √ Not ApplicableVII. MATERIAL LITIGATION AND ARBITRATION MATTERS

Material litigation and arbitration matter during the reporting period

√ No material litigation and arbitration matters during the reporting period

VIII. PUNISHMENT AND CORRECTION ON THE LISTED COMPANY AND ITSDIRECTORS, SENIOR MANAGEMENT, CONTROLLING SHAREHOLDERSAND ULTIMATE CONTROLLERS DUE TO SUSPECT OF LAWVIOLATIONS AND THE ISSUE OF RECTIFICATION

Applicable √ Not ApplicableIX. EXPLANATION OF THE INTEGRITY STATUS OF THE COMPANY ANDITS CONTROLLING SHAREHOLDERS AND ULTIMATE CONTROLLERDURING THE REPORTING PERIOD

Applicable √ Not Applicable

Section V Significant Issues

X. SIGNIFICANT RELATED-PARTY TRANSACTIONS (I) Related-party transactions relating to daily operation

1. Matters that have been disclosed in temporary announcements and with no

subsequent progress or change

√ Applicable Not Applicable

Summary of mattersQuery indexRenewal of the Framework Agreement on

Regular Related-Party Transaction andthe Estimated Related-Party TransactionLimit: During the reporting period, theCompany renewed its regular related-party transaction with the related partiesfor the procurement of products andmaterials for the period from 2026 to2028, which was approved by theshareholders’ meeting.

For details, please refer to the

Announcement on the Renewal of theFramework Agreement on RegularRelated-Party Transaction and theEstimated Related-Party Transaction Limitof Haier Smart Home Co., Ltd. disclosedby the Company on 28 March 2025, andother related announcements, as well asthe Announcement of Resolutions at theShareholders’ Meeting disclosed on 29May 2025.

2. Matters that have been disclosed in temporary announcements and with subsequent

progress or change

√ Applicable Not Applicable

Pursuant to, among others, the “Product and Materials Procurement Framework Agreementbetween Haier Smart Home Co., Ltd. and Haier Group Corporation” (海爾智家股份有限公司與海爾集團公司之產品及物料採購框架協議) and the “Services ProcurementFramework Agreement between Haier Smart Home Co., Ltd. and Haier Group Corporation”(海爾智家股份有限公司與海爾集團公司之服務採購框架協議) considered and approvedat the 28th meeting of the 10th session of the Board of Directors and the 2021 AnnualGeneral Meeting, and the “Resolution of Haier Smart Home Co., Ltd. on Renewing theFramework Agreement on Financial Services with Haier Group Corporation and Haier GroupFinance Co., Ltd. and Estimated Amount of Connected Transactions” (海爾智家股份有限公司關於與海爾集團公司海爾集團財務有限責任公司續簽〈金融服務框架協議〉暨預計關聯交易額度的議案) considered and approved at the 4th meeting of the 11th session ofthe Board of Directors and the 2022 Annual General Meeting, the Company has madeestimation on the connected transactions for the next three years, as detailed in theaforesaid announcements regarding the resolutions of the meetings.For the actual performance of the Company’s connected transactions during the half yearof 2025, please refer to “Related parties and related-party transactions” under Section VIII.Financial Report set out in this regular report.

Section V Significant Issues

3. Matters not disclosed in temporary announcements

Applicable √ Not Applicable (II) Related-party transactions regarding acquisition or disposal of assets/equity

1. Matters disclosed in temporary announcements and with no subsequent progress

or change

√ Applicable Not Applicable

Summary of mattersQuery index

Acquisition of the Real Estate of Haier

White Goods R&D Centre and Related-party Transaction: Qingdao Haier AirConditioner Gen Corp., Ltd., theCompany’s wholly-owned subsidiary,purchased the Real Estate of HaierWhite Goods R&D Centre from HaierGroup Corporation to meet its officeneeds. The purchase price wasRMB267.24 million.

For details, please refer to theAnnouncement on the Acquisition of theReal Estate of Haier White Goods R&DCentre and Related-party Transaction ofHaier Smart Home Co., Ltd. disclosed bythe Company on 28 March 2025.

2. Matters that have been disclosed in temporary announcements and with subsequent

progress or change

Applicable √ Not Applicable

3. Matters not disclosed in temporary announcements

Applicable √ Not Applicable

4. If performance agreement is involved, the performance achieved during the reporting

period shall be disclosed

Applicable √ Not Applicable

Section V Significant Issues

(III) Significant related-party transactions of joint external investment

1. Matters that have been disclosed in temporary announcements and with no

subsequent progress or change

√ Applicable Not Applicable

Overview of the matterQuery indexHaier Group Finance Co., Ltd. (hereinafter,the “Finance Company”) planned toincrease its capital by convertingundistributed profits into capital, with atotal capital increase of RMB3 billion.Upon completion of the capital increase,Qingdao Haier Air-ConditionerElectronics Co., Ltd. and Qingdao HaierAir Conditioner Gen Corp., Ltd., theCompany’s subsidiaries, as well as HaierGroup Corporation and Qingdao HaikedaElectronics Co., Ltd., the Company’srelated parties, will increase their capitalcontributions to the Finance Company inproportion to their existing shareholding,and the shareholding of each party in theFinance Company will remainunchanged.

For more details, please refer to theAnnouncement on the ProportionalCapital Increase of the Joint-stockCompany, Haier Group Finance Co., Ltd.by Converting Undistributed Profits intoCapital and Related-Party Transaction ofHaier Smart Home Co., Ltd.’ (L2025–008) disclosed by the Company on 28March 2025.

2. Matters that have been disclosed in temporary announcements and with subsequent

progress or change Applicable √ Not Applicable

3. Matters not disclosed in temporary announcements

Applicable √ Not Applicable

Section V Significant Issues

(IV) Amounts due to or from related parties

1. Matters that have been disclosed in temporary announcements and with no

subsequent progress or change Applicable √ Not Applicable

2. Matters that have been disclosed in temporary announcement and with subsequent

progress or change Applicable √ Not Applicable

3. Matters not disclosed in temporary announcements

Applicable √ Not Applicable(V) Financial business between the Company and the finance company with which

it has a related relationship, the company’s controlling finance company andrelated parties

√ Applicable Not Applicable

1. Deposit business

√ Applicable Not Applicable

Unit and Currency: RMBChanges of the period

Related partyRelationship

Maximum daily

deposit limit

Range of deposit

interestBalance as at thebeginning of the

period

Total amountdeposited during

the period

Total amountwithdrawn during

the period

Balance as at theend of the periodHaier Group Finance

Co., Ltd

Subsidiary of Haier

Group

34 billion0.00012%–

4.1%33,884,585,069.50265,681,947,201.56265,600,323,759.9233,966,208,511.13

Total///33,884,585,069.50265,681,947,201.56265,600,323,759.9233,966,208,511.13

Section V Significant Issues

2. Lending business

√ Applicable Not Applicable

Unit and Currency: RMBChanges of the periodRelated partyRelationshipLoan limit

Range of loaninterest

Balance as atthe beginningof the period

Total amount

depositedduring theperiod

Total amountwithdrawnduring theperiodBalance as atthe end of theperiodHaier Group

Finance Co.,Ltd

Subsidiary ofHaier Group

10 billion1.828%–

4.9%196,200,183.662,126,324,323.0028,461,903.152,294,062,603.51

Total///196,200,183.662,126,324,323.0028,461,903.152,294,062,603.51

3. Trustee business or other finance businesses

√ Applicable Not Applicable

Unit and Currency: RMBRelated partyRelationshipType of businessTotal amount

Actual number

of occurrenceHaier Group

Finance Co., Ltd

Subsidiary of Haier

Group

Foreign exchange

derivativesproducts

5.5 billion724,141,204.80

Haier Group

Finance Co., Ltd

Subsidiary of Haier

Group

Service charge80 million4,336,109.25

4. Other explanations

Applicable √ Not Applicable

(VI) Other material related transactions

Applicable √ Not Applicable

(VII) Others

Applicable √ Not Applicable

Section V Significant Issues

XI. SIGNIFICANT CONTRACTS AND THEIR EXECUTION

(I) Trusteeship, contracting and leasing

Applicable √ Not ApplicableDuring the reporting period, the Company had no material escrow matters. Up to now, thefollowing entrusted assets that have been approved by the Company’s shareholders’ meeting arestill in effect:

According to Haier Group’s commitment on further supporting the development of Qingdao Haierand resolving peer competition to reduce connected transactions, based on the fact thatQingdao Haier Optoelectronics Co., Ltd. (青島海爾光電有限公司) and its subsidiaries, the mainbody of Haier Group engaging in the color television business, are still in a period oftransformation and integration, and their financial performance has not yet met the Company’sexpectations, Haier Group is unable to complete the transfer before the aforesaid commitmentperiod. Haier Group intends to entrust the Company with the operation and management of theescrow assets and pay the Company an annual escrow fee of RMB1 million during the escrowperiod. (II) Significant guarantees performed and outstanding during the reporting period

√ Applicable Not Applicable

Unit and Currency: RMB’0,000

External guarantees provided by the Company (excluding guarantees for subsidiaries)Guarantor

Relationshipbetween theguarantor and

the listedcompany

Secured

party

Amount ofguarantee

Date ofoccurrence

of theguarantee

(date ofagreement)

Commencementdate of guarantee

Expiration

date ofguarantee

Type ofguarantee

Main debtsituation

Collateral

(if any)

Whether the

guaranteehas been

fulfilled

Whether theguarantee is

overdue

Overdueamount of

theguarantee

Whetherthere is acounter-guarantee

WhetherRelated-

partyguarantee

or notRelationshipTotal amount of guarantee occurred during the reporting period (excluding guarantees for subsidiaries)Total balance of guarantee at the end of the reporting period (A) (excluding guarantees for subsidiaries)

Guarantees provided by the Company for subsidiariesTotal amount of guarantees for subsidiaries occurred during the reporting period1,939,517Total balance of guarantees for subsidiaries at the end of the reporting period (B)1,160,607

Total amount of guarantees provided by the Company (including guarantees for subsidiaries)Total amount of guarantee (A + B)1,160,607Ratio of total amount of guarantees to net assets of the Company (%)10.1Including:

Amount of guarantees for shareholders, ultimate controllers and their related parties (C)0Amount of debt guarantees provided directly or indirectly for the secured party with asset-liability ratio exceeding 70% (D)664,557The amount of total amount of guarantee in excess of 50% of net assets (E)0Total amount of the above three guarantees (C + D + E)664,557Explanation of possibly bearing related discharge duty for premature guaranteesNoExplanation of guarantee statusNo

(III) Other major contracts

Applicable √ Not Applicable

Section V Significant Issues

XII. EXPLANATION OF PROGRESS IN USE OF PROCEEDS

Applicable √ Not ApplicableXIII. STATEMENT ON OTHER SIGNIFICANT EVENTS

√ Applicable Not Applicable

Entrusted wealth management: By the end of the reporting period, the balance of the Company’sentrusted wealth management amounted to RMB8.280 billion. Under the premise of ensuring sufficientcapital required by the principal operating activities and daily operations, the Company and some of itssubsidiaries purchased some low-risk wealth management products and structured deposits from majorcommercial banks to improve the yield of temporarily-idle funds and the return for shareholders withinthe authority of the president’s office meeting and under the condition of ensuring fund safety.

Section VI Changes in Shares andInformation About Shareholders

I. CHANGES IN SHARE CAPITAL (I) Table of Changes in shares 1. Table of Changes in shares

During the reporting period, there was no change in the total number of shares and sharecapital structure of the Company.

2. Statement on the changes in shares

Applicable √ Not Applicable

3. Effect of changes in shares on the financial indicators such as earnings per share

and net assets per share (if any) after the reporting period to the disclosure dateof interim report Applicable √ Not Applicable

4. Other disclosure deemed necessary by the Company or required by securities

regulatory authorities Applicable √ Not Applicable

(II) Changes in shares with selling restrictions

Applicable √ Not ApplicableII. INFORMATION ON SHAREHOLDERS

(I) Total number of shareholders:

Total number of ordinary shareholders by the end of the reporting period207,505Total numbers of preferential shareholders with restoration of voting rights

by the end of the reporting period

Section VI Changes in Shares and Information About Shareholders

(II) Table of shareholdings of top ten shareholders, top ten shareholders of tradableshares (or shares without selling restrictions) by the end of the reporting period

Unit: shareShareholdings of top ten shareholders (excluding shares lent out under refinancing)

Name of shareholder(full name)

Increase/decreaseduring thereportingperiod

Number ofshares heldat the end of

the period

Percentage

(%)Number ofshares heldwith sellingrestrictions

Status of shares pledged,

marked or frozen

Nature ofshareholderStatusNumberHKSCC NOMINEES LIMITED(note)

2,313,497,56224.66UnknownUnknownHaier COSMO Co., Ltd. (海爾卡

奧斯股份有限公司)

1,258,684,82413.41NoneDomestic non-state-

owned legal entityHaier Group Corporation1,072,610,76411.43NoneDomestic non-state-

owned legal entityHCH (HK) INVESTMENT

MANAGEMENT CO., LIMITED

538,560,0005.74NoneForeign legal entityHong Kong Securities Clearing

Co., Ltd.

449,764,1994.79NoneUnknownChina Securities FinanceCorporation Limited

182,592,6541.95NoneUnknownQingdao Haier Venture &

Investment Information Co.,Ltd. (青島海爾創業投資諮詢有限公司)

172,252,5601.84NoneDomestic non-state-

owned legal entityQingdao Haichuangzhi

Management ConsultingEnterprise (Limited Partnership)(青島海創智管理諮詢企業（有限合夥）)

133,791,0581.43NoneDomestic non-state-

owned legal entityIndustrial and Commercial Bank

of China-SSE 50 ExchangeTraded Open-End IndexSecurities Investment Fund

(中國工商銀行 — 上證50交易型開放式指數證券投資基金)

73,636,6980.78NoneUnknown

Industrial and Commercial Bank ofChina Limited— Huatai-PineBridge CSI 300 ExchangeTraded Open-End IndexSecurities Investment Fund

(中國工商銀行股份有限公司— 華泰柏瑞滬深300交易型開放式指數證券投資基金)

66,918,1280.71NoneUnknown

Section VI Changes in Shares and Information About Shareholders

Shareholdings of top ten shareholders without selling restrictions (excluding shares lent

out under refinancing and executive lock-up shares)

Name of shareholder

Number oftradable sharesheld without

sellingrestrictionsClass and number of shares

ClassNumberHKSCC NOMINEES LIMITED2,313,497,562Overseas listed

foreign shares

2,313,497,562Haier COSMO Co., Ltd. (海爾卡奧

斯股份有限公司)

1,258,684,824RMB ordinary1,258,684,824Haier Group Corporation1,072,610,764RMB ordinary1,072,610,764HCH (HK) INVESTMENT

MANAGEMENT CO., LIMITED

538,560,000Overseas listed

foreign shares

538,560,000Hong Kong Securities Clearing Co.,

Ltd.

449,764,199RMB ordinary449,764,199China Securities Finance

Corporation Limited

182,592,654RMB ordinary182,592,654Qingdao Haier Venture &

Investment Information Co., Ltd.(青島海爾創業投資諮詢有限公司)

172,252,560RMB ordinary172,252,560

Qingdao Haichuangzhi

Management ConsultingEnterprise (Limited Partnership)(青島海創智管理諮詢企業（有限合夥）)

133,791,058RMB ordinary133,791,058

Industrial and Commercial Bank of

China -SSE 50 Exchange TradedOpen-End Index SecuritiesInvestment Fund (中國工商銀行— 上證50交易型開放式指數證券投資基金)

73,636,698RMB ordinary73,636,698

Industrial and Commercial Bank of

China Limited—Huatai-PineBridge CSI 300 Exchange TradedOpen-End Index SecuritiesInvestment Fund (中國工商銀行股份有限公司 — 華泰柏瑞滬深300交易型開放式指數證券投資基金)

66,918,128RMB ordinary66,918,128

Section VI Changes in Shares and Information About Shareholders

Name of shareholder

Number oftradable sharesheld withoutsellingrestrictionsClass and number of shares

ClassNumberExplanation on repurchase accountof top ten shareholders

As at the end of the reporting period, the repurchaseaccounts of the Company held a total of 60,269,270shares.Explanation on delegated votingrights, entrusted voting rights,abstained voting rights of theabove shareholders

None

Related parties or parties acting in

concert among the aforesaidshareholders

(1) Haier COSMO Co., Ltd. (海爾卡奧斯股份有限公司)

is a subsidiary of Haier Group Corporation. HaierGroup Corporation holds 51.20% of its equity.Qingdao Haier Venture & Investment InformationCo., Ltd. (青島海爾創業投資諮詢有限公司), HCH(HK) INVESTMENT MANAGEMENT CO., LIMITEDand Qingdao Haichuangzhi ManagementConsulting Enterprise (Limited Partnership) (青島海創智管理諮詢企業（有限合伙）) are parties actingin concert with Haier Group Corporation; (2) TheCompany is not aware of the existence of anyconnections of other shareholders.Explanation of preferential

shareholders with restoration ofvoting rights and theirshareholdings

N/A

Note: HKSCC NOMINEES LIMITED is the Banking Collection Account for the shareholders of the Company’s H-shares, which

is the original data provided by China Hong Kong securities registration agency to the Company after the mergeraccording to local market practices and technical settings, not representing the ultimate shareholder.

Section VI Changes in Shares and Information About Shareholders

Shareholders holding more than 5% of the shares, top ten shareholders and top ten holders ofoutstanding shares without selling restrictions participating in the lending of shares under therefinancing business

Applicable √ Not ApplicableChanges in top ten shareholders and top ten holders of outstanding shares without sellingrestrictions due to lending/returning under refinancing as compared to the previous period. Applicable √ Not ApplicableNumber of shares held by top ten shareholders with selling restrictions and the sellingrestrictions

Applicable √ Not Applicable(III) Strategic investors or general legal persons who became the top ten

shareholders due to placing of new shares

Applicable √ Not ApplicableIII. DIRECTORS, SENIOR MANAGEMENT

(I) Changes of shareholding of current and retired directors and senior management

during the reporting period

Applicable √ Not ApplicableOther explanations

Applicable √ Not Applicable

Section VI Changes in Shares and Information About Shareholders

(II) Incentive share option granted to directors and senior management during the

reporting period

√ Applicable Not Applicable

Unit: ’0,000 Shares

NamePosition

Number of

optionsheld at thebeginning ofthe period

Number ofnewlygrantedoptionsduring thereportingperiod

Shares ofexercisablerights duringthe reportingperiod

Sharessubject tooptionexerciseduring the

reporting

period

Number ofoptions heldat the end ofthe periodLi HuagangDirector36.5600–

18.2818.28

Gong WeiDirector18.2800–

9.149.14

Li ShaohuaDirector6.2400–

3.123.12

Sun DanfengDirector3.7500–

1.871.87

Li PanSenior management18.2800–

9.149.14

Zhao YanfengSenior management18.7300–

9.369.36

Li YangSenior management18.2800–

9.149.14

Song YujunSenior management12.4900–

6.246.24

Guan JiangyongSenior management9.1400–

4.574.57

Wu YongSenior management9.1400–

4.574.57

Fu SonghuiSenior management7.4900–

3.753.75

Huang DechengSenior management9.9900–

4.994.99

Sun JiachengSenior management9.9900–

4.994.99

JAMES QUN

LIU

Senior management10.2400–

10.240

Huang XiaowuSenior management18.2800–

9.149.14

Liu XiaomeiSenior management5.8200–

2.912.91

Total/212.7000–

111.45101.21

Note: The “shares subject to stock option exercised during the reporting period” in the table above refer to the changes

resulting from the partial cancellation of share options by the Company during the reporting period (for details, pleaserefer to the disclosure in “(I) Relevant incentive events disclosed in temporary announcements and without anysubsequent progress or change” in SECTION IV—“III. EQUITY INCENTIVE PLAN, EMPLOYEE STOCK OWNERSHIPPLAN OR OTHER EMPLOYEE INCENTIVES AND EFFECTS THEREOF”.

(III) Other explanations

Applicable √ Not Applicable

Section VI Changes in Shares and Information About Shareholders

IV. CHANGES IN CONTROLLING SHAREHOLDER AND THE ULTIMATECONTROLLER Applicable √ Not Applicable

V. RELEVANT INFORMATION OF PREFERRED SHARES

Applicable √ Not Applicable

Section VII Relevant Information of

Corporate Bonds

I. CORPORATE BOND (INCLUDING ENTERPRISE BOND) ANDNON-FINANCIAL CORPORATE DEBT FINANCING INSTRUMENTS

√ Applicable Not Applicable

(I) Corporate bonds (including enterprise bonds)

Applicable √ Not Applicable(II) Funds raised by corporate bonds

Corporate bonds involved the use or rectification of raised funds during the reporting period

√ All corporate bonds of the Company did not involve the use or rectification of raised funds during

the reporting period.(III) Other matters that should be disclosed for special purpose bonds

Applicable √ Not Applicable(IV) Important matters related to corporate bonds during the reporting period

Applicable √ Not Applicable(V) Debt financing instruments of non-financial enterprises in the interbank bondmarket

√ Applicable Not Applicable

1. Basic information on debt financing instruments of non-financial enterprises

Unit and Currency: RMB’00,000,000

Bond nameAbbreviationCodeRelease dateInterest date

Expirationdate

Bondbalance

Interest rate

(%)

Principal andinterest repaymentmethod

Tradingvenues

Investorsuitabilityarrangements

(if any)

Tradingmechanism

Whetherthere is a

risk oftermination

of listingand trading2025 First Tranche of Green

two-New Medium-termNotes of Haier SmartHome Co., Ltd.

25 Haier Smart

Home MTN001(GreenTwo-New)

10258083025 February

2025

26 February

2025

26 February

2028

151.99

Annual interest

payment with theprincipalrepayment atmaturity.

Interbankbond market

None/NO2025 Second Tranche of

Green Two-new Scienceand TechnologyInnovation Bonds HaierSmart Home Co., Ltd.

25 Haier SmartHome MTN002(Science andInnovationBond)

10258249817 June 202518 June 202518 June

2028

201.66None/NO

Section VII Relevant Information of Corporate Bonds

The Company’s response to the risk of termination of listing and trading of bonds Applicable √ Not Applicable

Overdue bonds Applicable √ Not ApplicableExplanation of overdue debts

Applicable √ Not Applicable

2. Triggering and enforcement of company or investor option clauses and investor

protection clauses Applicable √ Not Applicable

3. Adjustment of credit rating results

Applicable √ Not Applicable

4. The implementation and changes of guarantees, debt repayment plans and other

debt repayment safeguard measures during the reporting period and their impacts Applicable √ Not Applicable

5. Explanation of other situations of debt financing instruments of non-financial

enterprises Applicable √ Not Applicable

(VI) The Company’s consolidated losses during the reporting period exceeded 10%

of its net assets at the end of the previous year Applicable √ Not Applicable

Section VII Relevant Information of Corporate Bonds

(VII) Key accounting data and financial indicators

√ Applicable Not Applicable

Unit and Currency: RMB

Main indicators

At the end of thereporting period

At the end of

last year

Increase/decrease at

the end of thereporting periodcompared with theend of last year (%)Current ratio1.061.024.56Quick ratio0.780.736.62Gearing ratio (%)59.3759.140.39

For the reportingperiod (January-June)

The correspondingperiod of last year

Increase/decrease for

the reportingperiod comparedwith the correspondingperiod of last year (%)Net profit after deducting non-

recurring gains and losses

11,702,408,556.7010,160,504,902.3815.18EBITDA to total debt ratio24.58%23.30%5.51Interest coverage ratio11.3711.360.03Cash interest coverage ratio7.706.7314.49EBITDA interest coverage ratio14.2614.54–

1.94

II. CONVERTIBLE CORPORATE BOND

Applicable √ Not Applicable

Section VIII Financial Report

I. AUDIT REPORT

Applicable √ Not ApplicableII. FINANCIAL STATEMENTS

Consolidated Balance Sheet30 June 2025Prepared by: Haier Smart Home Co., Ltd.

Unit and Currency: RMB

ItemsNotes30 June 202531 December 2024

Current assets:

Monetary fundsVII.155,357,102,536.8255,597,554,622.83Provision of settlement fundFunds lentFinancial assets held for tradingVII.28,815,448,315.621,236,017,839.53Derivative financial assetsVII.379,365,117.40142,709,716.91Bills receivableVII.46,907,611,901.3912,179,856,870.01Accounts receivableVII.531,125,796,665.7026,494,845,510.56Financing receivablesVII.61,248,197,448.34412,922,615.25PrepaymentsVII.71,861,233,589.082,378,144,459.47Premiums receivableReinsurance accounts receivableReinsurance contract reserves receivableOther receivablesVII.84,228,793,070.443,601,357,495.02Including: Interest receivables904,741,268.55771,591,076.67

Dividends receivablesFinancial assets purchased under resale

agreementsInventoriesVII.943,517,272,732.8443,189,855,697.96Including: Data resourcesContract assetsVII.101,496,159,397.94997,963,705.67Assets held for saleNon-current assets due within one yearVII.112,307,574,005.861,439,758,652.55Other current assetsVII.124,330,601,827.064,443,274,038.03Total current assets161,275,156,608.49152,114,261,223.79Non-current assets:

Loans and advances grantedDebt investmentsVII.1314,590,918,331.4215,474,759,856.99Other debt investmentsLong-term receivables139,022,168.65224,724,107.31Long-term equity investmentsVII.1421,413,900,164.4820,932,439,255.93Investments in other equity instrumentsVII.155,650,156,251.256,073,680,870.82

Section VIII Financial Report

ItemsNotes30 June 202531 December 2024Other non-current financial assetsInvestment propertiesVII.16665,377,401.85246,161,259.83Fixed assetsVII.1738,733,351,465.1837,613,215,769.46Construction in progressVII.185,677,443,291.085,686,050,990.48Biological assets for productionOil and gas assetsRight-of-use assetsVII.196,324,384,910.105,841,869,564.36Intangible assetsVII.2014,455,019,794.0414,042,940,068.17Including: Data resourcesDevelopment costVIII.2236,103,656.27267,267,592.92Including: Data resourcesGoodwillVII.2127,834,626,137.0427,384,007,599.06Long-term prepaid expensesVII.22604,735,820.92598,216,433.64Deferred income tax assetsVII.232,441,521,911.442,477,206,492.36Other non-current assetsVII.241,658,350,424.871,759,556,893.63Total non-current assets140,424,911,728.59138,622,096,754.96Total assets301,700,068,337.08290,736,357,978.75Current liabilities:

Short-term borrowingsVII.2516,127,614,637.2413,784,367,443.93Borrowings from central bankFunds borrowedFinancial liabilities held for tradingDerivative financial liabilitiesVII.26440,096,398.0971,011,310.01Bills payableVII.2725,408,488,465.9921,220,364,311.81Accounts payablesVII.2853,257,299,256.5554,665,277,420.32Receipts in advanceContract liabilitiesVII.295,710,603,667.3610,865,337,767.67Disposal of repurchased financial assetsAbsorbing deposit and deposit in inter-

bank marketCustomer deposits for trading in securitiesAmounts due to issuer for securities

underwritingPayables for staff’s remunerationVII.304,438,435,647.305,057,260,277.99Taxes payableVII.313,608,609,516.383,915,219,916.17Other payablesVII.3230,240,547,430.9121,746,135,764.08Including: Interest payables

Dividends payables8,995,192,390.9314,082,609.41Fees and commissions payableReinsurance Accounts payablesLiabilities held for saleNon-current liabilities due within one yearVII.3311,148,785,048.8016,530,040,461.37Other current liabilitiesVII.341,468,735,367.991,899,945,460.39Total current liabilities151,849,215,436.61149,754,960,133.74

Section VIII Financial Report

ItemsNotes30 June 202531 December 2024Non-current liabilities:

Deposits for insurance contractsLong-term borrowingsVII.3510,595,616,602.879,665,074,313.67Bonds payableVII.363,500,000,000.00Including: Preference sharesPerpetual bondsLease liabilitiesVII.374,916,252,581.974,480,895,997.36Long-term payablesVII.38138,177,568.54188,220,056.59Long-term payables for staff’sremunerationVII.392,659,860,931.782,561,647,446.35Estimated liabilitiesVII.402,404,338,137.692,386,261,752.92Deferred incomeVII.411,311,378,644.131,252,216,590.03Deferred income tax liabilitiesVII.231,623,752,433.041,547,287,169.00Other non-current liabilities122,217,515.0498,073,333.45Total non-current liabilities27,271,594,415.0622,179,676,659.37Total liabilities179,120,809,851.67171,934,636,793.11Owners’ equity (or shareholders’equity):

Paid-in capital (or share capital)VII.429,382,913,334.009,382,913,334.00Other equity instrumentsIncluding: Preference shares

Perpetual bondsCapital reserveVII.4319,844,397,232.2520,310,218,222.04Less: treasury stockVII.444,367,132,060.903,510,728,776.44Other comprehensive incomeVII.452,280,700,601.57825,502,860.47Special reserveSurplus reserveVII.465,296,602,892.455,296,602,892.45General risk provisionsUndistributed profitsVII.4782,456,809,019.1879,474,366,234.70Total equity attributable to owners (or

shareholders) of the Parent Company114,894,291,018.55111,778,874,767.22Minority shareholders’ interests7,684,967,466.867,022,846,418.42

Total owners’ equity (or shareholders’

equity)122,579,258,485.41118,801,721,185.64Total liabilities and owners’ equity (or

shareholders’ equity)301,700,068,337.08290,736,357,978.75Person in charge of the Company: Li HuagangPerson in charge of accounting function: Sun JiachengPerson in charge of accounting department: Ying Ke

Section VIII Financial Report

Balance Sheet of the Parent Company

30 June 2025Prepared by: Haier Smart Home Co., Ltd.

Unit and Currency: RMBItemsNotes30 June 202531 December 2024Current Assets:

Monetary funds10,337,792,458.428,721,089,765.37Financial assets held for trading6,094,300,111.12Derivative financial assetsBills receivableAccounts receivableXIX.12,547,209,298.182,089,263,590.36Financing receivablesPrepayments3,124,793.193,124,793.19Other receivablesXIX.262,239,070,610.5835,309,208,101.73Including: Interest receivables66,600,316.50137,951,583.62

Dividends receivables3,615,317,738.91955,746,044.23Inventories58,324,395.529,092,410.78Including: Data resourcesContract assetsAssets held for saleNon-current assets due within one year321,325,000.001,105,291,666.67Other current assets9,264,931.90174,671,080.16Total current assets81,610,411,598.9147,411,741,408.26Non-current assets:

Debt investments7,029,527,912.197,243,616,935.47Other debt investmentsLong-term receivablesLong-term equity investmentsXIX.362,575,577,386.3162,193,654,756.17Investments in other equity instruments1,602,852,951.001,602,852,951.00Other non-current financial assetsInvestment propertiesFixed assets119,811,886.16131,874,644.27Construction in progress3,620,405.74490,452.83Biological assets for productionOil and gas assetsRight-of-use assetsIntangible assets32,137,672.6435,196,337.86Including: Data resourcesDevelopment costIncluding: Data resourcesGoodwillLong-term prepaid expenses2,652,341.223,502,636.81

Section VIII Financial Report

ItemsNotes30 June 202531 December 2024

Deferred income tax assetsOther non-current assets2,557,619,709.231,738,121,667.23

Total non-current assets73,923,800,264.4972,949,310,381.64Total assets155,534,211,863.40120,361,051,789.90Current liabilities:

Short-term borrowings3,700,000,000.002,000,000,000.00Financial liabilities held for tradingDerivative financial liabilitiesBills payableAccounts payables2,015,053,240.921,526,611,034.49Receipts in advanceContract liabilities12,597,148.6312,597,148.63Payables for staff’s remuneration7,979,314.647,798,419.39Taxes payable565,822.40884,572.31Other payables99,347,694,829.8663,004,946,189.17Including: Interest payable1,234,444.45

Dividends payable8,991,794,045.13Liabilities held for saleNon-current liabilities due within one year1,716,211,250.001,495,350,000.00Other current liabilities11,440,662.3218,881,166.43Total current liabilities106,811,542,268.7768,067,068,530.42Non-current liabilities:

Long-term borrowings2,271,500,000.003,292,370,000.00Bonds payable3,500,000,000.00Including: Preference shares

Perpetual bondsLease liabilitiesLong-term payableLong-term payables for staff’s

remunerationEstimated liabilitiesDeferred income16,814,070.5014,265,249.50Deferred income tax liabilities394,292,088.98394,292,088.98Other non-current liabilitiesTotal non-current liabilities6,182,606,159.483,700,927,338.48Total liabilities112,994,148,428.2571,767,995,868.90Owners’ equity (or Shareholders’

equity):

Paid-in capital (or share capital)9,382,913,334.009,382,913,334.00Other equity instrumentsIncluding: Preference sharesPerpetual bondsCapital reserve25,843,919,017.1325,680,561,451.57Less: treasury stock1,505,380,117.761,467,523,464.56

Section VIII Financial Report

ItemsNotes30 June 202531 December 2024Other comprehensive income675,788,147.41618,368,749.67Special reserveSurplus reserve4,691,456,667.004,691,456,667.00Undistributed profits3,451,366,387.379,687,279,183.32

Total owners’ equity (or shareholders’equity)42,540,063,435.1548,593,055,921.00Total liabilities and owners’ equity(or shareholders’ equity)155,534,211,863.40120,361,051,789.90Person in charge of the Company: Li HuagangPerson in charge of accounting function: Sun JiachengPerson in charge of accounting department: Ying Ke

Section VIII Financial Report

Consolidated Profit StatementJanuary-June 2025

Unit and Currency: RMBItemsNotes2025 Interim2024 InterimI. Total operating revenue156,494,034,448.85141,982,482,605.75

Including: Operating revenueVII.48156,494,034,448.85141,982,482,605.75Interest incomeInsurance premiums earnedFee and commission incomeII. Total cost of operations142,264,928,563.02129,691,089,346.09Including: Operating costVII.48114,437,933,108.76103,945,159,570.63Interest expensesFee and commission expensesInsurance withdrawal paymentNet payment from indemnityNet provisions withdrew for insurancecontract liabilityInsurance policy dividend paidReinsurance costTaxes and surchargesVII.49679,554,803.08610,302,317.06Selling expensesVII.5015,816,814,510.0714,517,816,334.58Administrative expensesVII.515,891,046,898.485,382,166,653.05R&D expensesVII.525,790,436,804.105,182,598,681.20Financial expensesVII.53–350,857,561.4753,045,789.57Including: Interest expenses1,446,615,689.511,252,571,601.13Interest income908,582,647.56947,056,127.00Add: Other incomeVII.54775,214,508.42585,424,373.34Investment income (losses are

represented by ‘-’)VII.55917,258,503.36931,730,990.63Including: investment income of

associates and joint ventures850,409,233.36913,969,362.35Income generated from the derecognition

of financial assets measured at

amortized cost (losses are represented

by ‘-’)Exchange gain (losses are represented by

‘-’)Gains on net exposure hedges (losses are

represented by ‘-’)Income from change in fair value (losses

are represented by ‘-’)VII.5634,753,540.63–29,565,597.82Loss on credit impairment (losses are

represented by ‘-’)VII.57–71,912,087.85–69,794,942.03

Section VIII Financial Report

ItemsNotes2025 Interim2024 InterimLoss on assets impairment (losses are

represented by ‘-’)VII.58–744,113,044.82–706,437,535.88Gain from disposal of assets (losses arerepresented by ‘-’)VII.59–7,368,037.54–1,569,698.49III. Operating profit (losses are representedby ‘-’)15,132,939,268.0313,001,180,849.41Add: non-operating incomeVII.60121,855,656.1476,490,746.47Less: non-operating expensesVII.61257,738,776.0696,898,224.12IV. Total profit (total losses are represented

by ‘-’)14,997,056,148.1112,980,773,371.76Less: income tax expenseVII.622,511,940,348.672,207,175,817.26V. Net profit (net losses are represented by

‘-’)12,485,115,799.4410,773,597,554.50

(1) Classification by continuous operation

1. Net profit from continuous operation

(net losses are represented by ‘-’)12,485,115,799.4410,773,597,554.50

2. Net profit from discontinued

operation (net losses arerepresented by ‘-’)

(2) Classification by ownership of the

equity

1. Net profit attributable to shareholders

of the Parent Company (net lossesare represented by ‘-’)12,032,995,820.2710,409,642,540.63

2. Profit or loss attributable to minority

shareholders (net losses arerepresented by ‘-’)452,119,979.17363,955,013.87VI. Other comprehensive income, net of taxVII.631,452,271,379.89–334,806,467.13

(I) Other comprehensive income

attributable to owners of the ParentCompany, net of tax1,455,197,741.10–335,021,596.15

1. Other comprehensive income that

cannot be reclassified into theprofit or loss–158,056,399.69–128,316,608.25

(1) Changes arising from re-

measurement of defined benefitplans135,857,881.73–2,491,664.07

(2) Other comprehensive income

that cannot be transferred intoprofit or loss under equitymethod

(3) Changes in fair value of

investments in other equityinstruments–293,914,281.42–125,824,944.18

Section VIII Financial Report

ItemsNotes2025 Interim2024 Interim

(4) Changes in fair value of credit

risks of the enterprise

2. Other comprehensive income to be

reclassified into the profit or loss1,613,254,140.79–206,704,987.90

(1) Other comprehensive income

that can be transferred intoprofit or loss under equitymethod28,468,182.8623,160,537.38

(2) Changes in fair value of other

debt Investments

(3) Reclassified financial assets that

are credited to othercomprehensive income

(4) Credit impairment provision for

other debt investments

(5) Reserve for cash flow hedging

–130,457,670.38–30,039,858.31

(6) Exchange differences on

translation of financialstatements denominated inforeign currencies1,715,243,628.31–199,825,666.97

(7) Others

(II) Other comprehensive income

attributable to minority shareholders,net of tax–2,926,361.21215,129.02VII. Total comprehensive income13,937,387,179.3310,438,791,087.37

(I) Total comprehensive income

attributable to the owners of ParentCompany13,488,193,561.3710,074,620,944.48(II) Total comprehensive income

attributable to the minorityshareholders449,193,617.96364,170,142.89VIII. Earnings per share:

(I) Basic earnings per share (RMB/share)XXI.11.301.13(II) Diluted earnings per share

(RMB/share)XXI.11.291.12For business combination under common control occurring in the current period, the net profit of theacquiree before the combination was RMB3,593,306.97, and the net profit of the acquiree for theprevious period was RMB-10,575,848.59.Person in charge of the Company: Li HuagangPerson in charge of accounting function: Sun JiachengPerson in charge of accounting department: Ying Ke

Section VIII Financial Report

Profit Statement of the Parent CompanyJanuary-June 2025

Unit and Currency: RMBItemsNotes2025 Interim2024 InterimI. Operating income453,790,319.36251,601,614.76Less: operating costXIX.4421,626,827.34223,444,233.50

Taxes and surcharges4,975,640.952,634,526.12Selling expenses6,114,834.6621,861,602.21Administration expenses230,730,912.40379,191,355.33R&D expenses3,468,437.287,802,548.59Financial expenses–82,235,139.76–179,030,129.87Including: interest expenses94,567,133.6752,482,308.39

Interest income173,636,781.09233,381,967.37Add: other income3,036,529.454,280,121.77Investment income (losses arerepresented by ‘-’)XIX.52,871,560,525.29508,175,341.20Including: investment income of

associates and joint ventures182,219,429.45180,476,867.12

Derecognition income on

financial assetsmeasured at amortizedcost (losses arerepresented by ‘-’)Gains on net exposure hedges

(losses are represented by ‘-’)Income from change in fair value

(losses are represented by ‘-’)13,176,519.93Loss on credit impairment (losses

are represented by ‘-’)–700,000.00Loss on assets impairment (losses

are represented by ‘-’)Gain from disposal of assets (losses

are represented by ‘-’)–241,461.19II. Operating profit (losses are represented by

‘-’)2,755,940,919.97308,152,941.85Add: non-operating income200.00Less: non-operating expenses59,870.79134,512.56III. Total profit (total losses are represented

by ‘-’)2,755,881,249.18308,018,429.29Less: income tax expensesIV. Net profit (net losses are represented by

‘-’)2,755,881,249.18308,018,429.29

Section VIII Financial Report

ItemsNotes2025 Interim2024 Interim(I) Net profit from continuous operations(net losses are represented by ‘-’)2,755,881,249.18308,018,429.29(II) Net profit from discontinued operations(net losses are represented by ‘-’)V. Other comprehensive income, net of tax57,419,397.7438,468,441.16

(I) Other comprehensive income thatcannot be reclassified into the profit orloss

1. Changes arising from re-

measurement of defined benefitplans

2. Other comprehensive income that

cannot be transferred into profit orloss under equity method

3. Changes in fair value of investments

in other equity instruments

4. Changes in fair value of credit risks

of the enterprise(II) Other comprehensive income to bereclassified into the profit or loss57,419,397.7438,468,441.16

1. Other comprehensive income that

can be transferred into profit or loss

under equity method57,419,397.7438,468,441.16

2. Changes in fair value of other debt

investments

3. Reclassified financial assets that are

credited to other comprehensive

income

4. Credit impairment provision for other

debt investments

5. Reserve for cash flow hedging

6. Exchange differences on translation

of financial statements denominated

in foreign currencies

7. Others

VI. Total comprehensive income2,813,300,646.92346,486,870.45VII. Earnings per share:

(I) Basic earnings per share (RMB/share)(II) Diluted earnings per share

(RMB/share)Person in charge of the Company: Li HuagangPerson in charge of accounting function: Sun JiachengPerson in charge of accounting department: Ying Ke

Section VIII Financial Report

Consolidated Cash Flow StatementJanuary-June 2025

Unit and Currency: RMBItemsNotes2025 Interim2024 InterimI. Cash flow from operating activities:

Cash received from the sale of goodsand rendering services166,973,160,557.73144,804,449,491.40Net increase in distributor and inter-bankdepositsNet increase in borrowing from the

central bankNet cash increase in borrowing fromother financial institutesCash received from premiums under

original insurance contractNet cash received from reinsurance

businessNet increase in deposits of policy holders

and investmentCash received from interest, fee and

commissionsNet increase in cash borrowedNet increase in cash received from

repurchase operationNet cash received from customer

deposits for trading in securitiesRefunds of taxes1,265,635,650.921,067,732,811.42Cash received from other related

operating activitiesVII.641,512,184,469.601,435,678,595.14Sub-total of cash inflows from operating

activities169,750,980,678.25147,307,860,897.96Cash paid on purchase of goods and

services118,785,453,051.35103,618,664,285.75Net increase in loans and advances of

distributorsNet increase in deposits in the PBOC and

inter bankCash paid for compensation payments

under original insurance contactNet increase in cash lentCash paid for interest, bank charges and

commissionsCash paid for insurance policy dividend

Section VIII Financial Report

ItemsNotes2025 Interim2024 Interim

Cash paid to and on behalf ofemployees18,846,597,606.7016,435,257,033.85Cash paid for all types of taxes9,435,218,293.507,917,809,512.74Cash paid to other operation related

activitiesVII.6411,544,665,945.3610,912,069,462.19Sub-total of cash outflows from operating

activities158,611,934,896.91138,883,800,294.53Net cash flow from operating activitiesVII.6511,139,045,781.348,424,060,603.43II. Cash flow from investing activities:

Cash received from recovery of

investments20,072,795,541.039,707,697,079.51Cash received from return on

investments449,498,890.02480,559,603.84Net cash received from the disposal of

fixed assets, intangible assets and

other long-term assets17,203,877.859,279,434.48Net cash received from disposal of

subsidiaries and other operating

entitiesOther cash received from investment

activitiesVII.64131,428,806.14Sub-total of cash inflows from investing

activities20,670,927,115.0410,197,536,117.83Cash paid on purchase of fixed assets,

intangible assets and other long-term

assets3,764,462,806.184,204,198,714.75Cash paid for investments26,928,024,657.4615,184,939,467.03Net increase in secured loansNet cash paid on acquisition of

subsidiaries and other operating

entitiesOther cash paid on investment activitiesSub-total of cash outflows from investing

activities30,692,487,463.6419,389,138,181.78Net cash flow from investing activities–10,021,560,348.60–9,191,602,063.95III. Cash flow from financing activities:

Cash received from capital contributions47,830,000.00268,875,731.22Including: cash received from capital

contributions by minority shareholdersof subsidiariesCash received from borrowings13,818,811,428.036,237,610,857.45Cash received from issuance of bonds3,500,000,000.00Other cash received from financingactivitiesVII.64111,646,384.65115,332,534.00

Section VIII Financial Report

ItemsNotes2025 Interim2024 InterimSub-total of cash inflows from financingactivities17,478,287,812.686,621,819,122.67Cash paid on repayment of loans14,319,613,817.744,633,695,648.37Cash paid on distribution of dividends,

profits or repayment of interestexpenses1,318,338,742.421,191,435,719.30Including: dividend and profit paid tominority shareholders by subsidiariesOther cash paid to financing activitiesVII.643,905,562,240.981,299,349,689.85Sub-total of cash outflows from

financing activities19,543,514,801.147,124,481,057.52Net cash flow from financing activities–2,065,226,988.46–502,661,934.85IV. Effect of fluctuations in exchangerates on cash and cash equivalents467,537,948.61–41,638,689.56V. Net increase in cash and cash

equivalents–480,203,607.11–1,311,842,084.93Add: balance of cash and cash

equivalents at the beginning of theperiodVII.6554,994,595,280.1856,715,672,668.25VI. Balance of cash and cash equivalents

at the end of the periodVII.6554,514,391,673.0755,403,830,583.32Person in charge of the Company: Li HuagangPerson in charge of accounting function: Sun JiachengPerson in charge of accounting department: Ying Ke

Section VIII Financial Report

Cash Flow Statement of the Parent CompanyJanuary-June 2025

Unit and Currency: RMBItemsNotes2025 Interim2024 InterimI. Cash flow from operating activities:

Cash received from the sale of goods andrendering of services142,867,762.31219,993,729.62Refunds of taxes3,291,819.4938,214.96Other cash received from operating

activities136,466,207.24164,614,625.43Sub-total of cash inflows from operatingactivities282,625,789.04384,646,570.01Cash paid on purchase of goods andservices133,785,234.50Cash paid to and on behalf of employees19,501,379.0727,649,816.71Cash paid for all types of taxes12,863,251.1911,299,372.62Other cash paid to operation activities124,465,778.03104,532,697.84Sub-total of cash outflows fromoperating activities290,615,642.79143,481,887.17Net cash flow from operatingactivities–7,989,853.75241,164,682.84II. Cash flow from investing activities:

Cash received from recovery of

investments13,152,000,000.007,222,000,000.00Cash received from return on

investments80,944,929.7888,433,946.88Net cash received from the disposal of

fixed assets, intangible assets and

other long-term assetsNet cash received from disposal of

subsidiaries and other operating

entitiesOther cash received from investment

activities1,726,172,255.14389,573,294.54Sub-total of cash inflows from investing

activities14,959,117,184.927,700,007,241.42Cash paid on purchase of fixed assets,

intangible assets and other long-term

assets4,390,059.312,692,652.09Cash paid for investments18,278,117,869.2612,422,000,000.00Net cash paid on acquisition of

subsidiaries and other operating

entities

Section VIII Financial Report

ItemsNotes2025 Interim2024 InterimOther cash paid on investment activities1,434,000,000.00

Sub-total of cash outflows from

investing activities19,716,507,928.5712,424,692,652.09Net cash flow from investingactivities–4,757,390,743.65–4,724,685,410.67III. Cash flow from financing activities:

Cash received from capital injectionsCash received from borrowings2,515,000,000.00940,000,000.00Cash received from issuance of bonds3,500,000,000.00Other cash received from financing

activities2,941,508,886.507,717,935,238.95Sub-total of cash inflows from financingactivities8,956,508,886.508,657,935,238.95Cash paid on repayment of borrowings1,626,480,000.0014,000,000.00Cash paid on distribution of dividends,

profits or repayment of interest

expenses87,281,645.0350,962,018.77Other cash paid on financing activities857,354,695.20466,600,210.43

Sub-total of cash outflows from

financing activities2,571,116,340.23531,562,229.20Net cash flow from financing

activities6,385,392,546.278,126,373,009.75IV. Effect of fluctuations in exchange

rates on cash and cash equivalents–3,309,255.82–120,980.13V. Net increase in cash and cash

equivalents1,616,702,693.053,642,731,301.79Add: balance of cash and cash

equivalents at the beginning of the

period8,721,089,765.377,579,640,524.79VI. Balance of cash and cash equivalents

at the end of the period10,337,792,458.4211,222,371,826.58Person in charge of the Company: Li HuagangPerson in charge of accounting function: Sun JiachengPerson in charge of accounting department: Ying Ke

Section VIII Financial Report

Consolidated Statement of Changes in Owner’s EquityJanuary-June 2025

Unit and Currency: RMB

2025 Interim

Equity attributable to owners of the Parent Company

Other equity instruments

Items

Paid-in capital(or share capital)PreferencesharesPerpetual

bondsOthers

Capital

reserveLess: treasury

stockOthercomprehensive

incomeSpecial

reserveSurplus

reserveGeneral risk

provisionUndistributed

profitsOthersSub-total

Minorityshareholders’

interestsTotal owners’

equity

I. Closing balance for the previous period9,382,913,334.0020,115,358,921.933,510,728,776.44793,828,357.475,296,602,892.45

—79,288,144,269.76111,366,118,999.177,022,846,418.42118,388,965,417.59

Add: changes in accounting policiesError correction for prior periodBusiness combination under common

control194,859,300.1131,674,503.00186,221,964.94412,755,768.05412,755,768.05

Others

II. Opening balance for the current year9,382,913,334.0020,310,218,222.043,510,728,776.44825,502,860.475,296,602,892.4579,474,366,234.70111,778,874,767.227,022,846,418.42118,801,721,185.64III. Increase/decrease for the current period

(decrease is represented by ‘-’)

–465,820,989.79856,403,284.461,455,197,741.102,982,442,784.483,115,416,251.33662,121,048.443,777,537,299.77

(I) Total comprehensive income1,455,197,741.1012,032,995,820.2713,488,193,561.37449,193,617.9613,937,387,179.33(II) Capital injection and reduction by

owners

–465,820,989.79856,403,284.46

–1,322,224,274.25220,334,331.09

–1,101,889,943.16

1. Ordinary shares invested by owners220,334,331.09220,334,331.09

2. Capital contribution by holders of

other equity instruments

3. Share-based payment included in

owners’ equity221,073,939.39221,073,939.39221,073,939.39

4. Others

–686,894,929.18856,403,284.46

–1,543,298,213.64

–1,543,298,213.64

(III) Profit distribution

–8,991,794,045.13

–8,991,794,045.13–7,406,900.61–8,999,200,945.74

1. Withdrawal of surplus reserves

2. Withdrawal of general risk provision

3. Distribution to owners (or

shareholders)

–8,991,794,045.13

–8,991,794,045.13–7,406,900.61–8,999,200,945.74

4. Others

(IV) Internal transfer of owner’s equity

1. Transfer of capital reserves into

capital (or share capital)

2. Transfer of surplus reserves into

capital (or share capital)

3. Surplus reserves used for

remedying loss

—

4. Changes in defined benefit plans

carried forward to retainedearnings

5. Other comprehensive income

carried forward to retainedearnings

6. Others

(V) Special reserve

1. Withdrawal for the period

2. Utilization for the period

(VI) Others

–58,758,990.66

–58,758,990.66

–58,758,990.66

IV. Closing balance for the period9,382,913,334.0019,844,397,232.254,367,132,060.902,280,700,601.575,296,602,892.4582,456,809,019.18114,894,291,018.557,684,967,466.86122,579,258,485.41

Section VIII Financial Report

2024 Interim

Equity attributable to owners of the Parent Company

Other equity instruments

Items

Paid-in capital

(or share capital)Preference

sharesPerpetual

bondsOthers

CapitalreserveLess: treasury

stockOthercomprehensive

incomeSpecialreserveSurplusreserveGeneral risk

provisionUndistributed

profitsOthersSub-total

Minorityshareholders’

interestsTotal owners’

equity

I. Closing balance for the previous period9,438,114,893.0021,514,544,884.545,034,065,107.421,969,365,062.654,842,338,543.8068,535,686,494.60101,265,984,771.176,264,355,202.17107,530,339,973.34

Add: changes in accounting policiesError correction for prior periodBusiness combination under common

control194,859,300.1115,856,718.90306,295,814.70517,011,833.71517,011,833.71

Others

II. Opening balance for the current year9,438,114,893.0021,709,404,184.655,034,065,107.421,985,221,781.554,842,338,543.8068,841,982,309.30101,782,996,604.886,264,355,202.17108,047,351,807.05III. Increase/decrease for the current period

(decrease is represented by ‘-’)144,594,822.81466,600,210.43

–334,178,995.992,755,755,351.362,099,570,967.75500,251,942.912,599,822,910.66

(I) Total comprehensive income

–335,021,596.1510,409,642,540.6310,074,620,944.48364,170,142.8910,438,791,087.37

(II) Capital injection and reduction by

owners145,437,422.97466,600,210.43

–321,162,787.46149,901,492.31

–171,261,295.15

1. Ordinary shares invested by owners149,901,492.31149,901,492.31

2. Capital contribution by holders of

other equity instruments

3. Share-based payment included in

owners’ equity201,405,574.94201,405,574.94201,405,574.94

4. Others

–55,968,151.97466,600,210.43

–522,568,362.40

–522,568,362.40

(III) Profit distribution

–7,513,967,094.69

–7,513,967,094.69–13,819,692.29–7,527,786,786.98

1. Withdrawal of surplus reserves

2. Withdrawal of general risk

provision

3. Distribution to owners (or

shareholders)

–7,513,967,094.69

–7,513,967,094.69–13,819,692.29–7,527,786,786.98

4. Others

(IV) Internal transfer of owner’s equity

1. Transfer of capital reserves into

capital (or share capital)

2. Transfer of surplus reserves into

capital (or share capital)

3. Surplus reserves used for

remedying loss

4. Changes in defined benefit plans

carried forward to retainedearnings

5. Other comprehensive income

carried forward to retainedearnings

6. Others

(V) Special reserve

1. Withdrawal for the period

2. Utilization for the period

(VI) Others

–842,600.16842,600.16

–139,920,094.58

–139,920,094.58

–139,920,094.58

IV. Closing balance for the period9,438,114,893.0021,853,999,007.465,500,665,317.851,651,042,785.564,842,338,543.80

—71,597,737,660.66103,882,567,572.636,764,607,145.08110,647,174,717.71

Legal representative of the Company: Li HuagangPerson in charge of accounting function: Sun JiachengPerson in charge of accounting department: Ying Ke

Section VIII Financial Report

Statement of Changes in Owners’ Equity of the Parent CompanyJanuary-June 2025

Unit and Currency: RMB

2025 Interim

Other equity instruments

Items

Paid-in capital (orshare capital)Preference

sharesPerpetual

bondsOthers

Capital

reserveLess: treasury

stockOthercomprehensive

incomeSpecial

reserveSurplus reserve

Undistributed

profitsTotal owners’

equity

I. Closing balance for the previous period9,382,913,334.0025,680,561,451.571,467,523,464.56618,368,749.674,691,456,667.009,687,279,183.3248,593,055,921.00

Add: changes in accounting policiesError correction for prior periodOthers

II. Opening balance for the current year9,382,913,334.0025,680,561,451.571,467,523,464.56618,368,749.674,691,456,667.009,687,279,183.3248,593,055,921.00III. Increase/decrease for the current period (decrease isrepresented by ‘-’)163,357,565.5637,856,653.2057,419,397.74

—–6,235,912,795.95–6,052,992,485.85

(I) Total comprehensive income57,419,397.742,755,881,249.182,813,300,646.92(II) Capital injection and reduction by owners163,357,565.5637,856,653.20125,500,912.36

1. Ordinary shares invested by owners

2. Capital contribution by holders of other equity

instruments

3. Share-based payment included in owners’ equity187,782,906.31187,782,906.31

4. Others

–24,425,340.7537,856,653.20

–62,281,993.95

(III) Profit distribution

–8,991,794,045.13–8,991,794,045.13

1. Withdrawal of surplus reserves

2. Distribution to owners (or shareholders)

–8,991,794,045.13–8,991,794,045.13

3. Others

(IV) Internal transfer of owner’s equity

1. Transfer of capital reserves into capital (or share

capital)

2. Transfer of surplus reserves into capital (or share

capital)

3. Surplus reserves used for remedying loss

4. Changes in defined benefit plans carried forward

to retained earnings

5. Other comprehensive income carried forward to

retained earnings

6. Others

(V) Special reserve

1. Withdrawal for the period

2. Utilization for the period

(VI) Others

IV. Closing balance for the period9,382,913,334.0025,843,919,017.131,505,380,117.76675,788,147.41

—4,691,456,667.003,451,366,387.3742,540,063,435.15

Section VIII Financial Report

2024 Interim

Other equity instruments

Items

Paid-in capital (or

share capital)PreferencesharesPerpetual

bondsOthers

Capital

reserveLess: treasury

stockOthercomprehensive

incomeSpecial

reserveSurplus reserve

Undistributed

profitsTotal owners’

equity

I. Closing balance for the previous period9,438,114,893.0027,263,651,777.443,175,293,942.36630,674,691.95

—4,237,192,318.357,484,026,291.6245,878,366,030.00

Add: changes in accounting policiesError correction for prior periodOthersII. Opening balance for the current year9,438,114,893.0027,263,651,777.443,175,293,942.36630,674,691.954,237,192,318.357,484,026,291.6245,878,366,030.00III. Increase/decrease for the current period (decrease is

represented by ‘-’)182,744,999.21466,600,210.4338,468,441.16-7,205,948,665.40-7,451,335,435.46(I) Total comprehensive income38,468,441.16308,018,429.29346,486,870.45(II) Capital injection and reduction by owners182,744,999.21466,600,210.43-283,855,211.22

1. Ordinary shares invested by owners

2. Capital contribution by holders of other equity

instruments

3. Share-based payment included in owners’ equity182,744,999.21182,744,999.21

4. Others466,600,210.43-466,600,210.43(III) Profit distribution-7,513,967,094.69-7,513,967,094.69

1. Withdrawal of surplus reserves

2. Distribution to owners (or shareholders)-7,513,967,094.69-7,513,967,094.69

3. Others

(IV) Internal transfer of owner’s equity

1. Transfer of capital reserves into capital (or share

capital)

2. Transfer of surplus reserves into capital (or share

capital)

3. Surplus reserves used for remedying loss

4. Changes in defined benefit plans carried forward

to retained earnings

5. Other comprehensive income carried forward to

retained earnings

6. Others

(V) Special reserve

1. Withdrawal for the period

2. Utilization for the period

(VI) OthersIV. Closing balance for the period9,438,114,893.00

———

27,446,396,776.653,641,894,152.79669,143,133.11

—4,237,192,318.35278,077,626.2238,427,030,594.54

Legal representative of the Company: Li HuagangPerson in charge of accounting function: Sun JiachengPerson in charge of accounting department: Ying Ke

Section VIII Financial Report

III. GENERAL INFORMATION OF THE COMPANY

1. Overview of the Company

√ Applicable Not Applicable

The predecessor of Haier Smart Home Co., Ltd (hereinafter referred to as the Company) wasQingdao Refrigerator Factory, which was established in 1984. As permitted to offering byPeople’s Bank of China, Qingdao Branch on 16 December 1989, with the document of Qing TiGai [1989] No. 3 issued on 24 March 1989, based on the reconstruction of the original QingdaoRefrigerator Factory, a limited company was set up by directional fund raising of RMB150 million.In March and September 1993, as approved by the document of Qing Gu Ling Zi [1993] No. 2and No. 9 issued by the pilot leading team of Qingdao joint stock company, the Company wasconverted from a directional offering company to a public subscription company and issuedadditional 50 million shares to the public and listed with trading on Shanghai Stock Exchange inNovember 1993. In October 2018, D-shares in issue of the Company were listed on the ChinaEurope International Exchange AG. In December 2020, H-shares in issue of the Company werelisted on the Stock Exchange of Hong Kong Limited by way of introduction.The Company’s registered office is located at the Haier Science and Technology InnovationEcological Park of Laoshan District, Qingdao, Shandong Province, and the headquarters islocated at the Haier Science and Technology Innovation Ecological Park of Laoshan District,Qingdao, Shandong Province.The Company is mainly engaged in research and development, manufacturing and sales of homeappliances including refrigerators/freezers, kitchen appliances, air-conditioners, laundry appliancesand water appliances, and other smart home business, as well as providing smart homepackaged solutions.The ultimate controlling parent company of the Company is Haier Group Corporation.These financial statements have been approved for publication by the Board of the Company on28 August 2025.

2. Scope of consolidated statements

For details of changes in the scope of consolidated financial statements for the current period,please refer to “IX. Changes in Consolidation Scope” and “X. Interest in Other Entities” of thisnote.

Section VIII Financial Report

IV. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

1. Basis of preparation

The financial statements of the Company were prepared on the going concern basis according tothe transactions and matters actually occurred, in accordance with the Accounting Standards forEnterprises—Basic Standards published by the Ministry of Finance, specific accountingstandards, and guidance on application of accounting standards for enterprises, interpretations toaccounting standards for enterprises and other relevant requirements (hereinafter collectivelyreferred to as the “Accounting Standards for Enterprises”) which issued subsequently, and incombination with the disclosure provisions of the Rules for the Information Disclosure andCompilation of Companies Publicly Issuing Securities No. 15: General Provisions for FinancialReport (Revised in 2023) of CSRC as well as the following significant accounting policies andaccounting estimation.

2. Going Concern

√ Applicable Not Applicable

The Company has ability to continue its operation for at least 12 months since the end of thereporting period and there are no significant events affecting its ability to continue as a goingconcern.

V. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES

√ Applicable Not Applicable

According to the characteristics of its production and operation, the Company formulated a series ofspecific accounting policies and accounting estimates, including the provisions for impairment foraccounts receivable (Note V.11); the measurement of inventories (Note V.12); the depreciation andamortization of the investment properties (Note V.15); the depreciation of fixed assets (Note V.16), theamortization of intangible assets (Note V.19), the criterion for determining of long-term assetsimpairment (Note V.20); and the date of revenue recognition (Note V.26), etc.

1. Statement of compliance with Accounting Standards for Enterprises

The financial statements prepared by the Company meet the requirements of the AccountingStandards for Enterprises, which accurately and completely reflected information relating to thefinancial position, results of operations, changes in shareholders’ equity and cash flows of theCompany.

2. Accounting period

The accounting year of the Company is from 1 January each year to 31 December of the sameyear in solar calendar.

3. Operating period

√ Applicable Not Applicable

Section VIII Financial Report

The Company takes the period from the acquisition of assets for processing to the ultimaterealization of cash or cash equivalents as a normal operating cycle. The Company takes 12months as an operating period, which is also the classification basis for the liquidity of its assetsand liabilities.

4. Recording currency

Renminbi is the recording currency of the Company

5. Materiality criteria determination method and selection basis

√ Applicable Not Applicable

CaseMateriality criteriaMaterial receivables for

which bad debt provisionis individually assessed

The amount of provision on an individual basis accounts for morethan 10% of the total bad debt provisions for various types ofreceivables and is greater than RMB100 millionMaterial receivables andbad debt provisionswhich are recovered orreversed

The amount of recovery or reversal on an individual basis accounts

for more than 10% of the total amount of various types ofreceivables and is greater than RMB100 millionActual write-off of material

accounts receivable

The amount of write-off on an individual basis accounts for more

than 10% of the total bad debt provisions of various types ofreceivables and is greater than RMB100 millionMaterial prepayments agedmore than one year

Prepayment aged more than 1 year on an individual basis

accounts for more than 10% of the total prepayments and isgreater than RMB100 millionMaterial projects under

construction

The ending balance of a project on an individual basis is greater

than RMB100 millionMaterial capitalized R&D

projects

The ending balance of a project on an individual basis accounts

for more than 10% of the ending balance of development

expenditure and is greater than RMB100 millionMaterial accounts payableand other payables agedmore than one year

Accounts payable/other payables with aged more than 1 year on

an individual basis account for more than 10% of the total

accounts payable/other payables and are greater than RMB100

millionMaterial contract liabilities

aged more than one year

Contract liabilities aged more than 1 year on an individual basis

account for more than 10% of the total contract liabilities and

are greater than RMB100 millionMaterial non-wholly owned

subsidiaries

The net assets of the subsidiaries account for more than 5% of

the Company’s net assets or the net profits and losses of the

subsidiaries account for more than 10% of the Company’s

consolidated net profit.Material joint ventures orassociates

The book value of long-term equity investment in an individual

invested unit accounts for more than 5% of the Company’s net

assets or the investment profits and losses under the long-term

equity investment equity method account for more than 10% of

the Company’s consolidated net profit.

Section VIII Financial Report

6. Accounting methods of business combinations under common control and not

under common control

√ Applicable Not Applicable

A business combination is a transaction or event that brings together two or more separateentities into one reporting entity. Business combinations are classified into business combinationsunder common control and business combinations not under common control.

(1) Business combinations under common control

A business combination under common control is a business combination in which all ofthe combining entities are ultimately controlled by the same party or parties both beforeand after the combination, and that control is not transitory. For business combinationunder common control, the party that obtains the control over the other parties on thecombination date is the acquirer, and other parties involving in the business combinationare the transferors. The combination date is the date on which the acquiring partyeffectively obtains the control over the party being acquired.For business combination under common control, the transferor’s assets and liabilitiesobtained by the Company (as the acquirer) in a business combination are accounted for atthe carrying amount of the transferor in the ultimate controller’s consolidated financialstatements as at the date of combination, except for adjustments due to differences inaccounting policies. The difference between the carrying amount of the combinationconsideration paid by the Company (or the aggregate nominal value of shares issued) andthe carrying amount of net assets obtained in a business combination shall be adjusted tocapital reserve, in case the capital reserve is insufficient for the elimination, the retainedearnings shall be adjusted.Intermediary fees (such as audit, legal services and valuation consultancy) and otherrelevant management fees incurred in the business combination by the Company (as theacquirer) are credited in profit or loss in the period when they occurred. Trading expensesin direct relation to the issuance of equity instrument as the consideration for thecombination is written down to the capital reserve (share premium), where the capitalreserve (share premium) is insufficient, and to surplus reserves and undistributed profits inorder. Trading expenses in direct relation to the issuance of debt instrument as theconsideration for the combination is included in the initial recognition amount of the debtinstrument.

(2) Business combinations involving entities not under common control

A business combination not under common control is a business combination in which allof the combining entities are not ultimately controlled by the same party or parties bothbefore and after the combination. For business combination not under common control, theparty that obtains the control of the other parties at the combination date is the acquirer;other parties involving in the business combination are the transferors. The combinationdate is the date on which the acquirer effectively obtains control of the transferors.

Section VIII Financial Report

In business combination involving entities not under common control, the cost ofcombination of the Company (as the acquirer) shall be the sum of the assets paid,obligations incurred or assumed and the fair value of the equity securities issued by theCompany for obtaining control of the transferor at the date of acquisition. Intermediary fees(such as audit, legal services and valuation consultancy) and other relevant managementfees incurred by the Company for the purpose of business combination are credited inprofit or loss in the period when they occurred. Transaction fees for the equity instrumentsor debt instruments issued by the Company as combination consideration is included in theinitial recognition amount of such equity instruments or debt instruments. Contingentconsideration involved shall be recorded as the combination cost based on its fair value onthe acquisition date. Should any new or further evidence arise within 12 months after theacquisition date and makes it necessary to adjust the contingent consideration on theacquisition date, the goodwill arising from the business combination shall be amendedaccordingly.The cost of combination and identifiable net assets obtained by the Company (as theacquirer) in a business combination involving entities not under common control aremeasured at fair value on the acquisition date. Where the cost of the combination exceedsthe acquirer’s interest in the fair value of the transferor’s identifiable net assets, thedifference is recognized as goodwill; where the cost of combination is lower than theacquirer’s interest in the fair value of the transferor’s identifiable net assets, the differenceis initially recognized in profit or loss for the current year after the Company conducted areview of computation for the identifiable assets, liabilities or fair value of contingentliabilities and combination cost, and where the combination cost is still lower than the fairvalue of the identifiable net assets of the transferor obtained during the course ofcombination, then the difference is recorded in the profit and loss.

7. Judgement Criteria for Control and Preparation of Consolidated Financial

Statements

√ Applicable Not Applicable

Judgement Criteria for Control:

The scope of consolidation of consolidated financial statements is on the basis of control. Controlmeans that the Company has the power over the investee, enjoys variable returns byparticipating in relevant activities of the investee, and has the ability to use its power over theinvestee to influence the amount of its return. Control refers to the Company’s right over theinvestee to enjoy variable returns through involvement in the investee and have the ability to exertthe right to affect those returns The Company will reassess when changes in relevant facts andcircumstances result in changes in the relevant elements involved in the definition of control.

Section VIII Financial Report

Preparation method of consolidated statements:

(1) Scope of consolidated financial statements

The Company incorporated all subsidiaries under its control (including the separate entitiescontrolled by the Company) into the scope of consolidation financial statements, includingthe enterprises under the Company’s control, divisible part in the investees and structuredentities. Control refers to the Company having power over the investee and is entitled tovariable returns from its involvement with the investee and has the ability to use its powerover the investee to affect the amount of those return.

(2) To unify the accounting policies, balance sheets date and accounting periods of the

Company and subsidiariesWhen preparing consolidated financial statements, adjustments are made if subsidiaries’accounting policies or accounting periods are different from that of the Company, inaccordance with the Company’s accounting policies and accounting periods.

(3) Offset matters in the consolidated financial statements

The consolidated financial statements shall be prepared by the Company on the basis ofthe financial statements of the Company and subsidiaries and based on other relevantinformation. In preparing the consolidated financial statements, all significant balances,transactions and unrealized profits between the Company and subsidiaries and amongsubsidiaries are eliminated. In preparing the consolidated financial statements, the Companytreats the entire enterprise group as one accounting entity and reflects the overall financialposition, operating results and cash flows of the Group in accordance with therequirements for recognition, measurement and presentation of relevant accountingstandards for enterprises and consistent accounting policies. The owner’s equity of thesubsidiaries not attributable to the Company shall be presented separately as “minorityequity” under the owner’s equity item in the consolidated balance sheet. The minority equityattributable to net profit or loss of subsidiaries in the current period shall be presented as“minority interest” under the “net profit” item in the consolidated profit statement. Where theamount of loss of a subsidiary attributable to the minority shareholders exceeds their shareof the opening balance of owner’s equity of the subsidiary, the excess shall be allocatedagainst minority equity. The long-term equity investment of the Company held by thesubsidiaries, deemed as treasury stock of the corporate group as well as the reduction ofowners’ equity, shall be presented as “Less: Treasury stock” under the owner’s equity itemin the consolidated balance sheet.

Section VIII Financial Report

(4) Accounting treatment of subsidiaries acquired from combination

For subsidiaries acquired from business combination under common control of theCompany, the opening amount of the consolidated balance sheet is adjusted, as if thebusiness combination has taken place since the ultimate controller began its control. Theincome, expenses and profits of subsidiaries or business combinations from the beginningof the current period to the end of the reporting period are included in the consolidatedprofit statement. The cash flows from the beginning of the current period to the end of thereporting period of a subsidiary or business combination are included in the consolidatedcash flow statement, and the related items in the comparative statements are adjustedWhere control can be exercised over the investee under the same control due to additionalinvestment and other reasons, the Company shall deem the parties participating in thebusiness combination to have made adjustments in their current status when the ultimatecontroller began its control. Equity investments held by the Company before control of thetransferor are recognised for profit or loss, other comprehensive income and other changesin net assets between the later of the date on which the original equity interest is acquiredand the date on which the Company and the transferor are under the same control and thedate of combination, which are offset against the opening retained earnings or current profitor loss, respectively, in the period of the comparative statements.For subsidiaries acquired from business combination under non-common control, theopening amount of the consolidated balance sheet is not adjusted. The income, expensesand profits of the subsidiary or business from the date of purchase to the end of thereporting period are included in the consolidated profit statement. The cash flows of thesubsidiary or business from the date of purchase to the end of the reporting period areincluded in the consolidated statement of cash flows. Where control can be exercised overan investee that is not under the same control due to additional investment or otherreasons, the Company remeasures the equity interest of the investee held before thepurchase date based on the fair value of the equity interest at the purchase date, and thedifference between the fair value and its carrying amount is included in the currentinvestment income. Where the equity interest in the transferor held before the purchasedate relates to other comprehensive income under the equity method and other changes inowner’s equity other than net profit or loss, other comprehensive income and profitdistribution, other comprehensive income and other changes in owner’s equity relatingthereto are transferred to investment income of the current period as at the purchase date,except for other comprehensive income arising from the remeasurement of net liabilities orchanges in net assets of defined benefit plans by the investee.

Section VIII Financial Report

(5) Dispose of equity interests in subsidiaries achieved in stages until losing control

General treatmentDuring the reporting period, when the Company disposes of a subsidiary or business,the income, expenses and profits of that subsidiary or business from the beginning ofthe period to the date of disposal are included in the consolidated income statementof the Company; The cash flows from the beginning of the period to the disposaldate of the subsidiary or operation are included in the consolidated statement of cashflows of the Company.When control over the investee is lost due to the disposal of part of the equityinvestment or other reasons, the Company remeasures the remaining equityinvestment after disposal at its fair value at the date when control is lost. Thedifference between the sum of the consideration obtained on disposal of the equityinterest and the fair value of the remaining equity interest, less the sum of the shareof the net assets of the original subsidiary calculated by the Company based on theoriginal shareholding ratio and goodwill calculated on a continuing basis from the dateof purchase or consolidation, is included in investment income in the period in whichcontrol is lost and goodwill is written off. The Company converts other comprehensiveincome relating to the equity investment in the original subsidiary, etc. to investmentincome in the current period when control is lost.

Disposal of subsidiaries step by stepWhere the Company disposed of equity investment in a subsidiary step by stepthrough multiple transactions until control is lost, for example, the terms, conditionsand economic impact of each transaction that disposes of the equity investment in asubsidiary meet one or more of the following conditions, the Company accounts formultiple transactions as a single transaction:

i. The transactions were entered into simultaneously or with mutual influence inmind;ii. The transactions as a whole are capable of achieving a complete commercial

outcome;iii. The occurrence of one transaction depends on the occurrence of at least one

other transaction;iv. The transaction is uneconomical by itself but economic when considered in

conjunction with other transactions.

Section VIII Financial Report

Where each transaction that disposes of an equity investment in a subsidiary untilcontrol is lost is a blanket transaction, the Company accounts for each transaction asa transaction that disposes of the subsidiary and loses control; However, theCompany recognises the difference between each disposal price before the loss ofcontrol and the share of net assets of the subsidiary corresponding to the disposal ofthe investment as other comprehensive income in the consolidated financialstatements and is transferred to profit or loss in the period in which control is lostwhen control is lost.Where each transaction that disposes of an equity investment in a subsidiary until theloss of control is not a blanket transaction, the relevant policy for partial disposal ofan equity investment in a subsidiary without loss of control is accounted for beforethe loss of control by the Company; When control is lost, accounting is performed inthe same manner as would be done for a disposal subsidiary.

(6) Purchase of minority interests in subsidiaries

The difference between the Company’s costs of newly acquired long-term equityinvestment resulting from the purchase of minority interests and the share of net assetsattributable to the subsidiary calculated on an ongoing basis from the date of purchase (orthe date of combination) based on the newly increased shareholding ratio, the equitypremium in the capital reserve in the consolidated balance sheet is adjusted, and if theequity premium in the capital reserve is insufficient to offset, the retained earnings isadjusted.

(7) Partial disposal of equity investments in subsidiaries without loss of control

The Company adjusts the equity premium in the capital reserve in the consolidated balancesheet for the difference between the disposal price obtained from the partial disposal of thelong-term equity investment in the subsidiary without loss of control and the share of thenet assets of the subsidiary that would continue to be calculated from the purchase date orthe combination date corresponding to the disposal of the long-term equity investment, oradjust the retained earnings if the equity premium in the capital reserve is insufficient tooffset.

8. Classification of joint arrangement and accounting methods of joint operations

√ Applicable Not Applicable

A joint arrangement refers to an arrangement jointly controlled by two or more parties. Inaccordance with the Company’s rights and obligations under a joint arrangement, the Companyclassifies joint arrangements into joint operations and joint ventures.

(1) Joint operations

Joint operations refer to a joint arrangement in which the Company is a party and isentitled to relevant assets and obligations of this arrangement.

Section VIII Financial Report

The Company recognizes the following items in relation to its interest in a joint operation,and accounts the same in accordance with relevant accounting standards for businessenterprises: recognize the assets held solely by the Company, and recognize assetsheld jointly by the Company in appropriation to the share of the Company; recognize theobligations assumed solely by the Company, and recognize obligations assumed jointly bythe Company in appropriation to the share of the Company; recognize revenue fromdisposal of joint operations in appropriation to the share of the Company; recognizerevenue from disposal of joint operations in appropriation to the share of the Company;recognize fees solely occurred by the Company and recognize fees from joint operations inappropriation to the share of the Company.When the Company, as a joint venture, invests or sells assets to or purchase assets (theassets do not constitute a business, the same below) from joint operations, the Companyshall only recognize the part of profit or lost from this transaction attributable to otherparties of joint operations before these assets are sold to a third party. In case of animpairment loss incurred on these assets which meets the requirements as set out inAccounting Standards for Business Enterprises No. 8—Asset Impairment, the Companyshall full recognize the amount of this loss in relation to its investment in or sale of assetsto joint operations or recognize the loss according to the Company’s share of commitmentin relation to the its purchase of assets from joint operations.

(2) Joint ventures

Joint ventures refer to a joint arrangement during which the Company only is entitled to netassets of this arrangement. Investment in joint venture is accounted for using the equitymethod according to the accounting policies referred to under “14. Long-term equityinvestment” of Note V.

9. Recognition standard for cash and cash equivalents

Cash recognized in the cash flow statements represents the cash on hand and deposits availablefor payment of the Company at any time.Cash equivalents recognized in the cash flow statements refer to short-term, highly liquidinvestments held by the Company that are readily convertible to known amounts of cash andwhich are subject to an insignificant risk on change in value.

10. Foreign currency businesses and translation of foreign currency statements

√ Applicable Not Applicable

(1) Foreign currency transactions

If foreign currency transactions occur, they are translated into the amount of functionalcurrency by applying the exchange rate at the transaction date.

Section VIII Financial Report

Monetary items denominated in foreign currencies are translated by the Company intofunctional currencies at the rates of exchange ruling at the balance sheet date. All foreignexchange difference are credited in the profit or loss of the current period, except thosearising from the funds denominated in foreign currency specially borrowed for theestablishment of the qualifying assets are treated based on the principal of capitalization ofborrowing costs.Non-monetary items in foreign currency measured at historical cost are translated by theCompany using the spot exchange rate prevailing on the date when transaction occurredand its functional currency shall remain unchanged. Non-monetary items denominated inforeign currencies that are measured at fair value are translated using the foreign exchangerate at the date the fair value is determined; the exchange differences between thetranslated and original amounts of functional currencies are recognized in the statement ofprofit or loss or other comprehensive income as changes in fair value (including changes inexchange rate).

(2) Translation of foreign currency financial statements

If the functional currencies used as the bookkeeping base currency by the subsidiaries, jointventures and associates under the control of the Company are different from that of theCompany, their financial statements denominated in foreign currencies shall be translated toperform accounting and prepare the consolidated financial statements.The assets and liabilities of the foreign currency balance sheet of the Company aretranslated using the spot exchange rate at the balance sheet date; all items except for“undistributed profits” of the owner’s equity are translated at the spot exchange rate on thetransaction date. The revenue and expenses in the foreign currency income statement ofthe Company are translated using the approximate rate of the spot exchange rate on thetransaction date. Exchange differences on translation of financial statements denominated inforeign currencies are presented as the “other comprehensive income” in the owner’sequity of the balance sheet.Foreign currency cash flow and cash flows of a foreign subsidiary of the Company istranslated using the approximate rate of the spot exchange rate on the date of the cashflows. The impact of exchange rate changes on cash amount is regarded as areconciliation item and reflected separately in the cash flow.When disposing overseas operations, the translation difference in the foreign currencyfinancial statements as shown in the owner’s equity of the balance sheet and related to theoverseas operation shall be transferred from owner’s equity to profit or loss in the currentperiod of disposal. If part of the overseas operations is disposed of, the translationdifference in the foreign currency financial statements of the disposal part shall becalculated based on the proportion of the disposal and transferred to profit or loss in thecurrent period of disposal.

Section VIII Financial Report

11. Financial instruments

√ Applicable Not Applicable

A financial instrument refers to any contract that gives rise to a financial asset of one entity anda financial liability or equity instrument of another entity. A financial asset or financial liability andequity instrument is recognized when the Company becomes a party to the contract of afinancial instrument.

(1) Classification, recognition and measurement of financial assets

On initial recognition of a financial asset, according to the business model for managingfinancial assets and the contractual cash flow characteristics of financial assets, theCompany classifies financial assets into: Financial assets measured at amortized cost;financial assets measured at fair value through other comprehensive income; financialassets measured at fair value through profit or loss of the current period.Financial assets are measured at fair value upon initial recognition. For financial assetsmeasured at fair value through profit and loss of the current period, related transactioncosts are directly included in profit and loss of the current period; for other types offinancial assets, related transaction costs are included in their initial recognized amounts.For the accounts receivable or bills receivable arising from the sale of products or theprovision of labor services that do not contain or consider the significant financingcomponents, etc., the Company shall take the consideration amount entitled to be receivedas the initial recognized amount.

1) The debt instruments held by the Company:

Financial assets measured at amortized cost

The Company’s business model for managing such financial assets is: With theaim of obtaining contractual cash flow, the contractual cash flow characteristicsof such financial assets shall be consistent with the basic lending arrangements,that is, the cash flow generated on a specific date is only the payment for theprincipal and the interest based on the outstanding principal amount. For suchfinancial assets, the Company recognizes the interest income in accordancewith the effective interest method. Such financial assets are subsequentlymeasured at amortised cost. The gains or losses arising from amortisation orimpairment are recognised in profit or loss of the current period. Such financialassets of the Company mainly include cash and cash equivalents, billsreceivable, accounts receivable, other receivables, creditor’s right investmentand long-term receivables. The Company lists the creditor’s rights investmentsand long-term receivables matured within one year (inclusive) from the balancesheet date as non-current assets matured within one year; the creditor’s rightsinvestments matured within one year (inclusive) when being obtained are listedas other current assets.

Section VIII Financial Report

Financial assets measured at fair value through other comprehensive incomeThe Company’s business mode for managing such financial assets is: With theaim of obtaining contractual cash flow and selling the financial assets, thecontractual cash flow characteristics of such financial assets shall be consistentwith the basic lending arrangements. Such financial assets are measured at fairvalue through other comprehensive income, but impairment gains and losses,exchange gains and losses, and interest income calculated by the effectiveinterest method are included in profit and loss of the current period. Suchfinancial assets of the Company mainly include financing receivables and othercreditor’s rights investments. The Company lists other creditor’s rightsinvestments matured within one year (inclusive) from the balance sheet date asnon-current assets matured within one year; other creditor’s rights investmentsmatured within one year (inclusive) when being obtained are listed as othercurrent assets. Financial assets measured at fair value through profit or loss of the current periodThe Company classifies financial assets other than those above measured atamortized cost and those measured at fair value through other comprehensiveincome as financial assets measured at fair value through profit or loss of thecurrent period. In addition, at the time of initial recognition, in order to eliminateor significantly reduce accounting mismatch, the Company designated somefinancial assets as financial assets measured at fair value through profit or lossof the current period. Such financial assets are subsequently measured at fairvalue and changes in fair value are included in profit or loss of the currentperiod. Such financial assets that are matured more than one year and areexpected to be held for more than one year from the balance sheet date arelisted as other non-current financial assets.

2) Equity instrument investments of the Company:

The Company classifies equity instrument investments that have no control, jointcontrol and significant influence on itself as financial assets measured at fair valuethrough profit or loss of the current period; investments that are expected to be heldfor more than one year from the balance sheet date are listed as other non-currentfinancial assets.In addition, the Company designated some non-trading equity instrument investmentsas financial assets measured at fair value through other comprehensive income, whichare listed as other equity instrument investments. Such designation cannot berevoked once made. The Company includes the relevant dividends and interestincome of such financial assets in profit and loss of the current period, and changesin fair value are included in other comprehensive income. When the financial asset isderecognised, the Company transfers the cumulative gain or loss previously includedin other comprehensive income directly to retained earnings and is not included inprofit or loss of the current period.

Section VIII Financial Report

(2) Classification, recognition and measurement of financial liabilities

On initial recognition, financial instruments or their components issued by the Company areclassified into financial liabilities or equity instruments based on the contractual terms of thefinancial instruments and the economic nature, rather than solely on its legal form, togetherwith the definition of financial liability and equity instruments.The Company classifies financial liabilities as financial liabilities at fair value through profitand loss of the current period and other financial liabilities at initial recognition.Financial liabilities at fair value through profit and loss of the current period aresubsequently measured at fair value. Any gains or losses arising from changes in the fairvalue and any interest expenses related to the financial liabilities are recognized in profit orloss of the current period. The financial liabilities at fair value through profit and loss of thecurrent period of the Company mainly consist of financial liabilities held for trading.Other financial liabilities are subsequently measured at amortized costs using effectiveinterest method. Other financial liabilities of the Company are financial liabilities measured atamortized cost, including bills payable, accounts payable, other payables, borrowings,bonds payable, etc. Such financial liabilities are recognized initially at fair value lesstransaction costs and subsequently measured using the effective interest method. Financialliabilities with a maturity of less than one year (inclusive) are listed as current liabilities:

those with maturity of more than one year but are mature within one year from the balancesheet date (inclusive) are listed as non-current liabilities due within one year; the rest arepresented as non-current liabilities.

(3) Classification and treatment of financial liabilities and equity instruments

The Company classifies financial liabilities and equity instruments on the followingprinciples: (1) Where the Company is unable to unconditionally avoid delivering cash oranother financial asset to fulfil a contractual obligation, the contractual obligation meets thedefinition of a financial liability. Although some financial instruments do not explicitly includethe terms and conditions imposing the contractual obligation to deliver cash or anotherfinancial asset, they may indirectly give rise to the contractual obligation through otherterms and conditions. (2) Where a financial instrument shall or may be settled in theCompany’s own equity instrument, consideration shall be given to whether the Company’sown equity instrument as used to settle the instrument is a substitute of cash or anotherfinancial asset or the residual interest in the assets of the Company after deducting all of itsliabilities. In the former case, the instrument shall be the Company’s financial liability; in thelatter case, the instrument shall be the equity instrument of the Company. Under certaincircumstances whereby a financial instrument contract stipulates that the Company shall ormay use its own equity instrument to settle the financial instrument, and the amount of thecontractual right or obligation equal to the number of its own equity instruments to bereceived or delivered multiplied by their fair value at the time of settlement, the contractshall be classified as a financial liability, regardless of whether the amount of thecontractual right or obligation is fixed, or fluctuates in full or in partly in response tochanges in a variable other than the market price of the Company’s own equity instruments(for example an interest rate, a commodity price or a financial instrument price).

Section VIII Financial Report

When classifying a financial instrument (or a component thereof) in consolidated financialstatements, the Company shall consider all terms and conditions agreed between membersof the Group and the holders of the financial instrument. If the Group as a whole has anobligation in respect of the instrument to settle it by delivering cash or another financialasset or in such a way that it would be a financial liability, such instrument shall beclassified as a financial liability.If the financial instrument or its component is attributable to the financial liability, therelevant interests, dividends, gains or losses, and gains or losses arising from redemptionor refinancing, shall be recorded in the profit or loss of the current period.If the financial instrument or its component is attributable to equity instrument, theCompany treats it as change in equity when it is issued (including refinanced), repurchased,sold or cancelled. Changes in fair value of equity instrument is not recognized by theCompany. Transaction costs related to equity transactions are deducted from equity. TheCompany recognizes the distribution to holders of the equity instruments as distribution ofprofits, and dividends paid do not affect total amount of shareholders’ equity.

(4) Recognition and measurement on transfer of financial assets

A financial asset shall be de-recognized when one of the following conditions is met: thecontractual right for receiving cash flows from the financial asset is terminated; thefinancial asset is transferred, and the risk and rewards of ownership of the financial assethave been substantially transferred to the transferee; and the financial asset istransferred; the Company neither transfers nor retains substantially all the risks and rewardsof ownership of the financial asset, but ceases the control over the financial asset. If theCompany neither transfers nor retains substantially all the risks and rewards of ownership ofthe financial asset, and the control over the financial asset is not ceased, the financial assetand the related financial liabilities should be recognized based on the degree of continuinginvolvement. The degree of continuing involvement means the level of risks borne by theCompany resulting from the change in value of the financial asset.On de-recognition of other equity instruments investment, the difference between thecarrying amount and the sum of the consideration received and the cumulative changes infair value that had been recognized directly in other comprehensive income is recognized inthe retained earnings. On de-recognition of other financial assets, the difference betweenthe carrying amount and the sum of the consideration received and the cumulative changesin fair value that had been recognized directly in other comprehensive income is recognizedin current profit or loss.

Section VIII Financial Report

For financial assets that are sold with recourse or endorsement, the Company needs todetermine whether the risk and rewards of ownership of the financial asset have beensubstantially transferred. If the risk and rewards of ownership of the financial asset havebeen substantially transferred, the financial asset shall be derecognized. If the risk andrewards of ownership of the financial asset have been substantially retained, the financialasset shall not be de-recognized. If the Company neither transfers nor retains substantiallyall the risks and rewards of ownership of the financial asset, the Company shall assesswhether the control over the financial asset is retained, and the financial assets shall beaccounted for according to the above paragraphs.

(5) Derecognition of financial liabilities

If the current obligation of a financial liability (or part of it) has been discharged, theCompany derecognizes the financial liability (or part of the financial liability). The Company(borrower) enters into an agreement with the lender to replace the original financial liabilityin the form of a new financial liability, and if the new financial liability is substantiallydifferent from the original financial liability, the original financial liability is derecognized andthe new financial liability is recognized. If the Company makes substantial changes to thecontractual terms of the original financial liability (or a part thereof), the original financialliability is derecognized and the new financial liability is recognized in accordance with therevised terms.If the financial liability (or a part thereof) is derecognized, the difference between thecarrying amount and the consideration paid (including the transferred non-cash assets orliabilities assumed) is recognized in current profit or loss.

(6) Offsetting financial assets and financial liabilities

When the Company has the legal right to offset recognized financial assets and financialliabilities, and the legal right can be executed at present, and the Company has a plan tosettle the financial assets and financial liabilities at the same time or at net amount, thefinancial assets and financial liabilities can be presented in the balance sheet at net amountafter offsetting. Except for the above circumstances, financial assets and financial liabilitiescannot be offset and shall be presented separately in the balance sheet.

Section VIII Financial Report

(7) Determination of fair value of financial assets and financial liabilities

Fair value is the amount at which an asset could be sold or a liability could be transferredbetween willing parties in an orderly transaction on a measurement date. The fair value of afinancial instrument that is traded in an active market is determined at the quoted price inthe active market. Quoted price in the active market represents quoted price which can beeasily obtained periodically from exchange market, brokers, industry associations or pricingservices agency, etc., which is the transactions amount in arm’s length transactions. Thefair value of a financial instrument that is not traded in an active market is determined byusing a valuation technique. Valuation techniques include using prices of recent markettransactions between knowledgeable and willing parties, reference to the current fair valueof another financial asset that is substantially the same with this instrument, discountedcash flow analysis and option pricing models, etc. During the valuation, the Companyadopts an applicable valuation technique under current conditions and there are enoughavailable data and other information to support. Those inputs should be consistent with theinputs a market participant would use when pricing the asset or liability, and the Companyshould maximize the use of relevant observable inputs. When related observable inputscan’t be acquired or are not feasible to be acquired, then use unobservable inputs.In summary, the Company categorizes inputs for fair value measurement into three levelsand uses the inputs by the order of Level 1, Level 2 and Level 3. Level 1: quoted prices(unadjusted) in active markets for identical assets or liabilities at the measurement date.Level 2: inputs other than quoted prices included within Level 1 that are observable for theasset or liability, either directly or indirectly. Level 3: unobservable inputs for the asset orliability.

(8) Impairment of financial assets

For financial assets measured at amortized cost and debt instrument investments measuredat fair value through other comprehensive income, contract assets and financial guaranteecontracts, the Company recognizes the loss provision based on the expected credit losses.The Company considers reasonable and reliable information about past events, currentconditions and forecasts of future economic conditions, and takes the risk of default as aweight, and calculates the probability-weighted amount of the present value of thedifference between the cash flow receivable and the cash flow expected to be received ofthe contract to confirm the expected credit losses.On each balance sheet date, the Company measures the expected credit losses offinancial instruments in different phases. If the credit risk has not increased significantlysince the initial recognition, the financial instruments are in the first phase. The Companymeasures the loss provision according to the expected credit losses in the next 12 months;if credit risk has increased significantly but credit impairment has not yet occurred since theinitial recognition, the financial instruments are in the second phase. The Companymeasures the loss provision according to the expected credit losses of the instrumentsduring the entire duration; if credit impairment has occurred since the initial recognition, thefinancial instruments are in the third phase. The Company measures the loss provisionaccording to the expected credit losses of the instruments during the entire duration.

Section VIII Financial Report

For financial instruments with lower credit risk on the balance sheet date, the Companymeasures the loss provision according to the expected credit losses in the next 12 months,assuming that its credit risk has not increased significantly since the initial recognition.For financial instruments in the first phase and second phase and financial instruments withrelatively lower credit risk, the Company calculates interest income based on their bookbalance before the deduction of provisions and effective interest rate. For financialinstruments in the third phase, the Company calculates interest income based on theiramortized cost after the impairment provision has been deducted from the book balanceand effective interest rate.For bills receivable, accounts receivable and contract assets, whether there exist significantfinancing components, the Company measures loss provision based on expected creditloss over the entire duration.The Company classifies accounts receivable into groups on the basis of shared credit riskcharacteristics, and calculates the expected credit losses on groups, the bases of groupdetermination are as follows:

For each group of bills receivable, the Company applies exposure at default and expectedcredit losses rate over the entire duration to calculate the expected credit losses by takinginto account the historical credit losses experience, the existing conditions and forecast offuture economic conditions.For each group of accounts receivable, the Company makes the comparison of expectedcredit losses rates of accounts receivable in overdue days and over the entire duration tocalculate the expected credit losses by taking into account the historical credit lossesexperience, the existing conditions and forecast of future economic conditions.For each group of other accounts receivable, the Company applies exposure at default andexpected credit losses rate within the next 12 months or over the entire duration tocalculate the expected credit losses by taking into account the historical credit lossesexperience, the existing conditions and forecast of future economic conditions.The Company recognizes the loss impairment provision or reversed in profit or loss of thecurrent period. For held debt instruments at fair value through other comprehensiveincome, the Company recognizes loss/gain on impairment in profit or loss of the currentperiod, and adjusts other comprehensive income at the same time.

Section VIII Financial Report

12. Inventory

√ Applicable Not Applicable

(1) Classification of inventory

Inventory refers to finished products and commodities held by the Company in dailyactivities for sale, products in progress, materials and supplies consumed in the process ofproduction or provision of labour services, including mainly raw materials, turnovermaterials, materials for commissioned processing work, packaging materials, products inprogress, semi-finished products through in-house manufacturing, finished products(products in stock) and project construction, among others.

(2) Pricing of dispatch of inventory

The actual cost of inventories upon delivery is calculated using the weighted averagemethod.

(3) Impairment provision for inventory

At the balance sheet date, inventory is measured at the lower of cost and net realisablevalue.The net realisable value of inventories that can be directly put to sale, including finishedproducts, commodities and materials for sale is determined as the estimated selling price ofsuch inventory less estimated selling expenses and related tax expenses; the net realisablevalue of or inventories held for production, is determined as the estimated selling price offinished products manufactured less estimated cost incurred upon completion, estimatedselling expenses and related tax expenses; the net realisable value of inventory held for theexecution of sales contract or labour contract is computed on the basis of the contractprice. If the quantity of inventories held by the Company is more than the quantity orderedunder a sales contract, the net realisable value of the inventories in excess is computed onthe basis of the general selling price.Inventory impairment provision is made on the basis of individual inventory items, providedthat if certain inventories are related to a series of products manufactured and sold in thesame region with identical or similar end uses or purposes and are difficult to measureseparately with other items, their cost and net realisable value may be measured on anaggregate basis. Inventories The cost and net realizable value of inventories in largequantity with low unit prices are measured according to inventory types.At the balance sheet date, if the cost of inventory of the Company is higher than its netrealisable value, impairment provision is made and charged to current profit or loss. If thefactor causing the write-down of inventory value has been removed, the amount ofwrite-down should be reversed and transferred out of the previous inventory impairmentprovision amount. The reversed amount is included in current profit or loss.

Section VIII Financial Report

(4) Inventory system

The Company adopts the perpetual inventory system as its inventory system.

(5) Amortisation of low-value consumables and packaging materials

The Company adopts one-off amortisation of its low-value consumables and packagingmaterials.

13. Contract assets

√ Applicable Not Applicable

The Company presents the right of the Company to charge consideration from the customerunconditionally (i.e. only depends on the passage of time) as a receivable, while theconsideration that the Company has the right (and this right depends on factors other thanpassage of time) to receive for goods transferred to customers is presented as a contractassets. If the Company sells two clearly distinguishable goods to the customer, and it has theright to receive payment because one of the goods has been delivered, but the receipt of suchpayment is conditioned on the delivery of another goods, the Company shall recognise such rightto receive payment as contract asset.For the determination and accounting treatment methods of the expected credit loss of contractassets, please see note V.11 “Impairment of financial assets”.

14. Long-term equity investments

√ Applicable Not Applicable

Long-term equity investments hereunder refer long-term equity investments in which theCompany exercises control, joint control or significant influence over the investee.

(1) Determination of initial investment cost

The initial cost of long-term equity investments acquired through business combination

involving parties under common control should be recognised as the share of thecarrying value of the owner’s equity of the acquired party; the initial cost of long-termequity investments acquired through business combination involving parties not undercommon control should be recognised as the combination costs determined at thedate of acquisition;The Company invested in other equity investment other than long-term equity

investments acquired through combination, the initial investment cost of long-termequity investments acquired with cash payment is the acquisition price actually paid;the initial investment cost of long-term equity investments acquired with the issuanceof equity- based securities is represented by the fair value of equity-based securities;the initial investment cost of long-term equity investments acquired through debtrestructuring is determined in accordance with relevant provisions under AccountingStandards for Business Enterprises No.12—Debt Restructuring; the initial investmentcost acquired in exchange for non-monetary assets shall be determined inaccordance with relevant provisions of the standard.

Section VIII Financial Report

(2) Subsequent measurement and recognition of profit or loss

Cost methodLong-term equity investments in which the Company is able to exercise control overthe investee is accounted for using the cost method. Under the cost method, thecarrying value of long-term equity investments, other than additional investment orrecouped investment, shall remain constant. The Company declared the distribution ofprofit or cash dividend to the investee and calculated the portion of entitlement,which is recognised as investment income. Equity methodThe equity method is used by the Company to account for long-term equityinvestments in associates and joint ventures. Under the equity method, the initialinvestment cost is not adjusted for any excess of the initial investment cost over theshare of the net fair value of the investee’s identifiable assets. When the initialinvestment cost is less than the share of the fair value of the investment’s identifiablenet assets, the difference is recognised in current profit or loss and the cost oflong-term equity investment is adjusted accordingly.Under the equity method, share of net profit or losses and other comprehensiveincome of the investee are recognised by the Company as investment income andother comprehensive income, respectively, and the carrying amount of the long-termequity investment is adjusted accordingly. Share of profit or cash dividend declaredby the investee is charged against the carrying value of the long-term equityinvestment; changes in owners’ equity of the investee other than net profit or loss,other comprehensive income and profit distribution are adjusted against the carryingvalue of long-term equity investment and included in capital reserve. Share of netprofit or loss of the investee is recognised by the Company on the basis of the fairvalue of the identifiable assets of the investee when the investment is acquired andadjusted against the net profit of the investee. If the accounting policy andaccounting period of the investee are inconsistent with those of the Company, thefinancial statements of the investee is adjusted to align with the accounting policy andaccounting period of the Company, and investment income and other comprehensiveincome is recognised accordingly.Net losses of the investee is recognised by the Company by deducting the carryingvalue of the long-term equity investment together with long-term equity that insubstance forms part of the net investment in the investee until it reaches zero.Moreover, if the Company has incurred obligations to assume additional losses of theinvestee, estimated liabilities are recognised according to the obligation expected tobe assumed and charged to current investment loss. If the investee records net profitin future periods, the Company shall recognise its share of gains after applying suchshare of gains to make up for the unrecognised share of loss.

Section VIII Financial Report

(3) Change of accounting method for long-term equity investment

Change from fair value measurement to the equity method: If an equity investment inthe investee not previously affording control, joint control or significant influence andaccounted for in accordance with the standard for recognition and measurement offinancial instruments becomes capable of affording joint control or significant influenceover the investee as a result of increased shareholding following additionalinvestment, the accounting method should be changed to the equity method, and thefair value of the original equity investment determined according to the standard forrecognition and measurement of financial instruments plus the fair value ofconsideration paid for the acquisition of the new investment shall be changed theinitial investment cost under the equity method.Change from fair value measurement or equity method to cost method: if an equity

investment previously held in the investee not previously affording control, joint controlor significant influence and accounted for in accordance with the standard forrecognition and measurement of financial instruments, or a long- term equityinvestment previously held in associates or joint ventures becomes capable ofaffording control over the investee, it is accounted for long-term equity investmentformed through business combination.Change from equity method to fair value measurement: if a long-term equity investment

previously held in the investee affording joint control or significant influence ceases toafford joint control or significant influence as a result of decrease in shareholdingpercentage following partial disposal, the remaining equity investment is recognised inaccordance with the standard for recognition and measurement of financialinstruments, and the difference between the fair value at the date of loss of jointcontrol or significant influence and the carrying value is included in current profit orloss.Change from cost method to equity method or fair value measurement: when preparing

separate financial statements, if the Company losses control over an investee due todisposal of some equity-based investment and other reasons, the Company accountsfor the remaining equity affording joint control or significant influence over an investeeas a result of disposal based on the equity method, and the remaining equity will beadjusted as if it is accounted for using the equity method from the date ofacquisition; for the remaining equity not affording joint control or significant influenceover an investee as a result of disposal, it is accounted for in accordance withrelevant requirements of Accounting Standards for Business Enterprises No. 22—

Recognition and measurement of financial assets, and the differences between the fairvalue and book value on the date when control is lost are included in profit or loss.When preparing consolidated financial statements, it shall be accounted for inaccordance with relevant requirements of Accounting Standards for BusinessEnterprises No.33— Consolidated financial statements.

Section VIII Financial Report

(4) Bases for determining joint control or significant influence over an investee

Joint control is the contractually agreed sharing of control over an arrangement, whichrelevant activities of such arrangement must be decided by unanimously agreement fromparties who share control. If all the parties or a group of parties must act in concert todecide on the relevant activities of certain arrangement, it can be considered that all partiesor a group of parties have collective control over the arrangement. When determining ifthere is any joint control, it should first be determined if the arrangement is controlledcollectively by all parties or a combination of parties, and then determined whetherdecisions about activities related to the arrangement must be made by the unanimousagreement of those parties who have collective control over the arrangement. If there aretwo or more party groups that can collectively control certain arrangement, it does notconstitute joint control. When determining if there is any joint control, the relevantprotection rights will not be taken into account.Significant influence is the power of the investor to participate in the decision-making of aninvestee’s financial and operational policies, but neither control nor jointly control theformulation of such policies with other parties. When determining if there is any significantinfluence on the investee, the influence of the voting shares of the investee held directly orindirectly and the potential voting rights held by the Company and other parties which areexercisable in the current period and converted to the equity of the investee, including thewarrants, stock options and convertible bonds that are issued by the investee and can beconverted in the current period, shall be taken into account by the Company.When the Company holds directly or indirectly through the subsidiary 20% (inclusive) to50% of the voting shares of the investee, it is generally considered to have significantinfluence on the investee, unless there is concrete evidence to prove that it cannotparticipate in the production and operational decisions of the investee and cannot posesignificant influence in this situation.The Company usually determines whether there is significant influence on the investeethrough the following one or several circumstances:

Representation at the board or similar authority of the investee.Participation in the decision-making process of the investee’s financial and operational

policies. Having important transactions with the investee. Posting of management personnel at the investee. Providing key technical data to the investee.Having one or several of the above circumstances does not mean that the Company musthave significant influence on the investee. The Company needs to comprehensivelyconsider all the facts and circumstances to make an appropriate judgment.

Section VIII Financial Report

(5) Methods for impairment test and impairment provision

At the balance sheet date, the Company inspects whether there are indications of possibleimpairment of a long-term equity investment. If there are indications of impairment, animpairment test should be performed to ascertain its recoverable amount, and animpairment provision equivalent to the margin by which the recoverable amount is lowerthan the carrying value should be made. Once recognised, impairment loss will not bereversed in subsequent accounting periods. The recoverable amount is determined as thehigher of net fair value of the long-term equity investment on disposal and present value ofestimated future cash flow.

(6) Disposal of long-term equity investments

Upon the Company’s disposal of long-term equity investments, the difference between thecarrying value and consideration actually acquired is included in current profit or loss. Upondisposal of long-term equity investment, the portion previously included in othercomprehensive income is accounted for according to the relevant percentage on the samebasis adopted in the direct disposal of the relevant assets or liabilities by the investee.

15. Investment properties

(1) Types and measurement models of investment properties

The Company’s investment properties include the following types: leased land-use rightsand leased buildings.The Company’s investment properties is initially measured at cost and subsequently on acost basis.

(2) Adoption of cost model as accounting policy

Among the Company’s investment properties, leased buildings are subject to depreciationon a straight-line basis in accordance with accounting policies identical with accountingpolicies for fixed assets. Leased land-use rights and land-use rights held for disposal afterappreciation land- use rights in investment properties are amortised using the straight-linemethod in accordance with accounting policies identical with fixed asset accountingpolicies for intangible assets.At the balance sheet date, the Company inspects whether there are indications of possibleimpairment of an investment property. If there are indications of impairment, an impairmenttest should be performed to ascertain its recoverable amount, and an impairment provisionequivalent to the margin by which the recoverable amount is lower than the carrying valueshould be made. Once recognised, impairment loss will not be reversed in subsequentaccounting periods.

Section VIII Financial Report

Where the investment properties are sold, transferred, retired or damaged, the differencesfrom disposal after deducting the carrying amount and related taxes are recognised in profitor loss for the current period by the Company. When the Company has evidence indicatingthe self-occupied houses and buildings are converted to leasing or leasing out itsproperties held for sale under operating leases, the carrying amount of such fixed assets,intangible assets or inventories before the conversion are transferred to investmentproperties. When the Company has evidence indicating the property held to earn rentals orfor capital appreciation are converted to self-occupation or the property intended foroperating lease purpose are open for sale, the carrying amount of such properties beforethe conversion are transferred to fixed assets, intangible asset or inventories.

16. Fixed assets

(1) Recognition criteria

√ Applicable Not Applicable

Fixed assets of the Company refer to tangible assets held for the production ofcommodities, provision of labour services, lease or operational management with a usefullife of more than one accounting year. Fixed assets are recognised if all of the followingconditions are met:

Economic benefits relating to such fixed assets are likely to flow into the Company; The cost of the fixed assets can be reliably measured.Subsequent expenditure incurred for a fixed asset that meets the recognition criteria shallbe included in the cost of the fixed asset, and the carrying amount of the component ofthe fixed asset that is replaced shall be derecognised. Otherwise, such expenditure shall berecognised in profit or loss for the period in which it is incurred.Fixed assets of the Company are initially measured at cost. The purchase cost of a fixedasset comprises its purchase price, related taxes and any directly attributable expenditurefor bringing the asset to its working condition for its intended use, such as transportationcosts and installation expenses. If the payment for a purchased fixed asset is deferredbeyond the normal credit terms, the cost of the fixed asset shall be determined based onthe present value of the instalment payments. The difference between the actual paymentand the present value of the purchase price is recognised in profit or loss over the creditperiod, except for such difference that is capitalised according to Accounting Standard forBusiness Enterprises No. 17— Borrowing Costs.

Section VIII Financial Report

(2) Classification and depreciation of fixed assets

The Company’s fixed assets are mainly classified into: buildings, machinery equipment,transportation equipment and office and other equipment; depreciation is conducted on astraight-line basis. The useful life and estimated net residual value of fixed assets aredetermined based on the nature and use of the fixed assets. At the end of the year, theuseful life and estimated residual value of and depreciation method for fixed assets arereviewed, and adjustment is made for any difference with the original estimated amount.Other than fully depreciated fixed assets which remain in use and the land which isseparately priced and recorded, the Company measures depreciation for all fixed assets.The type, depreciation method, estimated useful lives, estimated residual values and yearlydepreciation of the Company’s fixed assets are as follows:

Type of assetsDepreciation method

Estimateduseful lives(years)

Estimatedresidualvalues, netBuildingsLife average method8–

–5%Machinery equipmentLife average method4–

–5%Transportation equipmentLife average method5–

–5%Office and other equipmentLife average method3–

–5%

(3) Methods for impairment test and impairment provision for fixed assets

At the balance sheet date, the Company inspects whether there are indications of possibleimpairment of fixed assets. If there are indications of impairment, an impairment test shouldbe performed to ascertain its recoverable amount, and an impairment provision equivalentto the margin by which the recoverable amount is lower than the carrying value should bemade. Once recognised, impairment loss will not be reversed in subsequent accountingperiods.

(4) Disposal of fixed assets

Fixed assets are derecognised upon disposal, or when no economic benefits are expectedfrom use or disposal. The difference between gains on disposal, transfer, retirement ordamage of fixed assets, net of their book value and related taxes, are included in profit andloss.

17. Construction in progress

√ Applicable Not Applicable

(1) Measurement of construction in progress

The cost of the Company’s construction in progress is recognised at actual constructionexpenses, including all necessary construction expenses incurred during the construction,and borrowing costs capitalized before the work reaches the expected conditions for useand other related costs.

Section VIII Financial Report

(2) Criteria for and timing of the transfer of construction in progress to fixed assets

The Company’s construction in progress is transferred to fixed assets when the work iscompleted and reaches the expected conditions for use. The criteria for judgement ofexpected conditions for use should meet one of the following:

The physical construction (including installation) of fixed assets has been completed infull or substantially completed in full;Trial production or operation has commenced and the result indicates that the assetcan operate normally or can manufacture compliant products in a consistent manner,or the trial operation indicates that it can operate or conduct business normally;The amount of fixed asset expenditure of the construction is minimal or almost certain

not be further incurred;Fixed assets acquired have reached design or contractual requirements, or are

essentially consistent with design and contractual requirements.

(3) Methods for impairment test and impairment provision for construction in progress

At the balance sheet date, the Company inspects whether there are indications of possibleimpairment of construction in progress. If there are indications of impairment, animpairment test should be performed to ascertain its recoverable amount, and animpairment provision equivalent to the margin by which the recoverable amount is lowerthan the carrying value should be made. Once recognised, impairment loss will not bereversed in subsequent accounting periods.The recoverable amount is determined as the higher of net fair value of the asset lessdisposal cost and the present value of estimated future cash flow.

18. Borrowing costs

√ Applicable Not Applicable

(1) Principle for recognition of capitalisation of borrowing cost

Borrowing costs incurred by the Company that can be directly attributed to the acquisitionor production of assets qualified for capitalisation are capitalised and included in relevantasset costs; other borrowing costs are recognised as cost at the amount incurred at thetime of incurrence and charged to current profit or loss. Assets qualified for capitalisationrefer to fixed assets, investment properties and inventory that require a considerably longperiod of acquisition or production activities to reach the expected conditions for use orsale.

Section VIII Financial Report

(2) Computation of capitalised amounts

Capitalisation period: from the point of time at which the capitalisation of borrowing costsbegins to the point of time at which capitalisation ceases. The period of suspension ofcapitalisation of borrowing costs is not included.Period of suspension of capitalisation: In case of abnormal disruption during the acquisitionor production process for a consecutive period of more than 3 months, the capitalisationperiod for borrowing costs should be suspended.Computation of capitalised amount: For specific borrowings, the amount is determinedas interest expense incurred for the period in respect of the specific borrowing less interestincome received through the deposit of unutilised borrowed funds or investment gainsreceived through provisional investments; For general borrowings utilised, the amount isdetermined as the weighted average amount of the portion of cumulative asset expenses inexcess of the asset expense of specific borrowings multiplied by the capitalisation rate forthe general borrowings utilised, where the capitalisation rate is the weighted averageinterest rate of general borrowings; where there is a discount or premium in theborrowings, the amortisation of such discount or premium for each accounting period isdetermined according to the effective interest rate and the interest amount for each periodis adjusted accordingly.

19. Intangible assets

Intangible assets are the identifiable non-monetary assets which have no physical form and arepossessed or controlled by the Company, and are recognized when the following conditions aremet:

it is probable that economic benefits attributable to the intangible assets will flow into the

Company; the costs of the intangible assets can be measured reliably.

(1) Measurement of intangible assets

Intangible assets of the Company are initially recognized at costs. The actual costs of

purchased intangible assets include the consideration and relevant expenses actually paid.

For intangible assets contributed by investors, relevant actual costs are determined based

on the value agreed in the investment contract or agreement. But if the value agreed in the

investment contract or agreement is not a fair value, the actual costs should be determined

based on the fair value. The cost of a self-developed intangible asset is the total

expenditure incurred in bringing the asset to its intended use. Intangible assets acquired in

a business combination not under common control that are owned by the acquiree but not

recognised in its financial statements are recognised as intangible assets at fair value on

initial recognition of the acquiree’s assets.

Section VIII Financial Report

Subsequent measurement of intangible assets of the Company: Intangible assets withfinite useful lives are amortized on a straight-line basis; their useful lives and amortizationmethods are reviewed at the end of each year, and adjusted accordingly if there is anyvariance with the previous estimates; Intangible assets with indefinite useful lives are notamortized and their useful lives are reviewed at the end of each year. If there is anobjective evidence that the useful life of an intangible asset is finite, an estimation shouldbe made on the useful life and the intangible asset should be amortized using the straight-line method.

(2) Criterion of determining indefinite useful life

The useful life of an intangible asset is indefinite if the period in which the asset bringseconomic benefits for the Company is unforeseeable, or the useful life could not beascertained.Criterion of determining indefinite useful lives: the period is derived from contractualrights or other legal rights and there are no explicit years of use stipulated in the contractor laws and regulations; the period in which the intangible assets generate benefits forthe Company still could not be estimated after considering the industrial practice orrelevant expert opinions.At the end of each year, the Company reviews the useful lives of the intangible assets withindefinite useful lives. The assessment is primarily reviewed by relevant departments thatuse the intangible assets, using the down-to-top approach, to determine if there arechanges to the determination basis of indefinite useful lives.

(3) Methods of test and provision for impairment of intangible assets

At the balance sheet date, the Company reviews intangible assets to check whether thereis any sign of impairment. If yes, the recoverable amount is recognized through animpairment test and provision for impairment is made based on the difference between thecarrying value and the recoverable amount.Impairment loss will not be reversed in subsequent accounting periods once provision ismade for it. The recoverable amount of intangible assets should be based on the higher ofthe net fair value of the assets less the disposal expense and the present value ofestimated future cash flow of the assets.

Section VIII Financial Report

(4) Basis for research and development phases for internal research and development

project and basis for capitalization of expenditure incurred in development stageAs for an internal research and development project, expenditure incurred in the researchstage is recognized in the profit or loss as incurred. Expenses incurred in the developmentstage are capitalized only if all of the following conditions are met: the technicalfeasibility of completing the intangible assets so that they will be available for use or forsale; the intention to complete the intangible assets for use or for sale; how theintangible assets will generate economic benefits, including there is evidence that theproducts produced by the intangible assets has a market or the intangible assetsthemselves have a market; if the intangible assets are for internal use, there is evidencethat there exists usage for the intangible assets; the availability of adequate technical,financial and other resources to complete the development and gain the ability to use orsell the intangible assets; the capability to reliably measure the expenditures attributableto the development stage of the intangible assets.Specific standards for distinguishing research stage and development stage of an internalresearch and development project: the Company refers to the research stage as the stageof planned investigation and search for obtaining new technology and knowledge, whichfeatures planning and exploration; before commercial production or other uses, theCompany regards the stage of applying the research achievements and other knowledge ina plan or design to produce new or substantially improved materials, equipment andproducts as development stage, which features pertinence and is very likely to formresults.All the expenditures incurred on research and development which cannot be distinguishedbetween research stage and development stage are recognized in the profit or loss.

20. Impairment of long-term assets

√ Applicable Not Applicable

Long-term equity investment, investment properties measured based on cost model, fixed assets,construction in progress, intangible assets and other long-term assets are tested for impairmentif there is any sign of impairment at the balance sheet date. If the result of the impairment testindicates that the recoverable amount of the assets is less than the carrying amount, a provisionfor impairment will be made based on the difference and will be recorded in impairment loss. Therecoverable amount is the higher of the net fair value of the assets less the disposal expenseand the present value of estimated future cash flow of the assets. Provision for asset impairmentis calculated and recognized on the individual asset basis. If it is not possible to estimate therecoverable amount of an individual asset, the recoverable amount of the asset group to whichthe asset belongs is determined. An asset group is the smallest asset portfolio that can generatecash inflows independently.Goodwill arising from a business combination and an intangible asset with an indefinite useful lifeis tested for impairment at least at each year end, irrespective of whether there is any indicationthat the asset may be impaired. Intangible assets that have not been ready for intended use aretested for impairment each year.

Section VIII Financial Report

When the Company carries out impairment test of the goodwill, the carrying amount of thegoodwill, arising from business combination, shall be allocated to the related asset groups onreasonable basis since the acquisition date, or to the related asset group portfolios if it is difficultto be allocated to the related asset groups. When the carrying amount of the goodwill isallocated to the related asset groups or asset group portfolios, it shall be allocated in theproportion of the fair value of each asset group or asset group portfolio against the total fairvalue of related asset groups or asset group portfolios. If it is difficult to measure the fair valuereliably, it shall be allocated in the proportion of the carrying amount of each asset group orasset group portfolio against the total carrying amount of related asset groups or asset groupportfolios.When impairment test is made by the Company to the related asset groups or asset groupportfolios including goodwill, if there is a sign that the related asset groups or asset groupportfolios are prone to impair, the Company shall first conduct impairment test on the assetgroups or asset group portfolios excluding goodwill, calculate the recoverable amount andrecognize the corresponding impairment loss by comparing with its carrying amount. TheCompany shall then conduct impairment test on the asset groups or asset group portfoliosincluding goodwill and compare the carrying amount (including the carrying amount of allocatedgoodwill) of related asset groups or asset group portfolios with the recoverable amount thereof.Impairment loss shall be recognized in accordance with the differences when the recoverableamount of the related asset groups or asset group portfolios is lower than the carrying amountthereof. The amount of the impairment loss is first reduced by the carrying amount of thegoodwill allocated to the asset group or set of asset groups, and then the carrying amount ofother assets (other than the goodwill) within the asset group or set of asset groups, pro ratabased on the carrying amount of each asset.Once the above impairment loss on assets is recognized, it shall not be reversed by theCompany in any subsequent accounting period.

21. Long-term prepaid expense

√ Applicable Not Applicable

Long-term prepaid expenses of the Company are expenditures which have incurred but thebenefit period of which is more than one year (exclusive). They are amortized by installments overthe benefit period based on each item under the expenses. If items under the long-term pre-paidexpenses are no longer beneficial to the subsequent accounting periods, the amortized value ofsuch unamortized items is then fully transferred to the profit or loss.

Section VIII Financial Report

22. Contract liabilities

√ Applicable Not Applicable

A contract liability represents the Company’s obligation to transfer goods to a customer forwhich the Company has received consideration (or an amount of consideration is due) from thecustomer. If the customer has already paid the contract consideration before the Companytransfers goods to the customer or the Company has obtained the unconditional collection right,the Company will recognise such amount received or receivable as contract liabilities at earlier ofthe actual payment by the customer or the amount payable becoming due. Contract assets andcontract liabilities under the same contract are presented on a net basis, and contract assetsand contract liabilities under different contracts are not offset.

23. Staff’s remuneration

Staff’s remunerations are all forms of compensation and other relevant expenditure given by theCompany in exchange for services rendered by employees, including short-term remunerations,post-employment benefits, termination benefits and other long-term benefits.

(1) Accounting treatment of short-term remunerations

√ Applicable Not Applicable

Short-term remunerations provided by the Company include short-term salaries, bonus,allowance, subsidies, employee welfare, housing provident fund, labor union fee andeducation fee, medical insurance premiums, work-related injury insurance premiums,maternity insurance premiums, short-term compensated leave, short-term profit-sharingplans, etc. During the accounting period when employees render services, the Companyshall recognize short-term remunerations that actually incurred as liabilities and credited intothe current profit or loss or the cost of relevant assets on an accrual basis by the benefitobjects.

(2) Accounting treatment of post-employment benefits

√ Applicable Not Applicable

Post-employment benefits mainly include the basic pension insurance, enterprise annuity,etc., In accordance with the risks and obligations undertaken by the Company, thepost-employment benefits are classified as defined contribution plans and defined benefitplans.Defined contribution plans: the Company shall recognize the sinking funds paid on thebalance sheet date to individual entities in exchange for services from employees in theaccounting period as liabilities, and shall credit such funds into the profit or loss or the costof relevant assets in accordance with the benefit objects.

Section VIII Financial Report

Defined benefit plans: the Company determines the cost for providing benefits using theexpected cumulative welfare unit method, with actuarial valuations being carried out byindependent actuary at the interim and annual balance sheet date. The costs for staff’sremunerations incurred by the defined benefit plans of the Group are categorized asfollows: (1) service cost, including current period service cost, past service cost andsettlement profit or loss. Specifically, current period service cost means the increase of thepresent value of defined benefit obligations resulted from the current period services offeredby employees. Past service cost means the increase or decrease of the present value ofdefined benefit obligations resulted from the revision of the defined benefit plans related tothe prior period services offered by employees; (2) interest expenses of defined benefitplans; (3) changes caused by the remeasurement of liabilities for defined benefit plans.Unless other accounting standards require or permit the credit of the costs for employeewelfare into the cost of assets, the Company will credit (1) and (2) above into the profit orloss; and recognize (3) above as other comprehensive income and will not transfer it backto the profit or loss in subsequent accounting periods.

(3) Accounting treatment of termination benefits

√ Applicable Not Applicable

Termination benefits are the indemnity proposal provided by the Company for employeesfor the purpose of terminating labor relations with employees before expiry of the laborcontracts or encouraging employees to accept downsizing voluntarily. When the Companycould not unilaterally withdraw the termination benefits provided as a result of plan fortermination of labor relations or the redundancy offer, or upon recognition of costs orexpenses related to a restructuring involving the payment of termination benefits, whicheveris earlier, the staff’s remuneration liabilities arising from such termination benefits arerecognized and included in current profit or loss.

24. Estimated liability

√ Applicable Not Applicable

(1) Criterion for determining of estimated liability

If an obligation in relation to contingencies such as external guarantees, discounting ofcommercial acceptance bills, pending litigation or arbitration and product quality assuranceis the present obligation of the Company and the performance of such obligation is likely tolead to an outflow of economic interests and its amount can be reliably measured, suchobligation shall be recognized as an estimated liability.

(2) Measurement of estimated liability

The estimated liability shall be initially measured according to the best estimate of thenecessary expenses for the performance of the present obligation. If there is a continuousrange for the necessary expenses and if all the outcomes within this range are equally likelyto occur, the best estimate shall be determined according to the middle estimate within therange; if there are two or more items involved, the best estimate should be determinedaccording to all possible outcomes and relevant probabilities.

Section VIII Financial Report

At the balance sheet date, the carrying value of estimated liabilities should be reviewed. Ifthere is objective evidence that the carrying value could not reflect in the current bestestimate, the carrying value shall be adjusted to reflect the current best estimate.If all or part of the expense necessary for settling the provisions is expected to becompensated by the third party, the amount of compensation is separately recognized asan asset when it is basically determined to be recoverable, and the recognized amount ofthe compensation shall not exceed the carrying amount of the provisions.

25. Share-based payments

√ Applicable Not Applicable

Share-based payments of the Company are transactions in which equity instruments are grantedto employees in exchange for services rendered by employees or for the assumption of liabilitiesbased on equity instruments. Share-based payments of the Company are equity-settledshare-based payments and cash-settled share-based payments.For equity-settled share-based payment transaction in return for services from employees, it shallbe measured at the fair value of equity instruments granted to the employees at the date ofgrant by the Company. On each balance sheet date within the vesting period, the Companymakes the best estimation of the number of vested equity instruments based on subsequentinformation such as the updated changes in the number of employees who are granted to vestand the achievement of specified performance conditions. Based on the above results, theservices received in the current period are included in the relevant cost or expenses based onthe fair value on the date of grant, with the increase in the capital reserve accordingly. Therecognized relevant cost or expenses and the total amount of owners’ interest shall no longer beadjusted after the vesting date. However, equity instruments vested immediately after the date ofgrant shall be included in the relevant cost or expenses based on its fair value on the date ofgrant, with the increase in the capital reserve accordingly.The cash-settled share-based payment shall be measured at the fair value of liability assumed bythe Company, which is determined based on the shares or other equity instruments. For thecash-settled share-based payment that may be exercised immediately after the grant, the fairvalue of the liability assumed by the Company shall, on the date of the grant, be recognized inrelevant costs or expenses and the liabilities shall be increased accordingly. For cash-settledshare-based payment that may be exercised if services are fulfilled during the vesting period orthe specified performance condition is achieved, on each balance sheet date within the vestingperiod, the services acquired in the current period shall, based on the best estimate of exercise,be recognized in relevant costs or expenses at the fair value of the liability assumed by theCompany, and the liabilities shall be adjusted correspondingly. At each balanced sheet date andthe settlement date prior to the settlement of liabilities, the fair value of the liability isre-measured with its change consolidated in profit/loss.

Section VIII Financial Report

When there is changes to the Company’s share-based payment plans, if the modificationincreases the fair value of the equity instruments granted, corresponding recognition of serviceincrease in accordance with the increase in the fair value of the equity instruments; if themodification increases the number of equity instruments granted, the increase in fair value of theequity instruments is recognized as a corresponding increase in service achieved. Increase in thefair value of equity instruments refer to the difference between the fair values of the equityinstrument on the modified date before or after the modification. If the Company modifies thevesting conditions in such manner conductive to the employees, including the shortening of thevesting period, change or cancellation of the performance conditions (rather than marketconditions), the modified vesting conditions are considered upon the disposal of vestingconditions. If the modification reduces the total fair value of shares paid or the Company usesother methods not conductive to employees to modify the terms and conditions of share-basedpayment plans, the Company will continue to be accounted for the services obtained in theaccounting treatment, as if the change had not occurred, unless the Company cancelled some orall of the equity instruments granted.During the vesting period, if the Company cancel equity instruments granted which will be treatedas accelerating the exercise of rights and any amount to be charged over the remaining vestingperiod should be recognized immediately in the profit or loss, while at the same time recognizethe capital reserve. Employees or other parties can choose to meet non-vesting conditions, butfor those that are not met in the vesting period, the Company will treat it as cancellation ofequity instruments granted.

26. Revenue

Revenue is the total inflow of economic benefits formed by the Company and its subsidiariesduring day-to-day operations which might lead to increase of shareholders’ equity and beirrelevant to capital invested by shareholders.The Company and its subsidiaries performed performance obligations stated in the contract, i.e.,recognized revenue when the client obtains the control right of relevant goods or services.Where the contract includes two or more performance obligations, during the starting date of thecontract, the Company and its subsidiaries allocate transaction price to various singleperformance obligation in accordance with the relevant proportion of separate selling price ofgoods or services promised by various single performance obligation, and measure revenue inaccordance with transaction price allocated to various single performance obligation.Transaction price is the amount of consideration that the Company and its subsidiaries areexpected to be entitled to collect due to transfer of goods and services transferred to the client,excluding the amount collected for any third party. The transaction price recognized by theCompany and its subsidiaries does not exceed the amount of recognized revenue when relevantuncertainties are eliminated and might not incur material carrying back. The amount that isexpected to be returned to the client is taken as liability of returned goods and is not recordedin transaction price.

Section VIII Financial Report

When one of the following conditions is met, the Company and its subsidiaries performperformance obligations during a certain time horizon, otherwise, it belongs to fulfillingperformance obligations at a certain time point:

The client simultaneously obtains and consumes economic benefits as the Company and itssubsidiaries perform the contract;The client is able to control goods under construction during the process of performance ofthe Company and its subsidiaries;Goods produced by the Company and its subsidiaries during the process of performancehave no alternative use, and the Company and its subsidiaries are entitled to collect theamount for the cumulative completed and performed portion to date during the entirecontractual period.For the performance obligations performed during a certain time horizon, the Company and itssubsidiaries recognize revenue in accordance with the schedule of performance during such timehorizon. When the schedule of performance can’t be reasonably recognized, where the costs thathave been incurred by the Company and its subsidiaries are estimated to be compensated,revenue shall be recognized in accordance with the amount of costs that has been incurred untilthe schedule of performance can be reasonably confirmed.For performance obligations performed at a certain time point, the Company and its subsidiariesrecognize revenue at the time point when the client obtains the control right of relevant goods orservices. When judging whether the client has obtained control right over goods or services, theCompany and its subsidiaries will consider the following signs:

The Company and its subsidiaries enjoy the right of instant collection over such goods and

services;The Company and its subsidiaries have transferred the material objects of such goods tothe client;The Company and its subsidiaries have transferred statutory ownership right of the goodsor major risks and rewards of the ownership to the client; The client has accepted such goods or service.The right that the Company and its subsidiaries are entitled to collect the consideration forhaving transferred goods or services to the client (and such right depends on other factors otherthan time lapse) is presented as contract asset, and contract asset is provisioned impairment onthe basis of expected credit losses. The right owned by and unconditionally collected from theclient by the Company and its subsidiaries (only depend on time lapse) shall be presented asaccounts receivable. Obligations that the Company and its subsidiaries have collected or shallcollect consideration from the client and shall transfer goods or services to the client arepresented as contractual obligations.

Section VIII Financial Report

Specific accounting policies relating to major activities that the Company and its subsidiariesobtain revenue are described as follows:

(1) Sale of goods

Generally, contracts for sale of goods between the Company and its clients only includeperformance obligation of transferring the whole machine of home appliance. Generally, onthe basis of taking into account the following factors comprehensively, the Companyrecognizes the revenue at the time point of transfer of control right of goods: the right ofinstant collection for obtaining goods, transfer of major risks and rewards on ownership ofgoods, transfer of statutory ownership of goods, transfer of assets of material objects ofgoods, the client’s acceptance of such goods.

(2) Construction contract income

Construction contract between the Company and the client generally includes performanceobligations of construction and installation of commercial air-conditioner and smart home,because the client is able to control goods under construction during the Company’sperformance process, the Company takes them as performance obligations performedduring a certain time horizon, and recognizes revenue in accordance with the schedule ofperformance, and it is an exemption when the schedule of performance can’t bereasonably confirmed. The Company confirms the schedule of performance of servicesprovided in accordance with the input method. When the schedule of performance can’t bereasonably confirmed, where the costs that have been incurred by the Company areestimated to be compensated, the revenue will be recognized in accordance with theamount of costs that has been incurred until the schedule of performance can bereasonably confirmed.

(3) Warranty obligations

According to contractual agreement and regulations of laws, the Company provides qualityassurance for goods sold and project constructed. For guarantee-type quality assurance inorder to ensure the client that goods sold comply with existing standards, the Companyconducts accounting treatment in accordance with estimated liabilities. For service-typequality assurance in order to ensure the client that we also provide a separate service otherthan that the goods sold comply with existing standards, the Company takes it as aseparate performance obligation, and allocates partial transaction price to service-typequality assurance in accordance with the relevant proportion of separate selling price ofgoods and service-type quality assurance, and recognizes revenue when the client obtainscontrol right over services. When assessing whether quality assurance provides a separateservice other than ensuring the client that the goods sold comply with existing standards,the Company shall consider factors such as whether such quality assurance is understatutory requirements or industrial practices, the term of quality assurance and the natureof the Company’s commitment to perform the tasks.

Section VIII Financial Report

27. Government grants

√ Applicable Not Applicable

(1) Types of government grants

Government grants refer to the gratuitous monetary assets or non-monetary assetsobtained by the Company from the government, excluding the capital invested by thegovernment as an owner. The government grants are mainly divided into asset-relatedgovernment grants and revenue-related government grants.

(2) Accounting treatment of government grants

Asset-related government grants shall be recognized as deferred income in current profit orloss on an even basis over the useful life of relevant assets; government grants measuredat nominal amount shall be recognized directly in current profit or loss. Revenue-relatedgovernment grants shall be treated as follows: those used to compensate relevantexpenses or losses to be incurred by the enterprise in subsequent periods are recognizedas deferred income and recorded in current profit or loss when such expenses arerecognized; those used to compensate relevant expenses or losses that have beenincurred by the enterprise are recorded directly in current profit or loss.

(3) Basis for determination of asset-related government grant and revenue-related

government grantIf the government grant received by the Company is used for purchase, construction orother project that forms a long-term asset, it is recognized as asset-related governmentgrant.If the government grant received by the Company is not asset-related, it is recognized asrevenue-related government grant.Government grant received without clear objective shall be classified as asset-relatedgovernment grant or revenue-related government grant by:

Government grant subject to a certain project shall be separated according to the

proportion of expenditure budget and capitalization budget, and the proportion shallbe reviewed and modified if necessary on each balance sheet date;Government grant shall be categorized as revenue-related if its usage is described ingeneral statement and no specific project is specified in the relevant governmentdocument.

(4) Amortization method and determination of amortization period of deferred revenue

related to government grantsAsset-related government grant received by the Company is recognized as deferredrevenue and is evenly amortized to the profit or loss in the current period over theestimated useful life of the relevant asset starting from the date when the asset is availablefor use.

Section VIII Financial Report

(5) Recognition of government grants

Government grant measured at the amounts receivable is recognized at the end ofthe period when there is clear evidence that the relevant conditions set out in thefinancial subsidy policies and regulations are fulfilled and the receipt of such financialsubsidy is assured.Other government grants other than those measured at the account receivable isrecognized upon actual receipt of such subsidies.

28. Deferred tax assets/deferred tax liabilities

√ Applicable Not Applicable

Deferred income tax assets and deferred income tax liabilities of the Company are calculated andrecognized based on the differences between the tax bases and the carrying amounts of assetsand liabilities (temporary differences).

(1) Deferred income tax assets are recognized by the Company to the extent that it is probable

that future taxable profits will be available against which the deductible temporarydifferences can be utilized. For deductible losses and tax credits that can be carriedforward to future years, deferred income tax assets shall be recognized to the extent that itis probable that taxable profit will be available in the future to offset the deductible lossesand tax credits. Save as the exceptions, deferred income tax liabilities shall be recognizedfor the taxable temporary differences.

(2) Deferred income tax asset of the Company is recognized to the extent that there is enough

taxable income for the deduction of the deductible temporary difference. At the balancesheet date, if there is sufficient evidence that there will be enough taxable income in thefuture for the deduction of the deductible temporary difference, the deferred income taxasset not recognized in previous accounting period is recognized. If there is no sufficientevidence that there will be enough taxable income in the future for the deduction of thedeferred income tax asset, the carrying value of the deferred income tax asset is reduced.

(3) The Company recognizes deferred income tax liability for taxable temporary difference arising

from investments in subsidiaries and associated companies, unless the Company couldcontrol the time of reversal of the temporary differences and the temporary differenceswould not be probably reversed in the foreseeable future. The Company recognizesdeferred income tax asset for deductible temporary differences arising from investments insubsidiaries and associated companies, if the temporary difference will be very probablyreversed in the foreseeable future and it is highly probable that taxable income will beavailable in the future to deduct the deductible temporary difference.

Section VIII Financial Report

(4) The Company does not recognize deferred income tax liability for a temporary difference

arising from the initial recognition of goodwill. No deferred income tax asset or deferredincome tax liability is recognized for the temporary differences resulting from the initialrecognition of assets or liabilities due to a transaction other than a business combination,which affects neither accounting profit nor taxable income (or deductible loss). At thebalance sheet date, deferred income tax assets and deferred income tax liabilities of theCompany are measured at the tax rates that apply to the period when the asset isexpected to be recovered or the liability is expected to be settled.

(5) Deferred income tax assets and deferred income tax liabilities are offset when:

1) deferred tax assets and deferred tax liabilities relate to income taxes levied by the same

taxation authority on the same taxable entity within the Company;

2) such taxable entity within the Company has a legally enforceable right to settle current

income tax assets and current income tax liabilities on a net basis.

29. Leases

√ Applicable Not Applicable

Lease is a contract in which the Company transfers or obtains the right of use of an identifiedasset or several identified assets under control for the exchange or payment of considerationwithin a certain period of time. At inception of a contract, the Company assesses whether acontract is, or contains, a lease.

(1) The Company as the lessee

1) Initial measurement

On the commencement date of the lease term, the Company recognizes its right touse leased assets over the lease term as right-of-use assets and recognizes thepresent value of the lease payments that have not been paid as lease liabilities,except for short-term leases and low-value leases. The lease payments arediscounted using the implicit interest rate in the lease when calculating the presentvalue of the lease payments. If that rate cannot be readily determined, the Companyuses its incremental borrowing rate as the discount rate.Right-of-use assets shall be initially measured at costs. The costs include:

a. initial measurement amount of the lease liabilities;b. a lease payment paid on or before the date of commencement of the lease term,

where there were lease incentives, such incentives received shall be deducted;c. initial direct costs incurred by the lessee;d. costs expected to be incurred by the Company for demolition and removal of

leased assets, restoration of the premises where the leased assets are located,

or restoration of the leased assets to the conditions of the lease terms.

Section VIII Financial Report

2) Subsequent measurement

If the Company accrues depreciation for right-of-use assets by reference to thedepreciation policy for fixed assets (see this Note V.16 “Fixed assets” for details), andcan reasonably determine that the ownership of the leased asset can be acquired atthe expiration of the lease term, the Company shall depreciate the leased asset withinits remaining useful life. If the Company cannot reasonably determine that theownership of the leased asset can be acquired at the expiration of the lease term, theCompany shall depreciate the leased asset within the lease term or its remaininguseful life, whichever is shorter. For lease liabilities, the Company shall calculate theinterest expenses for each period over the lease term at the fixed periodic interestrate, and recognize it in current profit or loss or the cost of relevant assets. Variablelease payments that are not included in the measurement of lease liabilities arerecognized in current profit or loss or the cost of relevant assets when they areactually incurred. After the commencement date of the lease term, in the event thatthere is a change in the substantive fixed payments, a change in expected paymentunder a guaranteed residual value, a change in an index or rate used in determiningthe lease payments, or a change in the evaluation result or actual exercise ofpurchase option, extension option or termination option, the Company remeasures thelease liabilities based on the present value of the lease payments after the changeand adjusts the carrying value of the right-of-use asset accordingly. If the carryingamount of the right-of-use asset has been reduced to zero, but a further reduction inthe measurement of the lease liabilities is still warranted, the Company recognizes theremaining amount of the remeasurement in current profit or loss.

3) Short-term leases and leases of low-value assets

For short-term leases (leases with a term of less than 12 months as of the leasecommencement date) and leases of low-value assets, the Company adopts asimplified approach by not recognizing the right-of-use assets and lease liabilities, andinstead recognizes the cost of relevant assets or current profit or loss on astraight-line basis for each period over the lease term.

(2) The Company as the lessor

The Company classifies leases into finance leases and operating leases based on thesubstance of the transaction at the inception date of the lease. A finance lease is a leasethat transfers substantially all the risks and rewards incidental to ownership of the leasedasset. An operating lease is a lease other than a finance lease.

1) Operating leases

The Company uses the straight-line method to recognize lease receipts underoperating leases as rental income for each period during the lease term. Variablelease payments relating to operating leases that are not recognized as lease receiptsare recognized in current profit or loss when they are actually incurred.

Section VIII Financial Report

2) Finance leases

On the commencement date of the lease term, the Company recognizes finance leasereceivables and derecognizes finance lease assets. Finance lease receivables areinitially measured at the net investment in the lease (the sum of the unguaranteedresidual value and the present value of the lease receipts not yet received on thecommencement date of the lease term discounted at the interest rate embedded inthe lease), and interest income is recognized over the lease term calculated at a fixedperiodic interest rate. Variable lease payments acquired by the Company that are notincluded in the measurement of the net investment in the lease are recognized incurrent profit or loss when they are actually incurred.

30. Other significant accounting policies and accounting estimates

√ Applicable Not Applicable

(1) Asset securitisation

The Company has securitised certain receivables to entrust the assets to specific-purposeentities which would issue such securities to investors. As asset service provider, theCompany is responsible for the provision of maintenance and daily management of theassets, formulation of annual asset disposal plans, formulation and implementation of assetdisposal plan, signing of relevant asset disposal agreements and preparation asset servicereports on a regular basis.In applying the accounting policy for the securitisation of financial assets, the Company hasconsidered the extent to which the risk and reward of the assets have been transferred toother entities, and the extent to which the Company exercises control over the entity:

When the Company has transferred substantially all risk and reward relating to theownership of a financial asset, such financial asset is derecognised;When the Company retains substantially all risk and reward relating to the ownershipof a financial asset, the Company continues to recognise such financial asset;If the Company neither transfers nor retains substantially all risk and reward relating tothe ownership of a financial asset, the Company considers whether it has control overthe financial asset. If the Company does not retain control, the financial asset isderecognised, and the rights and obligations arising from or retained the transfer arerecognised as assets and liabilities, respectively. If the Company retains control, thefinancial asset is recognised according to the extent of continued involvement in thefinancial assets.

(2) Hedge accounting

Hedge refers, in respect of the risk exposure arising from the company’s management ofspecific risks such as foreign exchange risks, interest rate risks, price risks and credit risks,to risk management activity of designating financial instruments as hedging instrumentssuch that the change in the fair value or cash flow of the hedging instruments can beexpected to set off the change in the fair value or cash flow of the hedged item.

Section VIII Financial Report

The hedged item refers to an item designated for hedge against the risk of change in fairvalue or cash flow that can be reliably measured.Hedging instruments are financial instruments designated for hedge, the change in fair valueor cash flow of which is expected to set off the change in the fair value or cash flow of thehedged item.The Company assesses whether the hedge relationship fulfills the requirement for hedgeeffectiveness at the inception date of the hedge and continuously in subsequent periods.The effectiveness of hedge refers to the extent to which the change in the fair value orcash flow of the hedging instruments can offset the change in the fair value or cash flow ofthe hedged item caused by the risk against which the hedge is made. The change in thefair value or cash flow of a hedging instrument in excess or shortfall of the change in thefair value or cash flow of the hedging instruments can offset the change in the fair value orcash flow of the hedged item represents the ineffective portion of the hedge.

(3) Significant accounting estimates

In the course of applying accounting policies, the Company is required to makejudgements, estimations and assumptions on the carrying values of statement items thatcannot be accurately measured owing to uncertainties to which operating activities aresubject. Such judgements, estimations and assumptions are made based on the pastexperience of the management and taking into consideration of other relevant factors. Suchjudgements, estimations and assumptions affect the reported amounts of income,expenses, assets and liabilities and the disclosure of contingent liabilities as at the balancesheet date. However, the actual outcome resulting from the uncertainty of such estimatescould be different from the current estimates of the management, thereby resulting insignificant adjustments to the carrying value of the future assets or liabilities affected. TheCompany regularly reviews such judgements, estimations and assumptions on a goingconcern basis. If the change in accounting estimates affects only the current period inwhich the change occurs, the affected amount is recognized for the period in which thechange occurs; if both the current period and future periods are affected, the affectedamount is recognised for the current period and the future periods.At the balance sheet date, important aspects in which the Company is required to makejudgements, estimations and assumptions on the amount of items on the financialstatements are as follows:

Estimated liabilities

The Company estimates and makes provision for product warranty and estimatedcontract loss according to contract terms, existing knowledge and historicalexperience. When such contingencies have given rise to a present obligation, and theperformance of such present obligation is likely to result in the outflow of economicbenefit from the Company, the Company recognises estimated liabilities for thecontingencies based on the best estimates of expenses required for the performanceof relevant present obligations. The recognition and measurement of estimatedliabilities is dependent to a large extent on management judgement. In the course ofjudgement, the Company is required to assess factors such as risks, uncertainties

Section VIII Financial Report

and the time value of currency relating to such contingencies. In particular, theCompany recognises estimated liabilities in respect of after-sales undertaking tocustomers for return and replacement, maintenance and installation of goods sold.The recognition of estimated liabilities has taken into account the maintenanceexperience and data of the Company for recent years, although past experience inmaintenance may not reflect maintenance in the future. Any increase or decrease inthis provision might affect the profit or loss of future years. Provision for ECLThe Company measures ECL through default risk exposure and the ECL rate, whichis determined based on the default probability rate and default loss rate. Indetermining the ECL rate, the Company uses data such as internal historic credit lossexperience and adjusts the historic data taking into consideration current conditionsand prospective information. When considering prospective information, indicatorsadopted by the Company include the risk of economic downside, expected growth inunemployment rate, and changes in external market conditions, technical conditionsand customer conditions. The Company monitors and reviews the assumptionsrelating to ECL computation on a regular basis. There was no significant change toaforesaid estimation technique and key assumptions during the year.

Impairment provisions for inventoryThe Company makes impairment provisions for inventory of which cost is higher thannet realisable value and obsolete and slow-moving inventory based on the lower ofcost and net realisable value according to its inventory accounting policy. Theimpairment of inventory to its net realisable value is based on assessment of thesellability of inventory and its net realisable value. The authentication of inventoryimpairment requires the management to obtain conclusive evidence and makejudgment and estimates taking into consideration factors such as the purpose ofinventory and post-balance sheet date events. Any difference between the actualoutcome and the previous estimate will affect the carrying value of inventory and thecharge or reversal of impairment provisions for inventory during the period in whichthe estimates are modified.

Section VIII Financial Report

Fair value of financial instruments

For financial instruments without an active trading market, the Company determinesits fair value using valuation techniques. Such valuation techniques include discountedcash flow model analysis and others. During the assessment, the Company isrequired to make estimates on future cashflow, credit risk, market volatility rate andrelevance and select an appropriate discount rate. Such relevant assumptions aresubject to uncertainty, and any change will affect the fair value of financialinstruments. Impairment of other equity instrument investmentsThe Company’s determination of impairment for other equity instrument investments islargely dependent on the management’s judgment and assumptions to determinewhether impairment should be recognised. In the course of making judgments andassumptions, the Company is required to assess the extent and duration of the fairvalue of the investment being lower than cost, as well as the financial conditions andshort-term business prospects of the investee, including industry conditions,technological revolution, credit rating, default rate and counterparty risks. Impairment provision for long-term assetsAt the balance sheet date, the Company assesses whether there are indications ofpossible impairment of non-current assets other than financial assets. In addition tothe annual impairment test, intangible assets with indefinite useful life are also testedfor impairment when there are indications of the same. Impairment tests on non-current assets other than financial assets are conducted when there are indicationsthat its carrying value may not be recoverable. An impairment has occurred when thecarrying value of an asset or asset group is higher than the recoverable amount (thehigher of net fair value less disposal cost and the present value of estimated futurecash flow). The net fair value less disposal cost is determined with reference to theagreed selling price of similar assets in a fair transaction or observable market pricesless incremental costs attributable directly to the disposal of such asset. In estimatingthe present value of future cashflow, significant judgement is required to be made inrespect of the production volume and selling price of the asset or (asset group),relevant operating cost and discount rate for the computation of present value. TheCompany takes into consideration all available relevant information when makingestimates on the recoverable amount, including forecasts on production volume,selling price and relevant operating costs based on reasonable and justifiableassumptions. The Company conducts goodwill impairment tests at least annually. Thisrequires estimates on the present value of future cashflow of asset group or portfolioof asset groups to which goodwill has been allocated. When making estimates on thepresent value of future cashflow, the Company is required to make estimates oncashflow generated from future asset group or portfolio of asset groups, and at thesame time select an appropriate discount rate to determine the present value offuture cashflow.

Section VIII Financial Report

Depreciation and amortisationDepreciation and amortisation of investment properties, fixed assets and intangibleassets is charged on a straight-line basis over their useful life after taking theirresidual values into account. The Company reviews the useful life on a regular basisto determine the amount of depreciation and amortisation charge to be allocated toeach reporting period. The useful life is determined based on past experience relatingto similar assets taking into consideration expected technological upgrades. If thereare significant changes in previous estimates, the depreciation and amortisationcharge for future periods will be adjusted.

Deferred income tax assetsThe Company recognises deferred income tax assets in respect of all unutilised taxlosses, to the extent that it is probable that sufficient taxable profit will be available tooffset the loss. This requires the exercise of significant judgement by the Company’smanagement to estimate the timing and amount of future taxable profit, taking intoaccount its tax planning strategy, to determine the amount of deferred income taxassets to be recognised. Income tax

In the Company’s usual operating activities, the final tax treatment and computationof certain transactions are subject to uncertainty. Whether certain items can bepresented on a pretax basis is subject to approval of the competent taxationauthority. If the final confirmed outcome of such taxation matters is different from theamount of the initial estimates, such difference will affect the current income tax anddeferred income tax for the period of final confirmation. Provision for sales rebate

The Company and its subsidiaries adopt a sales rebate policy for sales agentcustomers. Based on relevant provisions of the sales agreements, vetting of specifictransactions, market conditions, channel inventory level and past experience withreference to the status of completion of agreed appraisal indicators by sales agentcustomers, the Company and its subsidiaries makes estimates on and provision forsales rebate on a regular basis. The provision of sales rebate involves judgment andestimation by the management. In the event of any material change in previousestimates, the aforesaid difference will affect the sales rebate for the period for whichthe estimates are changed.

31. Changes in significant accounting policies and accounting estimation

√ Applicable Not Applicable

In accordance with the Interpretation No. 18 of Accounting Standards for Business Enterprisesissued by the Ministry of Finance, provision for the guarantee-type quality assurance expenses ofthe Company are included in “Operating cost” instead of “Selling expenses”.

Section VIII Financial Report

The Company adopted the retrospective approach to adjust the data of financial statements forcomparable periods accordingly, and the effects of the above changes in accounting policies onthe consolidated income statement for the same period are as follows:

Statement ItemAdjustmentOperating cost4,218,830,574.18Selling expenses–4,218,830,574.18VI. TAXATION

1. Main tax categories and rates

Main tax categories and rates

√ Applicable Not Applicable

Tax typesBasis of taxationTax rateValue-added taxTaxable revenue from sales of goods

and rendering services

6%, 9%, 13%(Local) educationsurcharge

Circulation tax payable1%, 2%, 3%City maintenance and

construction tax

Circulation tax payable7%EITTaxable incomeStatutory tax rate or

preferential rates as follows

2. Preferential tax

√ Applicable Not Applicable

Companies subjected to preferential tax and preferential tax rate:

CompanyTax ratePreferential taxQingdao Haier Refrigerator Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Haier Special Refrigerator Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Haier Dishwasher Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Haier Special Freezer Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Haier Intelligent Home Appliance

Technology Co., Ltd.

15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseWuhan Haier Electronics Holding Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterprise

Section VIII Financial Report

CompanyTax ratePreferential taxWuhan Haier Freezer Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseHefei Haier Refrigerator Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Haier Air Conditioner Gen Corp., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseHefei Haier Air-conditioning Co., Limited15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseZhengzhou Haier Air-conditioning Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseShenyang Haier Refrigerator Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Haier Air-Conditioner Electronics Co.,Ltd.

15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Meier Plastic Powder Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Hai Gao Design and Manufacture Co.,

Ltd.

15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Hairi High Technology Co., Ltd15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Haier (Jiaozhou) Air-conditioning Co.,

Limited

15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Haier Intelligent Technology

Development Co., Ltd.

15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseFoshan Haier Freezer Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Haier Central Air Conditioning Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseHaier U+smart Intelligent Technology (Beijing)

Co., Ltd.

15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Haier Electronic Plastic Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Wei Xi Intelligent Technology Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Haier Special Refrigerating Appliance

Co., Ltd.

15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Haier Smart Kitchen Appliance Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseHefei Haier Air Conditioning Electronics Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseShanghai Haier Medical Technology Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseShanghai Haier Smart Technology Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterprise

Section VIII Financial Report

CompanyTax ratePreferential taxQingdao Yunshang Yuyi IOT Technology Co.,

Ltd.

15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseHaier (Shanghai) Home Appliance Research and

Development Center Co., Ltd.

15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseHaier (Shenzhen) R&D Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseLaiyang Haier Smart Kitchen Appliance Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseGuangdong Haier Intelligent Technology Co. Ltd15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseDalian Haier Refrigerator Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Jijia Cloud Intelligent Technology Co.,Ltd.

15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseHefei Haier Washing Machine Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Haier Washing Machine Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Haier Laundry Appliances Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseFoshan Shunde Haier Electric Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseTianjin Haier Cleaning Electrical Appliances Co.,

Ltd. ()

15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Economic and Technological

Development Zone Haier Water Heater Co.,Ltd.

15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseWuhan Haier Water Heater Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseFoshan Haier Drum Washing Machine Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Haier Strauss Technology Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Haier New Energy Electric Appliance

Co., Ltd.

15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Haier Washing Appliance Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Haier Lexin Cloud Technology Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseHefei Haier Drum Washing Machine Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao Haier Smart Electrics Equipment Co.

Ltd.

15.00%entitled to the preferential taxation

policies as a hi-tech enterprise

Section VIII Financial Report

CompanyTax ratePreferential taxQingdao Haier Smart Living Appliance Co. Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseQingdao RRS Lejia IoT Technology Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseTonghai Energy Technology Development Co.,Ltd. ()

15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseJiangxi Haier Medical Technology Co., Ltd.15.00%entitled to the preferential taxation

policies under the Western

Development initiative of the PRCChongqing Haier Electrical Appliance Sales Co.,Ltd. and some Western companies

15.00%entitled to the preferential taxation

policies under the Western

Development initiative of the PRCChongqing Haier Air-conditioning Co., Ltd.15.00%entitled to the preferential taxation

policies under the Western

Development initiative of the PRCChongqing Haier Refrigeration Appliance Co.,

Ltd.

15.00%entitled to the preferential taxation

policies under the Western

Development initiative of the PRCChongqing Haier Washing Machine Co., Ltd.15.00%entitled to the preferential taxation

policies under the Western

Development initiative of the PRCGuizhou Haier Electronics Co., Ltd.15.00%entitled to the preferential taxation

policies under the Western

Development initiative of the PRCChongqing Hairishun Home Appliance Sales Co.,

Ltd. and some Western companies

15.00%entitled to the preferential taxation

policies under the Western

Development initiative of the PRCChongqing Haier Washing Machine Co., Ltd15.00%entitled to the preferential taxation

policies under the Western

Development initiative of the PRCChongqing Haier Water Heater Co., Ltd15.00%entitled to the preferential taxation

policies under the Western

Development initiative of the PRCChongqing Haier Drum Washing Machine Co.,

Ltd

15.00%entitled to the preferential taxation

policies under the Western

Development initiative of the PRCGuizhou Peiji Logistics Co., Ltd.15.00%entitled to the preferential taxation

policies under the Western

Development initiative of the PRCCentral Asia Baofeng International Logistics Co.,

Ltd.

15.00%entitled to the preferential taxation

policies under the Western

Development initiative of the PRC

Section VIII Financial Report

CompanyTax ratePreferential taxCentral Asia Baofeng International Logistics Co.,

Ltd. Xi’an Branch

15.00%entitled to the preferential taxation

policies under the WesternDevelopment initiative of the PRCShenzhen Furunde Supply Chain ManagementCo., Ltd.

15.00%entitled to the preferential taxation

policies under the WesternDevelopment initiative of the PRCGooday Supply Chain Technologies Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseHaier Robotics Technology (Qingdao) Co., Ltd.15.00%entitled to the preferential taxation

policies as a hi-tech enterpriseGuiyang Ririshun Logistics Co., Ltd.15.00%entitled to the preferential taxation

policies under the Western

Development initiative of the PRCXi’an Gooday Smart Supply Chain Co., Ltd.15.00%entitled to the preferential taxation

policies under the Western

Development initiative of the PRCChongqing Gooday Supply Chain Management

Co., Ltd.

15.00%entitled to the preferential taxation

policies under the Western

Development initiative of the PRCQusong Tonghai Energy Technology Co., Ltd.15.00%entitled to the preferential taxation

policies under the Western

Development initiative of the PRCLinzhou Tonghai Energy Technology Co., Ltd.15.00%entitled to the preferential taxation

policies under the Western

Development initiative of the PRCQingdao Haier Technology Co., Ltd.10.00%entitled to the preferential taxation

policies as a key software

enterprise

Section VIII Financial Report

VII. EXPLANATORY NOTES FOR ITEMS IN CONSOLIDATED FINANCIALSTATEMENTS

Unless otherwise specified, the following closing balances represent the amount as at 30 June 2025and opening balances represent the amount as at 31 December 2024; amount for the periodrepresents the amount from 1 January to 30 June 2025 and amount for the previous periodrepresents the amount from 1 January to 30 June 2024.

1. Monetary funds

ItemsClosing balanceOpening balanceCash on hand1,685,740.35560,953.91Cash in bank53,646,652,252.8754,256,005,280.85Other cash balances1,708,764,543.601,340,988,388.07Total55,357,102,536.8255,597,554,622.83Include: total amount of overseas deposits20,946,662,922.0621,113,746,333.40Deposit in Finance Company20,194,208,511.1320,565,469,130.81Other monetary funds mainly included investment fund, deposit on third party payment platforms,guarantees and other restricted fund, etc.

2. Financial assets held for trading

ItemsClosing balanceOpening balanceShort-term wealth management products8,317,511,328.41746,436,121.40Investments in equity instruments183,105,112.16195,177,368.77Investment funds314,831,875.05294,404,349.36Total8,815,448,315.621,236,017,839.53

Section VIII Financial Report

3. Derivative financial assets

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceForward foreign exchange contracts77,736,648.25138,404,575.66Cross-currency interest rate swaps4,254,681.44Forward commodity contracts1,628,469.1550,459.81Total79,365,117.40142,709,716.91

4. Bills receivable

(1) Details of bills receivable

ItemsClosing balanceOpening balanceBank acceptance notes4,970,941,573.8810,382,273,687.38Commercial acceptance notes1,937,657,931.731,798,754,865.96Balance of bills receivable6,908,599,505.6112,181,028,553.34Allowance for bad debts987,604.221,171,683.33Bills receivable, net6,907,611,901.3912,179,856,870.01

(2) Changes in allowance for bad debts of bills receivable in the current period

Items

Openingbalance

Increase for

the current period

Decrease for

the current period

ClosingbalanceProvision for

the current

period

OthermovementReversal

Write-off/other

movementAllowance for bad debts1,171,683.33184,079.11987,604.22Total1,171,683.33184,079.11987,604.22

The Company’s bills receivables were mainly generated from daily operation activities suchas sales of commodity, provision of labor, etc., and the allowance for bad debts wasmeasured based on expected credit loss over the entire duration whether there existsignificant financing components.The bills receivable pledged by the Company at the end of the period wasRMB2,411,049,768.49 (amount at the beginning of the period: RMB5,115,222,700.13).

Section VIII Financial Report

5. Accounts receivable

(1) Accounts receivable are disclosed by aging as follows:

AgingClosing balanceOpening balanceWithin 1 year30,916,671,290.4826,234,170,508.25

–2 years657,666,795.64689,351,514.18

–3 years359,369,408.62388,342,245.65Over 3 years309,571,739.21252,055,595.77Balance of accounts receivable32,243,279,233.9527,563,919,863.85Allowance for bad debts1,117,482,568.251,069,074,353.29Accounts receivable, net31,125,796,665.7026,494,845,510.56

(2) By method of provision of allowance for bad debts

√ Applicable Not Applicable

Closing balanceCategoriesBook balanceAllowance for bad debtsCarrying value

AmountPercentage (%)Amount

Percentage ofprovision (%)Account receivables subject toprovision for bad debts ona separate basis350,826,367.321.09340,572,030.0197.0810,254,337.31Account receivables subject toprovision for bad debts ona collective basis31,892,452,866.6398.91776,910,538.242.4431,115,542,328.39Total32,243,279,233.95100.001,117,482,568.253.4731,125,796,665.70

(continued)

Opening balanceCategoriesBook balanceAllowance for bad debtsCarrying value

AmountPercentage (%)Amount

Percentage ofprovision (%)Account receivables subject toprovision for bad debts ona separate basis401,873,990.951.46384,907,108.0595.7816,966,882.90Account receivables subject to

provision for bad debts ona collective basis27,162,045,872.9098.54684,167,245.242.5226,477,878,627.66Total27,563,919,863.85100.001,069,074,353.293.8826,494,845,510.56

Section VIII Financial Report

(3) Account receivables subject to provision for bad debts on a separate basis at the end of

the period

√ Applicable Not Applicable

Unit and Currency: RMBClosing balanceReason for provisionNameBook balance

Allowance forbad debts

Percentage ofprovision (%)44 customers in total350,826,367.32340,572,030.0197.08The obligors were in

significant financialdifficultyTotal350,826,367.32340,572,030.0197.08/

Explanation of provision for bad debts on a separate basis:

√ Applicable Not Applicable

The account receivables of significant individual amount and subject to provision for baddebts on a separate basis at the end of the period was RMB195,473,905.66 (amount at thebeginning of the period: RMB195,473,905.66).

(4) Account receivables subject to provision for bad debts on a collective basis

√ Applicable Not Applicable

AgingClosing balance

Book balance

Allowance for

bad debts

Percentage of

provision (%)Within 1 year30,834,777,556.79439,252,101.781.42

–2 years631,096,459.95127,175,019.8920.15

–3 years241,746,317.5582,424,055.5434.10Over 3 years184,832,532.34128,059,361.0369.28Total31,892,452,866.63776,910,538.242.44

Section VIII Financial Report

(continued)

AgingOpening balance

Book balance

Allowance for

bad debts

Percentage of

provision (%)Within 1 year26,106,894,301.60389,323,682.891.49

–2 years659,738,683.37100,738,283.5015.27

–3 years181,282,912.2360,958,005.8533.63Over 3 years214,129,975.70133,147,273.0062.18Total27,162,045,872.90684,167,245.242.52

(5) Changes in allowance for bad debts of accounts receivable in the current period:

Items

Openingbalance

Increase for

the current period

Decrease for

the current period

ClosingbalanceProvision forthe currentperiod

OthermovementReversal

Write-off/othermovementAllowance for bad debts1,069,074,353.29108,717,671.6753,424,844.116,884,612.601,117,482,568.25

(6) The aggregate amount of the top 5 account receivables and contract assets as at the end

of the period was RMB6,232,723,478.43 (amount at the beginning of the period:

RMB6,775,144,962.81), accounting for 18.42% (at the beginning of the period: 23.65%) ofthe book balance of account receivables and contract assets, and the amount of provisionfor bad debts was RMB45,450,462.85 (amount at the beginning of the period:

RMB18,226,518.24).

(7) Actual write-off of accounts receivable in the current period

The amount of accounts receivable actually written off in the current period wasRMB56,324,142.82 (amount for the corresponding period: RMB708,946,193.17) and theamount of significant bad debt write-off of accounts receivable was RMB0.00.

(8) The Company’s accounts receivable that were terminated due to the transfer of financial

assets in the current periodThe amount of accounts receivable that the company terminated at the end of the perioddue to the transfer of financial assets was RMB7,092,705,208.95 (amount at the beginningof the period: RMB6,095,179,589.77) and the transfer method was outright sale factoring.

(9) Restricted accounts receivable in the current period

The amount of accounts receivable restricted at the end of the period is RMB0.00 (amountat the beginning of the period: RMB0.00).

Section VIII Financial Report

6. Financing receivables

(1) Presentation by category

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceBills receivable1,115,591,707.01235,730,229.72Accounts receivable132,605,741.33177,192,385.53Total1,248,197,448.34412,922,615.25

(2) The amount of the Company’s pledged financing receivables at the end of the period is

RMB129,036,825.42 (amount at the beginning of the period: RMB0.00).

(3) Financing receivables at the end of the period that had been endorsed or discounted by the

Company and were not yet due at the balance sheet date

√ Applicable Not Applicable

Unit and Currency: RMB

Items

Amountsderecognized at

the end ofthe period

Amounts notderecognized atthe end ofthe periodBills receivable10,658,378,486.25Total10,658,378,486.25

(4) No provision for bad debts has been made for financing receivables during the period.

(5) There were no financing receivables written off during the period.

Section VIII Financial Report

7. Prepayments

(1) Prepayments are presented by aging:

AgingClosing balanceOpening balance

AmountPercentageAmountPercentageWithin 1 year1,766,042,471.0094.44%2,319,075,168.2997.16%

–2 years62,002,314.433.32%43,056,825.131.80%

–3 years17,620,244.770.94%8,098,753.240.34%Over 3 years24,323,435.951.30%16,669,039.880.70%Balance of prepayments1,869,988,466.15100.00%2,386,899,786.54100.00%Provision for impairment ofprepayments8,754,877.078,755,327.07Net prepayments1,861,233,589.082,378,144,459.47

(2) Provision for impairment

Items

Openingbalance

Increase for

the current period

Decrease for

the current period

ClosingbalanceProvision forthe current

period

OthermovementReversal

Write-off/othermovementProvision for impairment8,755,327.07450.008,754,877.07Total8,755,327.07450.008,754,877.07

(3) The total amount of the top 5 in the prepayments at the end of the period was

RMB383,730,344.99, accounting for 20.52% of the book balance of prepayment (amount atthe beginning of the period: RMB974,866,936.72, accounting for 40.84%).

(4) There was no significant prepayment aged over 1 year at the end of the period.

8. Other receivables

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceInterest receivable904,741,268.55771,591,076.67Other receivables3,324,051,801.892,829,766,418.35Total4,228,793,070.443,601,357,495.02

Section VIII Financial Report

Interest receivable

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceWithin 1 year379,874,423.51374,172,658.71

–2 years339,218,399.38316,667,022.35

–3 years184,276,615.5280,000,932.60Over 3 years1,371,830.14750,463.01Total904,741,268.55771,591,076.67Other receivables

Other receivables are disclosed by aging as follows:

AgingClosing balanceOpening balanceWithin 1 year2,635,235,474.032,251,224,809.42

–2 years194,411,405.63161,728,827.38

–3 years121,693,437.8173,549,505.88Over 3 years435,978,580.19392,681,572.53Balance of other receivables3,387,318,897.662,879,184,715.21Allowance for bad debts63,267,095.7749,418,296.86Other receivables, net3,324,051,801.892,829,766,418.35 Provision of allowance for bad debts based on the general model of expected credit lossesAllowance for bad debtsStage 1Stage 2Stage 3Total

Expected credit

losses for thecoming 12 months

Lifetime expectedcredit losses (not

credit-impaired)

Lifetime expected

credit losses(credit-impaired)Opening balance39,245,962.8110,172,334.0549,418,296.86Provision for the current period14,477,006.967,576,676.6122,053,683.57Reversal for the current period5,250,344.175,250,344.17Write-off and others for the current

period2,954,540.492,954,540.49Closing balance45,518,085.1117,749,010.6663,267,095.77

Section VIII Financial Report

Changes in allowance for bad debt provision of other receivables in the current periodItems

Openingbalance

Increase for

the current period

Decrease for

the current period

ClosingbalanceProvision forthe currentperiod

OthermovementReversal

Write-off/

othermovementAllowance for bad debts49,418,296.8622,053,683.575,250,344.172,954,540.4963,267,095.77

The total amount of the top 5 other receivables at the end of the period wasRMB855,104,972.12 (amount at the beginning of the period: RMB1,038,763,021.83),accounting for 25.24% of the book balance of other receivables (at the beginning of theperiod: 36.08%), and the amount of provision for bad debts was RMB0.00 (amount at thebeginning of the period: RMB0.00). Other receivables written off during the periodThe amount of other receivables actually written off in the current period wasRMB4,122,692.97 (amount for the corresponding period: RMB8,107,151.46) and nosignificant other receivables were written off for bad debts.Other receivables mainly included deposits, quality guarantees, employee loans, tax refunds,and advance payments, etc.

9. Inventories

(1) Details of inventories

ItemsClosing Balance

Book balance

Impairmentprovision of

inventoriesCarrying valueRaw materials6,699,772,457.36255,379,870.716,444,392,586.65Work in progress428,109,423.20428,109,423.20Finished goods38,209,369,513.571,564,598,790.5836,644,770,722.99Total45,337,251,394.131,819,978,661.2943,517,272,732.84

Section VIII Financial Report

(Continue)ItemsOpening Balance

Book balance

Impairmentprovision ofinventoriesCarrying valueRaw materials6,899,891,071.77229,902,166.826,669,988,904.95Work in progress388,624,719.50388,624,719.50Finished goods37,599,053,611.301,467,811,537.7936,131,242,073.51Total44,887,569,402.571,697,713,704.6143,189,855,697.96

(2) Impairment provision of inventories

Items

Openingbalance

Increase for

the current period

Decrease for

the current period

ClosingbalanceProvision for

the current

period

OthermovementReversal

Write-off/othermovementRaw materials229,902,166.8231,908,473.986,430,770.09255,379,870.71Work in progressFinished goods1,467,811,537.79433,086,565.54336,299,312.751,564,598,790.58Total1,697,713,704.61464,995,039.52342,730,082.841,819,978,661.29

(3) Details of impairment provision of inventories are as follows

Items

Specific basis fordetermining netrealizable value

Reason for reversing orwriting off the impairmentprovision of inventoriesRaw materialsMeasurement at the lower

of cost and net realizablevalue

Production, use or salesFinished goodsMeasurement at the lower

of cost and net realizablevalue

sales

Section VIII Financial Report

10. Contract assets

(1) Details

√ Applicable Not Applicable

Unit and Currency: RMB

ItemsClosing BalanceOpening Balance

Book balance

Allowance for

bad debtsCarrying valueBook balance

Allowance for

bad debtsCarrying valueRelating to construction

service contract1,587,563,750.0891,404,352.141,496,159,397.941,089,472,041.7291,508,336.05997,963,705.67Total1,587,563,750.0891,404,352.141,496,159,397.941,089,472,041.7291,508,336.05997,963,705.67

(2) Classification by method of provision for bad debts

CategoriesClosing balance

Book balanceAllowance for bad debtsCarrying valueAmountPercentage (%)Amount

Percentage ofprovision (%)Contract assets subject toprovision for bad debts on

a separate basis56,845,712.923.5855,755,776.0698.081,089,936.86Contract assets subject to

provision for bad debts on

a collective basis1,530,718,037.1696.4235,648,576.082.331,495,069,461.08Total1,587,563,750.08100.0091,404,352.145.761,496,159,397.94

(Continue)

CategoriesOpening balance

Book balanceAllowance for bad debtsCarrying valueAmountPercentage (%)Amount

Percentage ofprovision (%)Contract assets subject toprovision for bad debts on

a separate basis55,755,776.065.1255,755,776.06100.00Contract assets subject to

provision for bad debts on

a collective basis1,033,716,265.6694.8835,752,559.993.46997,963,705.67Total1,089,472,041.72100.0091,508,336.058.40997,963,705.67

Section VIII Financial Report

(3) Contract assets subject to provision for bad debts on a separate basis at the end

of the period

√ Applicable Not Applicable

Unit and Currency: RMB

Closing balanceReason for provisionNameBook balance

Allowance for

bad debts

Percentage ofprovision (%)7 customers in total56,845,712.9255,755,776.0698.08The obligors were in

significant financialdifficultyTotal56,845,712.9255,755,776.0698.08/

(4) Contract assets subject to provision for bad debts on a collective basis at the end

of the period

√ Applicable Not Applicable

Unit and Currency: RMBNameClosing balance

Book balance

Allowance for

bad debts

Percentage of

provision (%)Relating to constructionservice contract1,530,718,037.1635,648,576.082.33Total1,530,718,037.1635,648,576.082.33

(5) Provision for bad debts on contract assets during the current period

Items

Openingbalance

Increase for

the current period

Decrease for

the current period

ClosingbalanceProvision for

the current

period

OthermovementReversal

Write-off/other

movementRelating to constructionservice contract91,508,336.05103,983.9191,404,352.14Total91,508,336.05103,983.9191,404,352.14

Section VIII Financial Report

11. Non-current assets due within one year

ItemsClosing balanceOpening balanceDebt investments due within one year2,307,574,005.861,439,758,652.55Total2,307,574,005.861,439,758,652.55Including: time deposit in finance company1,695,536,677.09334,466,985.88

12. Other current assets

(1) Details

ItemsClosing BalanceOpening Balance

Book balance

ImpairmentprovisionBook balance

ImpairmentprovisionDeductible taxes products3,353,363,884.613,618,407,941.29Short-term deposits115,221,674.82491,724,709.59Returns cost receivables590,584,931.58279,221,989.21566,481,435.22281,079,517.50Entrusted loans496,677,379.89Others53,975,945.3747,739,469.43Total4,609,823,816.27279,221,989.214,724,353,555.53281,079,517.50

(2) Impairment provision

Items

Openingbalance

Increase for

the current period

Decrease for

the current period

ClosingbalanceProvision for

the current

period

OthermovementReversal

Write-off/other

movementReturns cost receivables281,079,517.50279,221,989.21281,079,517.50279,221,989.21Total281,079,517.50279,221,989.21281,079,517.50279,221,989.21

(3) Time deposit in Finance Company was RMB115,221,674.82 at the end of the period.

13. Debt investments

ItemsClosing balanceOpening balance

PrincipalInterestPrincipalInterestTime deposit -long term16,142,500,000.00755,992,337.2816,292,500,000.00622,018,509.54Less: Debt investments due within

one year2,187,500,000.00120,074,005.861,327,500,000.00112,258,652.55Total13,955,000,000.00635,918,331.4214,965,000,000.00509,759,856.99Include: time deposit in

Finance Company12,065,000,000.00583,553,482.1112,605,000,000.00448,060,172.04

Section VIII Financial Report

14. Long-term equity investments

√ Applicable Not Applicable

InvesteesIncrease/decrease for the current period

Opening balance

Investment

increase

Investment incomerecognized underequity method

Adjustment inothercomprehensiveincomeOther changes in

equity

Declaration ofcash dividends or

profitsAssociateHaier Group Finance Co., Ltd.8,219,298,837.87377,480,635.87–

691.01

–235,200,000.00Bank of Qingdao Co., Ltd.3,473,162,128.86222,430,213.11144,943,528.84—–76,288,906.40Wolong Electric (Jinan) Motor Co., Ltd.198,467,631.6614,338,896.00–15,000,000.00Qingdao Hegang New Material

Technology Co., Ltd.342,315,345.526,843,983.51—–4,186,865.40Qingdao Haier SAIF Smart HomeIndustry Investment Center (LimitedPartnership)191,276,594.86——Mitsubishi Heavy Industries Haier(Qingdao) Air-conditioners Co., Ltd.698,845,993.6171,576,418.84—Qingdao Haier Multimedia Co., Ltd.88,300,000.00Baoshihua Energy Technology Co., Ltd.

()31,132,443.76–1,409,295.17Zhengzhou Highly Electric Appliance

Co., Ltd. (鄭)98,560,581.01Zhejiang Futeng Fluid Technology

Co., Ltd.73,460,549.11Hongtong Environmental Technology

(Guangzhou) Co., Ltd. (環

術（廣州）)6,464,386.26Qingdao Haimu Investment

Management Co., Ltd.2,692,755.00Qingdao Haimu Smart Home

Investment Partnership (Limited

Partnership) 56,749,040.79Qingdao Guochuang Intelligent Home

Appliance Research Institute Co.,

Ltd.40,920,413.542,015,812.22Guangzhou Heying Investment

Partnership (Limited Partnership)132,620,094.53Qingdao Home Wow Cloud Network

Technology Co., Ltd.1,083,682.47–1,108,867.33Bingji (Shanghai) Corporate

Management Co., Ltd.1,095,450,007.1527,395,141.18Shangang Luhai International Logistics

(Jinan) Co., Ltd. (陆

（）)58,941,327.061,047,222.88Haier Best Water Technology Co., Ltd.148,369,638.402,124,281.52Huizhixiangshun Equity Investment Fund

(Qingdao) Partnership (Limited

Partnership)188,907,510.60Qingdao Ririshun Huizhi Investment

Co., Ltd.4,083,482.78Qingdao Xiaoshuai Intelligent

Technology Co., Ltd9,578,046.652,125,935.87Qingdao Xinshenghui Technology Co.,

Ltd.11,365,227.21599,131.76

Section VIII Financial Report

InvesteesIncrease/decrease for the current period

Opening balance

Investment

increaseInvestment incomerecognized underequity method

Adjustment inothercomprehensiveincomeOther changes in

equity

Declaration ofcash dividends or

profitsNingbo Beilian Intelligent TechnologyCo., Ltd. ()3,724,499.78–236,575.45Qingdao Oriental Haisheng TechnologyCo., Ltd. (岛

)9,980,000.00Konan Electronic Co., Ltd.59,415,065.89–2,439,536.524,305,373.50–218,290.50HNR (Private) Company Limited140,530,747.4234,169,113.58–5,099,023.40HPZ LIMITED11,203,257.77——Controladora Mabe, S.A. de C.V.5,638,478,867.77126,143,371.74–112,929,878.77–8,251,636.94–80,024,194.29Middle East Air conditioning Company,

Limited7,389,990.91–2,260,730.88–458,145.29Total21,032,788,148.249,980,000.00882,244,447.9030,761,163.87–8,251,636.94–412,327,551.76

(Continued)

InvesteesIncrease/decrease for the current periodClosing balance

Closing balance ofimpairment provisionOther movement

The disposal ofthe investmentAssociateHaier Group Finance Co., Ltd.8,361,578,782.73Bank of Qingdao Co., Ltd.3,764,246,964.41Wolong Electric (Jinan) Motor Co., Ltd.197,806,527.66Qingdao Hegang New Material

Technology Co., Ltd.344,972,463.63Qingdao Haier SAIF Smart Home

Industry Investment Center (Limited

Partnership)191,276,594.86Mitsubishi Heavy Industries Haier

(Qingdao) Air-conditioners Co., Ltd.770,422,412.45Qingdao Haier Multimedia Co., Ltd.88,300,000.00–88,300,000.00Baoshihua Energy Technology Co., Ltd.

()29,723,148.59Zhengzhou Highly Electric Appliance

Co., Ltd. (鄭)98,560,581.01Zhejiang Futeng Fluid Technology

Co., Ltd.73,460,549.11Hongtong Environmental Technology

(Guangzhou) Co., Ltd. (環術廣州)6,464,386.26Qingdao Haimu Investment

Management Co., Ltd.2,692,755.00Qingdao Haimu Smart Home Investment

Partnership (Limited Partnership)56,749,040.79

Section VIII Financial Report

InvesteesIncrease/decrease for the current periodClosing balance

Closing balance ofimpairment provisionOther movement

The disposal ofthe investmentQingdao Guochuang Intelligent Home

Appliance Research Institute Co.,Ltd.42,936,225.76Guangzhou Heying InvestmentPartnership (Limited Partnership)132,620,094.53Qingdao Home Wow Cloud Network

Technology Co., Ltd.–25,184.86Bingji (Shanghai) Corporate

Management Co., Ltd.1,122,845,148.33Shangang Luhai International Logistics

(Jinan) Co., Ltd. (陆

)–108,598.9759,879,950.97Haier Best Water Technology Co., Ltd.150,493,919.92Huizhixiangshun Equity Investment Fund

(Qingdao) Partnership (Limited

Partnership)–17,011,435.35171,896,075.25Qingdao Ririshun Huizhi Investment Co.,

Ltd.4,083,482.78Qingdao Xiaoshuai Intelligent

Technology Co., Ltd11,703,982.52Qingdao Xinshenghui Technology Co.,

Ltd.11,964,358.97Ningbo Beilian Intelligent Technology

Co., Ltd. ()3,487,924.33Qingdao Oriental Haisheng Technology

Co., Ltd. (岛

)9,980,000.00Konan Electronic Co., Ltd.61,062,612.37HNR (Private) Company Limited169,600,837.60HPZ LIMITED11,203,257.77–11,203,257.77Controladora Mabe, S.A. de C.V.5,563,416,529.51Middle East Airconditioning Company,

Limited–4,671,114.74Total–21,791,149.0621,513,403,422.25–99,503,257.77

Section VIII Financial Report

15. Investments in other equity instruments

(1) Details of investments in other equity instruments at the end of the period:

ItemsClosing balanceOpening balanceSINOPEC Fuel Oil Sales Corporation Limited1,328,800,000.001,674,427,670.51Haier COSMO IOT Ecosystem Technology

Co., Ltd.2,795,887,119.072,786,307,000.00Others1,525,469,132.181,612,946,200.31Total5,650,156,251.256,073,680,870.82

(2) Dividends from investment in other equity instruments during the current period:

Items

Amount for thecurrent periodOthers3,225,726.29Total3,225,726.29

16. Investment properties

(1) The changes in investment properties measured at cost this year are as follows:

Items

Houses andbuildingsLand use rightsTotalI. Original book value

1. Opening balance162,700,718.91108,900,075.76271,600,794.67

2. Increase for the current period

(1) External acquisition214,599,883.20214,599,883.20

(2) Intangible asset/fixed assets/

construction in progress transferred in191,660,227.89191,660,227.89

(3) Increase from business

combinations

3. Decrease for the current period

(1) Disposal

(2) Disposal of subsidiaries

(3) Other transferring out

4. Change in foreign exchange rate

and others17,269,237.1817,269,237.18

5. Closing balance586,230,067.18108,900,075.76695,130,142.94

Section VIII Financial Report

Items

Houses andbuildingsLand use rightsTotalII. Accumulated depreciation and accumulated amortization

1. Opening balance19,258,789.346,180,745.5025,439,534.84

2. Increase for the current period

(1) Provision or amortization3,238,920.77292,591.073,531,511.84

(2) Intangible asset/fixed assets/

construction in progress transferred in574,600.56574,600.56

3. Decrease for the current period

(1) Disposal

(2) Disposal of subsidiaries

(3) Other transferring out

4. Change in foreign exchange rate

and others207,093.85207,093.85

5. Closing balance23,279,404.526,473,336.5729,752,741.09III. Provision for impairment

1. Opening balance

2. Increase for the current period

(1) Provision

3. Decrease for the current period

(1) Disposal

(2) Disposal of subsidiaries

(3) Other transferring out

4. Change in foreign exchange rate

and others

5. Closing balance

IV. Book value

1. Closing book value562,950,662.66102,426,739.19665,377,401.85

2. Opening book value143,441,929.57102,719,330.26246,161,259.83

(2) The depreciation and amortization amount charge for the period is RMB3,531,511.84 (amount

for the corresponding period: RMB2,084,840.88).

(3) The recoverable amount of the investment real estate of the Company at the end of the

period is not less than its book value, so no provision for impairment is made.

Section VIII Financial Report

17. Fixed assets

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceFixed assets38,733,351,465.1837,613,215,769.46Total38,733,351,465.1837,613,215,769.46

(1) Fixed assets:

Items

Houses andbuildings

Productionequipment

TransportationequipmentI. Original book value:

1. Opening balance23,587,425,943.9939,983,465,124.95282,740,896.81

2. Increase for the current period

(1) Acquisition19,579,747.22363,026,991.033,553,499.21

(2) Construction in progress

transferred in1,311,473,701.821,212,516,592.9315,834,494.14

(3) Increase in business

combinations

(4) Investment properties

transferred in

3. Decrease for the current period

(1) Disposal or write-off187,771,425.53456,000,308.5714,132,509.90

(2) Disposal of subsidiaries

(3) Transfer to investment

properties191,660,227.89

4. Change in foreign exchange rate

and others576,231,484.63519,106,432.9915,281,247.26

5. Closing balance25,115,279,224.2441,622,114,833.33303,277,627.52II. Accumulated depreciation

1. Opening balance7,079,072,646.1021,078,671,488.71161,340,026.39

2. Increase for the current period

(1) Provision544,248,174.341,670,014,498.4121,976,770.00

(2) Investment properties

transferred in

3. Decrease for the current period

(1) Disposal or write-off76,124,981.15354,877,165.746,928,570.79

(2) Disposal of subsidiaries

(3) Transfer to investment

properties574,600.56

4. Change in foreign exchange rate

and others102,890,975.29199,092,965.346,037,374.50

5. Closing balance7,649,512,214.0222,592,901,786.72182,425,600.10

Section VIII Financial Report

Items

Houses and

buildings

Productionequipment

Transportation

equipmentIII. Provision for impairment

1. Opening balance42,187,643.3417,624,919.83105,101.78

2. Increase for the current period

(1) Provision

(2) Investment properties

transferred in

3. Decrease for the current period

(1) Disposal or write-off15,847,683.491,708,197.4678,319.36

(2) Disposal of subsidiaries

(3) Transfer to investment

properties

4. Change in foreign exchange rate

and others1,664,391.35334,943.591,982.35

5. Closing balance28,004,351.2016,251,665.9628,764.77IV. Book value

1. Closing book value17,437,762,659.0219,012,961,380.65120,823,262.65

2. Opening book value16,466,165,654.5518,887,168,716.41121,295,768.64(Continue)

ItemsOffice furnitureOthersTotalI. Original book value:

1. Opening balance1,866,237,560.003,564,759,601.8769,284,629,127.62

2. Increase for the current period

(1) Acquisition20,546,040.73450,588.77407,156,866.96

(2) Construction in progress

transferred in88,896,896.04120,084,199.192,748,805,884.12

(3) Increase in business

combinations

(4) Investment properties

transferred in

3. Decrease for the current period

(1) Disposal or write-off72,935,367.28155,134,680.58885,974,291.86

(2) Disposal of subsidiaries

(3) Transfer to investment

properties191,660,227.89

4. Change in foreign exchange rate

and others145,846,374.30163,116,974.531,419,582,513.71

5. Closing balance2,048,591,503.793,693,276,683.7872,782,539,872.66

Section VIII Financial Report

ItemsOffice furnitureOthersTotalII. Accumulated depreciation

1. Opening Balance1,091,419,033.132,198,543,345.9631,609,046,540.29

2. Increase for the current period

(1) Provision120,671,021.82159,543,528.562,516,453,993.13

(2) Investment properties

transferred in

3. Decrease for the current period

(1) Disposal or write-off64,369,294.86108,606,377.69610,906,390.23

(2) Disposal of subsidiaries

(3) Transfer to investment

properties574,600.56

4. Change in foreign exchange rate

and others66,440,830.74113,796,374.71488,258,520.58

5. Closing Balance1,214,161,590.832,363,276,871.5434,002,278,063.21III. Provision for impairment

1. Opening balance209,527.142,239,625.7862,366,817.87

2. Increase for the current period

(1) Provision

(2) Investment properties

transferred in

3. Decrease for the current period

(1) Disposal or write-off5,323.2314,269.9517,653,793.49

(2) Disposal of subsidiaries

(3) Transfer to investment

properties

4. Change in foreign exchange rate

and others14,684.17181,318.432,197,319.89

5. Closing balance218,888.082,406,674.2646,910,344.27IV. Book value

1. Closing book value834,211,024.881,327,593,137.9838,733,351,465.18

2. Opening book value774,608,999.731,363,976,630.1337,613,215,769.46

(2) In the current period, the balance of the construction in progress transferred to the original

value of the fixed assets in a total of RMB2,748,805,884.12 (amount for the correspondingperiod: RMB2,107,328,131.20).

(3) As at 30 June 2025, the net book value of the buildings for which the Company has not yet

obtained certificates of title was RMB71 million (amount at the beginning of the periodRMB396 million), and the relevant certificates of title were being processed. The Companycan legally and effectively occupy and operate the above-mentioned buildings for which nocertificates of title have been obtained.

(4) The amount of mortgage secured by the fixed assets mortgage at the end of the period was

RMB31,825,255.89, and there was no mortgage secured by the fixed assets mortgage atthe beginning of the period.

Section VIII Financial Report

18. Construction in progress

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing BalanceOpening BalanceConstruction in progress5,677,443,291.085,686,050,990.48Total5,677,443,291.085,686,050,990.48

(1) Balance of construction in progress

√ Applicable Not Applicable

Unit and Currency: RMB

ProjectsClosing BalanceOpening Balance

Book balance

ImpairmentProvisionBook ValueBook balance

Impairment

provisionBook ValueQingdao Water Ecology

Technology Project1,107,019,900.031,107,019,900.031,066,513,889.601,066,513,889.60New Zealand FPA Project774,202,009.02774,202,009.02404,446,522.30404,446,522.30Qingdao Refrigeration

Appliance Project604,379,654.55604,379,654.55598,424,118.21598,424,118.21Qingdao HV Equipment

Project332,086,933.65332,086,933.65760,657,151.21760,657,151.21Haier Thailand Project316,627,436.01316,627,436.0194,645,094.3594,645,094.35America GE Appliances

Project165,078,821.5324,711,494.86140,367,326.67255,332,644.9324,814,364.49230,518,280.44Europe Candy Project130,621,013.23130,621,013.23195,308,817.72195,308,817.72Qingdao Haishi IoT

Technology Project117,647,025.54117,647,025.5474,638,984.2874,638,984.28Haier India Project103,944,468.67103,944,468.6729,688,644.9329,688,644.93Eastern European Project103,746,218.692,611,599.07101,134,619.62134,970,342.861,890,763.38133,079,579.48Others1,950,250,639.94837,735.851,949,412,904.092,098,967,643.81837,735.852,098,129,907.96Total5,705,604,120.8628,160,829.785,677,443,291.085,713,593,854.2027,542,863.725,686,050,990.48

Section VIII Financial Report

(2) Details of changes of significant construction in progress for the current period

Project name

OpeningbalanceIncrease for thecurrent period

Transfer to fixedassets

Transfer toinvestmentproperties

Change inforeignexchange rate

and othersClosing balanceSource of fundQingdao Water Ecology Technology

Project1,066,513,889.6073,840,906.0333,334,895.601,107,019,900.03Self-fundingNew Zealand FPA Project404,446,522.30403,328,632.3771,591,550.8538,018,405.20774,202,009.02Self-fundingQingdao Refrigeration Appliance Project598,424,118.21231,071,301.37225,115,765.03604,379,654.55Self-fundingQingdao HV Equipment Project760,657,151.21110,792,017.76539,362,235.32332,086,933.65Self-fundingHaier Thailand Project94,645,094.35218,630,522.363,351,819.30316,627,436.01Self-fundingAmerica GE Appliances Project255,332,644.93130,126,099.16219,594,881.75–785,040.81165,078,821.53Self-fundingEurope Candy Project195,308,817.7250,773,226.31130,994,895.3715,533,864.57130,621,013.23Self-fundingQingdao Haishi IoT Technology Project74,638,984.2843,008,041.26117,647,025.54Self-fundingHaier India Project29,688,644.93131,357,635.6856,980,042.05–121,769.89103,944,468.67Self-fundingEastern European Project134,970,342.8666,921,762.68103,625,833.165,479,946.31103,746,218.69Self-fundingOthers2,098,967,643.811,201,876,571.091,368,205,784.9917,612,210.031,950,250,639.94Self-fundingTotal5,713,593,854.202,661,726,716.072,748,805,884.1279,089,434.715,705,604,120.86

(3) Impairment provision of construction in progress

Project name

Openingbalance

Increase forthe current

period

Transfer tofixed assets

Otherdecrease

Change in

foreignexchange rate

and others

ClosingbalanceAmerica GE Appliances Project24,814,364.49–102,869.6324,711,494.86Eastern European Project1,890,763.38720,835.692,611,599.07Lejia IOT Project837,735.85837,735.85Total27,542,863.72617,966.0628,160,829.78

Section VIII Financial Report

19. Right-of-use assets

Items

Houses and

buildings

Productionequipment

Transportation

equipmentI. Original book value:

1. Opening balance7,414,325,184.86424,335,480.27287,794,375.66

2. Increase for the current period

(1) Acquisition839,125,111.4469,060,505.5066,554,028.46

(2) Increase from business

combinations

3. Decrease for the current period

(1) Disposal442,834,662.974,906,292.4221,136,622.99

(2) Disposal of subsidiaries

4. Change in foreign exchange rate and

others380,810,924.409,998,146.437,050,297.26

5. Closing balance8,191,426,557.73498,487,839.78340,262,078.39II. Accumulated depreciation

1. Opening balance2,728,106,200.7972,300,559.30141,273,353.79

2. Increase for the current period

(1) Provision623,087,733.4932,380,649.7947,860,539.92

3. Decrease for the current period

(1) Disposal404,315,509.20136,499.4623,315,553.70

(2) Disposal of subsidiaries

4. Change in foreign exchange rate and

others194,441,487.85–829,925.811,983,091.56

5. Closing balance3,141,319,912.93103,714,783.82167,801,431.57III. Impairment provision

1. Opening balance

2. Increase for the current period

(1) Provision

3. Decrease for the current period

(1) Disposal

(2) Disposal of subsidiaries

4. Change in foreign exchange rate and

others

5. Closing balance

IV. Book Value

1. Closing book balance5,050,106,644.80394,773,055.96172,460,646.82

2. Opening book balance4,686,218,984.07352,034,920.97146,521,021.87

Section VIII Financial Report

(continued)ItemsOffice furnitureOtherTotalI. Original book value:

1. Opening balance407,420,134.04624,841,431.909,158,716,606.73

2. Increase for the current period

(1) Acquisition748,444.0586,884,036.471,062,372,125.92

(2) Increase from business

combinations

3. Decrease for the current period

(1) Disposal4,371,913.6322,099,005.23495,348,497.24

(2) Disposal of subsidiaries

4. Change in foreign exchange rate and

others34,204,873.15–2,768,491.58429,295,749.66

5. Closing balance438,001,537.61686,857,971.5610,155,035,985.07II. Accumulated depreciation

1. Opening balance65,901,643.86309,265,284.633,316,847,042.37

2. Increase for the current period

(1) Provision22,726,847.8845,259,244.86771,315,015.94

3. Decrease for the current period

(1) Disposal4,371,913.6317,842,283.50449,981,759.49

(2) Disposal of subsidiaries

4. Change in foreign exchange rate and

others–1,776,008.63–1,347,868.82192,470,776.15

5. Closing balance82,480,569.48335,334,377.173,830,651,074.97III. Impairment provision

1. Opening balance

2. Increase for the current period

(1) Provision

3. Decrease for the current period

(1) Disposal

(2) Disposal of subsidiaries

4. Change in foreign exchange rate and

others

5. Closing balance

IV. Book Value

1. Closing book balance355,520,968.13351,523,594.396,324,384,910.10

2. Opening book balance341,518,490.18315,576,147.275,841,869,564.36

Section VIII Financial Report

20. Intangible assets

(1) Intangible assets

√ Applicable Not Applicable

Items

Proprietarytechnology

Licenses and

franchisesLand use rightsI. Original book value

1. Opening balance2,233,838,691.225,045,290,131.233,896,750,377.76

2. Increase for the current period

(1) Acquisition15,352.5676,419,471.62

(2) Internal research and development69,980,046.81

(3) Increase from business combinations

3. Decrease for the current period

(1) Disposal

(2) Disposal of subsidiaries

(3) Transfer to investment properties

4. Change in foreign exchange rate and

others77,544,677.4061,765,460.6213,484,758.08

5. Closing balance2,381,363,415.435,107,070,944.413,986,654,607.46II. Accumulated amortization

1. Opening balance1,544,511,772.331,379,799,620.89611,504,507.21

2. Increase for the current period

(1) Provision99,291,747.0597,138,585.9943,433,194.20

(2) Increase from business combinations

3. Decrease for the current period

(1) Disposal

(2) Disposal of subsidiaries

(3) Transfer to investment properties

4. Change in foreign exchange rate and

others43,977,809.6941,997,286.23–294,664.59

5. Closing balance1,687,781,329.071,518,935,493.11654,643,036.82III. Impairment provision

1. Opening balance67,588,227.33

2. Increase for the current period

(1) Provision

(2) Increase from business combinations

3. Decrease for the current period

(1) Disposal

(2) Disposal of subsidiaries

(3) Transfer to investment properties

4. Change in foreign exchange rate and

others–270,053.18

5. Closing balance67,318,174.15IV. Book Value

1. Closing book balance693,582,086.363,520,817,277.153,332,011,570.64

2. Opening book balance689,326,918.893,597,902,283.013,285,245,870.55

Section VIII Financial Report

(continued)

ItemsTrademark rights

Customerrelationship

Applicationmanagementsoftware andothersTotalI. Original book value

1. Opening balance2,771,507,897.391,635,555,560.337,212,821,183.7922,795,763,841.72

2. Increase for the current period

(1) Acquisition241,792,911.97318,227,736.15

(2) Internal research and development213,256,003.90283,236,050.71

(3) Increase from business combinations

3. Decrease for the current period

(1) Disposal9,227,469.019,227,469.01

(2) Disposal of subsidiaries

(3) Transfer to investment properties

4. Change in foreign exchange rate and

others194,757,505.82164,784,826.85181,286,504.86693,623,733.63

5. Closing balance2,966,265,403.211,800,340,387.187,839,929,135.5124,081,623,893.20II. Accumulated amortization

1. Opening balance34,235,166.67184,372,755.734,907,168,057.068,661,591,879.89

2. Increase for the current period

(1) Provision6,364,943.1139,682,709.36430,109,734.49716,020,914.20

(2) Increase from business combinations

3. Decrease for the current period

(1) Disposal5,590,363.485,590,363.48

(2) Disposal of subsidiaries

(3) Transfer to investment properties

4. Change in foreign exchange rate and

others171,759.1813,858,214.9363,909,422.63163,619,828.07

5. Closing balance40,771,868.96237,913,680.025,395,596,850.709,535,642,258.68III. Impairment provision

1. Opening balance23,643,666.3391,231,893.66

2. Increase for the current period

(1) Provision

(2) Increase from business combinations

3. Decrease for the current period

(1) Disposal

(2) Disposal of subsidiaries

(3) Transfer to investment properties

4. Change in foreign exchange rate and

others–270,053.18

5. Closing balance23,643,666.3390,961,840.48IV. Book Value

1. Closing book balance2,925,493,534.251,562,426,707.162,420,688,618.4814,455,019,794.04

2. Opening book balance2,737,272,730.721,451,182,804.602,282,009,460.4014,042,940,068.17

(2) At the end of the period, the intangible assets developed through the Company accounted

for the 18.92% of the original value at the end of the period (accounting for 18.63% at thebeginning of the period).

(3) The amount of intangible assets pledged at the end of the period was RMB96,501,464.38,

and the amount of intangible assets pledged at the beginning of the period wasRMB97,328,830.10.

Section VIII Financial Report

21. Goodwill

ItemsOpening balance

Increase for thecurrent period

Decrease for thecurrent period

Change in foreignexchange rate

and othersClosing balanceGEA21,360,922,505.97–89,241,338.9321,271,681,167.04Candy1,946,245,938.72226,726,259.942,172,972,198.66CCR2,141,379,302.22232,115,027.752,373,494,329.97Others1,935,459,852.1581,018,589.222,016,478,441.37Total27,384,007,599.06450,618,537.9827,834,626,137.04In the case of a goodwill impairment test, the Company compares the carrying amount of therelevant asset group or asset group combination (including goodwill) with its recoverable amount.If the recoverable amount is less than the book value, corresponding difference will berecognized in profit or loss.The recoverable amount of the asset group (including goodwill) is calculated with discountedestimated future cash flow method based on a management-approved 5–15 years budget. Futurecash flows beyond the budget period are estimated using the estimated perpetual annual growthrate. The perpetual annual growth rate (mainly 1.5%–

2.0%) adopted by the management is

consistent with industry forecast data and does not exceed the long-term average growth rate ofeach product. The management determines the compound income growth rate (mainly 2.58%-

9.39%) and the EBITDA profit margin (mainly

–

0.51%

–

10.57%) based on historical experience and

market development forecasts, and adopts the pre-tax interest rate that can reflect the specificrisks of the relevant asset group as the discount rate (mainly 10.31%–

12.63%). The management

analyzes the recoverable amount of each asset group based on these assumptions and believesthat there is no need to make provision for goodwill.

Section VIII Financial Report

22. Long-term amortized expenses

ItemsOpening balance

Increase for thecurrent period

Amortizationfor the current

period

Other

decrease

Change inforeignexchange rate

and othersClosing balanceRenovation fees204,123,378.57121,469,346.01125,473,432.01350,013.36200,469,305.93Improvement expenses on leasedplants199,983,171.2833,148,047.5722,329,737.352,063,522.61212,865,004.11Others194,109,883.7926,512,021.2231,096,899.561,876,505.43191,401,510.88Total598,216,433.64181,129,414.80178,900,068.924,290,041.40604,735,820.92

23. Deferred income tax assets/deferred income tax liabilities

(1) Deferred income tax assets before elimination

ItemsClosing balanceOpening balanceProvision for assets impairment691,981,589.67601,791,456.35Liabilities3,154,339,908.573,015,752,813.85Internal unrealized earnings eliminated due tocombination588,137,302.88887,557,367.83Uncovered losses216,845,200.00248,331,903.96R&D expenses1,627,294,523.531,523,977,439.36Others627,274,920.57620,466,885.20Total6,905,873,445.226,897,877,866.55

(2) Deferred income tax liabilities before elimination

ItemsClosing balanceOpening balanceAssets amortisation4,972,767,171.564,823,267,766.46Remeasurement of fair value of the reaming

equity on the day when the control rightwas lost374,198,127.62374,198,127.62Changes in fair value of investments in other

equity instruments301,824,503.26301,550,087.64Others439,314,164.38468,942,561.47Total6,088,103,966.825,967,958,543.19

(3) The deferred income tax assets and the deferred income tax liabilities eliminated at the end

of the period was RMB4,464,351,533.78 (amount at the beginning of the periodRMB4,420,671,374.19).

Section VIII Financial Report

24. Other non-current assets

ItemsClosing balanceOpening balancePrepayments for equipment and land1,247,083,649.621,381,218,293.01Others411,266,775.25378,338,600.62Total1,658,350,424.871,759,556,893.63

25. Short-term borrowings

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceBorrowings— secured by pledge68,435,097.9346,809,229.31Borrowings— secured by guarantee161,714,550.04466,702,681.40Borrowings— secured by credit15,868,184,989.2713,270,855,533.22Borrowings—secured by mortgage andguarantee29,280,000.00Total16,127,614,637.2413,784,367,443.93

26. Derivative financial liabilities

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceForward foreign exchange contracts440,096,398.0971,011,310.01Total440,096,398.0971,011,310.01

27. Bills payable

√ Applicable Not Applicable

Unit and Currency: RMBTypesClosing balanceOpening balanceCommercial acceptance notes11,258,358,504.798,488,327,100.21Bank acceptance notes14,150,129,961.2012,732,037,211.60Total25,408,488,465.9921,220,364,311.81

Section VIII Financial Report

28. Accounts payables

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceAccounts payables53,257,299,256.5554,665,277,420.32Total53,257,299,256.5554,665,277,420.32The book balance at the end of the period was mainly the unpaid expenditures on material andlabour. There were no significant accounts payables aged over 1 year at the end of the period.

29. Contract liabilities

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceContract liabilities5,710,603,667.3610,865,337,767.67Total5,710,603,667.3610,865,337,767.67The book balance at the end of the period was mainly due to the advance payment that hasbeen collected and has not yet performed the contractual obligations. There were no significantcontract liabilities aged over 1 year at the end of the period.

Section VIII Financial Report

30. Payables for staff remuneration

√ Applicable Not Applicable

(1) Payables for staff remuneration

Unit and Currency: RMBItemsOpening balance

Increase for thecurrent period

Decrease for thecurrent periodClosing balanceI. Short-term remuneration4,970,397,275.4817,034,336,515.0617,693,216,743.164,311,517,047.38II. Post-employment benefits

defined contribution plan24,053,768.471,273,899,140.401,241,280,437.4456,672,471.43III. Termination benefits17,767,282.2146,810,377.7228,121,598.5436,456,061.39IV. Other benefits due withinone year45,041,951.830.0011,251,884.7333,790,067.10Total5,057,260,277.9918,355,046,033.1818,973,870,663.874,438,435,647.30

(2) Short-term remuneration

√ Applicable Not Applicable

Unit and Currency: RMBItemsOpening balance

Increase for the

current period

Decrease for thecurrent periodClosing balanceI. Salaries, bonus, allowances andbenefit3,486,859,330.2913,024,898,003.4613,752,801,891.352,758,955,442.40II. Employee welfare387,478,465.49595,540,683.42561,111,371.56421,907,777.35III. Social benefit266,622,546.55917,334,162.94903,782,280.67280,174,428.82IV. Housing fund5,690,085.85322,195,513.20303,836,297.6424,049,301.41V. Labor union fee and education

fund13,453,646.8677,883,367.2972,892,482.5018,444,531.65VI. Short-term compensated leave278,959,789.45289,158,119.51309,380,283.53258,737,625.43VII. Others531,333,410.991,807,326,665.241,789,412,135.91549,247,940.32Total4,970,397,275.4817,034,336,515.0617,693,216,743.164,311,517,047.38

Section VIII Financial Report

(3) Defined contribution plan

√ Applicable Not Applicable

Unit and Currency: RMB

ItemsOpening balance

Increase for thecurrent period

Decrease for the

current periodClosing balance

1. Basic pension insurance22,019,009.131,213,177,585.151,182,699,270.4152,497,323.87

2. Unemployment insurance384,540.8723,027,096.5122,441,034.34970,603.04

3. Enterprise annuity payment1,650,218.4737,694,458.7436,140,132.693,204,544.52Total24,053,768.471,273,899,140.401,241,280,437.4456,672,471.43

(4) Termination benefits

ItemsClosing balanceOpening balanceTermination compensation36,456,061.3917,767,282.21Total36,456,061.3917,767,282.21

31. Taxes payable

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceValue-added tax1,080,794,130.97961,504,803.99Corporate income tax2,207,094,090.182,649,673,418.47Individual income tax98,361,951.41127,574,718.36City maintenance and construction tax32,038,914.1140,152,216.35Education surcharge16,327,025.6416,711,119.94Other taxes173,993,404.07119,603,639.06Total3,608,609,516.383,915,219,916.17

Section VIII Financial Report

32. Other payables

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceDividends payable8,995,192,390.9314,082,609.41Other payables21,245,355,039.9821,732,053,154.67Total30,240,547,430.9121,746,135,764.08

(1) Dividends payable

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceHaier COSMO Co., Ltd.1,214,681,202.55Haier Group Corporation1,035,112,291.69Other public shareholders6,745,398,896.6914,082,609.41Total8,995,192,390.9314,082,609.41

(2) Other payables

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceOther payables21,245,355,039.9821,732,053,154.67Total21,245,355,039.9821,732,053,154.67The closing balance mainly included the incurred but unpaid costs. There were nosignificant other payables aged over 1 year at the end of the period.

Section VIII Financial Report

33. Non-current liabilities due within one year

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceLong-term borrowings due within one year6,915,081,823.5110,365,227,785.72Lease liabilities due within one year1,529,016,877.331,352,476,354.94Estimated liabilities due within one year2,633,982,143.942,710,430,236.34Long term payables due within one year44,950,023.2850,806,318.73Non-current liabilities due within one year14,282,930.742,051,099,765.64Bonds interest payable due within one year11,471,250.00Total11,148,785,048.8016,530,040,461.37

34. Other current liabilities

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balancePayable refund637,978,483.14624,122,847.31Tax amount to be transferred to output tax715,726,430.191,134,910,313.73Others115,030,454.66140,912,299.35Total1,468,735,367.991,899,945,460.39

35. Long-term borrowings

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceBorrowings— secured by pledge184,194,404.30108,200,000.00Borrowings— unsecured by credit10,411,422,198.579,556,874,313.67Total10,595,616,602.879,665,074,313.67The interest rates of the Company’s long-term borrowings: 1.50%–

5.50%.

Section VIII Financial Report

36. Bonds payable

ItemsClosing balanceOpening balanceMedium-term notes3,511,471,250.00Less: Bonds interest payable due within one year11,471,250.00Total3,500,000,000.00As of 30 June 2025, the balance of bonds payable is as follows:

Name ofbonds

FacevalueCouponrateDate ofissueBondsmaturity

IssueamountOpeningbalanceCurrent issue

Interestprovision atface value

Premium/discountamortization

CurrentrepaymentReclassifiedas due withinone year

Closingbalancewhetherthere is abreachofcontractMTN0011001.99%2025/2/253 years1,500,000,000.001,500,000,000.0010,364,583.3310,364,583.331,500,000,000.00NoMTN0021001.66%2025/6/173 years2,000,000,000.002,000,000,000.001,106,666.671,106,666.672,000,000,000.00NoTotal3,500,000,000.003,500,000,000.0011,471,250.0011,471,250.003,500,000,000.00

37. Lease liabilities

ItemsClosing balanceOpening balanceLease liabilities6,445,269,459.305,833,372,352.30Less: lease liabilities due within one year1,529,016,877.331,352,476,354.94Total4,916,252,581.974,480,895,997.36

38. Long-term payables

ItemsClosing balanceOpening balanceInvestment from CDB development fund36,500,000.0036,500,000.00Others146,627,591.82202,526,375.32Less: long-term payables due within one year44,950,023.2850,806,318.73Total138,177,568.54188,220,056.59Under the Investment Contract of China Development Fund executed by the Company and itssubsidiaries including Qingdao Haier Air Conditioner Gen Corp., Ltd., Qingdao Haier (Jiaozhou)Air-conditioning Co., Limited together with China Development Fund Co. Ltd. in 2015 and 2016,China Development Fund Co. Ltd. invested RMB73 million in Qingdao Haier (Jiaozhou)Air-conditioning Co., Limited. China Development Fund Co. Ltd. obtained an annual return of

1.2% by means of dividends or buyback premium for the above investments. As of the end of

the period, the subsidiaries of the Company made buyback in amount of RMB36.5 million.

Section VIII Financial Report

39. Long-term employee benefits payable

√ Applicable Not Applicable

(1) Long-term employee benefits payable

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceI. Post-employment benefits: net liability ofdefined benefit plans1,810,349,667.721,766,487,772.54II. Termination benefits575,746,527.21541,765,948.00III. Other long-term benefits100,396,953.09100,022,169.77IV. Provision for work-related injury

compensation173,367,783.76153,371,556.04Total2,659,860,931.782,561,647,446.35

(2) Defined benefits plans

Some subsidiaries of the Company have set several defined benefit plans for the qualifiedstaff. Under these plans, the employees are entitled to the retirement benefits agreed insuch defined benefit plans.These plans are exposed to interest rate risks, changes in life expectancy of the beneficiaryand other risks.The recent actuarial evaluation of the assets and the present value of defined benefitobligations under such plans are determined by using the projected unit credit method.The defined benefit plan of HaierU.S.ApplianceSolutions,Inc., a subsidiary of

the CompanyHaierU.S.ApplianceSolutions,Inc., a subsidiary of the Company has providedpost-employment defined benefit plan of health care benefits to eligible employees.

Actuarial assumptions used in the defined benefit planItemsRateDiscount rate5.51%

Section VIII Financial Report

Present value of defined benefit obligationsItemsAmountI. Opening balance138,011,845.57II. Business combination not under common controlIII. Defined benefit cost recognized in current profit or loss–11,743,337.59

1. Current service cost

2. Past service cost

3. Settlement gains (losses are represented by ‘-’)

4. Interest cost

–11,743,337.59IV. Defined benefit cost recognized in other comprehensive income

1. Actuarial losses (gains are represented by ‘-’)

V. Other changes–22,668,625.98

1. The consideration paid at the time of settlement

2. Benefit paid

–22,194,274.48

3. Exchange differences

–474,351.50VI. Closing balance103,599,882.00

Net liability (net asset) of the defined benefit plan

ItemsAmountI. Opening balance138,011,845.57II. Business combination not under common controlIII. Defined benefit cost recognized in current profit or loss–11,743,337.59IV. Defined benefit cost recognized in

other comprehensive incomeV. Other changes–22,668,625.98VI. Closing balance103,599,882.00

Section VIII Financial Report

The defined benefit plan of CarrierRefrigerationBeneluxB.V, a subsidiary of theCompanyCarrierRefrigerationBeneluxB.V., a subsidiary of the Company, has providedpost-retirement defined benefit plan of health care benefits for the eligible employees.Actuarial assumptions used in the defined benefit planItemsRateDiscount rate3.30%

Present value of defined benefit obligationsItemsAmountI. Opening balance1,423,443,470.41II. Business combination not under common controlIII. Defined benefit cost recognized in current profit or loss27,876,203.99

1. Current service cost4,550,387.66

2. Past service cost

3. Settlement gains (losses are represented by ‘-’)

4. Interest cost23,325,816.33IV. Defined benefit cost recognized in other

comprehensive income–130,196,605.30

1. Actuarial losses (gains are represented by ‘-’)

–130,196,605.30V. Other changes73,768,244.65

1. The consideration paid at the time of settlement

2. Benefit paid

–23,362,234.12

3. Exchange differences97,130,478.77VI. Closing balance1,394,891,313.75

Section VIII Financial Report

Fair value of plan assetsItemsAmountI. Opening balance50,570,397.42II. Business combination not under common controlIII. Defined benefit cost recognized in current profit or loss

1. Interest income

IV. Defined benefit cost recognized in other comprehensive income

1. Return on plan assets (except those included in

net interests)

2. Changes in impact of asset cap (except those

included in net interests)V. Other changes3,777,042.00

1. Employer contributions

2. Benefit paid

3. Exchange differences3,777,042.00VI. Closing balance54,347,439.42

Net liability (net asset) of the defined benefit planItemsAmountI. Opening balance1,372,873,072.99II. Business combination not under common controlIII. Defined benefit cost recognized in current profit or loss27,876,203.99IV. Defined benefit cost recognized in other comprehensive income–130,196,605.30V. Other changes69,991,202.65VI. Closing balance1,340,543,874.33

Section VIII Financial Report

Classification of the balance of defined benefit plans

ItemsClosing balanceOpening balanceShort-term Benefit25,763,889.8137,042,017.07Long-term Benefit1,810,349,667.721,766,487,772.54Total1,836,113,557.531,803,529,789.61

40. Estimated liabilities

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceActive litigation34,489,279.2752,893,571.31Others402,474,952.22353,215,103.35Projection of warranty expenses andinstallation fees1,967,373,906.201,980,153,078.26Total2,404,338,137.692,386,261,752.92Significant assumption and estimation relating to estimation of warranty expenses and installationfees: the Company reasonably estimated the warranty expenses and installation fees rate basedon its actual expenses on the warranty expenses and installation fees as well as sales data in thepast. The Company estimated the warranty expenses and installation fees that are likely to beincurred in the future according to its policies on the warranty expenses and installation fees, aswell as the actual sales data.

41. Deferred income

√ Applicable Not Applicable

Unit and Currency: RMB

ItemsOpening balance

Increase for the

current period

Decrease for the

current periodClosing balanceGovernment grants1,252,216,590.03118,604,129.2459,442,075.141,311,378,644.13Total1,252,216,590.03118,604,129.2459,442,075.141,311,378,644.13

Section VIII Financial Report

42. Share capital

Share categoryOpening balance

Increase for thecurrent period

Decrease for thecurrent periodClosing balanceI. Restricted shares

1. State-owned shares

2. Shares held by domestic

non-state-owned legal entities

3. Shares held by domestic

individuals

4. Shares held by offshore non-state-

owned legal entitiesII. Non-restricted shares9,382,913,3349,382,913,334

1. Ordinary shares in RMB6,254,501,0956,254,501,095

2. Domestic listed foreign Shares

3. Offshore listed foreign Shares3,128,412,2393,128,412,239

4. Others

III. Total shares9,382,913,3349,382,913,334

43. Capital reserve

√ Applicable Not Applicable

Unit and Currency: RMB

ItemsOpening balance

Increase for the

current period

Decrease for the

current periodClosing balanceCapital premium (Share premium)18,567,161,037.206,098,611.77692,993,540.9517,880,266,108.02Others capital reserve1,743,057,184.84221,073,939.391,964,131,124.23Total20,310,218,222.04227,172,551.16692,993,540.9519,844,397,232.25

The main reasons for the change in capital premium: capital reduction by the minorityshareholders for the current period resulted in the decrease in capital premium ofRMB305,871,527.15; share premium in the current period was offset by combination undercommon control of RMB385,944,236.13.The main reasons for the change in other capital reserves: the amortized share-based paymentfor the current period included in other capital reserves of RMB221,073,939.39.

Section VIII Financial Report

44. Treasury stock

√ Applicable Not Applicable

Unit and Currency: RMBItemsOpening balance

Increase for thecurrent period

Decrease for thecurrent periodClosing balanceTreasury stock3,510,728,776.44856,403,284.464,367,132,060.90Total3,510,728,776.44856,403,284.464,367,132,060.90The main reasons for the change in treasury stock: the repurchase of treasury stock for thecurrent period of RMB856,403,284.46.

45. Other comprehensive income

ItemsOpening balanceAmounts for the current period

Amount beforecurrent incometax

Deduction ofimpact of income

taxAttributable to theparent companyafter tax

Attributable tominorityshareholdersafter taxOthersClosing balancea–362,738,623.5930,761,163.8728,468,182.862,292,981.01–334,270,440.73b–122,083,113.66–166,241,633.2333,928,506.29–130,457,670.38–1,855,456.56–252,540,784.04c83,057,616.241,711,876,540.521,715,243,628.31–3,367,087.791,798,301,244.55d1,081,059,271.89–377,719,032.4983,807,965.31–293,914,281.423,214.24787,144,990.47e146,207,709.59134,750,500.021,107,369.60135,857,881.73–

12.11282,065,591.32Total825,502,860.471,333,427,538.69118,843,841.201,455,197,741.10–2,926,361.212,280,700,601.57

Notes:

(1) Item a, b, and c are other comprehensive income that will be reclassified to profit or loss, the details are as follows:

Item a represents other comprehensive income classified to profit and loss under the equity method.Item b represents cash flow hedge reserves (the effective part of the cash flow hedge profit and loss).Item c represents exchange differences on translation of financial statements denominated in foreign currencies.

(2) Item d and e are other comprehensive income that cannot be reclassified into profit or loss. Details are as follows:

Item d represents the change in fair value of investments in other equity instruments.Item e represents changes arising from remeasurement of net liabilities or assets of defined benefit plans.

Section VIII Financial Report

46. Surplus reserve

√ Applicable Not Applicable

Unit and Currency: RMBItemsOpening balance

Increase for thecurrent period

Decrease for the

current periodClosing balanceStatutory surplus reserve5,248,946,090.865,248,946,090.86Discretionary surplus reserve26,042,290.4826,042,290.48Reserve fund11,322,880.6411,322,880.64Enterprise expansion fund10,291,630.4710,291,630.47Total5,296,602,892.455,296,602,892.45Pursuant to the Company Law of the People’s Republic of China and the Articles of Association,the Company is required to appropriate the statutory surplus reserve at 10% of its net profit ofthe year. When the accumulated statutory surplus reserve reaches 50% of the registered capital,no further withdrawal will be made.

47. Undistributed profits

√ Applicable Not Applicable

ItemsAmountsUndistributed profits at the end of previous year79,288,144,269.76Change in accounting policyCombination under common control186,221,964.94Undistributed profits at the beginning of the year79,474,366,234.70Add: net profit attributable to owners of the parent company12,032,995,820.27Other transfer in–58,758,990.66Adjustment due to implementation of enterprise accounting standardProfit available for distribution for the year91,448,603,064.31Less: appropriation of statutory surplus reserveDividend payable for ordinary shares–8,991,794,045.13Undistributed profits at the end of the period82,456,809,019.18

Section VIII Financial Report

48. Operating income and operating cost

(1) Operating income

Items

Amount forthe current

period

Amount forthe previousperiodPrimary business155,737,423,233.75141,200,772,557.97Other Business756,611,215.10781,710,047.78Total156,494,034,448.85141,982,482,605.75

(2) Primary business income and primary business cost by product category

CategoriesAmount for the current periodAmount for the previous period

Primarybusiness income

Primarybusiness cost

Primarybusiness income

Primarybusiness costAir conditioner32,773,116,118.2524,821,013,600.9429,010,601,435.7022,060,525,312.37Refrigerator42,517,263,682.8230,243,865,847.2340,858,797,164.0429,158,061,137.72Kitchen appliance20,507,654,798.4214,636,534,679.1520,121,663,515.8914,415,361,584.50Water appliance9,568,195,570.476,035,597,553.817,891,692,972.945,002,145,224.53Washing machine31,645,348,772.5722,036,825,098.9629,427,102,302.0020,539,974,853.10Equipment product and

integrated channelservices18,725,844,291.2216,413,846,241.6713,890,915,167.4012,443,153,339.38Total155,737,423,233.75114,187,683,021.76141,200,772,557.97103,619,221,451.60

49. Taxes and surcharge

√ Applicable Not Applicable

Unit and Currency: RMB

Items

Amount forthe current

period

Amount forthe previous

periodCity maintenance and construction tax216,826,875.38205,158,082.67Education surcharge111,002,174.00119,339,956.37Property tax87,636,662.4773,405,594.04Land use tax26,449,754.7924,445,566.26Stamp duty207,214,672.39160,693,601.14Others30,424,664.0527,259,516.58Total679,554,803.08610,302,317.06

Section VIII Financial Report

50. Selling expenses

√ Applicable Not Applicable

Unit and Currency: RMB

Items

Amount forthe current

period

Amount forthe previousperiodSelling expenses15,816,814,510.0714,517,816,334.58Total15,816,814,510.0714,517,816,334.58The Company’s selling expenses are mainly salary expenses, transportation and storage fees,and advertising and promotion fees.

51. Administrative expenses

√ Applicable Not Applicable

Unit and Currency: RMB

Items

Amount forthe currentperiod

Amount forthe previous

periodAdministrative expenses5,891,046,898.485,382,166,653.05Total5,891,046,898.485,382,166,653.05The Company’s administrative expenses are mainly salary expenses, office fees, depreciation andamortization of assets fees, etc.

Section VIII Financial Report

52. R&D expenses

√ Applicable Not Applicable

Unit and Currency: RMB

Items

Amount forthe current

period

Amount forthe previousperiodR&D expenses5,790,436,804.105,182,598,681.20Total5,790,436,804.105,182,598,681.20The Company’s R&D expenses are mainly salary expenses, R&D equipment expenses, inspectionand testing fees.

53. Financial expenses

Items

Amount forthe currentperiod

Amount forthe previousperiodInterest expense1,446,615,689.511,252,571,601.13Less: interest income908,582,647.56947,056,127.00Less: cash discount102,284,390.5062,102,125.84Exchange gains or losses(gains are represented by ‘-’)–881,376,818.22–263,159,366.26Others94,770,605.3072,791,807.54Total–350,857,561.4753,045,789.57Interest expenditure in lease liabilities for the current period was RMB176,593,110.63 (amount forthe corresponding period: RMB96,013,680.91).

Section VIII Financial Report

54. Other income

√ Applicable Not Applicable

Unit and Currency: RMB

Classified by nature

Amount forthe current

period

Amount forthe previousperiodGovernment grants related to revenue728,969,755.04532,638,111.02Government grants related to assets46,244,753.3852,786,262.32Total775,214,508.42585,424,373.34

55. Investment income (losses are represented by ‘-’)

Items

Amount forthe currentperiod

Amount forthe previousperiodLong-term equity investments income calculated

by the equity method850,409,233.36913,969,362.35Investment income from disposal of long-termequity investments–4,387,023.49–14,953,215.38Investment income from other equity instrument

investments during holding period3,225,726.292,996,902.10Income from wealth management products45,175,048.9529,641,941.56Investment income from disposal of financial

assets measured at fair value with changes

included in current profit or loss22,835,518.2576,000.00Total917,258,503.36931,730,990.63

Section VIII Financial Report

56. Gains on changes in fair value (losses are represented by ‘-’)

Items

Amount forthe current

period

Amount forthe previous

periodChanges in fair value of equity investments–4,275,003.34–54,049,574.20Changes in fair value of fund investments25,935,689.8522,787,943.83Others13,092,854.121,696,032.55Total34,753,540.63–29,565,597.82

57. Credit impairment losses

√ Applicable Not Applicable

Unit and Currency: RMB

Items

Amount forthe current

period

Amount forthe previous

periodBad debts losses on bills receivables184,079.11360,918.35Bad debts losses on accounts receivable–55,292,827.56–136,457,834.87Bad debts losses on other receivable–16,803,339.4066,301,974.49Total–71,912,087.85–69,794,942.03

Section VIII Financial Report

58. Impairment losses on assets (losses are represented by ‘-’)

Items

Amount forthe currentperiod

Amount forthe previousperiodImpairment losses on inventory–464,995,039.52–428,210,654.99Impairment losses on other current assets–279,221,989.21–280,012,125.83Impairment losses on fixed assetsImpairment losses on construction in progressImpairment losses on intangible assetsImpairment losses on contract assets103,983.911,738,301.13Impairment losses on long-term equity

investmentsImpairment losses on prepayments46,943.81Total–744,113,044.82–706,437,535.88

59. Gains on disposal of assets

√ Applicable Not Applicable

Unit and Currency: RMB

Items

Amount forthe current

period

Amount forthe previous

periodGains on disposal of non-current assets6,280,751.779,015,344.34Losses on disposal of non-current assets–13,648,789.31–10,585,042.83Total–7,368,037.54–1,569,698.49

Section VIII Financial Report

60. Non-operating income

√ Applicable Not Applicable

Unit and Currency: RMB

Items

Amount forthe current

period

Amount forthe previousperiodGains on disposal of non-current assets4,626,638.7396,154.87Quality claims and fines23,563,630.7524,265,721.43Others93,665,386.6652,128,870.17Total121,855,656.1476,490,746.47

61. Non-operating expenses

√ Applicable Not Applicable

Unit and Currency: RMB

Items

Amount forthe current

period

Amount forthe previous

periodLosses on disposal of non-current assets18,593,317.727,312,366.85Others239,145,458.3489,585,857.27Total257,738,776.0696,898,224.12

Section VIII Financial Report

62. Income tax expenses

(1) Statement of income tax expenses

Items

Amount forthe current

period

Amount forthe previous

periodCurrent income tax expense2,258,469,724.262,273,026,691.14Deferred income tax expense253,470,624.41–65,850,873.88Total2,511,940,348.672,207,175,817.26

(2) Reconciliation between accounting profit and income tax expenses for the current

periodItemsAmountsTotal accounting profit14,997,056,148.11Income tax expense calculated pursuant to statutory tax rate3,749,264,037.03Impact from different tax rates applicable to subsidiaries–1,395,463,023.45Impact from adjustment to income tax in prior periods–238,625,913.73Impact from non-taxable income–238,916,572.24Impact from non-deductible cost, expense and loss215,003,853.81Impact from deductible provisional differences or deductible

losses of unrecognized deferred tax447,958,728.00Others–27,280,760.75Total income tax expense2,511,940,348.67

63. Other comprehensive income

√ Applicable Not Applicable

Please refer to notes VII.45 for details.

Section VIII Financial Report

64. Cash flow statement items

(1) Cash related to operating activities

Other cash received from operating activities

√ Applicable Not Applicable

Unit and Currency: RMBItems

Amount for thecurrent periodDeposits and securities271,876,028.06Government grants466,806,344.50Non-operating income excluding government grants36,649,145.18Interest income654,969,731.79Others81,883,220.07Total1,512,184,469.60Other cash paid to operating activities

√ Applicable Not Applicable

Unit and Currency: RMBItems

Amount for the

current periodCash paid on selling and after-sales expenses7,723,584,328.13Cash paid on administrative and R&D expenses3,623,107,522.91Cash paid on financial expenses88,422,457.30Non-operating expenses18,627,498.30Deposits and securities32,264,475.02Others58,659,663.70Total11,544,665,945.36

Section VIII Financial Report

(2) Cash related to investing activities

Other cash received from significant investing activities

√ Applicable Not Applicable

Unit and Currency: RMBItems

Amount for the

current periodRedemption of wealth management products19,962,026,830.53Total19,962,026,830.53Other cash paid to significant investing activities

√ Applicable Not Applicable

Unit and Currency: RMBItems

Amount for the

current periodPurchase of wealth management products26,918,044,657.46Total26,918,044,657.46

Other cash received from investing activities

√ Applicable Not Applicable

Unit and Currency: RMBItems

Amount for the

current periodRecovery of amounts from disposal of equity interests in

previous years128,938,719.56Others2,490,086.58Total131,428,806.14

Section VIII Financial Report

(3) Cash related to financing activities

√ Applicable Not Applicable

Unit and Currency: RMBOther cash received from financing activities

Items

Amount for thecurrent periodAmount recovered from the capital pool of COSMOPlat Mould(Qingdao) Co., Ltd.111,646,384.65Total111,646,384.65Other cash paid to financing activities

√ Applicable Not Applicable

Unit and Currency: RMBItems

Amount for the

current periodRepurchase of shares856,403,284.46Cash paid to lease813,449,403.83Purchase of minority interests in subsidiaries2,155,055,760.34Cash paid for business combination under common control77,749,769.26Others2,904,023.09Total3,905,562,240.98

Changes of various liabilities arising from financing activities

√ Applicable Not Applicable

Unit and Currency: RMB

ItemsOpening balance

Increase forthe current period

Decrease forthe current periodClosing balanceCash change

Non-cash

changeCash change

Non-cash

changeShort-term borrowings13,784,367,443.9311,512,725,588.49218,280,882.329,347,387,559.6440,371,717.8616,127,614,637.24Long-term borrowings

(including those duewithin one year)20,030,302,099.392,306,085,839.54146,536,745.554,972,226,258.1017,510,698,426.38Lease liabilities (including

those due within oneyear)5,833,372,352.271,464,770,128.25813,449,403.8339,423,617.396,445,269,459.30Bonds payable (including

those due within oneyear)3,500,000,000.0011,471,250.003,511,471,250.00Total39,648,041,895.5917,318,811,428.031,841,059,006.1215,133,063,221.5779,795,335.2543,595,053,772.92

Section VIII Financial Report

65. Supplementary information to the cash flow statement

(1) Supplementary information to the cash flow statement

Supplementary information

Amount for thecurrent period

Amount for theprevious period

1. Net profit adjusted to cash flow of

operating activities:

Net profit12,485,115,799.4410,773,597,554.50Add: impairment provision for assets744,113,044.82706,437,535.88Losses from credit impairment71,912,087.8569,794,942.03Depreciation of fixed assets, depletion ofoil and gas assets, depreciation ofbiological assets for production2,519,985,504.972,321,884,231.99Amortization of right-of-use assets771,315,015.94735,739,606.98Amortization of intangible assets716,020,914.20689,256,426.61Amortization of long-term prepaidexpenses178,900,068.92236,321,231.56Losses from disposal of fixed assets,intangible assets and other long-termassets (gains are represented by “—”)21,334,716.538,785,910.47Losses from changes of fair value (gainsare represented by “—”)–34,753,540.6329,565,597.82Financial expenses (gains are representedby “—”)1,326,152,965.53803,559,417.21Losses from investments (gains arerepresented by “—”)–917,258,503.36–931,730,990.63Decrease in deferred income tax assets

(increase is represented by “—”)217,417,921.39–18,620,089.52Increase of deferred income tax liabilities

(decrease is represented by “—”)36,052,703.02–47,230,784.35Decrease in inventories (increase is

represented by “—”)–772,501,496.05–383,440,948.12Decrease of operational account

receivables (increase is represented by“—”)–1,945,082,457.96–3,781,790,557.04Increase of operational account payables

(decrease is represented by “—”)–4,559,914,956.76–2,961,721,296.82Others280,235,993.49173,652,814.86Net cash flow generated from operational

activities11,139,045,781.348,424,060,603.43

Section VIII Financial Report

Supplementary information

Amount for thecurrent period

Amount for theprevious period

2. Significant investment and financing

activities not involving cash inflows and outflows:

Capital transferred from debtsConvertible corporate bonds due within

one yearFixed assets under finance lease

3. Net changes of cash and cash

equivalents:

Cash balance at the end of the period54,514,391,673.0755,403,830,583.32Less: cash balance at the beginning of

the period54,994,595,280.1856,715,672,668.25Add: cash equivalents balance at the end

of the periodLess: cash equivalents balance at the

beginning of the periodNet increase of cash and cash

equivalents–480,203,607.11–1,311,842,084.93

(2) Composition of cash and cash equivalents

ItemsClosing balanceOpening balanceI. Cash54,514,391,673.0754,994,595,280.18

Including: Cash on hand1,685,740.35560,953.91Bank deposits always available for

payment53,646,652,252.8754,256,005,280.85Other monetary funds always available for

payment866,053,679.85738,029,045.42II. Cash equivalents

Including: bond investments due within

three monthsIII. Closing balance of cash and cash

equivalents54,514,391,673.0754,994,595,280.18Including: restricted cash and cash

equivalents used by the parent

company or subsidiaries ofthe Group

Section VIII Financial Report

(3) Monetary funds that are not cash and cash equivalents

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceReasonsDeposit769,431,523.05532,703,901.59Poor marketability, not readily

realizable, or not availablefor paymentRestricted special account deposit40,756,203.2236,317,505.47Others32,523,137.4833,937,935.59Total842,710,863.75602,959,342.65/

(4) Information about Supplier Financing Arrangements

1) Terms and conditions of supplier financing arrangements

Accounts payable financing factoring: The subsidiaries of the Company engagein accounts payable financing with banks, whereby the subsidiaries of theCompany apply to the banks for the banks to directly pay the supplier on thedue date of the accounts payable. Upon the expiration of the agreed financingperiod (generally 6–12 months), the subsidiaries of the Company will repay thecorresponding amount to the banks. When the banks make payment to thesupplier on behalf of the subsidiaries, the subsidiaries of the Company cease torecognize the related accounts payable and simultaneously incur a liability to thebanks.Accounts payable supply chain factoring: The subsidiaries of the Company

conduct supply chain financing business. According to the relevantarrangements, participating suppliers can choose to receive payment forinvoices under this arrangement in advance from financial institutions withoutbeing influenced by the Company. Regardless of whether the supplier opts forearly payment, the subsidiaries of the Company will repay the full invoiceamount on the agreed payment due date and are not responsible for payinginterest or other fees to the financial institutions. Since this arrangement doesnot extend the original payment period, the subsidiaries’ debts to the financialinstitutions are classified as accounts payable.

Section VIII Financial Report

2) Information of financial liabilities related to supplier financing arrangements

ItemClosing balanceOpening balanceShort-term borrowings128,166,335.6998,355,349.41Including: Amounts received by

suppliers from financingprovider128,166,335.6998,355,349.41Accounts payable9,124,785,121.938,502,906,169.43Including: Amounts received by

suppliers from financing

provider5,045,915,845.754,674,536,705.90The payment period for comparable accounts payable not under supplier financingarrangements ranges from 30 to 270 days.

Section VIII Financial Report

66. Monetary items in foreign currency

ItemsClosing balanceOpening balance

Balance inforeigncurrencyExchange rateBalance in RMB

Balance inforeigncurrencyExchange rateBalance in RMBMonetary fundsUSD2,342,544,643.157.158616,769,340,082.482,212,325,253.417.188415,903,078,851.59EUR90,052,655.688.4024756,658,434.09171,400,140.177.52571,289,906,034.89JPY5,230,348,450.420.049594259,393,901.054,381,349,907.640.046233202,562,950.28HKD451,020,938.830.9120411,331,096.21539,613,158.970.9260499,681,785.21Others3,515,374,745.413,453,401,844.51Subtotal21,712,098,259.2421,348,631,466.48Accounts receivablesUSD1,258,488,324.017.15869,009,014,516.281,463,282,401.937.188410,518,659,218.06EUR666,945,428.338.40245,603,942,266.96637,522,791.087.52574,797,805,268.81JPY4,331,666,640.120.049594214,824,675.354,138,295,194.990.046233191,325,801.75Others7,254,967,234.954,807,501,407.14Subtotal22,082,748,693.5420,315,291,695.76Short-term borrowingsUSD965,044,955.477.15866,908,370,818.26774,590,743.797.18845,568,068,102.65EUR111,437,799.938.4024936,344,970.14129,161,874.077.5257972,033,515.70JPY0.0495941,952,854,108.540.04623390,286,304.00HKD770,000,000.000.9120702,240,000.002,530,000,000.000.92602,342,780,000.00Others2,561,041,908.661,734,146,904.27Subtotal11,107,997,697.0610,707,314,826.62Accounts payablesUSD1,947,283,184.277.158613,939,821,402.912,204,807,610.207.188415,849,039,025.17EUR688,313,334.478.40245,783,483,961.59799,305,156.447.52576,015,330,815.80JPY3,734,984,438.040.049594185,232,818.224,562,773,337.010.046233210,950,699.69NZD156,447,192.174.3475680,154,167.94144,506,699.364.0955591,827,187.21Others4,174,823,217.113,963,471,194.55Subtotal24,763,515,567.7726,630,618,922.42Non-current liabilities due

within one yearUSD500,000,000.007.15863,579,300,000.00500,000,000.007.18843,594,200,000.00EUR74,640,143.008.4024627,156,337.54573,987,092.007.52574,319,654,658.26Others999,885,485.96941,786,481.62Subtotal5,206,341,823.508,855,641,139.88Long-term borrowingsUSD660,000,000.007.15864,724,676,000.00660,000,000.007.18844,744,344,000.00EUR200,000,000.008.40241,680,480,000.00Subtotal6,405,156,000.004,744,344,000.00

Section VIII Financial Report

67. Leases

(1) As lessee

√ Applicable Not Applicable

Variable lease payments not included in the measurement of lease liabilities:

√ Applicable Not Applicable

RMB39,906,692.00Lease expenses of short-term leases or leases of low-value assets which are subject tosimplified treatment:

√ Applicable Not Applicable

RMB689,733,552.24Total cash outflow for leases: 1,543,089,648.07 (Unit and Currency:RMB)The leased assets leased by the Company include housing and buildings, productionequipment, transportation equipment, office equipment and others used in the course ofoperations. Some of the leases contain renewal options and termination options.

(2) As lessor

a. Lease incomes from operating leases as lessor for the current period:

RMB25,464,848.81, including incomes related to variable lease payments not includedin lease receipts: nil.b. Undiscounted lease receipts for the next five years:

Lease receipts

Undiscounted lease receipts

per yearClosing amountOpening amountWithin 1 year59,345,996.7811,744,103.001 to 2 years59,883,319.3110,343,953.002 to 3 years62,855,681.2910,343,953.003 to 4 years66,006,384.9810,343,953.004 to 5 years69,346,130.9010,343,953.00Over 5 years189,526,144.08132,155,812.00Total506,963,657.34185,275,727.00The leased assets leased out by the Company are mainly housing, buildings and landuse rights. For details of changes of the leased assets, please refer to Note VII.16.

Section VIII Financial Report

VIII. RESEARCH AND DEVELOPMENT EXPENDITURE

1. By the nature of expenses

√ Applicable Not Applicable

Unit and Currency: RMB

Items

Amount forthe currentperiod

Amount forthe previousperiodIndependent research and development expenses5,739,193,531.775,088,836,211.86Outsourcing research and development expenses277,375,105.19362,452,756.21Total6,016,568,636.965,451,288,968.07Including: expensed research and development

expenditure5,790,436,804.105,182,598,681.20Capitalized research and development expenditure226,131,832.86268,690,286.87

2. Development expenditure on research and development projects eligible for capitalization

Decrease for the current periodItems

Openingbalance

Increase for the

current period

Recognized as

intangible

asset

Included incurrent profit

and loss

Change in

foreignexchange rate

and others

ClosingbalanceLiving Environment IntelligentDetection PROGRAM28,814,783.25117,555,459.48146,370,242.73OWNERSHIP EXPERIENCE

PROGRAM51,656,319.937,096,261.8148,028,438.77–89,037.5310,635,105.4491ABD.ERP IT PROGRAM28,007,204.8512,887,648.20164,768.71–154,992.6540,575,091.69Others158,789,284.8988,592,463.3788,672,600.5026,184,311.38184,893,459.14Total267,267,592.92226,131,832.86283,236,050.7125,940,281.20236,103,656.27

Section VIII Financial Report

IX. CHANGES OF CONSOLIDATION SCOPE

1. Business combination not under common control

Applicable √ Not Applicable

2. Business combination under common control

√ Applicable Not Applicable

(1) Business combination under common control occurring in the current period

Name of theacquiree

The proportion ofequity acquired inthe businesscombination

The basis for thetransaction ofconstituting businesscombination undercommon control

Combination

date

Recognition basisof combinationdateCOSMOPlat Mould

(Qingdao) Co., Ltd.100.00%

Controlled by Haier Group

Corporation before andafter combination2025.3

Transfer of votingrights

(Continued)

Name of the acquiree

The income of theacquiree from the

beginning of thecurrent period tocombination date

Net profit of theacquiree from the

beginning of the

current period tocombination date

The income of theacquiree during thecomparison period

Net profit of theacquiree during thecomparison periodCOSMOPlat Mould

(Qingdao) Co., Ltd.139,744,829.733,593,306.97133,233,842.59–5,554,270.73

(2) Combination cost

√ Applicable Not Applicable

Unit and Currency: RMBCombination cost—— Cash—— EquityCOSMOPlat Mould (Qingdao) Co., Ltd.77,749,769.26

Section VIII Financial Report

(3) The carrying amount of the assets and liabilities of the acquiree as of the

combination date

√ Applicable Not Applicable

Unit and Currency: RMB

a. Acquiree’s assets and liabilities

Items

COSMOPlat Mould (Qingdao)

Co., Ltd.Combination date

End of theprevious periodMonetary funds8,151,371.1713,712,033.13Accounts receivables36,498,914.84298,755,305.13Inventories138,787,502.80145,441,470.58Contract assets10,457,165.3610,294,407.38Other current assets12,292,032.7813,922,096.30Investments in other equity instruments86,992,207.36Fixed assets73,851,879.9094,570,444.38Construction in progress2,842,390.825,949,707.82Intangible assets8,660,560.568,265,155.63Accounts payables–229,495,562.35–219,041,447.08Payables for staff’s remuneration–6,839,598.34–16,710,350.13Taxes payable–640,750.97–137,995.99Other current liabilities–1,956,603.11–8,653,112.52Deferred income–17,089,283.86–20,604,153.94Net assets35,520,019.60412,755,768.05Less: minority interestsNet assets acquired35,520,019.60412,755,768.05

3. Disposal of subsidiary

Whether single disposal of investment in subsidiary will result in losing control power:

Items

Qingdao HaierKitchen IoTTechnologyCo., Ltd. (

)

Haier Israel

Innovation

Center LtdEquity disposal price——Proportion of equity disposal100%100%Method of equity disposalCancellationCancellationTime of loss-of-controlJune 2025March 2025Basis for determination the time of loss-of- controlCancellationCancellationDifference between consideration and its share ofnet assets of the subsidiary as respect to thedisposal in the consolidated level–110,214.59–4,296,665.23

Section VIII Financial Report

4. Changes of consolidation scope due to other reasons

√ Applicable Not Applicable

(1) During the period, Qingdao Ruibo Ecological Environmental Technology Co., Ltd. (岛

态环), a subsidiary of the Company, established Qingdao HaierEnvironmental Protection Material Technology Co., Ltd. (岛环).

(2) During the period, Qingdao Haier Home AI Industry Innovation Center Co., Ltd., a subsidiary

of the Company, established Haier Jingling Technology (Zhejiang) Co., Ltd. (龄

).

(3) During the period, Qingdao Haier Intelligent Home Appliance Technology Co., Ltd., a

subsidiary of the Company, established Qingdao Haiyi Wenhua Commercial ManagementCo., Ltd. (岛).X. INTERESTS IN OTHER ENTITIES

1. Interests in subsidiaries

(1) Composition of the Group

Name of subsidiary

Principal place ofbusinessPlace of registrationNature of businessShareholding

% of voting

rightMethodDirectIndirectFlourishing Reach

Limited

Mainland of ChinaBermudaGroup company, which mainly

engage in investmentholding, the production andsale of washing machinesand water heaters,distribution service

100.00%100.00%Establishment

Haier Electronics Group

Co., Ltd.

Mainland of China and

Hong Kong

BermudaGroup company, which mainly

engage in investmentholding, the production andsale of water equipment,distribution service

100.00%100.00%Establishment

Haier U.S. Appliance

Solutions, Inc.

the United Statesthe United StatesGroup company, which mainly

engage in home appliancesproduction and distributionbusiness

100.00%100.00%Establishment

Haier Singapore

Investment HoldingCo., Ltd.

Singapore and other

overseas areas

SingaporeGroup company, which mainly

engage in home appliancesproduction and distributionbusiness

100.00%100.00%Business

combinationunder commoncontrolHaier New Zealand

Investment HoldingCompany Limited

New ZealandNew ZealandGroup company, which mainly

engage in home appliancesproduction and distributionbusiness

100.00%100.00%Business

combinationunder commoncontrolCandy S.p.AEuropeItalyGroup company, which mainly

engage in home appliancesproduction and distributionbusiness

100.00%100.00%Business

combination notunder commoncontrolCarrier Refrigeration

Benelux B.V.

EuropeGermanyGroup company, which mainly

engage in home appliancesproduction and distributionbusiness

100.00%100.00%Business

combinationunder commoncontrol

Section VIII Financial Report

Name of subsidiary

Principal place ofbusinessPlace of registrationNature of businessShareholding

% of voting

rightMethodDirectIndirectKwikot (Haier) SA (Pty)

Ltd

South AfricaSouth AfricaMainly engage in water heater

production and distributionbusiness

100.00%100.00%Business

combinationunder commoncontrolQingdao Haier AirConditioner Gen Corp.,Ltd.

Qingdao High-tech

Zone

Qingdao High-techZone

Manufacture and sale ofhousehold air-conditioners

92.37%92.37%Business

combinationunder commoncontrolGuizhou HaierElectronics Co., Ltd.

Huichuan District,

Zunyi City, GuizhouProvince

Huichuan District,

Zunyi City, GuizhouProvince

Manufacture and sale of

refrigerator

59.00%59.00%Business

combinationunder commoncontrolHefei Haier Air-

conditioning Co.,Limited

Hefei Haier Industrial

Park

Hefei Haier Industrial

Park

Manufacture and sale of

air-conditioners

100.00%100.00%Business

combinationunder commoncontrolWuhan Haier Electronics

Holding Co., Ltd.

Wuhan Haier Industrial

Park

Wuhan Haier Industrial

Park

Manufacture and sale of

air-conditioners

59.86%59.86%Business

combinationunder commoncontrolQingdao Haier Air-

Conditioner ElectronicsCo., Ltd.

Qingdao Development

Zone

Qingdao Development

Zone

Manufacture and sale of

air-conditioners

97.43%97.43%Business

combinationunder commoncontrolQingdao Haier

Information PlasticDevelopment Co., Ltd.

Qingdao High-tech

Zone

Qingdao High-tech

Zone

Manufacturing of plasticproducts

100.00%100.00%Business

combinationunder commoncontrolDalian Haier Precision

Products Co., Ltd.

Dalian Export

Expressing Zone

Dalian Export

Expressing Zone

Manufacture and sale of

precise plastics

90.00%90.00%Business

combinationunder commoncontrolHefei Haier Plastic Co.,

Ltd.

Hefei Economic &

TechnologicalDevelopment Area

Hefei Economic &

TechnologicalDevelopment Area

Manufacture and sale of plastic

parts

95.17%4.83%100.00%Business

combinationunder commoncontrolQingdao Meier Plastic

Powder Co., Ltd.

Qingdao Development

Zone

Qingdao Development

Zone

Manufacture of plastic powder,

plastic sheet andhigh-performance coatings

40.00%60.00%100.00%Business

combinationunder commoncontrolChongqing Haier

Precision Plastic Co.,Ltd.

Jiangbei District,

Chongqing City

Jiangbei District,Chongqing City

Plastic products, sheet metalwork, electronics andhardware

90.00%10.00%100.00%Business

combinationunder commoncontrolQingdao HaierRefrigerator Co., Ltd.

Qingdao High-tech

Zone

Qingdao High-tech

Zone

Manufacture and production of

fluorine-free refrigerators

97.91%97.91%Establishment

Qingdao Haier

Refrigerator(International) Co., Ltd.

Pingdu Development

Zone, Qingdao

Pingdu Development

Zone, Qingdao

Manufacture of refrigerators100.00%100.00%EstablishmentQingdao Household

Appliance Technologyand EquipmentResearch Institute

Qingdao High-tech

Zone

Qingdao High-tech

Zone

Research and development of

home appliances mold andtechnological equipment

100.00%100.00%Establishment

Qingdao Haier Whole Set

Home ApplianceService Co., Ltd.

Qingdao High-tech

Zone

Qingdao High-tech

Zone

Research, development and

sales of health- related smallhome appliance

98.33%98.33%Establishment

Qingdao Haier Special

Refrigerator Co., Ltd.

Qingdao Development

Zone

Qingdao Development

Zone

Manufacture and sales of

fluorine-free refrigerators

100.00%100.00%Establishment

Qingdao Haier

Dishwasher Co., Ltd.

Qingdao Development

Zone

Qingdao Development

Zone

Manufacture of dish washing

machine and gas stove

99.59%99.59%Establishment

Section VIII Financial Report

Name of subsidiary

Principal place ofbusinessPlace of registrationNature of businessShareholding

% of votingrightMethodDirectIndirectQingdao Haier Special

Freezer Co., Ltd.

Qingdao Development

Zone

Qingdao Development

Zone

Research, manufacture and

sales of freezer and otherrefrigeration products

96.78%96.78%Establishment

Dalian Haier Air-

conditioning Co., Ltd.

Dalian Export

Expressing Zone

Dalian Export

Expressing Zone

Air conditioner processing and

manufacturing

90.00%90.00%Establishment

Dalian Haier Refrigerator

Co., Ltd.

Dalian Export

Expressing Zone

Dalian Export

Expressing Zone

Refrigerator processing and

manufacturing

100.00%100.00%Establishment

Qingdao Haier Electronic

Plastic Co., Ltd.

Qingdao Development

Zone

Qingdao Development

Zone

Development, assembling and

sales of plastics, electronicsand products

100.00%100.00%Establishment

Wuhan Haier Freezer

Co., Ltd

Wuhan Economic &

TechnologicalDevelopment ZoneHigh-tech IndustrialPark

Wuhan Economic &

TechnologicalDevelopment ZoneHigh-tech IndustrialPark

Research, manufacture and

sales of freezer and otherrefrigeration products

82.93%4.36%87.29%Establishment

Qingdao Haidarui

Procurement ServiceCo., Ltd.

Qingdao High-tech

Zone

Qingdao High-techZone

Develop, purchase and sell

electrical products andcomponents

98.00%2.00%100.00%Establishment

Qingdao Haier Intelligent

Home ApplianceTechnology Co., Ltd.

Qingdao High-techZone

Qingdao High-techZone

Development and application ofhome appliances,communication, electronicsand network engineeringtechnology

91.46%1.01%92.47%Establishment

Chongqing HaierAir-conditioning Co.,Ltd.

Jiangbei District,

Chongqing City

Jiangbei District,

Chongqing City

Manufacture and sales of air

conditioners

76.92%23.08%100.00%Establishment

Qingdao Haier Precision

Products Co., Ltd.

Qianwang ang Road,

Jiaonan City

Qianwang ang Road,

Jiaonan City

Development and manufacture

of precise plastic, metalplate, mold and electronicproducts for homeappliances

70.00%70.00%Establishment

Qingdao Haier Air

ConditioningEquipment Co., Ltd.

Jiaonan City, QingdaoJiaonan City, QingdaoManufacture of home

appliances and electronics

100.00%100.00%Establishment

Dalian Free Trade Zone

Haier Air-conditioningTrading Co., Ltd.

Dalian Export

Expressing Zone

Dalian Export

Expressing Zone

Domestic trade100.00%100.00%EstablishmentDalian Free Trade Zone

Haier RefrigeratorTrading Co., Ltd.

Dalian Export

Expressing Zone

Dalian Export

Expressing Zone

Domestic trade100.00%100.00%EstablishmentChongqing HaierElectronics Sales Co.,Ltd.

Jiangbei District,

Chongqing City

Jiangbei District,Chongqing City

Sales of home appliances95.00%5.00%100.00%EstablishmentChongqing HaierRefrigeration ApplianceCo., Ltd.

Jiangbei District,

Chongqing City

Jiangbei District,

Chongqing City

Processing and manufacturing

of refrigerator

84.95%15.05%100.00%Establishment

Hefei Haier Refrigerator

Co., Ltd.

Hefei Haier Industrial

Park

Hefei Haier Industrial

Park

Processing and manufacturing

of refrigerator

100.00%100.00%Establishment

Qingdao Haier Intelligent

Building TechnologyCo., Ltd.

Qingdao Development

Zone

Qingdao Development

Zone

Air-conditioning engineer100.00%100.00%EstablishmentChongqing Lianmai

Electric ApplianceSales Co., Ltd. (

邁銷)

Jiangbei District,

Chongqing City

Jiangbei District,

Chongqing City

Sales of home appliances and

electronics

51.00%51.00%Establishment

Qingdao Haier (Jiaozhou)

Air-conditioning Co.,Limited

Jiaozhou City,

Qingdao

Jiaozhou City,

Qingdao

Manufacture and sale of

air-conditioners

100.00%100.00%Establishment

Qingdao Haier

Component Co., Ltd.

Jiaozhou City,

Qingdao

Jiaozhou City,

Qingdao

Manufacture and sales of

plastic and precise sheetmetal products

100.00%100.00%Establishment

Section VIII Financial Report

Name of subsidiary

Principal place ofbusinessPlace of registrationNature of businessShareholding

% of voting

rightMethodDirectIndirectHaier Shareholdings(Hong Kong) Limited

Hong KongHong KongInvestment100.00%100.00%EstablishmentHarvest International

Company

Cayman IslandsCayman IslandsInvestment100.00%100.00%EstablishmentShenyang Haier

Refrigerator Co., Ltd.

Shenbei New Area,

Shenyang City

Shenbei New Area,

Shenyang City S

Manufacture and sales ofrefrigerator

100.00%100.00%Establishment

Foshan Haier FreezerCo., Ltd.

Sanshui District,

Foshan City

Sanshui District,

Foshan City

Manufacture and sales ofrefrigerator

100.00%100.00%Establishment

Zhengzhou Haier

Air-conditioning Co.,Ltd.

Zhengzhou Economicand TechnologicalDevelopment Zone

Zhengzhou Economicand TechnologicalDevelopment Zone

Manufacture and sales offreezer

100.00%100.00%Establishment

Qingdao HaidayuanProcurement ServiceCo., Ltd.

Qingdao Development

Zone

Qingdao Development

Zone

Develop, purchase and sell

electrical products andcomponents

100.00%100.00%Establishment

Qingdao Haier Intelligent

TechnologyDevelopment Co., Ltd.

Qingdao High-tech

Zone

Qingdao High-tech

Zone

Development and research ofhome appliance products

100.00%100.00%Establishment

Qingdao Hairi High

Technology Co., Ltd.

Qingdao High-tech

Zone

Qingdao High-tech

Zone

Design, manufacture and sales

of product model and mould

100.00%100.00%Business

combinationunder commoncontrolQingdao Hai Gao Design

and Manufacture Co.,Ltd.

Qingdao High-tech

Zone

Qingdao High-tech

Zone

Industrial design and prototype

production

75.00%75.00%Business

combinationunder commoncontrolZhongshan Haier HV

Equipment Co., Ltd.(

)

ZhongshanZhongshanSales of home appliances100.00%100.00%EstablishmentQingdao Haier HV

Equipment TechnologyCo., Ltd. (島

)

QingdaoQingdaoManufacture and sale of air

conditioning equipment

100.00%100.00%Establishment

Shanghai Haier Medical

Technology Co., Ltd.

ShanghaiShanghaiWholesale and retail of medical

facility

66.87%66.87%Establishment

Qingdao Haier

Technology Co., Ltd.

QingdaoQingdaoDevelopment and sales of

software and informationproduct

100.00%100.00%Business

combinationunder commoncontrolQingdao HaierTechnology InvestmentCo., Ltd.

QingdaoQingdaoEntrepreneurship investment

and consulting

100.00%100.00%Establishment

Qingdao Casarte Smart

Living Appliances Co.,Ltd.

QingdaoQingdaoDevelopment, production and

sales of appliances

100.00%100.00%Establishment

Qingdao Haichuangyuan

Appliances Sales Co.,Ltd.

QingdaoQingdaoSales of home appliances and

digital products

100.00%100.00%EstablishmentHaier Overseas Electric

Appliance Co., Ltd.

QingdaoQingdaoSales of home appliances,

international freightforwarding

100.00%100.00%Establishment

Haier Group (Dalian)

Electrical AppliancesIndustry Co., Ltd.

DalianDalianSales of home appliances,

international freightforwarding

100.00%100.00%Business

combinationunder commoncontrolQingdao Haier Central Air

Conditioning Co., Ltd.

QingdaoQingdaoProduction and sales of air and

refrigeration equipment

100.00%100.00%Establishment

Chongqing Haier Home

Appliance Sale HefeiCo., Ltd.

HefeiHefeiSales of home appliances100.00%100.00%EstablishmentQingdao Weixi Smart

Technology Co., Ltd.

QingdaoQingdaoIntelligent sanitary ware85.00%85.00%Establishment

Section VIII Financial Report

Name of subsidiary

Principal place ofbusinessPlace of registrationNature of businessShareholding

% of voting

rightMethodDirectIndirectHaier U+smart IntelligentTechnology (Beijing)Co., Ltd.

BeijingBeijingSoftware development100.00%100.00%EstablishmentHaier (Shanghai)

Electronics Co., Ltd.

ShanghaiShanghaiSales, research and

development of homeappliances

100.00%100.00%Establishment

Shanghai Haier ZhongzhiFang Chuang KeManagement Co., Ltd.

ShanghaiShanghaiBusiness management

consulting, chuangkemanagement

100.00%100.00%Establishment

Qingdao Haier SmartKitchen Appliance Co.,Ltd.

QingdaoQingdaoProduction and sales of kitchen

smart home appliances

85.82%85.82%Establishment

GE Appliance (Shanghai)Co., Ltd.

ShanghaiShanghaiSales of home appliances100.00%100.00%EstablishmentQingdao Haier Special

Refrigerating ApplianceCo., Ltd.

QingdaoQingdaoProduction and sales of home

appliances

100.00%100.00%Establishment

Shanghai Zhihan

Technology Co., Ltd.(摯

)

ShanghaiShanghaiPromotion of technological

development

100.00%100.00%Establishment

Laiyang Haier Smart

Kitchen Appliance Co.,Ltd.

LaiyangLaiyangProduction and sales of home

appliances

100.00%100.00%Establishment

Hefei Haier Air

ConditioningElectronics Co., Ltd.

HefeiHefeiProduction and sales of home

appliances

100.00%100.00%Establishment

Haier (Shanghai) Home

Appliance Researchand DevelopmentCenter Co., Ltd.

ShanghaiShanghaiResearch and development of

home appliances

100.00%100.00%Establishment

Haier (Shenzhen) R&DCo., Ltd.

ShenzhenShenzhenDevelopment, research and

technical services ofhousehold and commercialelectrical

100.00%100.00%Establishment

Guangzhou Haier Air

Conditioner Co., Ltd.

GuangdongGuangdongManufacturing of refrigeration

and air conditioningequipment

100.00%100.00%Establishment

Qingdao Yunshang YuyiIOT Technology Co.,Ltd.

QingdaoQingdaoIoT technology research and

development

60.00%60.00%Establishment

Qingdao Jijia Cloud

Intelligent TechnologyCo., Ltd.

QingdaoQingdaoR&D and sales of lighting

appliances

80.00%80.00%Establishment

Qingdao Haimeihui

ManagementConsulting Co., Ltd.(島匯

)

QingdaoQingdaoLeasing and business services100.00%100.00%EstablishmentWuxi Yunshang Internet

of Clothing TechnologyCo., Ltd. (無錫

)

WuxiWuxiInternet of Things technology R

& D

100.00%100.00%Establishment

Qingdao Haidacheng

Procurement ServiceCo., Ltd.

QingdaoQingdaoDevelop, purchase and sell

electrical products andcomponents

100.00%100.00%Establishment

Guangdong Haier

Intelligent TechnologyCo. Ltd. (

)

GuangzhouGuangzhouScientific research and

technology service sector

76.72%76.72%Business

combination notunder commoncontrol

Section VIII Financial Report

Name of subsidiary

Principal place ofbusinessPlace of registrationNature of businessShareholding

% of votingrightMethodDirectIndirectBeijing Haixianghui

Technology Co., Ltd.(匯

)

BeijingBeijingScientific research and

technology service sector

100.00%100.00%Establishment

Haier Smart HomeExperience CloudEcological TechnologyCo., Ltd. (驗態)

QingdaoQingdaoTechnology development of

smart home products, wholefurniture customization, etc.

100.00%100.00%Establishment

Haier Smart Home

(Qingdao) Network Co.,Ltd. (島

絡)

QingdaoQingdaoTechnical services,

development, consulting,transfer, etc.

100.00%100.00%Establishment

Haier Smart Home

(Qingdao) NetworkOperation Co., Ltd. (島絡)

QingdaoQingdaoResidential interior decoration,

professional constructionoperation, special equipmentinstallation, upgrading andrepair, etc.

100.00%100.00%Establishment

Qingdao Internet of WineTechnology Co., Ltd.(島)

QingdaoQingdaoUrban distribution and

transportation services,import and export of goods,technology import andexport and food business,etc.

100.00%100.00%Establishment

Qingdao Linghai Air

ConditioningEquipment Co., Ltd.(島調設)

QingdaoQingdaoManufacture and production of

air conditioner andrefrigeration equipment

100.00%100.00%Establishment

Qingdao HaixiangxueHuman Resources Co.,Ltd. (島)

QingdaoQingdaoProfessional intermediary

activities

100.00%100.00%Establishment

Jiangxi Haier MedicalTechnology Co., Ltd.

JiangxiJiangxiWholesale and retail of medical

equipment

100.00%100.00%Establishment

Qingdao Haizhi Shenlan

Technology Co., Ltd.

QingdaoQingdaoTechnical service development100.00%100.00%EstablishmentQingdao Haishengze

Technology Co., Ltd.

QingdaoQingdaoAir conditioning equipment

technical services

100.00%100.00%Establishment

Qingdao Hailvyuan

Recycling TechnologyCo., Ltd.

QingdaoQingdaoElectrical and electronic

products waste treatment

100.00%100.00%Establishment

Qingdao Haier HVAC

Equipment Co., Ltd.(島調

)

QingdaoQingdaoManufacture and sale of

air-conditioners

75.00%25.00%100.00%Establishment

Qingdao Haier Home AI

Industry InnovationCenter Co., Ltd. (島

創)

QingdaoQingdaoIntegrated service of AI

industry application system

100.00%100.00%Establishment

Zhejiang Weixi IoT

Technology Co., Ltd.(衛

)

ZhejiangZhejiangIoT application service100.00%100.00%EstablishmentQingdao Haier Quality

Inspection Co., Ltd.(島質檢測

)

QingdaoQingdaoInspection and testing of home

appliance

100.00%100.00%Business

combinationunder commoncontrol

Section VIII Financial Report

Name of subsidiary

Principal place ofbusinessPlace of registrationNature of businessShareholding

% of votingrightMethodDirectIndirectQingdao HaiyongchengCertification ServiceCo., Ltd.(島認證)

QingdaoQingdaoProduct certification service100.00%100.00%Business

combinationunder commoncontrolQingdao Zhonghai Borui

Testing TechnologyService Co., Ltd.(島檢測術)

QingdaoQingdaoHome appliance testing and

technology consulting

100.00%100.00%Business

combinationunder commoncontrolsQingdao Haier Special

Plastic DevelopmentCo., Ltd.

QingdaoQingdaoManufacture and sale of

refrigerator doors

100.00%100.00%Business

combinationunder commoncontrolsQingdao Haizhiling AirConditioningEngineering Co., Ltd.(

)

QingdaoQingdaoSoftware development and sale

of daily necessities

100.00%100.00%Establishment

Haier Smart Home(Xiongan, Hebei)Technology Co., Ltd.( () )

QingdaoQingdaoPromotion of energy-saving

technology

100.00%100.00%Establishment

Qingdao Ruibo

EcologicalEnvironmentalTechnology Co., Ltd.(島態環

)

QingdaoQingdaoEnvironmental and AI

technology consulting

89.13%89.13%Establishment

Qingdao SanyiniaoTechnology Co., Ltd.(島)

QingdaoQingdaoTechnology service and

advertisement design

100.00%100.00%Establishment

Qingdao Jingzhi RecycleEnvironmentalTechnology Co., Ltd.(島鯨環)

QingdaoQingdaoOperation of dangerous waste100.00%100.00%EstablishmentQingdao YunshangJieshen YilianTechnology Co., Ltd.(島

)

QingdaoQingdaoProfessional cleaning and sale

of daily necessities

51.00%51.00%Establishment

Shanghai Yunshang Yuyi

IoT Technology Co.,Ltd. (

)

ShanghaiShanghaiProfessional cleaning and sale

of daily necessities

100.00%100.00%Establishment

Shijiazhuang Yunshang

Yilian Technology Co.,Ltd. (

)

ShijiazhuangShijiazhuangProfessional cleaning and sale

of daily necessities

51.00%51.00%Establishment

Nanjing Yunshang Yilian

Technology Co., Ltd.(

)

NanjingNanjingProfessional cleaning and sale

of daily necessities

80.00%80.00%Establishment

Shanxi Yunshang Yilian

Technology Co., Ltd.(

)

ShanxiShanxiProfessional cleaning and sale

of daily necessities

51.00%51.00%Establishment

Section VIII Financial Report

Name of subsidiary

Principal place ofbusinessPlace of registrationNature of businessShareholding

% of voting

rightMethodDirectIndirectTianjin Yunshang Yilian

Technology Co., Ltd.(

)

TianjinTianjinProfessional cleaning and sale

of daily necessities

51.00%51.00%Establishment

Chengdu YunshangMeier Yilian TechnologyCo., Ltd. (

)ChengduChengduProfessional cleaning and sale

of daily necessities

80.00%80.00%Establishment

Qingdao Haier SmartDishwasher Co., Ltd.(島)

QingdaoQingdaoManufacture, research and

development and sales ofhome appliances

100.00%100.00%Establishment

Qingdao HaixiangmianTechnology Co., Ltd.(島)

QingdaoQingdaoSale of food and daily

necessities

100.00%100.00%Establishment

Qingdao Haier Kitchen

IoT Technology Co.,Ltd. (島

)QingdaoQingdaoTechnology service and sale of

daily necessities

100.00%100.00%Establishment

Tibet Haifeng Intelligent

Innovation TechnologyCo., Ltd. (

創)

TibetTibetDevelopment of software and

medical equipment

100.00%100.00%Establishment

Qingdao Haixiangzhi

Technology Co., Ltd.(島

)

QingdaoQingdaoManufacturing of home

appliances

100.00%100.00%Establishment

Qingdao Haier

Refrigeration ApplianceCo., Ltd. (島

)

QingdaoQingdaoManufacturing of home

appliances

100.00%100.00%Establishment

Chongqing Haier

Washing ApplianceCo., Ltd. (

)

ChongqingChongqingManufacturing of home

appliances

100.00%100.00%Establishment

Tonghai Energy

TechnologyDevelopment Co., Ltd.(

)

BeijingBeijingTechnology development

service

84.32%84.32%Business

combination notunder commoncontrolQingdao Haier Youyang

Technology Co., Ltd.(島養

)

QingdaoQingdaoTechnology development

service

51.00%51.00%Establishment

Qingdao Haier YikangTechnology Co., Ltd.(島

)

QingdaoQingdaoTechnology development

service

100.00%100.00%Establishment

Qingdao Haier Smart

Dishwasher Co., Ltd.(島)

QingdaoQingdaoManufacturing of home100.00%100.00%EstablishmentZhongshan Haier HV

Equipment Co., Ltd.(

)

ZhongshanZhongshanappliances100.00%100.00%EstablishmentQingdao Haier HV

Equipment TechnologyCo., Ltd. (島

)

QingdaoQingdaoManufacturing of home100.00%100.00%Establishment

Section VIII Financial Report

Name of subsidiary

Principal place ofbusinessPlace of registrationNature of businessShareholding

% of votingrightMethodDirectIndirectJingzhou HaierEnvironmentalProtection MaterialTechnology Co., Ltd.(荆环

)

JingzhouJingzhouRenewable Energy Recycling100.00%100.00%Establishment

Jingzhou Haizhi CycleTechnology Co., Ltd.(荆环)

JingzhouJingzhouRenewable Energy Recycling100.00%100.00%EstablishmentQingdao HaierEnvironmentalProtection MaterialTechnology Co., Ltd.(島环

)

QingdaoQingdaoRenewable Energy Recycling51.00%51.00%Establishment

Haier Jingling Technology(Zhejiang) Co., Ltd.(龄

)

ZhejiangZhejiangTechnology development

service

66.00%66.00%Establishment

Qingdao Haiyi Wenhua

CommercialManagement Co., Ltd.(島

)

QingdaoQingdaoPark Management Service95.56%95.56%EstablishmentMicroenterprises such asQingdao Hai HengFeng ElectricalAppliances Sale &Service Co., Ltd.

All over the countryAll over the countrySales of home appliancesEstablishment

Reasons for including subsidiaries which the Company has 50% or less of the equity intothe scope of consolidated financial statements:

At the end of the reporting period, the Company had substantial control over the financeand operation of companies like Qingdao Hai Heng Feng Electrical Appliances Sale &Service Co., Ltd, which were included into the scope of consolidated financial statements.

(2) Material non-wholly owned subsidiaries

Applicable √ Not Applicable

Section VIII Financial Report

2. Transactions leading to the change of shareholding in subsidiaries but not losing

the control

√ Applicable Not Applicable

(1) Description of changes in the share of owners’ equity in subsidiaries:

√ Applicable Not Applicable

Capital contribution by minority shareholders of the subsidiary of the Company leads tochanges in the Company’s shareholding ratio.

(2) Impact of the transactions on minority interest and the equity attributable to

shareholders of the Company:

ItemsAmountTotal Consideration for acquisition/disposal2,153,437,783.43Less: share of net assets of subsidiaries in respect to theshareholding proportion acquired/disposed2,152,502,266.28Difference–935,517.15Including: adjustment to decrease capital reserve–304,169,114.78

3. Interests in joint ventures and associates

√ Applicable Not Applicable

(1) Joint ventures and associates

Name of joint venture and associates

Principal place ofbusiness

Place ofregistrationNature of business

Nature ofbusiness

Accounting treatmentof investmentHaier Group Finance Co., LtdQingdaoQingdaoFinancial services42.00%Equity methodBank of Qingdao Co., LtdQingdaoQingdaoCommercial Bank8.19%Equity methodWolong Electric (Jinan) Motor Co., Ltd.JinanJinanMotor Manufacturing30.00%Equity methodQingdao Hegang New Material TechnologyCo., Ltd. (岛

)

QingdaoQingdaoSteel plate manufacturing23.94%Equity methodQingdao Haier SAIF Smart Home Industry

Investment Center (Limited Partnership)

QingdaoQingdaoVenture Capital63.13%Equity methodMitsubishi Heavy Industries Haier (Qingdao)

Air-conditioners Co., Ltd.

QingdaoQingdaoManufacturing of home

appliances

45.00%Equity method

Qingdao Haier Multimedia Co., Ltd.QingdaoQingdaoR&D and sales of

television

20.20%Equity method

Baoshihua Energy Technology Co., Ltd.

()

BeijingBeijingTechnology service

development

20.00%Equity method

Zhengzhou Highly Electric Appliance Co.,

Ltd. (郑)

ZhengzhouZhengzhouManufacture and sale of

press

49.00%Equity method

Section VIII Financial Report

Name of joint venture and associates

Principal place ofbusiness

Place ofregistrationNature of business

Nature ofbusiness

Accounting treatmentof investmentZhejiang Futeng Fluid Technology Co., Ltd.HuzhouHuzhouGas compression

machinerydevelopment andmanufacturing

48.00%Equity method

Hongtong Environmental Technology(Guangzhou) Co., Ltd.

(环术（）)

GuangzhouGuangzhouMachinery and equipment

development andmanufacturing

15.00%Equity method

Qingdao Haimu Investment ManagementCo., Ltd.

QingdaoQingdaoInvestment management49.00%Equity methodQingdao Haimu Smart Home Investment

Partnership (Limited Partnership)

QingdaoQingdaoInvestment management24.00%Equity methodQingdao Guochuang Intelligent Household

Appliance Research Institute Co., Ltd.(岛创)

QingdaoQingdaoDevelopment of home

appliances

35.51%Equity method

Guangzhou Heying Investment Partnership

(Limited Partnership)

GuangzhouGuangzhouInvestment49.00%Equity methodQingdao Home Wow Cloud Network

Technology Co., Ltd

QingdaoQingdaoHome online service22.10%Equity methodBingji (Shanghai) Corporate Management

Co., Ltd.

ShanghaiShanghaiInvestment management45.00%Equity methodShangang Luhai International Logistics

(Jinan) Co., Ltd.

(陆 )

JinanJinanLogistic service40.00%Equity methodHaier Best Water Technology Co., Ltd.

(饮)

QingdaoQingdaoWater equipment

technologydevelopment service

49.00%Equity method

Huizhixiangshun Equity Investment Fund

(Qingdao) Partnership (LimitedPartnership)

QingdaoQingdaoInvestment management30.00%Equity methodQingdao RRS Huizhi Investment Co., Ltd.QingdaoQingdaoInvestment management50.00%Equity methodQingdao Xiaoshuai Intelligent TechnologyCo., Ltd.

(岛帅)

QingdaoQingdaoInformation technology

development

32.13%Equity method

Qingdao Xinshenghui Technology Co., Ltd.

(岛汇)

QingdaoQingdaoTechnology service

development

20.00%Equity method

Ningbo Beilian Intelligent Technology Co.,

Ltd.()

NingboNingboTechnology service

development

35.00%Equity method

Qingdao Oriental Haisheng Technology Co.,

Ltd. (岛)

QingdaoQingdaoTechnology service

development

49.90%Equity method

Konan Electronic Co., LtdJapanJapanMotor Manufacturing50.00%Equity methodHPZ LIMITEDNigeriaNigeriaManufacturing of home

appliance

25.01%Equity method

HNR (Private) Company LimitedPakistanPakistanManufacturing of home

appliance

31.72%Equity method

Controladora Mabe, S.A. de C.V.MexicoMexicoManufacturing of home

appliance

48.41%Equity method

Section VIII Financial Report

(1) The basic profile and financial information of important associates

√ Applicable Not Applicable

Unit and Currency: RMB The basic profile of important associates:

Haier Group Finance Co., Ltd. (hereinafter referred to as “Finance company”) wasestablished by Haier Group Corporation and its three affiliates. Registration place andprincipal place of business: No.178–2 Haier Road, Laoshan District, Qingdao City. TheCompany’s subsidiaries hold an aggregate of 42.00% equity interest in FinanceCompany. Financial information of important associates:

ItemsFinance company

Closing balance/

Amount for thecurrent period

Opening balance/

Amount for theprevious periodCurrent assets56,917,526,305.5955,206,996,489.12Non-current assets19,491,481,313.7720,913,398,205.82Total assets76,409,007,619.3676,120,394,694.94Current liabilities56,225,741,230.1455,911,360,017.96Non-current liabilities274,745,478.17639,275,539.37Total liabilities56,500,486,708.3156,550,635,557.33Minority interestsEquity attributable to shareholders of the parent

company19,908,520,911.0519,569,759,137.61Including: share of net assets calculated per

shareholding percentage8,361,578,782.648,219,298,837.80Operating income573,153,401.34931,067,464.94Net profit898,763,418.72677,251,560.13Other comprehensive income–1,645.2817,229.38Total comprehensive income898,761,773.44677,268,789.51Dividend received from associates for the year235,200,000.00235,200,000.00

Section VIII Financial Report

(2) Summarized financial information of insignificant joint ventures and associates

Investment in associates

Closing balance/Amount for thecurrent period

Opening balance/Amount for theprevious periodBank of Qingdao Co., Ltd.3,764,246,964.413,473,162,128.86Wolong Electric (Jinan) Motor Co., Ltd.197,806,527.66198,467,631.66Qingdao Hegang New Material Technology Co., Ltd.(岛)344,972,463.63342,315,345.52Qingdao Haier SAIF Smart Home Industry Investment

Center (Limited Partnership)191,276,594.86191,276,594.86Mitsubishi Heavy Industries Haier (Qingdao)

Airconditioners Co., Ltd.770,422,412.45698,845,993.61Qingdao Haier Multimedia Co., Ltd.88,300,000.0088,300,000.00Baoshihua Energy Technology Co., Ltd.

()29,723,148.5931,132,443.76Zhengzhou Highly Electric Appliance Co., Ltd.

(郑)98,560,581.0198,560,581.01Zhejiang Futeng Fluid Technology Co., Ltd.73,460,549.1173,460,549.11Hongtong Environmental Technology (Guangzhou) Co.,

Ltd. (环术)6,464,386.266,464,386.26Qingdao Haimu Investment Management Co., Ltd.2,692,755.002,692,755.00Qingdao Haimu Smart Home Investment Partnership

(Limited Partnership)56,749,040.7956,749,040.79Qingdao Guochuang Intelligent Household Appliance

Research Institute Co., Ltd.

(岛创)42,936,225.7640,920,413.54Guangzhou Heying Investment Partnership (Limited

Partnership)132,620,094.53132,620,094.53Qingdao Home Wow Cloud Network Technology Co.,

Ltd–25,184.861,083,682.47Bingji (Shanghai) Corporate Management Co., Ltd.1,122,845,148.331,095,450,007.15Shangang Luhai International Logistics (Jinan) Co., Ltd.

(陆)59,879,950.9758,941,327.06Haier Best Water Technology Co., Ltd.

(饮)150,493,919.92148,369,638.40Huizhixiangshun Equity Investment Fund (Qingdao)

Partnership (Limited Partnership)171,896,075.25188,907,510.60Qingdao RRS Huizhi Investment Co., Ltd.4,083,482.784,083,482.78Qingdao Xiaoshuai Intelligent Technology Co., Ltd.

(岛帅)11,703,982.529,578,046.65Qingdao Xinshenghui Technology Co., Ltd.

(岛汇)11,964,358.9711,365,227.21Ningbo Beilian Intelligent Technology Co., Ltd.

()3,487,924.333,724,499.78

Section VIII Financial Report

Investment in associates

Closing balance/

Amount for thecurrent period

Opening balance/

Amount for theprevious periodQingdao Oriental Haisheng Technology Co., Ltd. (岛

)9,980,000.00Konan Electronic Co., Ltd61,062,612.3759,415,065.89HNR (Private) Company Limited169,600,837.60140,530,747.42HPZ LIMITED11,203,257.7711,203,257.77Controladora Mabe, S.A. de C.V.5,563,416,529.515,638,478,867.77Middle East Airconditioning Company, Limited7,389,990.91Total book balance13,151,824,639.5212,813,489,310.37Total amount of the following financial data of

associates calculated based on shareholdingpercentage— Net profit504,763,812.03629,523,707.09— Other comprehensive income30,761,854.8821,625,261.80— Total comprehensive income535,525,666.91651,148,968.89

Section VIII Financial Report

XI. SEGMENT REPORT

√ Applicable Not Applicable

The Company is principally engaged in manufacture and sales of home appliances and relevantservices business, manufacture of upstream home appliances parts, distribution of products of thirdparty, logistics and after-sale business.The Company has five business segments: (1) Household Food Storage and Cooking Solutions: mainlymanufacturing and selling refrigerator/freezers and kitchen appliances; (2) Air Solutions: mainlymanufacturing and selling air conditioners; (3) Household Laundry Management Solutions: mainlymanufacturing and selling washing machines and dryers; (4) Household Water Solutions: mainlymanufacturing and selling water home appliances such as water heaters and water purifiers; (5) Otherbusiness: mainly include channel, equipment components, small home appliance business and others.The management of the Company assesses operating performance of each segment and allocatesresources according to the division. Sales between segments were mainly based on market price.Due to centralized management under the headquarters or exclusion from the assessment scope ofsegment management, the total assets of segments exclude monetary funds, financial assets held fortrading, derivative financial assets, dividends receivable, held-for-sale financial assets, other currentassets, debt investment, long-term accounts receivable, long-term equity investment, other equityinstruments investment, other non-current financial assets, goodwill and deferred income tax assets;the total liabilities of segments exclude long-term and short-term borrowings, financial liabilities held fortrading, derivative financial liabilities, taxes payable, interests payable, dividends payable, held-for-saleliabilities, bonds payable, deferred income tax liabilities and other non-current liabilities; profits ofsegments exclude financial expenses, profit or loss in fair value changes, income from investment, andincome on disposal of assets, Non-value-added tax refundable upon imposition component of otherincome, non-operating incomes and expenses and income tax.

(1) Information of reportable segments

Segment information for the period

Household Food Storage and

Cooking SolutionsSegment informationRefrigerator/freezersKitchen appliancesAir Solutions

Household Laundry

Management

SolutionsSegment revenue42,853,322,004.7920,671,670,604.2832,978,231,317.8832,005,647,939.47Including: external revenue42,734,835,187.8820,628,620,545.0932,855,731,341.3831,938,194,415.35Inter-segment revenue118,486,816.9143,050,059.19122,499,976.5067,453,524.12Total segment operating cost38,927,852,080.3218,701,282,563.3730,877,590,612.2328,522,588,338.91Segment operating profit3,925,469,924.471,970,388,040.912,100,640,705.653,483,059,600.56Total segment assets53,748,578,037.4424,783,748,732.0245,611,063,319.7239,041,719,547.72Total segment liabilities65,315,995,784.0314,013,094,521.8143,246,858,948.0625,411,403,395.19

Section VIII Financial Report

(continued)Segment information

Household WaterSolutionsOther business

Inter-segmenteliminationsTotalSegment revenue9,793,078,353.0267,712,677,512.62–49,520,593,283.21156,494,034,448.85Including: external revenue9,690,773,037.8918,645,879,921.26—156,494,034,448.85Inter-segment revenue102,305,315.1349,066,797,591.36–49,520,593,283.21—Total segment operating cost8,290,916,129.4067,369,708,462.33–49,522,176,147.33143,167,762,039.23Segment operating profit1,502,162,223.62342,969,050.291,582,864.1213,326,272,409.62Total segment assets15,067,350,286.07102,648,915,510.06–122,161,543,862.99158,739,831,570.04Total segment liabilities9,047,327,086.9292,135,183,582.27–122,022,184,806.99127,147,678,511.29

Segment information for the corresponding period of last year

Household Food Storage andCooking SolutionsSegment information

Refrigerator/

freezersKitchen appliancesAir Solutions

Household Laundry

Management

SolutionsSegment revenue41,127,956,870.2220,275,302,895.2029,234,848,611.9729,736,595,881.54Including: external revenue41,022,856,775.6420,228,275,282.9929,074,828,944.3029,601,746,705.79Inter-segment revenue105,100,094.5847,027,612.21160,019,667.67134,849,175.75Total segment operating cost37,540,201,155.6118,468,429,192.6827,501,511,688.2426,617,225,082.23Segment operating profit3,587,755,714.611,806,873,702.521,733,336,923.733,119,370,799.31Total segment assets50,542,675,724.2821,839,636,887.2932,728,708,862.9637,335,152,980.59Total segment liabilities71,520,224,809.9314,943,277,260.4329,805,083,060.2727,393,275,290.67

(continued)

Segment information

Household WaterSolutionsOther business

Inter-segment

eliminationsTotalSegment revenue8,106,193,795.0559,844,086,881.64–46,342,502,329.87141,982,482,605.75Including: external revenue8,011,173,935.8014,043,600,961.23141,982,482,605.75Inter-segment revenue95,019,859.2545,800,485,920.41–46,342,502,329.87Total segment operating cost6,902,559,378.7459,590,489,665.21–46,387,427,695.96130,232,988,466.75Segment operating profit1,203,634,416.31253,597,216.4344,925,366.0911,749,494,139.00Total segment assets11,352,587,655.4098,430,952,654.13–96,919,489,838.22155,310,224,926.43Total segment liabilities4,228,086,063.7481,313,928,140.48–96,780,130,782.22132,423,743,843.30

Section VIII Financial Report

(2) Geographical information

‘Other countries/regions’ in this report refers to all other countries/regions (including Hong Kongand Macau Special Administration Region and Taiwan) other than the mainland China for thepurpose of information disclosurea. External transaction revenue

Items

Amount forthe currentperiod

Amount forthe previous

periodMainland China77,415,039,692.1871,158,282,181.31Other countries/regions79,078,994,756.6770,824,200,424.44Among which:

America40,016,409,441.7139,079,401,455.27Australia3,257,604,123.303,224,852,882.97South Asia8,665,895,537.296,541,908,201.63Europe17,995,460,767.3214,504,641,098.47Southeast Asia4,130,278,679.373,491,588,857.32Middle East and Africa2,439,437,910.621,474,675,819.82Japan1,957,898,837.661,826,967,375.51Others616,009,459.40680,164,733.45Total156,494,034,448.85141,982,482,605.75b. Total non-current assets

ItemsClosing balanceOpening balanceMainland China30,494,688,089.4430,199,437,868.54Other countries/regions37,860,078,674.8735,855,840,703.95Total68,354,766,764.3166,055,278,572.49Total non-current assets exclude: debt investments, long-term receivable, long-term equityinvestments, other equity instrument investments, other non-current financial assets,goodwill and deferred income tax assets.

Section VIII Financial Report

XII. DISCLOSURE OF FAIR VALUE

1. Assets and liabilities measured at fair value

The level to which the fair value measurement result belongs is determined by the lowest level towhich the input value is significant to the fair value measurement as a whole:

Level 1: Unadjusted quotes for the same asset or liability in an active market.Level 2: Inputs that are directly or indirectly observable for related assets or liabilities, except for

Level 1 inputs.Level 3: Unobservable inputs of related assets or liabilities.At the end of the periodItemsInput used for fair value measurement

Quotes in anactive market(Level 1)

Importantobservable input(Level 2)

Importantunobservableinput (Level 3)TotalContinuously measured at fair valueFinancial assets held for trading389,695,653.648,317,511,328.41108,241,333.578,815,448,315.62Including: Bank wealth management

products8,317,511,328.418,317,511,328.41

Investment fund314,831,875.05314,831,875.05Investment in equity instruments74,863,778.59108,241,333.57183,105,112.16Derivative financial assets79,365,117.4079,365,117.40Including: Forward foreign exchange

contract77,736,648.2577,736,648.25Forward commodity contracts1,628,469.151,628,469.15Financing receivables1,248,197,448.341,248,197,448.34Including: Bills receivable1,115,591,707.011,115,591,707.01

Accounts receivable132,605,741.33132,605,741.33Other equity instruments26,258,327.105,623,897,924.155,650,156,251.25Including: Equity instruments measured

at fair value through other

comprehensive income26,258,327.105,623,897,924.155,650,156,251.25Derivative financial liabilities440,096,398.09440,096,398.09Including: Forward foreign exchange

contract440,096,398.09440,096,398.09

Section VIII Financial Report

At the beginning of the periodItemsInput used for fair value measurement

Quotes in anactive market(Level 1)

Importantobservable input(Level 2)

Importantunobservableinput (Level 3)TotalContinuously measured at fair valueFinancial assets held for trading381,340,384.56746,436,121.40108,241,333.571,236,017,839.53Including: Bank wealth management

products746,436,121.40746,436,121.40

Investment fund294,404,349.36294,404,349.36Investment in equity instruments86,936,035.20108,241,333.57195,177,368.77Derivative financial assets142,709,716.91142,709,716.91Including: Forward foreign exchange

contract138,404,575.66138,404,575.66

Forward commodity contracts50,459.8150,459.81Cross currency interest rateswap contracts4,254,681.444,254,681.44Financing receivables412,922,615.25412,922,615.25Including: Bills receivable235,730,229.72235,730,229.72

Accounts receivable177,192,385.53177,192,385.53Other equity instruments26,140,832.986,047,540,037.846,073,680,870.82Including: Equity instruments measured

at fair value through other

comprehensive income26,140,832.986,047,540,037.846,073,680,870.82Derivative financial liabilities71,011,310.0171,011,310.01Including: Forward foreign exchange

contract71,011,310.0171,011,310.01

For financial instruments traded in an active market, the Company determines its fair value basedon its quotes in an active market; for financial instruments not traded in an active market, theCompany uses valuation techniques to determine its fair value.

Section VIII Financial Report

2. The basis for determining the fair value of the continual Level 2 fair value

measurement itemsItems

Fair value at theend of the periodValuation techniquesFinancial assets held for tradingIncluding: Bank wealth management

products

8,317,511,328.41Discounted cash flowDerivative financial assetsIncluding: Forward foreign exchange

contract

77,736,648.25Discounted cash flowForward commodity contracts1,628,469.15Discounted cash flowFinancing receivablesIncluding: Bills receivable1,115,591,707.01Discounted cash flow

Accounts receivable132,605,741.33Discounted cash flowDerivative financial liabilitiesIncluding: Forward foreign exchange

contract

440,096,398.09Discounted cash flow

3. Continual Level 3 fair value measurement major items, the valuation techniques

adopted and information of important parametersItems

Fair value at theend of the periodValuation technique

Significantunobservable inputRange

Sensitivity of fair value tothe inputOther equity

instrumentsIncluding:

1. COSMO IoT

Technology

Co., LTD.

(

)

2,795,887,119.07Market approach1. Average P/S

multiple of peers

2. Discount for lack

of marketability

1. 3.51 to 3.59

2. 32.47% to

34.47%

1. 1% increase (decrease) in

average P/S multiple ofthe ComparableCompanies would resultin increase (decrease) infair value by RMB22.05million.

2. 1% increase (decrease) in

the lack of marketabilitywould result in decrease(increase) in fair value byRMB32.92 million.

2. SINOPEC Fuel

Oil Sales

Corporation

Limited (

)

1,328,800,000.00Market approach1. Average P/E

multiple of peers

2. Discount for

lack ofmarketability

1. 44.31 to

45.21

2. 25.97% to

27.97%

1. 1% increase (decrease) in

average P/E multiple ofthe ComparableCompanies would resultin increase (decrease) infair value by RMB13.20million.

2. 1% increase (decrease) in

the lack of marketabilitywould result in decrease(increase) in fair value byRMB18.10 million.

Section VIII Financial Report

4. Financial instruments not measured at fair value

Financial assets and financial liabilities not measured at fair value include: monetary funds, billsreceivable, accounts receivable, other receivables, other current assets, long-term and short-termborrowings, bills payable, accounts payable, other payables, long-term payables, bonds payable,etc. The difference between the book value and the fair value of financial assets and financialliabilities not measured at fair value at the end of the period is small.XIII. RELATED PARTIES AND RELATED-PARTY TRANSACTIONS(I) Explanation for basis of identifying related partyAccording to Accounting Standards for Business Enterprises No. 36—Related PartyDisclosures, parties are considered to be related if one party has the ability to control or jointlycontrol the other party or exercise significant influence over the other party. Parties (two or morethan two) are also considered to be related if they are subject to common control, joint controlor significant influence from another party.According to Management Practices for Information Disclosure of Listed Company (ChinaSecurities Regulatory Commission Order No. 182), related legal entity or individual will beidentified as related parties in certain occasions.(II) Relationships between related parties

1. Information about the parent company and other companies holding shares of the

CompanyName

Type ofenterpriseRegistered place

Registered

capital

Legalrepresentative

Relationships withthe Company

Interest in the

Company

Voting rights

to theCompanyHaier Group

Corporation

Collective

ownershipcompany

Qingdao High-tech

Zone Haier Park

311,180,000Zhou YunjieParent Company11.43%11.43%Haier COSMO Co.,Ltd. (

)

Joint-stock

company

Qingdao High-tech

Zone Haier Park

404,500,000Zhou YunjieSubsidiary of

ParentCompany

13.41%13.41%

HCH (HK) Investment

Management Co.,Limited

Private

company

Hong KongHKD10,000/Parties acting in

concert ofParentCompany

5.74%5.74%

Qingdao Haier Venture

& InvestmentInformation Co.,Ltd.

Company with

limitedliability

Qingdao Free TradeZone

923,000,000Zhou YunjieParties acting in

concert ofParentCompany

1.84%1.84%

Qingdao Haichuangzhi

ManagementConsultingEnterprise (LimitedPartnership)

Limited

partnershipcompany

Qingdao High-tech

Zone Haier Park

1,616,120,000/Parties acting in

concert ofParentCompany

1.43%1.43%

Haier International

Co., Limited

Private

company

Hong KongHKD2/Parties acting in

concert ofParentCompany

0.62%0.62%

Section VIII Financial Report

2. Subsidiaries of the Company

√ Applicable Not Applicable

The details of the subsidiaries of the Company are detailed in Note X.1. Interests insubsidiaries

3. Joint ventures and associates of the Company

√ Applicable Not Applicable

The details of important joint ventures and associates of the Company are detailed in NoteVII.14 and X.3.

4. Connected companies with no relationship of control

NameRelationship with the CompanyWuhan Haizhi Real Estate Development Co., Ltd.(开)

Subsidiary of Haier GroupQingdao Manniq Intelligent Technology Co., Ltd.Subsidiary of Haier GroupQingdao Maidirui Ecological EnvironmentTechnology Co., Ltd. (岛迈态环

)

Subsidiary of Haier GroupQingdao Oasis Technology Co., Ltd.Subsidiary of Haier GroupQingdao Haiyun Chuangzhi Business

Development Co., Ltd.

Subsidiary of Haier GroupQingdao Haina Cloud Intelligent System Co.,

Ltd.

Subsidiary of Haier GroupQingdao Haier Parts Procurement Co., Ltd.Subsidiary of Haier GroupQingdao Haier International Trading Co., Ltd.Subsidiary of Haier GroupQingdao Haier International Travel Agency Co.,Ltd.

Subsidiary of Haier GroupCOSMO Industrial Intelligence Research Institute(Qingdao) Co., LTD (岛)

Subsidiary of Haier GroupCosmoplat Chuangzhi IOT Technology Co., Ltd.Subsidiary of Haier GroupFeiketeng Intelligent Technology (Qingdao) Co.,Ltd. (腾岛)

Subsidiary of Haier GroupDalian Haier International Trade Co., Ltd.Subsidiary of Haier GroupHaier International Co., Ltd.Subsidiary of Haier GroupWuxi Haizhi Real Estate Co., Ltd. (无锡

)

Subsidiary of Haier GroupQingdao Lingzhi Electronic Technology Co., Ltd.

(岛)

Subsidiary of Haier GroupQingdao Junyi Holding Group Co., Ltd.

(岛)

Subsidiary of Haier GroupQingdao Haizhi Hengshan Real Estate Co., Ltd.

(岛)

Subsidiary of Haier GroupQingdao Haiyunlian Industrial Development Co.,

Ltd. (岛)

Subsidiary of Haier GroupQingdao Haier Parts Procurement Co., Ltd.Subsidiary of Haier GroupQingdao Haier Optoelectronics Co., Ltd.

(岛)

Subsidiary of Haier Group

Section VIII Financial Report

NameRelationship with the CompanyQingdao Dingxin Electronic Technology Co., Ltd.

(岛)

Subsidiary of Haier GroupQingdao Dingteng Industrial Technology Co.,Ltd. (岛顶腾)

Subsidiary of Haier GroupCOSMO Digital Technology (Qingdao) Co., Ltd.(数岛)

Subsidiary of Haier GroupHenan Anshuo Electric Co., Ltd.(硕)

Subsidiary of Haier GroupFoshan Haiyongchuang Investment ManagementCo., Ltd. (创)

Subsidiary of Haier GroupHayes Haier Appliances Co., Ltd.Subsidiary of Haier GroupThailand Histar Technology Co., LtdSubsidiary of Haier GroupWolong Electric (Jinan) Motor Co., Ltd.AssociateMitsubishi Heavy Industry Haier (Qingdao) Air

Conditioner Co., Ltd.

AssociateHNR (Private) Company LimitedAssociateControladora Mabe S.A.de C.V.AssociateQingdao Home Wow Cloud Network Technology

Co., Ltd.

AssociateQingdao Haier New Materials R & D Co., LtdAssociate of subsidiary of Haier

Group(III) Related party transactions

1. Details of the Company’s procurement of goods and services from related parties are as

follows:

√ Applicable Not Applicable

Unit and Currency: RMBRelated parties

Amount for the

current period

Amount for theprevious periodControladora Mabe S.A.de C.V.7,834,225,655.547,687,926,090.90Qingdao Haier Parts Procurement Co., Ltd.2,411,176,212.113,059,386,453.56HNR (Private) Company Limited2,384,856,286.981,729,101,867.08Other related parties3,268,864,410.083,281,847,133.11Total15,899,122,564.7115,758,261,544.65

Section VIII Financial Report

2. Details of the Company’s sales of goods to related parties are as follows:

√ Applicable Not Applicable

Unit and Currency: RMBRelated parties

Amount for the

current period

Amount for theprevious periodControladora Mabe S.A.de C.V.782,468,364.24723,506,543.36HNR (Private) Company Limited542,516,067.71331,070,763.13Qingdao Haier International Trading Co., Ltd.227,851,808.24283,889,750.78Mitsubishi Heavy Industry Haier (Qingdao) Air

Conditioner Co., Ltd.113,130,201.3329,021.75Other related parties398,333,574.56607,514,557.04Total2,064,300,016.081,946,010,636.06

3. Amount of unsettled items of related parties

Items and name of customers

ClosingBalance

OpeningBalanceBills receivable:

COSMO Digital Technology (Qingdao) Co., Ltd.

(数岛)4,237,280.79Qingdao Haiyun Chuangzhi Business

Development Co., Ltd.3,837,442.585,525,942.99Wuxi Haizhi Real Estate Co., Ltd. (无锡

)1,562,502.60795,626.82Qingdao Haizhi Hengshan Real Estate Co., Ltd.

(岛)904,819.96526,132.39Cosmoplat Chuangzhi IOT Technology Co., Ltd.12,712,495.66Other related parties2,568,772.212,539,002.43Accounts receivable:

HNR (Private) Company Limited435,957,820.61488,559,920.90Mitsubishi Heavy Industry Haier (Qingdao) Air

Conditioner Co., Ltd.177,144,013.9716,206,223.73Qingdao Oasis Technology Co., Ltd.131,085,131.17102,960,367.75Qingdao Home Wow Cloud Network Technology

Co., Ltd.37,298,970.5926,282,212.73Qingdao Maidirui Ecological Environment

Technology Co., Ltd. (岛迈态环

)34,436,214.0434,693,294.31Qingdao Dingteng Industrial Technology Co., Ltd.

(岛顶腾)24,767,243.2717,714,787.50Qingdao Haina Cloud Intelligent System Co., Ltd.18,867,764.9318,686,494.15Other related parties216,405,784.88151,563,701.28Prepayments:

Qingdao Haier Parts Procurement Co., Ltd.188,836,432.77319,433,156.93Qingdao Haier International Trading Co., Ltd.23,011,155.2113,105,977.20Hayes Haier Appliances Co., Ltd.16,288,252.00694,374.00

Section VIII Financial Report

Items and name of customers

ClosingBalance

OpeningBalanceOther related parties10,867,175.46585,536,857.89Other receivables:

Foshan Haiyongchuang Investment ManagementCo., Ltd. (创)25,000,000.00Controladora Mabe S.A.de C.V.12,272,076.1717,263,596.82Qingdao Junyi Holding Group Co., Ltd. (岛

)10,381,906.05Wuhan Haizhi Real Estate Development Co., Ltd.(开)8,231,801.508,231,801.50Haier International Co., Ltd.3,850,380.223,617,694.35Qingdao Haiyunlian Industrial Development Co.,Ltd. (岛)3,780,305.813,731,122.30Qingdao Oasis Technology Co., Ltd3,368,579.25Qingdao Haier International Trading Co., Ltd3,238,893.0220,305,273.82Other related parties17,426,579.46146,103,793.34Bills payable:

Qingdao Haier New Materials R & D Co., Ltd.455,209,329.84336,704,809.61Wolong Electric (Jinan) Motor Co., Ltd.38,796,579.006,643,894.00Accounts payable:

Controladora Mabe S.A.de C.V.1,401,566,311.921,036,070,558.18Qingdao Haier International Trading Co., Ltd.110,329,652.31220,206,536.59HNR (Private) Company Limited105,770,296.182,019,530.59Qingdao Haier New Materials R & D Co., Ltd.98,780,783.8992,751,346.46Qingdao Lingzhi Electronic Technology Co., Ltd.(岛)76,979,990.0532,483,627.17Dalian Haier International Trading Co., Ltd.72,364,408.1434,191,943.53Thailand Histar Technology Co., Ltd62,037,020.2668,202,373.17Qingdao Dingxin Electronic Technology Co., Ltd.

(岛)56,236,331.9510,779,491.89Wolong Electric (Jinan) Motor Co., Ltd.45,645,744.9771,939,568.11Other related parties470,165,286.88408,806,408.28Contract liabilities:

Qingdao Haier International Trading Co., Ltd.100,023,464.6645,490.79Mitsubishi Heavy Industry Haier (Qingdao) Air

Conditioner Co., Ltd.35,274,630.60399.60Qingdao Haier Parts Procurement Co., Ltd.30,642,209.77Wolong Electric (Jinan) Motor Co., Ltd.19,505,816.07Other related parties36,610,255.1735,442,758.48Other payables:

Dalian Haier International Trading Co., Ltd.21,899,297.2621,899,297.26Qingdao Manniq Intelligent Technology21,704,973.6746,404,473.49Co., Ltd.13,822,205.2021,925,926.08Feiketeng Intelligent Technology (Qingdao) Co.,

Ltd.(腾岛)13,715,135.6515,356,340.96Qingdao Haier International Travel Agency Co.,

Ltd.12,251,014.6815,933,086.90COSMO Industrial Intelligence Research Institute

(Qingdao) Co., LTD

(岛)10,396,897.44

Section VIII Financial Report

Items and name of customers

ClosingBalance

OpeningBalanceQingdao Haier Optoelectronics Co., Ltd.

(岛)6,028,308.414,866,175.06Qingdao Haier International Trading Co., Ltd.5,050,465.00Henan Anshuo Electric Co., Ltd.(硕)22,978,417.49118,435,364.39Other related partiesDividends payable:

Haier COSMO Co., Ltd. (

)1,214,681,202.55Haier Group Corporation1,035,112,291.69Qingdao Haier Venture & Investment Information

Co., Ltd. (岛创)166,230,610.50Qingdao Haichuangzhi Management Consulting

Enterprise (Limited Partnership)

(岛创)129,113,722.61

4. Other related party transactions

√ Applicable Not Applicable

(1) On 30 March 2023, Haier Group Corporation and Haier Group Finance Co., Ltd.

(hereafter, the “Finance Company”) renewed the Financial Services FrameworkAgreement, and the “resolution on the renewal of the Financial Services FrameworkAgreement between Haier Smart Home Co., Ltd. and Haier Group Corporation andthe estimated amount of connected transaction” was considered and passed at thegeneral meeting. The Financial Services Framework Agreement became effective fromthe passing of the resolution.Various current balances of the Company and the Finance Company are as follows:

ItemsClosing BalanceOpening BalanceMonetary funds deposited at the FinanceCompany20,194,208,511.1320,498,535,069.50Debt investment deposited at the Finance

Company12,065,000,000.0012,605,000,000.00Debt investment due within one year deposited

at the Finance Company1,617,500,000.00327,500,000.00Other current assets deposited at the Finance

Company89,500,000.00453,550,000.00Loans of the Finance Company2,294,062,603.51196,200,183.66Interest receivable from the Finance Company1,487,164,042.351,164,072,073.76Interest payable to the Finance Company17,175,060.622,070,180.99Bills issued8,029,203,957.897,770,695,481.53Foreign exchange derivatives of the Finance

Company–629,666.942,413,311.00

Section VIII Financial Report

Various balances of the Company and the Finance Company are as follows:

Items

Amount forthe current

period

Amount forthe previous

periodInterest income of the FinanceCompany411,893,046.61439,523,818.78Interest expense of the FinanceCompany14,237,380.91Service fee of the Finance Company4,336,109.254,425,427.95Spot foreign exchange business

(foreign exchange settlement andsale)3,239,292,158.452,455,313,888.20

(2) The lease expense of the Company and its subsidiaries for production and operation

leased from related parties for the current period was RMB30 million (amount for thecorresponding period: RMB57 million).

(3) Haier Group Corporation provided joint liability guarantee for certain bills payable of

the subsidiaries of the Company with the guaranteed amount of RMB1,789 million atthe end of the period (amount at the beginning of the period: RMB2,182 million).

(4) The Company’s subsidiary, Haier Pakistan (Private) Limited, has a loan balance of

RMB497 million from its related party, HNR Private Limited.(IV) Pricing Policy

1. Related-party Sales

Some related parties purchase components through the independent procurement platformof the Company, purchase electrical appliances for sales from the Company, and receiveafter-sales services, R&D service, housing rental and other business provided by thecompany due to their business needs. In April 2022, according to the implementation ofconnected transactions in the early stage and the relevant listing requirements in HongKong, the Company and Haier Group Corporation revised and signed the Product andMaterials Sales Framework Agreement, the Service Provision Framework Agreement and theProperty Leasing Framework Agreement on the basis of the original execution contract,which agreed on the financial connected transactions. The pricing principle included thatboth parties should agree on the price which is not less favourable than those provided bythe Company to the Independent Third Parties on arm’s length to ensure the fairness andreasonableness of connected transactions. The valid term of the agreement commencedfrom 1 January 2023 to 31 December 2025, which can be renewed for another three yearsupon expire.

Section VIII Financial Report

2. Related-party Procurement

In addition to independent procurement platform, the Company entrusted Haier GroupCorporation and its subsidiaries for procurements of part of raw materials. Moreover, theCompany entrusted Haier Group Corporation and its subsidiaries to provide the Companywith logistics and distribution, energy and power, basic research and testing, equipmentleasing, house leasing and maintenance, greening and cleaning, gift procurement, design,consulting, various ticket booking and other services. In April 2022, according to theimplementation of connected transactions in the early stage and the relevant listingrequirements in Hong Kong, the Company and Haier Group Corporation revised and signedthe Product and Materials Sales Framework Agreement, the Service Provision FrameworkAgreement and the Property Leasing Framework Agreement on the basis of the originalexecution contract, which agreed on the financial connected transactions. The pricingprinciple included that both parties should agree on the price which is not less favourablethan those provided by the Company to the Independent Third Parties on arm’s length toensure the fairness and reasonableness of connected transactions. The valid term of theagreement commenced from 1 January 2023 to 31 December 2025, which can berenewed for another three years upon expire.

3. Financial aspect

Some of the financial services such as deposit and loan service, discounting service andforeign exchange derivatives needed by the Company are provided by Haier GroupCorporation, its subsidiaries and other companies. According to the Financial ServiceAgreement entered among the Company, Haier Group Corporation and other parties, theprice of financial services is determined by the principle of not less favourable than marketvalue fair. The Company is entitled to decide whether to keep cooperation relationship withthem with the knowledge of the price prevailing in the market and in combination with itsown interests. While performing the agreement, the Company could also require otherfinancial service institutions to provide related financial services basing on actual situation.In order to meet the Company’s demands such as the avoidance of foreign exchangefluctuation risk, the Company may choose Haier Group Finance Co., Ltd. to provide someforeign exchange derivative business after comparing with comparable companies. TheCompany will uphold the safe and sound, appropriate and reasonable principle, underwhich all foreign exchange capital business shall have a normal and reasonable businessbackground to eliminate speculative operation. At the same time, the Company hasspecified the examination and permission rights, management positions and responsibilitiesat all levels for its foreign exchange capital business to eradicate the risks of operation bypersons and improved its response speed to risks on the premise that the risks areeffectively controlled. In March 2023, the Company and Haier Group Corporation renewedthe Financial Services Framework Agreement, which agreed on the financial connectedtransactions. The pricing principle included the deposit interest rate not lower than themaximum interest rate of major banks listed and the loan interest rate not less favourablethan the market price to ensure the fairness and reasonableness of connected transactions.The valid term of the agreement lasts until 31 December 2026, which can be renewed foranother three years upon expire.

Section VIII Financial Report

4. Others

The Company signed the Intellectual Property Licensing Framework Agreement with HaierGroup Corporation in November 2020. According to the agreement, Haier Group hasagreed to grant or procure its subsidiaries and contact persons to grant the license to theCompany at nil consideration to use all its intellectual property rights, including but notlimited to trademarks, patents, copyrights and logos for the products, packaging, servicesand business introduction documents of the Company. The date of the Intellectual PropertyLicensing Framework Agreement shall be permanently effective from the listing date. Whensuch specific intellectual property rights expire and are not renewed by Haier Group, ourright to use certain intellectual property rights under the Intellectual Property LicensingFramework Agreement will terminate.XIV. SHARE-BASED PAYMENTS

1. Equity instruments

(1) Details

√ Applicable Not Applicable

Unit of number: shares Unit and Currency of Amount: RMB

Granted during the periodExercised during the periodVested during the periodLapsed during the periodCategories of

participantsNumberAmountNumberAmountNumberAmountNumberAmountDirectors and senior

management956,512.0019,873,999.82171,547.003,909,858.591,114,664.008,878,280.27Staff6,370,513.00132,363,811.65777,372.0017,717,678.5034,254,021.00283,222,451.28Total7,327,025.00152,237,811.46948,919.0021,627,537.0935,368,685.00292,100,731.55

(2) Outstanding share options or other equity instruments at the end of the period

√ Applicable Not Applicable

Outstanding share options at the end of the periodOutstanding other equity instruments at the end of the periodShare-based payment itemsExercise price

The remaining

contractual termExercise price

The remaining

contractual term2021 First OptionRMB25.63 per shareSeptember 2021—September20262021 Second OptionRMB25.63 per shareDecember 2021—December20262022 OptionRMB23.86 per shareJune 2022— June 20262023 Stock Ownership Plan AN/AJuly 2023— July 20252023 Stock Ownership Plan HN/AJuly 2023— July 20252024 Stock Ownership Plan AN/AAugust 2024— August 20262024 Stock Ownership Plan HN/AAugust 2024— August 20262023 Restricted SharesN/AJuly 2023- June 20262024 Restricted SharesN/AJune 2024- May 20272025 Restricted SharesN/AJune 2025- June 2028

Section VIII Financial Report

2. Equity-settled share-based payments

√ Applicable Not Applicable

Unit and Currency: RMB’00,000,000Method of determining the fair value of equityinstrument on the date of grant

Closing price of share on the date of grant,Black-Scholes ModelImportant parameters of the fair value of

equity instrument on the date of grant

Historical volatility rate, risk-free rate, yieldrateBasis for determining the number ofexercisable equity instruments

The best estimate of the managementReason for significant differences betweencurrent and prior period estimates

NilAccumulated amount of equity-settled share-based payment included in the capitalreserve

RMB13.06

3. Cash-settled share-based payments

Applicable √ Not Applicable

4. Share-based payments for the current period

√ Applicable Not Applicable

Unit and Currency: RMB

Categories of participants

Equity-settledshare-based

payment

Cash-settledshare-based

paymentDirector, Senior management37,348,957.05Staff183,724,982.34Total221,073,939.39

5. Modification and termination of share-based payments

Applicable √ Not Applicable

Section VIII Financial Report

XV. CONTINGENCIESAs of 28 August 2025, the Company has no significant contingencies that need to be disclosed.XVI. EVENTS AFTER THE BALANCE SHEET DATEAccording to the resolution of the 2nd meeting of the 12th session of the Board of Directors of theCompany held on 28 August 2025, the profit for the period is proposed to be distributed on the basisof the total number of shares on the record date after deducting the repurchased shares from therepurchased account when the plan is implemented in the future, the Company will declare cashdividend of RMB2.69 (including taxes) for every 10 shares to all shareholders.XVII. RISKS RELATED TO FINANCIAL INSTRUMENTS

√ Applicable Not Applicable

The book value of various financial instruments on the balance sheet date is as follows:

Financial assetsItemsClosing Balance

Financial assetsmeasured at fair

value andchanges of which

included incurrent profit and

loss

Measured atamortized cost

Financial assetsmeasured at fairvalue andchanges of whichincluded in othercomprehensive

incomeTotalMonetary funds55,357,102,536.8255,357,102,536.82Financial assets held for trading8,815,448,315.628,815,448,315.62Derivative financial assets79,365,117.4079,365,117.40Bills receivable6,907,611,901.396,907,611,901.39Accounts receivable31,125,796,665.7031,125,796,665.70Financing receivables1,248,197,448.341,248,197,448.34Other receivables4,228,793,070.444,228,793,070.44Non-current assets due within one year2,307,574,005.862,307,574,005.86Other current assets115,221,674.82115,221,674.82Debt investments14,590,918,331.4214,590,918,331.42Long-term receivables139,022,168.65139,022,168.65Other equity instruments5,650,156,251.255,650,156,251.25

Section VIII Financial Report

Financial assets (continued)ItemsOpening Balance

Financial assetsmeasured at fairvalue andchanges of whichincluded incurrent profit and

loss

Measured atamortized cost

Financial assetsmeasured at fairvalue andchanges of whichincluded in othercomprehensive

incomeTotalMonetary funds55,597,554,622.8355,597,554,622.83Financial assets held for trading1,236,017,839.531,236,017,839.53Derivative financial assets142,709,716.91142,709,716.91Bills receivable12,179,856,870.0112,179,856,870.01Accounts receivable26,494,845,510.5626,494,845,510.56Financing receivables412,922,615.25412,922,615.25Other receivables3,601,357,495.023,601,357,495.02Other current assets491,724,709.59491,724,709.59Non-current assets due within one year1,439,758,652.551,439,758,652.55Debt investments15,474,759,856.9915,474,759,856.99Long-term receivables224,724,107.31224,724,107.31Other equity instruments6,073,680,870.826,073,680,870.82Financial liabilities

ItemsClosing Balance

Financialliabilitiesmeasured at fair

value

Financialliabilitiesmeasured atamortised costTotalShort-term borrowings16,127,614,637.2416,127,614,637.24Derivative financial liabilities440,096,398.09440,096,398.09Bills payable25,408,488,465.9925,408,488,465.99Accounts payable53,257,299,256.5553,257,299,256.55Other payables30,240,547,430.9130,240,547,430.91Non-current liabilities due in one year6,926,553,073.516,926,553,073.51Long-term borrowings10,595,616,602.8710,595,616,602.87Bond payables3,500,000,000.003,500,000,000.00Long-term payables138,177,568.54138,177,568.54

Section VIII Financial Report

Financial liabilities (continued)ItemsOpening Balance

Financialliabilitiesmeasured at fair

value

Financialliabilitiesmeasured atamortised costTotalShort-term borrowings13,784,367,443.9313,784,367,443.93Derivative financial liabilities71,011,310.0171,011,310.01Bills payable21,220,364,311.8121,220,364,311.81Accounts payable54,665,277,420.3254,665,277,420.32Other payables21,746,135,764.0821,746,135,764.08Non-current liabilities due in one year12,389,280,182.9812,389,280,182.98Long-term borrowings9,665,074,313.679,665,074,313.67Long-term payables188,220,056.59188,220,056.59Please refer to related items in Note VII for details on each of the financial instruments of theCompany. Risks related to these financial instruments and the risk management policies taken by theCompany to mitigate these risks are summarized below. The management of the Company managesand monitors these risk exposures to ensure the above risks are well under control.

1. Credit risk

The credit risk of the Company mainly arises from bank deposits, bills receivable, accountsreceivable, interest receivable, other receivables and wealth management products.

(1) The Company’s bank deposits and wealth management products are mainly deposited in

Haier Finance Co., Ltd., state-owned banks and other large and medium-sized listed banks.The interest receivables are mainly the accrued interests from fixed deposits which aredeposited in the above banks. The Group does not believe there is any significant creditrisk due to defaults of its counterparties which would cause any significant loss. (2)Accounts receivable and bills receivable: The Company only trades with approved andreputable third parties. All customers who are traded by credit are subject to creditassessment according to the policies of the Company, and the payment terms shall bedetermined on a reasonable basis. The Company monitors the balances of accountsreceivable on an ongoing basis and purchases credit insurance for receivables oflarge-amount credit customers in order to ensure the Company is free from material baddebts risks. (3) Other receivables of the Company mainly include export tax refund,borrowings and contingency provision. The Company strengthened its management andcontinuous monitoring in respect of these receivables and relevant economic businessbased on historical data, so as to ensure that the Company’s significant risk of bad debtsis controllable and will be further reduced.

Section VIII Financial Report

2. Liquidity risk

Liquidity risk is the risk that an enterprise may encounter deficiency of funds in fulfillingobligations associated with financial liabilities. To control such risk, the Company utilizes variousfinancing methods such as notes settlement and bank loans to strive for a balance betweensustainable and flexible financing. It also has obtained bank credit facilities from severalcommercial banks to satisfy its needs for working capital and capital expenditures.

3. Exchange rate risk

The Company’s businesses are based in mainland China, USA, Japan, Southeast Asia, SouthAsia, central and east Africa, Europe, and Australia, etc. and are settled in RMB, USD, and othercurrencies.The Company’s overseas assets and liabilities denominated in foreign currencies as well astransactions to be settled in foreign currencies expose the Company to fluctuations in exchangerates. The Company’s finance department is responsible for monitoring the size of transactions inforeign currencies and assets and liabilities denominated in foreign currencies to minimize the riskof exposure to fluctuation in exchange rate; the Company resorts the way of signing forwardforeign exchange contracts to avoid the risk of exchange fluctuation.

4. Interest rate risk

The Company’s interest rate risk arises primarily from its long- and short- term bank loans andbonds payables which are interest-bearing debts. Financial liabilities with floating interest ratesexpose the Company to cash flow interest rate risk, while financial liabilities with fixed interestrates expose the Company to fair value interest rate risk. The Group determines the relativeproportion of fixed-interest rate and floating interest rate contracts in light of the prevailing marketconditions.XVIII. OTHER SIGNIFICANT EVENTSAs of 28 August 2025, the Company has no other significant events that need to be disclosed.

Section VIII Financial Report

XIX.NOTES TO MAIN ITEMS OF FINANCIAL STATEMENTS OF THE PARENTCOMPANY

1. Accounts receivable

Aging

ClosingBalance

OpeningBalanceWithin 1 year693,244,700.84467,689,337.45

–2 years628,512,946.09714,128,728.58

–3 years639,447,810.65378,071,982.79Over 3 years586,003,840.60529,373,541.54Accounts receivable balance2,547,209,298.182,089,263,590.36Allowance for bad debtsNet accounts receivable2,547,209,298.182,089,263,590.36Changes in bad debt provision for accounts receivable in the current period:

Items

OpeningBalance

Increase for the current

period

Decrease for the current

period

ClosingBalanceProvision for

the current

period

OtherincreaseReversal

Write-off and

othermovementAllowance for baddebts

2. Other receivables

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing BalanceOpening BalanceInterest receivable66,600,316.50137,951,583.62Dividend receivable3,615,317,738.91955,746,044.23Other receivables58,557,152,555.1734,215,510,473.88Total62,239,070,610.5835,309,208,101.73

Section VIII Financial Report

Interest receivable

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing BalanceOpening BalanceWithin 1 year30,639,716.2770,005,254.26More than 1 year35,960,600.2367,946,329.36Total66,600,316.50137,951,583.62Dividend receivable

√ Applicable Not Applicable

Unit and Currency: RMBItemsClosing BalanceOpening BalanceWithin 1 year2,659,571,694.68385,746,044.23More than 1 year955,746,044.23570,000,000.00Total3,615,317,738.91955,746,044.23Other receivables

The disclosure of other receivables by aging is as follows:

AgingClosing BalanceOpening BalanceWithin 1 year48,546,317,312.8523,315,358,021.45More than 1 year10,014,901,515.6910,903,518,725.80Other receivables balance58,561,218,828.5434,218,876,747.25Allowance for bad debts4,066,273.373,366,273.37Net other receivables58,557,152,555.1734,215,510,473.88 Changes in bad debt provision for other receivables in the current period:

Increase for the current

period

Decrease for the current

periodItems

OpeningBalance

Provision for

the current

period

OtherincreaseReversal

Write-off and

othermovement

ClosingBalanceAllowance for baddebts3,366,273.37700,000.004,066,273.37

Section VIII Financial Report

3. Long-term equity investment

√ Applicable Not Applicable

(1) Details of long-term equity investments:

Closing BalanceOpening BalanceItemsBook balance

Provision for

impairmentBook balance

Provision for

impairmentLong-term equity investmentIncluding: Long-term equity investments in

subsidiaries59,214,568,571.827,100,000.0059,022,876,043.317,100,000.00Long-term equity investments inassociates3,477,408,814.49109,300,000.003,287,178,712.86109,300,000.00Total62,691,977,386.31116,400,000.0062,310,054,756.17116,400,000.00

(2) Long-term equity investments to subsidiaries

Name of investee

Opening

Balance

Increase/Decrease

for the periodClosing Balance

Impairment

provisions

at the endof the periodI. Subsidiaries:

Chongqing Haier Electronics Sales Co., Ltd.9,500,000.009,500,000.00Haier Group (Dalian) Electrical Appliances

Industry Co., Ltd34,735,489.7934,735,489.79Qingdao Haier Refrigerator Co., Ltd.402,667,504.64402,667,504.64Qingdao Haier Special Refrigerator Co.,

Ltd.426,736,418.99426,736,418.99Qingdao Haier Information Plastic

Development Co., Ltd.102,888,407.30102,888,407.30Dalian Haier Precision Products Co., Ltd.41,836,159.3341,836,159.33Hefei Haier Plastic Co., Ltd.72,350,283.2172,350,283.21Qingdao Haier Technology Co., Ltd.16,817,162.0316,817,162.03Qingdao Household Appliance Technology

and Equipment Research Institute66,778,810.8066,778,810.80Qingdao Meier Plastic Powder Co., Ltd.24,327,257.7724,327,257.77Chongqing Haier Precision Plastic Co., Ltd.47,811,283.2447,811,283.24Qingdao Haier Electronic Plastic Co., Ltd.69,200,000.0069,200,000.00Dalian Haier Refrigerator Co., Ltd.138,600,000.00138,600,000.00Dalian Haier Air-conditioning Co., Ltd.99,000,000.0099,000,000.00COSMOPlat Mould (Qingdao) Co., Ltd.53,324,428.5153,324,428.51Hefei Haier Air-conditioning Co., Limited79,403,123.8579,403,123.85Qingdao Haier Refrigerator (International)

Co., Ltd.238,758,240.85238,758,240.85Qingdao Haier Air-Conditioner Electronics

Co., Ltd.1,131,107,944.511,131,107,944.51Qingdao Haier Air Conditioner Gen Corp.,

Ltd.220,636,306.02220,636,306.02Qingdao Haier Special Freezer Co., Ltd.471,530,562.76471,530,562.76

Section VIII Financial Report

Name of investee

Opening

Balance

Increase/Decrease

for the periodClosing Balance

Impairment

provisions

at the endof the periodQingdao Haier Dishwasher Co., Ltd.206,594,292.82206,594,292.82Wuhan Haier Freezer Co., Ltd.47,310,000.0047,310,000.00Wuhan Haier Electronics Holding Co., Ltd.100,715,445.04100,715,445.04Chongqing Haier Air-conditioning Co., Ltd100,000,000.00100,000,000.00Hefei Haier Refrigerator Co., Ltd.49,000,000.0049,000,000.00Qingdao Haier Whole Set Home ApplianceService Co., Ltd.118,000,000.00118,000,000.00Chongqing Haier Refrigeration Appliance

Co., Ltd.91,750,000.0091,750,000.00Haier Shanghai Zhongzhi Fang Chuang Ke

Management Co., Ltd.2,000,000.002,000,000.00Qingdao Haier Special Refrigerating

Appliance Co., Ltd.100,000,000.00100,000,000.00Haier Shareholdings (Hong Kong) Limited35,448,380,641.24138,368,100.0035,586,748,741.24Shenyang Haier Refrigerator Co., Ltd.100,000,000.00100,000,000.00Foshan Haier Freezer Co., Ltd.100,000,000.00100,000,000.00Zhengzhou Haier Air-conditioning Co., Ltd.100,000,000.00100,000,000.00Qingdao Haidayuan Procurement Service

Co., Ltd.20,000,000.0020,000,000.00Qingdao Haier Intelligent Technology

Development Co., Ltd.130,000,000.00130,000,000.00Qingdao Haier Technology Investment Co.,

Ltd.410,375,635.00410,375,635.00Qingdao Casarte Smart Living Appliances

Co., Ltd.10,000,000.0010,000,000.00Haier Overseas Electric Appliance Co., Ltd.500,000,000.00500,000,000.00Haier (Shanghai) Electronics Co., Ltd.12,500,000.0012,500,000.00Haier U+smart Intelligent Technology

(Beijing) Co., Ltd.143,000,000.00143,000,000.00Haier Electronics Group Co., Ltd.3,979,407,602.613,979,407,602.617,100,000.00Flourishing Reach Limited (SPVX)12,751,300,336.0212,751,300,336.02Qingdao Haidarui Procurement Service Co.,

Ltd.107,800,000.00107,800,000.00Qingdao Haier Intelligent Household

Appliances Co., Ltd.326,400,000.00326,400,000.00Qingdao Haidacheng Procurement Service

Co., Ltd.100,000,000.00100,000,000.00Qingdao Haier Quality Inspection Co., Ltd.18,657,135.4918,657,135.49Qingdao Haier Home AI Industry Innovation

Center Co., Ltd.100,000,000.00100,000,000.00Haier Zhjia Experience Cloud Ecological

Technology Co., Ltd.100,000,000.00100,000,000.00Qingdao Ruibo Ecological Environmental

Technology Co., Ltd.55,000,000.0055,000,000.00Total59,022,876,043.31191,692,528.5159,214,568,571.827,100,000.00

Section VIII Financial Report

(3) Long-term equity investments to associates

Increase/Decrease for the current periodName of investeeOpening Balance

Increased/

decreasedamount for thecurrent period

Investmentincomerecognized underequity methodOthersClosing Balance

Impairmentprovisions at theend of the periodWolong Electric (Jinan)

Motor Co., Ltd.193,369,088.8514,593,823.15–15,000,000.00192,962,912.00Qingdao Haier SAIF Smart

Home IndustryInvestment Center(Limited Partnership)191,276,594.86191,276,594.86Bank of Qingdao Co., Ltd.1,375,893,627.6188,115,757.7627,197,537.581,491,206,922.95Mitsubishi Heavy Industries

Haier (Qingdao)Air-conditioners Co.,Ltd.698,845,993.6171,576,418.84770,422,412.45Qingdao Haier Carrier

Refrigeration EquipmentCo., Ltd.416,283,326.981,089,446.19417,372,773.1721,000,000.00Qingdao Haier MultimediaCo., Ltd88,300,000.0088,300,000.0088,300,000.00Qingdao HBIS New

Material TechnologyCo., Ltd.323,210,080.956,843,983.51–4,186,865.40325,867,199.06Total3,287,178,712.86182,219,429.458,010,672.183,477,408,814.49109,300,000.00

4. Operating revenue and operating cost

√ Applicable Not Applicable

Unit and Currency: RMB

Amount for the current periodAmount for the previous periodItemRevenueCostRevenueCostPrimary Business412,412,887.84388,616,965.82209,681,355.52183,992,284.05Other Business41,377,431.5233,009,861.5241,920,259.2439,451,949.45Total453,790,319.36421,626,827.34251,601,614.76223,444,233.50

Section VIII Financial Report

5. Investment income

√ Applicable Not Applicable

Unit and Currency: RMB

Items

Amount forthe current

period

Amount forthe previous

periodInvestment income from long-term equity

investment accounted for using cost method2,659,571,694.68302,819,744.23Long-term equity investments income calculated

by the equity method182,219,429.45180,476,867.12Income from wealth management products29,446,717.5224,878,729.85Investment income from investment in other equity

instrument during the holding period322,683.64Total2,871,560,525.29508,175,341.20XX. APPROVAL OF FINANCIAL REPORTThis financial report was approved for publication by the Board of Directors of the Company on28 August 2025.

XXI. OTHER SUPPLEMENTARY INFORMATION

1. Basic earnings per share and diluted earnings per share

Amount for the current periodAmount for the previous period

Earnings per share

(RMB)

Earnings per share

(RMB)Items

Weighted

averagereturn onnet assets

Basicearningsper share

Dilutedearningsper share

Weighted

averagereturn onnet assets

Basicearningsper share

Dilutedearningsper shareNet profit attributable to ordinary

shareholders of the Company10.34%1.301.299.82%1.131.12Net profit attributable to ordinary

shareholders of the Company

after deduction of non-recurring

profit or loss10.05%1.271.269.43%1.101.09

Section VIII Financial Report

2. Non-recurring profit or loss

√ Applicable Not Applicable

Unit and Currency: RMBItemsAmountProfit or loss from disposal of non-current assets,including the write-off of provision for asset impairment–25,721,740.02Government subsidies included in current profit or loss,except for government subsidies that are closely relatedto the Company’s normal business operations,conformed to requirements of state policies andgranted according to specific criteria, and have asustained impact on the Company’s profit or loss511,165,290.49Profit or loss arising from changes in fair value of financialassets and financial liabilities held by non-financialentities, and profit or loss arising from disposal offinancial assets and financial liabilities, except foreffective hedging activities related to the Company’snormal business operations57,589,058.88Net profit or loss of subsidiaries arising from businesscombinations under common control of the currentperiod from the beginning of the period to the date ofconsolidation3,593,306.97Other non-operating income and expenses except the

aforementioned items–121,916,440.93Less: Effect of income tax–70,186,916.68Effect of minority equity interest (After Tax)–23,935,295.14Total330,587,263.57

Section VIII Financial Report

For the Company’s recognition of items that are not listed in the “Explanatory Announcement onInformation 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 issignificant, and for non-recurring profit or loss items as illustrated in the “ExplanatoryAnnouncement on Information Disclosure for Companies Offering Their Securities to the PublicNo.1—Non-recurring Profit or Loss” designated as recurring profit or loss items, reasons shallbe specified. Applicable √ Not Applicable

Haier Smart Home Co., Ltd.

Chairman: LI Huagang28 August 2025Information of amendment Applicable √ Not Applicable