Company Code：600690 Short Name：Haier Smart Home

Haier Smart Home Co. Ltd.2025 Annual Report

Haier Smart Home Co. Ltd. Annual Report 2025Important Notice

I. The Board of Directors directors and senior management of Haier Smart Home Co. Ltd. (the

“Company”) hereby assure that the content set out in the annual report is true accurate and

complete and free from any false record misleading representation or material omission and

are individually and collectively responsible for the content set out therein.II. All Directors of the Company have attended the board meetings.III. Hexin Certified Public Accountants Limited LLP has issued a standard and unqualified audit

report for the Company.IV. Li Huagang (legal representative of the Company) Sun Jiacheng (chief financial officer of the

Company) and Ying Ke (the person in charge of accounting department) hereby certify that

the financial report set out in the annual report is true accurate and complete.V. Proposal of profit distribution or proposal of capitalizing capital reserves for the reporting

period resoluted and adopted by the Board

Proposal of profit distribution for the reporting period are examined and reviewed by the Board: to

declare a cash dividend of RMB8.867 per 10 shares (tax inclusive) to all shareholders based on the

total number of shares held on record date and after deducting the repurchased shares from the

repurchase account upon the execution of distribution proposal with proposed distribution amounting

to RMB8248280749.27 (tax inclusive). Together with the 2025 interim dividend The proportion of

cash distribution is 55.0% of the net profit attributable to shareholder of parent company of the

Company for the year. If there is any change in the total share capital of the Company during the

period from the date of this report to the record date of the equity distribution the total distribution

amount will be remained unchanged with corresponding adjustment to the proportion of distribution per

share.As of the end of the reporting period the parent company had accumulated losses that had not been

offset and the impact on matters such as the Company’s dividend distribution.□ Applicable √ Not Applicable

VI. Disclaimer in respect of forward-looking statements

√ Applicable □ Not Applicable

Forward-looking statements such as future plans development strategies as set out in this report do

not constitute the Company’s substantial commitment to investors. Investors are advised to pay

attention to investment risks.VII. Is there any fund occupation by controlling shareholders and other related parties for

non-operational purposes

No

Haier Smart Home Co. Ltd. Annual Report 2025 1Important Notice

VIII. Is there any provision of external guarantee in violation of the prescribed decision-making

procedures

No

IX. Are there more than half of the Directors who are unable to guarantee the truthfulness

accuracy and completeness of the annual report disclosed by the Company

No

X. Important Risk Warnings

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

out in the section of ‘MANAGEMENT DISCUSSION AND ANALYSIS’ in this report.XI. Others

□ Applicable √ Not Applicable

Chairman of the Board: Li Huagang

Haier Smart Home Co. Ltd

26 March 2026

2 Haier Smart Home Co. Ltd. Annual Report 2025Contents

CONSUMER FIRST. EMBRACING CHANGE. FORGING A SUSTAINABLE FUTURE. 4

SECTION I DEFINITIONS 9

SECTION II GENERAL INFORMATION OF THE COMPANY AND KEY FINANCIAL INDICATORS 11

SECTION III MANAGEMENT DISCUSSION AND ANALYSIS 19

SECTION IV CORPORATE GOVERNANCE ENVIRONMENT AND SOCIETY 75

SECTION V SIGNIFICANT EVENTS 120

SECTION VI CHANGES IN SHARES AND INFORMATION ABOUT SHAREHOLDERS 138

SECTION VII RELEVANT INFORMATION OF BONDS 151

SECTION VIII FINANCIAL REPORT 155

(I) Financial statements with signatures and seals of the legal representative

chief accountant and person in charge of accounting department

DOCUMENTS (II) Original audit report with seals of accounting firm signatures and seals of

AVAILABLE FOR registered accountants

INSPECTION

(III) Originals of all documents and announcements of the Company which have

been publicly disclosed on the newspaper designated by China Securities

Regulatory Commission during the reporting period

Haier Smart Home Co. Ltd. Annual Report 2025 3CONSUMER FIRST. EMBRACING CHANGE.FORGING A SUSTAINABLE FUTURE.— LETTER TO SHAREHOLDERS

Dear Shareholders

As I reflect on 2025 it stands out as one of the most challenging business environments in our

company’s history — and one in which Haier Smart Home proved its resilience. Shifting trade

policies and rising protectionism disrupted supply chains and made overseas markets harder to navigate

while regional conflicts added further uncertainty. On the demand side high interest rates and cost

pressures weighed on U.S. consumption European recovery remained sluggish and in China a soft

property market and fading appliance subsidies put downward pressure on demand and pricing.We delivered solid results with meaningful progress in 2025 driven by the contributions of 130000

employees across our global operations. In North America a challenging trade environment pressured

operating performance. Across our other markets however we gained share strengthened our competitive

position — even after absorbing significant disruption costs.Record Revenue and Earnings in 2025

In 2025 Haier Smart Home’s global revenue surpassed RMB300 billion for the first time reaching

RMB302.35 billion an increase of 5.71% year-on-year. Net profit attributable to shareholders of the parent

company reached RMB19.55 billion up 4.39% year-on-year. Under PRC GAAP net profit attributable to

shareholders — excluding non-recurring items — totaled RMB18.60 billion a 4.49% year-on-year increase.Net cash generated from operating activities in 2025 amounted to RMB26.00 billion equivalent to 1.33 times

net profit.In China our leadership in core categories held firm: we held offline market shares of 47.7% (GfK) in

refrigerators 47.4% (GfK) in washing machines and 32.5% in water heaters. Air conditioning performed

strongly with online market share rising 0.6 percentage points and offline share rising 1.8 percentage

points and domestic revenue growing at a double-digit rate.We continued to transform our distribution and supply chain model — connecting dealers directly to retail

outlets delivering service directly to consumers and rolling out a centralized distribution model that now

accounts for 57% of total shipments. These initiatives shortened the path from factory to consumer with

domestic inventory turnover improving year-on-year.Turning to our international business — which I see as the long-term growth engine of this company — our

goal is to bring Haier into every home everywhere. We invest in global platforms for R&D and market

operations to strengthen local competitiveness and deliver exceptional products and reliable service at every

touchpoint.In the United States we maintained the #1 industry position for the fourth consecutive year. Against a

declining market our premium brand delivered 7% revenue growth. The Air & Water Solutions sector

delivered double-digit revenue growth emerging as a meaningful contributor.In Europe we streamlined regional management layers to bring headquarters and local teams into direct

alignment operating side by side with shared objectives and enabling faster market response. In 2025 white

goods revenue grew at a double-digit rate average selling prices improved by more than 10% and

profitability rose substantially.

4 Haier Smart Home Co. Ltd. Annual Report 2025CONSUMER FIRST. EMBRACING CHANGE.

FORGING A SUSTAINABLE FUTURE.In South Asia unfavorable weather conditions held back air conditioning demand. Nonetheless we grew

revenue by 15%—among the fastest-growing brands in the market — by strengthening our brand presence

introducing premium products such as large-drum washing machines and accelerating penetration into chain

retail channels. In Pakistan revenue grew over 30% with our market share in refrigerators washing

machines and air conditioners exceeding 40%.In Southeast Asia we launched bestselling products from our China portfolio — including the L+ washing

machine the Mailang refrigerator and the AI Voice air conditioner — and expanded our retail footprint

through integrated online-offline channels. We achieved the #1 white goods sales position across key

markets such as Vietnam and Thailand.We enter new categories and markets through disciplined acquisitions — but closing a deal is only the

beginning. Our cross-border M&A experience and global operating platform enable acquired businesses to

ramp quickly. Carrier Commercial Refrigeration (CCR) in its first full operating year had to transition off

shared services (TSA) build standalone capabilities and overhaul operations simultaneously. Through our

RenDanHeYi approach CCR achieved double-digit revenue growth with 16% growth in Asia-Pacific well

ahead of the industry. Kwikot our South African water heater business also completed its first full year

delivering 10% profit growth versus pre-acquisition levels and a pre-tax margin of 12% while expanding into

solar water heaters water purifiers and air conditioners. These results reinforce my conviction that

disciplined M&A will remain a key lever for growth.Co-Creating with Consumers Redefining Value

Looking ahead the global trade landscape has fundamentally changed. Evolving trade policies are making it

harder to optimize supply chains for efficiency and geopolitical uncertainty is prompting companies to

prioritize supply chain resilience. These dynamics will weigh on returns on capital and drive consolidation

ultimately leading to a new market balance. I believe we are still in the middle-to-late stages of that

adjustment. The number of global appliance players is shrinking with some retreating to their home markets.At the same time the industry is being reshaped by new technologies and consumers favor innovation and

technology-driven products. Over the long term Haier Smart Home’s global product innovation and

operating platform is a durable competitive advantage helping us earn the trust of more consumers

worldwide.The value our platform creates ultimately comes from one source: the consumer. We must turn them into

co-creators so that hit products that deliver exceptional value become the rule rather than the exception —

earning lasting consumer preference — the best antidote to price wars and commoditization. Put simply:

move up the value chain by exceeding consumer expectations and build hit products while driving efficiency

at every step.A case in point is our Leader brand’s Effortless three-drum washing machine which became an industry

standout in 2025. As the world’s first three-drum washer it sold over 10000 units within 48 minutes of

launch and surpassed RMB100 million in retail sales within 16 hours going on to sell over 300000 units for

the full year — the #1 single model in the industry. Within six months it expanded from a single SKU into a

full product family spanning a full range of laundry care needs. Behind this success was deep consumer

participation: from design and structure to features — even the “Effortless Wash” name itself came from

consumers. They were not observers but co-creators and after launch they became our most effective

advocates.Haier Smart Home Co. Ltd. Annual Report 2025 5CONSUMER FIRST. EMBRACING CHANGE.FORGING A SUSTAINABLE FUTURE.Our Mailang refrigerator series followed the same playbook. As a warm-toned refrigerator cumulative sales

exceeded one million units with the model holding the #1 position in the RMB8000-and-above premium

segment. The color palette product name and features were all shaped through co-creation with

consumers. When consumers said they wanted a refrigerator that “just feels right” we responded with warm

tones. When they wanted a more inviting atmosphere for the beverage zone we developed an illuminated

shelf with three ambient modes — Stage Surprise and Twilight.In 2026 we will build a scalable repeatable system for developing hit products — one that works across

product lines and markets. It all starts with one thing: staying focused on what matters most —

understanding what consumers need developing products with single-minded focus and refining every

detail. In resource allocation we concentrate our efforts on the highest-impact opportunities and remain

disciplined about what we choose not to do. Organizationally every function will align around a shared

objective: from consumer insight to product definition from R&D breakthroughs to market launch every step

serves one goal: the next hit product. Through a sustained cadence of hit products we aim to shape how

consumers perceive our brand.Reshaping Our Organization Embracing the AI Opportunity

Despite the headwinds Haier’s years of proven global operating experience and our shared

platforms in R&D supply chain logistics and service give me confidence that we can capture

substantial growth ahead. I see three clear drivers: steady high-quality growth in smart home

appliances; rapid expansion and margin improvement in HVAC; and AI-driven opportunities to

deepen consumer engagement and transform how we organize and operate.Smart Home Appliances: Room to Grow Globally. Our smart home appliance business spans

refrigerators washing machines kitchen appliances and other white goods. Globally we hold strong

positions in the Americas Australasia and Europe but our international market share still has room to grow

compared with China and profitability varies significantly across regions. The 2025 restructuring of our

European operations has already delivered a significant improvement in operating efficiency. Australasia also

presents substantial margin expansion potential. In South Asia market conditions are exceptionally favorable:

India has the potential to become our third-largest market after China and the U.S. Southeast Asia carries

strong momentum. Product offerings there historically lagged our China portfolio by several generations but

the success of our Effortless three-drum washer shows that products from our China-led global R&D

platform resonate strongly in emerging markets. Turning to the U.S. as supply chain adjustments progress

we expect the operating environment to improve gradually.HVAC: From One-Quarter Toward One-Half of Company Revenue. In 2025 we consolidated our

residential air conditioning smart building and water solutions businesses into a unified HVAC division. This

was a strategic integration not a simple reorganization. Externally customers now deal with a single team

and can access comprehensive solutions spanning air and water management for the entire home rather

than standalone products — deepening customer relationships and increasing revenue per customer.Internally R&D supply chain and channel resources now serve unified objectives and the overlapping

investments that naturally arose from three separate businesses are being steadily consolidated.

6 Haier Smart Home Co. Ltd. Annual Report 2025CONSUMER FIRST. EMBRACING CHANGE.

FORGING A SUSTAINABLE FUTURE.Our HVAC business currently accounts for roughly one-quarter of Company revenue a share we expect to

grow to one-third or even close to half over time. This is a global opportunity: we see significant growth

potential in Europe South and Southeast Asia and the Americas. In commercial applications integrated

cooling and heating solutions enable us to deliver greater value per customer. We will invest significantly in

channels technology and the capabilities to deliver integrated solutions.Artificial Intelligence: From Tools to Proactive Helpers. Haier Smart Home is committed to being an

early mover in applied AI — not just to improve processes but to rethink how our organization works from

the ground up. On the consumer-facing side traditional smart home connectivity models may be disrupted

as AI-powered intelligent agents combined with Haier’s vast installed consumer base create the potential

for AI to serve as a home assistant. Imagine appliances that are no longer passive instruments but proactive

partners — anticipating needs and creating an entirely new consumer experience.In March 2025 we launched the Casarte Connoisseur suite featuring our proprietary “AI Vision” technology

spanning range hoods ovens refrigerators and washing machines. The AI Vision is a multimodal cooking

agent we developed in-house: it recognizes ingredients maps the oven’s interior and plans the optimal

cooking curve — effectively turning the oven into a culinary expert that can observe think and master

precision cooking. I look forward to more AI-powered hardware innovations that elevate the smart home

experience.Over the past year AI has also made our internal operations more efficient. Our R&D team built a

digital engineering platform powered by AI — effectively giving every engineer a 24/7 specialist. For our

1.5HP wall-mounted air conditioner development the testing and adjustment cycle was cut from 15 days to

7 days — a 54% improvement. Looking ahead AI agent support can transform large organizations into lean

mission-driven teams — improving not only efficiency but also decision quality across customer service

marketing and field operations.Building for the Long Term

Sustainable growth requires more than strong financial results — it requires earning the trust of our

communities our planet and our people. Haier has been named to Fortune’s World’s Most Admired

Companies list for seven consecutive years — the only company in the home appliance sector from the

Eurasia region to receive this recognition. Our MSCI ESG rating has been maintained at AA for two years

running the highest among domestic peers.Carbon Neutrality and Green Supply Chain. In 2025 we formally established a Climate Change

Committee chaired by the Company’s most senior leadership and published the Haier Smart Home Carbon

Neutrality White Paper detailing our roadmap to carbon neutrality including key initiatives and technology

pathways. Haier Smart Home has committed to achieving operational carbon neutrality no later than 2050.Emission reduction targets for two subsidiaries — Qingdao Haier Special Freezer Co. Ltd. and Candy SpA

— have been validated by the Science Based Targets initiative (SBTi). We have built an industry-leading

“6-Green” supply chain framework embedding sustainability across the full product lifecycle — from design

and procurement through manufacturing logistics recycling and service. This framework is helping reduce

product carbon footprints and drive green transformation across our supply chain.Where People Build Grow and Lead. In the U.S. GE Appliances earned its fourth consecutive Best Place

to Work recognition. In Europe we received the UK Best Employer award for the third year in a row.Haier Smart Home Co. Ltd. Annual Report 2025 7CONSUMER FIRST. EMBRACING CHANGE.FORGING A SUSTAINABLE FUTURE.Our RenDanHeYi management philosophy exists for one purpose: to activate people. First we activate the

entrepreneurial spirit in our people — giving every young professional the courage to take on ambitious

projects and every innovator a stage to test bold ideas. Second we challenge our managers to reinvent

themselves — because yesterday’s experience can become today’s burden and past success can become

tomorrow’s trap. Only by starting from zero can we keep pace with change. Third we push decision-making

authority to the front lines — across every market and every function — because the people closest to the

consumer know best what consumers need.Shareholder Returns: Growing Together Sharing Value

Alongside new highs in revenue and earnings in 2025 we continued to increase returns to shareholders. We

raised the cash dividend payout ratio to 55% an increase of 7 percentage points over 2024. Every increase

in our payout reflects the value we place on long-term shareholder trust.Looking ahead we are committed to creating sustainable long-term value for shareholders. We have

announced a three-year shareholder return plan for 2026–2028: a cash dividend payout ratio of no less than

58% for 2026 and no less than 60% for 2027 and 2028. This plan reflects our confidence in the road

ahead and our deep respect for the commitment our shareholders have made.I want to thank our 130000 colleagues for what they achieved this year. And to every shareholder: thank

you for your trust and your partnership. Though more than four decades have passed since Haier was

founded in 1984 the entrepreneurial drive that defined our earliest days is very much alive. From our roots

in Qingdao together we will keep building — taking Haier further into every corner of the world.Challenges lie ahead but our conviction has never been stronger.Sincerely

Li Huagang

Chairman of the Board of Directors

Haier Smart Home Co. Ltd.Forward-Looking Statements

This letter contains forward-looking statements that reflect the Company’s current expectations and assumptions regarding future events

including statements about anticipated revenue growth margin expansion market share trends dividend payout ratios strategic initiatives

and the expected impact of tariffs and supply chain developments. These statements are subject to risks and uncertainties that could

cause actual results to differ materially including changes in global economic conditions trade policies foreign exchange rates competitive

dynamics regulatory developments and consumer demand. The Company undertakes no obligation to update any forward-looking

statement whether as a result of new information future events or otherwise. Investors are cautioned not to place undue reliance on

these statements.

8 Haier Smart Home Co. Ltd. Annual Report 2025Section I Definitions

I. DEFINITIONS

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

report:

Definition of frequently used terms

CSRC China Securities Regulatory Commission

SSE Shanghai Stock ExchangeThe Company Haier Smart Haier Smart Home Co. Ltd. its original name is “Qingdao Haier Co.Home Ltd.” and the original short name is “Qingdao Haier”

Four Major Securities China Securities Journal Shanghai Securities News Securities Times

Newspapers Securities Daily

Haier Electrics 1169 Haier Electronics Group Co. Ltd. (a company originally listed in Hong

Kong stock code: 01169.HK) a subsidiary as accounted for in the

consolidated statement of the Company. Haier Electrics has been

privatized by way of H shares issuance on 23 December 2020 and

became a wholly owned subsidiary of the Company since then.GE Appliances Household appliances assets and business of General Electric Group

have currently been owned by the Company.FPA Fisher & Paykel Appliances Holdings Limited (Chinese name: 斐雪派克)

was established in 1934 and is known as the national appliance brand

of New Zealand the global top-level kitchen appliance brand and the

famous luxury brand of the world. It has products including ventilator

gas stove oven dishwasher microwave oven built-in freezer washing

machine clothes dryer and etc. Its business covers 50 countries/

regions across the world. FPA is a wholly-owned subsidiary of the

Company.Candy Candy Group (Candy S.p.A) is an international professional appliances

manufacturer from Italy. Since its establishment in 1945 it has been

committed to enabling the global users to enjoy a higher quality of life

through innovative technologies and quality services. Candy Group has

been prestigious in the global market with users all over the world via its

various self-owned professional household appliance brands. In January

2019 Candy became a wholly-owned subsidiary of the Company.

GfK CMM GfK CMM is a wholly-owned subsidiary of Germany’s GfK Group in

China specializing in market research within the durable consumer

goods sector. It is an authoritative retail monitoring and market research

institute in Chinese household appliance and consumer electronics

industries.Haier Smart Home Co. Ltd. Annual Report 2025 9Section I Definitions

Euromonitor Euromonitor established in 1972 is the leading strategic market

information supplier and has over 40-years of experience in respect of

publishing market report commercial reference data and on-line

database. They create data and analysis on thousands of products and

services around the world.Gfk Gfk Group the world’s leading market research company. After a long

period of development and accumulation Gfk Group’s global market

research business covers consumer durables research consumer

research media research healthcare market research and special

studies.All View Cloud All View Cloud (AVC) is a big data integrated solution provider to the

smart home field providing enterprises with big data information

services regular data information services and special data services.IEC The International Electrotechnical Commission founded in 1906 is the

world’s first organization for the preparation and publication of

international electrotechnical standardization and is responsible for

international standardization for electrical engineering and electronic

engineering. The goals of the commission include: to effectively meet

the needs of the global market; to ensure that the standards and

conformity assessment programs are applied globally in a prioritized

manner and to the greatest extent; to assess and improve the quality of

products and services involved in its standards; to create conditions for

the common use of complicated systems; to improve the effectiveness

of the industrialization process; to improve human health and safety

and to protect the environment.IEEE The Institute of Electrical and Electronics Engineers an international

association of electronic technology and information science engineers

is currently the largest non-profit professional technology society in the

world. It is committed to the development and research of electrical

electronic computer engineering and science-related fields and has

now developed into an international academic organization with great

influence in terms of the fields of space computer telecommunications

biomedicine power and consumer electronics.Model of RenDanHeYi The concept of “Achieving win-win via RenDanHeYi” is the guarantee of

(人單合一) Haier’s sustainable operation and the driving force of the Company

featuring a self-motivated and empowering corporate culture. “Ren” is an

employee who has the spirit of entrepreneurship and innovation; “Dan”

is to create value for users. The “RenDanHeYi” management model

encourages employees to create value for users with an entrepreneurial

mindset and to achieve self-value in line with the those of the

Company and its shareholders.

10 Haier Smart Home Co. Ltd. Annual Report 2025Section II General Information of the

Company and Key Financial Indicators

I. INFORMATION OF THE COMPANY

Chinese name 海尔智家股份有限公司

Chinese short name 海尔智家

English name Haier Smart Home Co. Ltd.English short name Haier Smart Home

Legal representative Li Huagang

II. CONTACT PERSON AND CONTACT INFORMATION

Secretary to the Representative of Company Secretary

Board securities affairs (D/H shares) Others

Name Liu Xiaomei Liu Tao Ng Chi Yin Trevor Global Customer

Service Hotline

Address Department of Department of Room 1908 19th /

Securities of Haier Securities of Haier Floor Harbour

Smart Home Co. Smart Home Co. Centre 25 Harbour

Ltd. Haier Science Ltd. Haier Science Road Wan Chai

and Technology and Technology Hong Kong

Innovation Innovation

Ecological Park Ecological Park

No.1 Haier Road No.1 Haier Road

Qingdao City Qingdao City

Tel 0532–88931670 0532–88931670 +852 2169 0000 4006 999 999

Fax 0532–88931689 0532–88931689 +852 2169 0880 /

Email finance@haier.com finance@haier.com ir@haier.hk /

Haier Smart Home Co. Ltd. Annual Report 2025 11Section II General Information of the Company and Key Financial Indicators

III. SUMMARY OF THE GENERAL INFORMATION

Registered Address Haier Industrial Park Laoshan District Qingdao City (now known as

Haier Science and Technology Innovation Ecological Park Laoshan

District Qingdao City)

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

Registered Address Company was No.165 Xiaobaigan Road Sifang District Qingdao City

Shandong Province and has changed to the current address since

1994 during which the address name was adjusted in line with the

change of name of the industrial park but the actual site remains

unchanged

Business address Haier Science and Technology Innovation Ecological Park Laoshan

District Qingdao City

Postal code of the business 266101

address

Website https://smart-home.haier.com/cn/

Email 9999@haier.com

IV. PLACE FOR INFORMATION DISCLOSURE AND DEPOSIT

Newspapers and websites Shanghai Securities News Securities Times China Securities Journal

for annual report Securities Daily

disclosure

Stock Exchange Website for www.sse.com.cn

annual report disclosure

as designated by the

CSRC

Other websites for annual https://smart-home.haier.com/cn/ www.xetra.com www.dgap.de

report disclosure https://www.hkexnews.hk

Deposit place of annual Department of Securities of Haier Smart Home Co. Ltd. Haier Science

report and Technology Innovation Ecological Park No.1 Haier Road

Qingdao City

V. SUMMARIZED INFORMATION OF SHARES OF THE COMPANY

Summarized information of shares of the Company

Stock Short

Stock Exchange of Name Before

Type of Shares Shares Listed Stock Short Name Stock Code Variation

A-shares Shanghai Stock Haier Smart Home 600690 Qingdao Haier

Exchange

D-shares Frankfurt Stock Haier Smart Home 690D Qingdao Haier

Exchange

H-shares Hong Kong Stock Haier Smart Home 6690 /

Exchange

12 Haier Smart Home Co. Ltd. Annual Report 2025Section II General Information of the Company and Key Financial Indicators

VI. OTHER RELATED INFORMATION

Accounting firm engaged Name Hexin Certified Public Accountants LLP

by the Company Business Address 24th Floor Century Building No.39 Donghai Road

(domestic) West Qingdao City

Name of signing Zhang Jun Li Xiang Zhi

accountant

Accounting firm engaged Name HLB Hodgson Impey Cheng Limited

by the Company Business address 31st Floor Gloucester Tower The Landmark 11

(overseas) Pedder Street Central Hong Kong Special

Administrative Region

Name of signing Yau Wai Yip

accountant

Note:

Accounting firm engaged by the Company (domestic and overseas): Pursuant to the motion for the appointment of an auditor

approved at the Company’s 2024 Annual Shareholders’ Meeting the Company engaged Hexin Certified Public Accountants LLP and

HLB Hodgson Impey Cheng Limited to issue the China Accounting Standards and International Accounting Standards auditing

report respectively for the Company’s 2025 annual report.VII. KEY ACCOUNTING DATA AND FINANCIAL INDICATORS IN THE

RECENT THREE YEARS

(I) Key accounting data

Unit and Currency: RMB

Key accounting data 2025 2024 Yoy change (%) 2023

After adjustment Before adjustment

Operating revenue 302346783918.30 286015294936.52 285981225203.93 5.71 274204520847.97

Total profit 23478743800.22 22722718578.69 22732792428.45 3.33 20211643792.71

Net profit attributable to

shareholders of the listed

company 19552798222.85 18731046273.17 18741120122.93 4.39 16596615045.87

Net profit after deduction of

non- recurring profit or loss

attributable to shareholders of

the listed company 18603631637.54 17804732809.63 17804732809.63 4.49 15824164161.43

Net cash flows from operating

activities 26002941969.92 26318091311.95 26543081911.96 –1.20 26535780568.36

Haier Smart Home Co. Ltd. Annual Report 2025 13Section II General Information of the Company and Key Financial Indicators

At the end At the end At the end

of 2025 of 2024 Yoy change (%) of 2023

After adjustment Before adjustment

Net assets attributable to

shareholders of the listed

company 118698401416.58 111778874767.22 111366118999.17 6.19 101265984771.17

Total assets 295795068591.57 290736357978.75 290113822824.61 1.74 261067684897.49

(II) Key financial indicators

Key financial indicators 2025 2024 Yoy change (%) 2023

After adjustment Before adjustment

Basic earnings per share

(RMB/share) 2.12 2.02 2.02 4.95 1.79

Diluted earnings per share

(RMB/share) 2.10 2.02 2.02 3.96 1.78

Basic earnings per share after

deducting non-recurring profit

or loss (RMB/share) 2.02 1.93 1.93 4.66 1.71

Decreased

Weighted average return on net by 0.63

assets (%) 16.98 17.61 17.70 percentage points 17.24

Weighted average return on net Decreased

assets after deducting by 0.65

non-recurring profit or loss (%) 16.16 16.81 16.81 percentage points 16.06

Explanation of the key accounting data and financial indicators of the Company as at the end of

the reporting period for the previous three years

√ Applicable □ Not Applicable

Explanation of the reasons for the retrospective adjustment or restatement: In December 2024

the Company realised control over Youjin (Shanghai) Corporate Management Co. Ltd. by way of

entrustment of voting rights. In March 2025 the Company completed the acquisition of equity

interests in COSMOPlat Mould (Qingdao) Co. Ltd. The transaction was accounted for as a

business combination under common control in accordance with relevant accounting standards

and accordingly the comparative figures for the corresponding period were restated.

14 Haier Smart Home Co. Ltd. Annual Report 2025Section II General Information of the Company and Key Financial Indicators

VIII. DIFFERENCES IN ACCOUNTING DATA UNDER DOMESTIC AND

OVERSEAS ACCOUNTING STANDARDS

(I) Differences in net profit and net asset attributable to shareholders of listed

company in financial report disclosed in accordance with International

Accounting Standards and China Accounting Standards

□ Applicable √ Not Applicable

There is no difference between the net profit and net assets attributable to shareholders of the

listed company presented in the consolidated financial statements as disclosed in accordance

with International Accounting Standards and Chinese Accounting Standards by the Company.(II) Differences in net profit and net asset attributable to shareholders of the listed

company in financial statements disclosed in accordance with overseas

accounting standards and China Accounting Standards

□ Applicable √ Not Applicable

Apart from the financial statements prepared in accordance with International Accounting

Standards the Company has not prepared financial statements in accordance with other

overseas accounting standards.(III) Explanation on the difference between the domestic and overseas accounting

standards:

□ Applicable √ Not Applicable

IX. KEY FINANCIAL DATA OF 2025 BY QUARTER

Unit and Currency: RMB

Q4

Q1 Q2 Q3 (October-

(January-March) (April-June) (July-September) December)

Operating revenue 79118173583.72 77375860865.13 77559583508.49 68293165960.96

Net profit attributable to shareholders of

the listed Company 5486615176.18 6546380644.09 5339701483.85 2180100918.73

Net profit after deduction of non-

recurring profit or loss attributable to

shareholders of the listed Company 5364091335.39 6338317221.31 5189920054.97 1711303025.87

Net cash flows from operating activities 2284614694.47 8854431086.87 6352080911.47 8511815277.11

Explanation on the difference between quarterly data and disclosed regular reporting data

□Applicable √ Not Applicable

Haier Smart Home Co. Ltd. Annual Report 2025 15Section II General Information of the Company and Key Financial Indicators

X. NON-RECURRING PROFIT AND LOSS ITEMS AND AMOUNT

√ Applicable □ Not Applicable

Unit and Currency: RMB

Non-recurring profit and loss items Amount in 2025 Amount in 2024 Amount in 2023

Profit or loss from disposal of non-current assets including

the write-off of provision for asset impairment –203144693.48 –77035862.98 –97873276.66

Government subsidies included in current profit or loss

except for government subsidies that are closely related to

the Company’s normal business operations conformed to

requirements of state policies and granted according to

specific criteria and have a sustained impact on the

Company’s profit or loss 1315433873.66 1324181478.11 1093584406.07

Profit or loss arising from changes in fair value of financial

assets and financial liabilities held by non-financial entities

and profit or loss arising from disposal of financial assets

and financial liabilities except for effective hedging

activities related to the Company’s normal business

operations 157464383.83 46092153.02 20829305.37

Net profit or loss of subsidiaries arising from business

combinations under common control of the current period

from the beginning of the period to the date of

consolidation 3593306.97 –10073849.76 –2581701.76

Other non-operating income and expenses apart from the

aforesaid items —80280033.06 –139979862.69 –71400519.77

Less: Effect of income tax —193626165.01 –178092484.16 –150225774.23

Effect of minority interests (after tax) —50274087.60 –38778108.00 –19881554.58

Total 949166585.31 926313463.54 772450884.44For 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 Applicable

16 Haier Smart Home Co. Ltd. Annual Report 2025Section II General Information of the Company and Key Financial Indicators

XI. COMPANIES WITH EQUITY INCENTIVES AND EMPLOYEE STOCK

OWNERSHIP PLANS MAY CHOOSE TO DISCLOSE NET PROFITS

AFTER DEDUCTION OF THE IMPACT OF SHARE-BASED PAYMENTS

√ Applicable □ Not Applicable

Unit and Currency: RMB

Increase/

decrease for

the reporting

period

compared

with the

corresponding

period of last

Key accounting data 2025 2024 year (%) 2023

After Before

adjustment adjustment

Net profit after deduction of the

impact of share-based payment 20652748587.38 19939606025.96 19949679875.72 3.58 17632584545.60

Haier Smart Home Co. Ltd. Annual Report 2025 17Section II General Information of the Company and Key Financial Indicators

XII. ITEMS MEASURED BY FAIR VALUE

√ Applicable □ Not Applicable

Unit and Currency: RMB

Affected amount to

Changes in the profit of current

Items Opening balance Closing balance current period period

Wealth management products 746436121.40 1485993504.45 739557383.05 94624262.70

Investment in other equity instruments 6073680870.82 5405101489.33 –668579381.49 48149944.99

Investment in trading equity instruments 195177368.77 209183404.17 14006035.40 100839725.39

Investment funds 294404349.36 339093852.91 44689503.55 55251132.65

Financing receivables 412922615.25 1787975081.92 1375052466.67 –75923719.88

Derivative financial instruments 71698406.90 –110226742.75 –181925149.65 –122518785.91

Total 7794319732.50 9117120590.03 1322800857.53 100422559.94

XIII. OTHERS

□Applicable √ Not Applicable

18 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and

Analysis

I. DISCUSSION AND ANALYSIS OF THE COMPANY’S BUSINESS

OPERATIONS DURING THE REPORTING PERIOD

Founded in 1984 Haier Smart Home has built its business by anticipating industry shifts delivering

market-defining innovations and continuously reinventing its operating model. Over four decades the

Company has grown into the global leader in major home appliances and a pioneer in smart home

solutions.Market Position

Global leader in major home appliances. According to Euromonitor International the Company has

ranked No. 1 globally in major home appliance brand retail volume for 17 consecutive years. The

Company operates a portfolio of seven global brands — Haier Casarte Leader GE Appliances

Candy Fisher & Paykel and AQUA. From 2008 to 2025 the Haier brand has held the No. 1 position

worldwide in both refrigerator and washing machine retail volume for 18 and 17 consecutive years

respectively.Pioneer in smart home solutions. Euromonitor data confirms that leveraging its full-category appliance

portfolio the Company was among the first in the industry to launch integrated smart home solutions.Sanyiniao the Company’s smart home platform delivers personalized professional smart living

solutions through three core capabilities: a customization engine a fulfillment platform and the Smart

Home AI Engine.Business Segments

The Company has developed a comprehensive portfolio of smart home solutions spanning food

preservation and cooking fabric care air management water solutions and other complementary

businesses.Food Preservation and Cooking Solutions

The Company manufactures and sells refrigerators freezers and kitchen appliances globally and

delivers integrated smart kitchen experiences combining intelligent appliances with ecosystem

resources. For example the Casarte Zhijing Series refrigerator features proprietary MSA nitrogen-

oxygen intelligent freshness technology retaining over 99% of nutritional value after seven days of cold

storage — elevating the industry standard to cellular-level preservation. The unit is also engineered for

a seamless flush fit within international standard cabinetry with zero side gaps and zero protrusion.In kitchen appliances the Company introduced a 325mm ultra-slim fully built-in range hood and a top-

intake fully built-in cooktop achieving fully integrated design with cabinetry. Equipped with “AI Vision”

technology the range hood intelligently detects cookware and food status to prevent boil-overs while

the oven automatically identifies ingredients and matches optimal cooking profiles. The Company also

introduced an original drawer-style dishwasher with ergonomic loading and dual-zone precision

washing.Haier Smart Home Co. Ltd. Annual Report 2025 19Section III Management Discussion and Analysis

Fabric Care Solutions

Haier washing machines are built on proprietary technology designed to solve everyday laundry

challenges. The product range — including washing machines dryers washer-dryer combos garment

care systems and drying racks — has evolved from standalone appliances to end-to-end fabric care

solutions. During the reporting period the Company advanced its three-drum zoned wash-and-care

product family and launched heat-pump washer-dryer combos across three brands to capture growth

in this emerging category. Key innovations include the Zhongzi Hemei washer which integrates

washing drying and garment care in one unit; the Jinghua washer which generates triple-

concentration cleaning fluid through high-pressure detergent pre-mixing for faster more effective

cleaning; and an industry-first 3D see-through drying technology that precisely measures internal fabric

moisture levels stopping the cycle the moment clothes are fully dry.Air Solutions

Residential Air Conditioning

The Company sells residential air conditioners and fresh air systems worldwide complemented by full-

lifecycle design installation and service solutions. Smart-enabled products deliver whole-home

intelligent air management across temperature humidity air quality and sterilization. During the

reporting period the Company launched air conditioners with proprietary refrigerant-directed

distribution and dual-evaporator coupled control technology expanding comfort coverage by 40%. The

system integrates proprietary AI models and cloud computing to monitor ambient conditions and

cross-reference Haier’s microbiology database automatically triggering targeted self-cleaning

programs.Smart Building Solutions

Aligned with China’s “dual carbon” strategic goals the Company’s smart building business provides

energy-efficient sustainable building solutions — covering building controls environmental systems

energy management and system integration — for government commercial transit educational and

healthcare clients. The Company holds meaningful market positions in China in magnetic levitation

central air conditioning IoT-enabled VRF systems and air-source heat pumps.Water Solutions

The Company provides a full range of water products globally including electric gas solar and heat

pump water heaters as well as POE/POU water purifiers and water softeners. Smart-connected

products enable integrated hot-water purification and heating scenarios. During the reporting period

the Company launched its “Crystal Tank” water heater technology — achieving zero metal contact

zero rust and zero magnesium residue — with PCC mineral-infusion technology that releases

beneficial minerals. For top-efficiency gas water heaters a proprietary centrifugal atomization system

achieves 100% condensate external discharge balancing energy efficiency with clean aesthetics.Through the 2024 acquisition of Kwikot a well-established South African brand the Company further

expanded its water heater footprint across Africa in 2025.

20 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

Global Footprint

The Company manufactures and sells a full range of home appliances and value-added services across

more than 200 countries and regions including North America Europe South Asia Southeast Asia

Australia and New Zealand Japan the Middle East and Africa.In overseas markets the Company develops and sells products under its proprietary brands tailored to

local consumer preferences. With over 30 years of international operating experience the Company

has expanded through a series of strategic acquisitions — including GE Appliances (2016) Fisher &

Paykel (2018) Candy (2019) and most recently CCR and Kwikot (2024). CCR supports the Company’s

commercial refrigeration strategy in Europe and Asia-Pacific while Kwikot strengthens the water heater

business and accelerates white goods market penetration in South Africa.Other Businesses

Building on its core smart home platform the Company also operates small appliance robotic

cleaning and channel distribution businesses. The small appliance business features products

designed in-house and manufactured by third-party OEM partners under the Company’s proprietary

brands enriching the smart home product ecosystem. The channel distribution business leverages the

Company’s extensive retail network to distribute TVs consumer electronics and other products for

Haier Group and third-party brands.Awards and Recognition

During the reporting period the Company was once again named to the Fortune Global 500. GE

Appliances earned Great Place to Work certification for the fourth consecutive time and was named

one of Fast Company’s Most Innovative Companies in Consumer Electronics for 2025 while receiving

IoT Breakthrough’s “Smart Appliance Company of the Year” award for the ninth consecutive year.Casarte’s brand value rose to RMB92.8 billion ranking first among premium brands for five

consecutive years.The Company was also included on Fortune’s China ESG Influence list with an MSCI ESG rating of

AA — among the highest in China’s home appliance sector. In R&D the Company’s proprietary

intelligent wash-and-dry technology received the Shandong Provincial Science and Technology

Progress First Prize and its green low-carbon rapid-wash technology won the China Light Industry

Federation Science and Technology Progress First Prize among multiple provincial and ministerial-level

awards.Explanation of the company’s new material non-core business during the reporting period

□ Applicable √ Not Applicable

Haier Smart Home Co. Ltd. Annual Report 2025 21Section III Management Discussion and Analysis

II. INDUSTRY OF THE COMPANY DURING THE REPORTING PERIOD

(I) Industry Overview for 2025

(1) Home Appliance Industry

Domestic market performance

In 2025 the extension of the home appliance trade-in policy had a diminishing impact on

the market. The policy’s residual effects supported demand through the first half of the year

but momentum faded in the second half resulting in strong early-year performance

followed by a downturn. According to AVC China’s home appliance retail sales across all

categories (excluding 3C products) reached RMB893.1 billion in 2025 a decrease of 4.3%

year-on-year. Sales in the second half of the year totaled RMB421.4 billion a 16% decline

from the previous year.In 2025 the Chinese home appliance industry underwent a significant reshuffle amid a

saturated market setting in motion a profound transformation in its growth strategies.First the industry’s growth drivers have been shifting from customer acquisition to brand

building. With the rising cost of online advertising paid acquisition models became less

effective. The industry is moving from meeting basic functional needs to creating value

through integrated home scenarios and from scattered product promotions to systematic

brand development. Through consistent content delivery and user engagement companies

can establish brand recognition and boost customer loyalty and pricing power.Second as online and offline channels continued to merge establishing a highly

collaborative omnichannel operating model has become critical for success. E-commerce

platforms continued to optimize product efficiency and user experience reinforcing the

fundamental model where customers actively search for products. Meanwhile instant retail

enabled by location-based services delivers goods within minutes and has emerged as a

new growth engine by bringing products directly to customers. Physical stores also

transformed from simple points of sale into experience centers local fulfillment hubs and

community spaces. As these channels merged a seamless integrated retail environment

has become the new industry standard. In this landscape leveraging digital tools for

omnichannel inventory sharing and direct-to-consumer delivery is the key to improving

channel operation efficiency and responding rapidly to customer needs. This strategy is also

vital for creating a sustainable competitive advantage.Third the “silver economy” has emerged as a new growth market for senior-friendly home

appliances. This market has already exceeded RMB100 billion in 2025 according to AVC

data. As of the end of 2025 China’s population aged 60 and above amounted to 323

million representing 23% of the total. Alongside this demographic growth elderly spending

is shifting from basic necessities toward lifestyle improvements and enjoyment. This trend

fueled sustained demand for home modifications related to living bathing cooking and

safety. Consequently products that are safe user-friendly and incorporate smart health

features and emotional connections are becoming a key driver of growth for the industry.

22 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

Overseas Markets

According to Euromonitor the global home appliance market in 2025 recorded stable

overall volume but experienced structural shifts. Global retail sales for core home

appliances reached USD 298.3 billion a year-on-year increase of 3.3%. Meanwhile global

retail sales for small home appliances reached USD 130.7 billion a 4.6% increase

year-on-year. While growth in developed markets remained relatively stable emerging

markets saw strong overall expansion. Regions like Southeast Asia and the Middle East

experienced rapid growth fueled by urbanization rising essential demand and the

expansion of online retail. However these regions also faced mounting pressure from

intensifying competition and rising costs.The U.S.: Market remained under pressure from low consumer confidence and sluggish

property sector.Europe: Sales Volume grew 2.1% and revenue declined 1% Industry Sales Value (YoY)

–1.0%；New EU energy efficiency regulations have stimulated product upgrades while

weak economic growth and consumer pressure are suppressing prices.South Asia: Market went down by 0.4% with major competitors experiencing decline in

both volume and profit in India. Pakistan market grew 10% and AC grew 15% driven by

economic and consumption recovery as well as favourable weather.Australia and New Zealand: Australian market grew by 3.8% supported by product suite

demand and government rebate policies. In New Zealand industry declined by 1%

constrained by a weak property market and labor shortages. Annual inflation stands at

3.0%. Overall recovery remains slow despite consumer confidence rebounded at year end.

Southeast Asia: In Thailand growth was primarily driven by air conditioners refrigerators

and washing machines. Vietnam saw continued increases in demand for air conditioners

while Malaysia experienced overall market growth. In Indonesia overall sales revenue

trended upward despite mild decline in volume of several categories. This indicated a shift

from volume-driven to value-driven market growth as product mix upgrades boosted

average prices.Japan: GfK estimates sales volume of refrigerator freezer and washing machine decline

3.0% sales revenue down 3.8%.

Haier Smart Home Co. Ltd. Annual Report 2025 23Section III Management Discussion and Analysis

(2) Central Air Conditioning Industry

According to data from China IoL China’s central air conditioning industry recorded sales

of RMB138.68 billion in 2025 with domestic and export markets showing divergent trends.Domestic sales contracted by 7.4% year-on-year to RMB112.55 billion while export sales

grew by 12.7% to RMB26.14 billion.The domestic market faced pressure from three main factors. A significant downturn in the

real estate sector caused a sharp drop in shipments for fully-furnished projects. Demand

from traditional sectors such as industrial manufacturing healthcare and hospitality

remained sluggish. At the same time intensifying price competition further squeezed the

market. Despite this weak overall performance new structural opportunities are emerging.The rapid expansion of data centers is steadily increasing demand for cooling systems.Furthermore China’s “dual carbon” goals are creating a market for high-efficiency products

such as magnetic levitation centrifugal chillers driven by energy-saving retrofits in older

buildings.In contrast export growth bucked the domestic trend. This increase was primarily driven by

Chinese companies’ strategic expansion into emerging markets improved product

performance and localized adaptation efforts. The continued global growth of the data

center industry also made a significant contribution. Exports have become a critical pillar for

growth during this period of domestic consolidation.

(3) Commercial Refrigeration Business

In 2025 the global commercial refrigeration industry entered a period of structural growth

driven by technological advancements and regulatory policies.Europe the world’s most mature core market for commercial refrigeration was estimated at

approximately USD 13 billion in 2025 representing steady year-on-year growth of about

3%. This growth was largely policy-driven. The strict enforcement of the EU’s F-gas

Regulation is phasing out equipment using high-GWP (Global Warming Potential)

refrigerants creating significant demand for environmentally friendly alternatives. This trend

is expected to continue in 2026 with eco-friendly refrigerants high-efficiency commercial

freezers and smart cold storage becoming mainstream.China’s commercial refrigeration market achieved growth in both sales volume and revenue

in 2025. Annual sales reached 18 million units up around 3% year-on-year with sales

revenue exceeding RMB36 billion up around 2%. The catering industry remained the

primary source of demand while the booming ready-to-cook foods sector and improved

cold chain logistics provided strong support for medium-to-large-scale cold storage facilities

and retail-end freezers. Looking ahead to 2026 the national “equipment renewal” policy

recovery of offline consumption and the need for equipment standardization from

restaurant chains will further stimulate end-user demand.

24 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

In India driven by government policies like the Prime Minister’s Farmers Integrated Food

Processing and Development Scheme (PMKSY) infrastructure investment in food

processing and pharmaceutical cold chain sectors has reached a record high. As India

transforms to modern and smart cold chain systems it is becoming one of the world’s

fastest-growing emerging markets with its compound annual growth rate expected to

remain in the double digits for years to come.In North America market growth is primarily driven by evolving retail formats. Specifically

the widespread development of micro-fulfillment centers for online grocers has fueled

sustained demand for highly automated refrigerated warehousing systems.(II) Industry Outlook for 2026

(1) Home Appliance Industry

Domestic Market

China’s domestic home appliance market is now defined by high penetration and a massive

installed base. According to AVC total home appliance ownership in China exceeds 4

billion units averaging more than eight units per household. The industry has shifted from

a period of rapid expansion to a competitive market centered on existing customers.Consequently replacement demand is now the main driver. The sector has entered a new

phase focusing on nurturing its customer base and encouraging product mix upgrades.Consumer preferences are moving from initial adoption to quality improvements with key

growth opportunities in green technology whole-house smart systems health-focused

solutions and integration with home furnishings.The national subsidy program is set to continue in 2026 with updated standards. A joint

notice from the Ministry of Commerce and four other departments outlines that the 2026

subsidies will target six appliance categories including refrigerators washing machines and

air conditioners that meet Level 1 energy or water efficiency standards. The subsidy will

cover 15% of the final sales price with a maximum of RMB1500 per item. This policy is

designed to encourage the adoption of high-efficiency and smart products. AVC forecasts

that overall industry growth may face pressure in 2026 due to the high base effect from

previous subsidies but structural opportunities will remain as the policy favours

high-efficiency models and accelerates product mix upgrades. Steady demand from home

renovations and upgrades will also create growth for companies offering comprehensive

solutions.Haier Smart Home Co. Ltd. Annual Report 2025 25Section III Management Discussion and Analysis

Overseas Markets

Overall the overseas home appliance market is expected to experience a moderate

recovery in 2026 with different growth drivers for developed and emerging markets.Companies must continuously monitor global macroeconomic fluctuations and changes in

trade policy capitalizing on structural growth opportunities through technological innovation

localized operations and flexible supply chain strategies.

(1) North America: U.S. GDP grew by 2.2% in 2025 with Q4 growth slowed to 1.4%.

Currently U.S. consumer demand is relatively weak. Additionally pressure from tariffs

continues to reduce consumer disposable income and raise import costs for

businesses dampening demand in the home appliance market. This situation is

expected to persist through the first half of 2026. However as the Federal Reserve is

expected to cut interest rates falling mortgage rates could stimulate the real estate

market and subsequently boost consumer demand for home appliances in the second

half of 2026.

(2) Europe: As energy efficiency standards become stricter highly efficient energy-saving

products are rapidly replacing older models. The European home appliance market

will continue to prioritize sustainability. Eco-friendly smart and efficient appliances are

becoming mainstream leading to intensified competition among manufacturers in both

ESG performance and product innovation.

(3) Emerging Markets: In 2026 consumer demand is expected to grow steadily.

Accelerating urbanization and an expanding middle class in Southeast Asia South

Asia the Middle East and Africa will continue to create significant market

opportunities for the industry.

(2) Central Air Conditioning Industry

Domestic Market. In 2026 demand in China’s central air conditioning industry will shift

from new installations to upgrades of existing systems. Although overall market growth has

slowed the national ‘dual carbon’ strategy and industrial upgrades are creating structural

opportunities. There is a rising demand for energy-efficient retrofits. The adoption of

high-efficiency products such as magnetic levitation centrifugal chillers is steadily

increasing in industrial and commercial buildings. The 15th Five-Year Plan on industrial

upgrades along with policies promoting energy-saving renovations in older buildings will

continue to fuel growth in integrated energy solutions. The intelligent computing sector is

generating new demand. The rapid expansion of AI and data centers is driving the need for

advanced cooling systems turning liquid cooling and high-power-density heat dissipation

technologies into significant growth markets.Export Market. The export market is expected to continue its growth trend with China IoL

projecting mid-to-high single-digit growth for the full year driven by factors such as the

global transition to new refrigerants.

26 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

Rising raw material prices are expected to temper industry price wars shifting the

competitive focus toward “all-scenario full lifecycle” integrated solutions. Distributors are

increasingly prioritizing long-term operational efficiency and asset value over initial

investment costs. Leading brands are poised to increase their market concentration through

technological expertise and extensive service networks reinforcing a winner-takes-all

dynamic.

(3) Commercial Refrigeration Industry

In 2026 the European commercial refrigeration market is expected to achieve steady

growth driven by strict policies and demand for equipment upgrade. Tighter regulations on

fluorinated gases and energy-efficient design are accelerating a systemic shift in product

mix toward low-carbon solutions. The competitive landscape remains highly fragmented

with leading companies strengthening their ESG credentials by investing in

renewable-energy-powered facilities and adopting circular economy principles. As the EU

Green Deal progresses and the replacement cycle for older equipment begins suppliers

with expertise in natural refrigerants and smart system integration are well-positioned to

capture a larger market share.III. DISCUSSION AND ANALYSIS ON OPERATIONS

I. Industry Trends and Company’s Strategic Initiatives

The development of China’s home appliance industry has undergone a profound transformation.Consumer demand has shifted from basic functionality to the pursuit of a higher quality of life.Green energy-efficient smart and health-focused products are now central to this consumption

upgrade and trade-in policies are effectively encouraging consumers to replace older appliances

with superior new models. At the same time a trend toward consumption focused on personal

well-being is on the rise making emotional value a new growth driver. Consumers are willing to

pay for high-quality products with strong emotional appeal shifting from purchasing to please

others to purchasing for self-satisfaction. Furthermore the growth from traditional e-commerce

traffic has peaked. The deep integration of offline experiences and online transactions has

become the norm. Improving retail efficiency now depends on digital insights into user needs

across the entire customer journey. With highly fragmented channel touchpoints simple traffic

acquisition models are losing their edge. Instead building long-term brand recognition has

become a key competitive advantage.The global market has also undergone significant adjustments. Geopolitical factors and tariff

barriers have increased the uncertainty of overseas operations placing higher demands on

companies’ localized operations and supply chain resilience. However the trend of consumption

upgrades in emerging markets remains clear. The rise of the middle class in these markets is

expected to drive a compound annual industry growth rate of over 7%. The retail channel

landscape is also rapidly evolving with both online and fragmented sales models gaining traction.In 2025 the proportion of online home appliance sales in the U.S. held steady at over 25%

while European online channels grew against headwinds. The penetration of the direct-to-

consumer (DTC) model has placed higher demands on companies’ digital marketing and

omnichannel coordination capabilities.Haier Smart Home Co. Ltd. Annual Report 2025 27Section III Management Discussion and Analysis

The HVAC industry is facing structural opportunities and overseas markets hold immense

potential. In the Chinese market integrated solutions such as heat pump systems and whole-

house HVAC and water systems are gaining favor. Product development is focused on the deep

integration of standardized components with scenario-based customizations. In Europe

Southeast Asia and the Middle East and Africa the HVAC market still has substantial room for

growth due to climate change and population increases. Chinese companies have significant

advantages in production capacity concentration and manufacturing efficiency offering broad

potential to increase their global market share.In response to the opportunities and challenges our Company has centered our core strategy on

maximizing user value systematically implementing transformative measures to upgrade our core

competitiveness and drive growth despite market headwinds.First we established a user co-creation model to develop best-selling products. In

response to the shift in user needs toward emotional and experiential value the Company has

transformed users from passive recipients into product co-creators. Through their deep

involvement in defining requirements and validating use cases we developed products with

exceptional experiences such as the Lazy Wash washing machine and the Mailang refrigerator.This model balanced emotional connection with practical functionality creating differentiated

competitiveness and driving our strategic shift from routine releases to systematic development of

best-selling products.Second we strengthened our operations for direct-to-consumer engagement across all

channels. In the domestic market we comprehensively promoted the transformation to a direct-

to-consumer model. By leveraging platform tools for digital inventory marketing and storefronts

we empowered distributors to operate with an asset-light model shorten transaction chain and

improve efficiency and precision of direct user engagement. This approach facilitated the

continuous accumulation and activation of our user base. In overseas markets we strengthened

localized brand-building systems promoting deep localization of products branding and

operations enabling the Haier brand to build a lasting reputation and a sustainable competitive

advantage in each local market.Third we unlocked synergies of our globalized local footprint. Our Company has over 60

overseas factories that formed a global manufacturing network. We implemented a “1+1+N”

global supply model which was based on localized supply supported by regional coordination

and secured by global resource synergy. This approach enabled the highly efficient dual

circulation of both localized and globalized operations not only enhanced the resilience and

stability of our supply chain but also ensured our ability to respond quickly to market

fluctuations. Our globalization strategy is evolving from simply exporting products to exporting

systemic capabilities which has become a core source of our resilience against external

uncertainties.Fourth we fully embraced AI by integrating intelligence into every business process

including R&D manufacturing and sales. Leveraging our Smart Home Brain and the Uhome

large model we advanced from product-level intelligence to scenario-based intelligence. We

utilized algorithms to optimize user experience data to drive precise services and technology to

enhance operational efficiency which facilitated a leap from relying on hardware competitiveness

to building comprehensive advantages across hardware software and services.

28 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

Fifth we strengthened our strategic position in the HVAC industry to cultivate new

growth engines. To capitalize on structural opportunities in the HVAC sector the Company

enhanced core competencies in home air conditioning and smart building solutions. We

accelerated the overseas expansion of our water solution business while promoting the

integration and synergy of our broader HVAC operations thereby building momentum for future

development and speeding up the cultivation of new growth drivers.The coordinated implementation of these initiatives provided solid support for the Company’s

high-quality growth amid the complex environment in 2025. It also laid the strategic foundation

for our continuous evolution into a platform-based service-oriented technology ecosystem

enterprise.II. Analysis of Financial Indicators

In 2025 the Company’s revenue totaled RMB302.347 billion a year-on-year increase of 5.7%

from 2024 driven by several factors: cocreation of best selling products end-to-end consumer

management and digital inventory in the domestic market; strong growth in South Asia

Southeast Asia Middle East and Africa as well as the consolidation of CCR and Kwikot.In 2025 the net profit attributable to shareholders of the parent company was RMB19.553

billion representing a 4.39% increase from 2024; net profit attributable to shareholders of the

parent company after deducting non-recurring gains and losses was RMB18.604 billion

representing a 4.5% increase from 2024.

(1) The Company’s gross profit margin reached 26.7% in 2025 down 1.1 percentage points

year-on-year. In the domestic market the cost saved from efficiency initiatives was offset

by increasing commodities market and intensified competition in the fourth quarter 2025;

global coordination digitalization and cost cutting efforts were also partly offset by

increasing tariff overseas.

(2) The selling expense ratio was 11.2% in 2025 a reduction of 0.6 percentage points compared

to the same period in 2024. In the domestic market digital transformation initiatives

improved efficiency in marketing resource allocation logistics and warehouse operations

resulting in a year-on-year optimization of the selling expense ratio. In overseas markets

operational efficiency was improved through retail innovation and global resource

integration.

(3) The administrative expense ratio was 4.6% in 2025 an increase of 0.3 percentage points

compared to the same period in 2024. digitalization and AI platform contributed to

efficiency improvement in the domestic market while one-off restructuring cost and

marketing expansion input resulted in an increase of administrative ratio overseas.

(4) The financial expense ratio was –0.02% in 2025 (where expense is “+” and income is “—”)

an decrease of 0.36 percentage points compared to 2024 leveraging an increase in foreign

exchange gains from appreciation of Euro.In 2025 the Company’s net cash flow from operating activities was RMB26.003 billion down

RMB315 million from 2024.Haier Smart Home Co. Ltd. Annual Report 2025 29Section III Management Discussion and Analysis

III. Key Market Performance

China Market

In the China market the Company focused on enhancing its omnichannel direct-to-consumer

competitiveness by developing three core capabilities for systematic transformation. First we

established foundational omnichannel direct-to-consumer capabilities through a digital inventory

system that streamlined business chain and improved operational efficiency. Second we

centered digital marketing efforts on precisely targeting and converting consumers leading to

higher traffic conversion and building long-term user value. Third we leveraged our multi-brand

portfolio to reach diverse consumer segments which enabled targeted outreach and deeper

engagement. The synergy of these evolving capabilities enabled our Company to achieve

domestic revenue growth of 3.1% that bucked market trends in 2025.

1. We enhanced our digital inventory transformation to build a foundation for omnichannel direct-

to-consumer capabilities. Digital upgrades in the supply chain and logistics streamlined

transactions and optimized operational efficiency. As of the end of 2025 RRS Logistics was

delivering 100000 units directly to users daily with the proportion of omnichannel direct-

to-consumer deliveries rising to 57%. Our 24-hour delivery service expanded to cover 1944

districts and counties and the rate of integrated delivery and installation increased to 97%.On the supply chain side we upgraded our order forecasting and automated inventory

deployment models and improved our integrated online-offline inventory system. These

changes enhanced inventory turnover and increased order forecast accuracy by 2.6%.On the logistics side we optimized our warehouse and distribution network improving

efficiency and achieving cost reductions of RMB340 million. We saved RMB110 million in

warehousing by sharing distributors’ inventory across channels and implementing digital

management for high-density storage which boosted warehouse utilization by 6 percentage

points. We also saved RMB230 million in distribution by consolidating shipments from

multiple industrial parks shipping small home appliances nationwide directly from a single

warehouse and enabling cross-regional delivery from the closest facility. Our unified

warehouse direct-to-consumer model has reshaped partnerships with distributors. By

systematically optimizing stocking delivery service and settlement the model reduced

distributors’ inventory pressure and capital requirements while addressing delivery and

after-sales service needs allowing them to focus on retail operations. Moreover the

transparency and predictability of the entire process from product supply to policy support

and revenue realization has significantly increased distributors’ motivation. By lowering

capital barriers and operational risks this model fostered a mutually beneficial and

empowering relationship between the Company and our distributors.

30 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

2. We cultivated our user base through digital marketing and a multi-touchpoint engagement

system.Our strategy focused on managing the entire user lifecycle. We have developed cross-

platform engagement capabilities that span the full customer journey from initial awareness

to long-term loyalty. Our marketing approach has evolved from experience-based to data-

driven centered on increasing our Share of Voice (SOV) and Net Promoter Score (NPS).This has allowed us to seamlessly integrate traffic acquisition with user engagement.In terms of user reach our social media following grew to 31.81 million a year-on-year

increase of 12% establishing an omnichannel coverage for user engagement. On

Xiaohongshu the Haier brand achieved a 17.8% increase in search volume within the major

home appliances category ranking first in search frequency. In terms of promotion

decision-making we developed a smart end-to-end system for influencer collaborations

which added analytical rigor and improved risk management for our campaigns. In 2025

the efficiency of our influencer marketing on Xiaohongshu and Douyin improved by 13.7%

and 24.7% respectively.

3. We strengthened our multi-brand portfolio and product suite strategy to precisely target

diverse user segments.We leveraged the differentiated market positioning of our three brands: Haier Casarte and

Leader. With product suites as a core strategy we focused resources on shaping

consumer perception by developing high-impact compelling marketing keywords related to

these suites. This approach effectively converted product exposure into brand recognition

enabling us to precisely target and serve diverse user segments reinforcing the competitive

advantage of our multi-brand portfolio.The Haier brand leveraged AI technology to comprehensively upgrade its brand products

and customer touchpoints. To appeal to younger consumers the brand launched the Little

Red Flower suite marketed as the “first AI appliance suite for young people” which sold

over 5.7 million units during the year. For families seeking quality the brand introduced the

Mailang suite which captivated users with its calming aesthetic. In 2025 the Haier brand’s

retail sales grew by 8% year-on-year solidifying its leading position in the mainstream home

appliance market.The Casarte brand forged an emotional connection with consumers by blending intangible

cultural heritage with proprietary AI technology. The brand launched the Connoisseur and

Maestro suites featuring the “AI Vision” to cater to the evolving preferences of high-net-

worth individuals who increasingly seek cultural identity over material satisfaction. In 2025

Casarte’s revenue grew by double-digit year-on-year with its core product categories

maintaining a leading share in the premium market. The brand’s market share in the high-

end segment reached 44% for refrigerators (priced over RMB10000) 75% for washing

machines 30% for water heaters (over RMB10000) and 53% for air conditioners priced

above RMB15000.Haier Smart Home Co. Ltd. Annual Report 2025 31Section III Management Discussion and Analysis

The Leader brand focused on feedback-driven marketing and user co-creation. The brand

achieved viral success with its best-selling Lazy Wash Triple-Drum Washing Machine which

led to the rapid expansion of the Lazy series into a full product line offering zone-washing

solutions for diverse scenarios. In 2025 Leader’s revenue surpassed RMB10 billion for the

first time a year-on-year increase of 30%. This success has established the brand as a key

growth engine for the Company’s strategy to engage younger consumers.North America

During the reporting period the Company remained focused on delivering technology-driven

innovation manufacturing excellence and differentiated products in North America. The newlaunches included Monogram 24” Panel-Ready Beverage Centre that brings elevated versatility

and thoughtful design; GE Profile Smart Compact Dishwasher for Countertop or built-in

installation; UltraFast Combo washer with new finishes that brings a vibrant design-forward

aesthetic and personality to the laundry space; Powered by Google Cloud’s generative AI the

expanded SmartHQ platform introduced specialized AI assistants for coffee and laundry care

each designed to tackle specific household challenges. Amid a changing tariff and policy

environment the Company continued to strengthen its position in premium segments with 7%

YOY growth.The Company also deepened partnerships with major retail channels through clear commercial

strategies fulfillment capabilities and strong customer support. GE Appliances was named a

2025 Vendor Partner of the Year by Lowe’s. In manufacturing GE Appliances completed the

expansion at its Georgia cooking products plant and plans to build its most advanced clothes-

washer manufacturing facility in Louisville Kentucky.In Air & Water Solutions the Company introduced new residential and commercial HVAC

offerings with enhanced compatibility serviceability and installation flexibility for contractors. The

segment achieved double-digit growth.European Market

In 2025 the European market as a core pillar of the Company’s globalization strategy

underwent a profound structural transformation and integration resulting in a significant

improvement in profitability. Against a complex and challenging macroeconomic backdrop the

Company remained user-centric and pivoted its business focus from scale expansion to high-

quality growth. This strategic shift led to a fundamental improvement in operational quality and

further enhanced the region’s strategic value.During the reporting period revenue in the European market achieved double-digit year-on-year

growth accompanied by a substantial upgrade in the quality of operations. Key initiatives driving

this transformation included:

1. Comprehensive Implementation of “Operating Model 2.0”

* Supply Chain: The Company continued to optimize its European supply chain footprint

systematically migrating production capacity to core manufacturing hubs in Turkey

Southeast Asia and China. This movement leveraged cost advantages while

enhancing market responsiveness.

32 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

* Channels: We deepened our Key Account (KA) strategy and customized service

offerings while accelerating the development of e-commerce platforms led by

Amazon and Direct-to-Consumer (DTC) channels resulting in rapid growth.* Organization: Efficiency was bolstered through organizational streamlining and

operational optimization yielding clear transitional benefits. Furthermore the Company

established or upgraded hundreds of terminal outlets across Europe. By elevating the

brand’s visual identity and strengthening retail promoter training we effectively

boosted brand resonance among younger demographics.

2. Focus on Product and Service Upgrades

Through sustained R&D investment the Company enhanced the competitiveness of its

refrigerator and washing machine portfolios across all price segments. Our washing

machine business climbed to the No. 2 market share position in the region driven by

product innovation — notably the coordinated launch of “triple-drum” washing machines

which showcased the seamless integration of our global R&D and sales networks. The

refrigerator segment maintained robust momentum continuing its trajectory toward the

industry’s top tier.To drive brand premiumization the Company launched a global sponsorship program

partnering with elite football clubs such as Liverpool and Paris Saint-Germain (PSG) to

significantly elevate brand awareness and customer perception. Regarding sustainability the

Company ensured all products met the EU’s stringent energy efficiency and environmental

standards. We proactively invested in low-carbon technologies to address future carbon

border adjustment (carbon tax) challenges while accelerating the deployment of our Smart

Home platform in Europe to provide users with intelligent scenario-based experiences.Emerging Markets

In 2025 Emerging Markets served as a critical engine for sustained growth. By efficiently

replicating the successful experiences and business models pioneered in the Chinese market the

Company achieved rapid growth that significantly outpaced the industry average.During the reporting period revenue from emerging regions (including Southeast Asia South

Asia and Middle East & Africa) grew by over 24% year-on-year further consolidating our

leadership in several core markets. The Company transitioned from a “product export” model to

deep “brand operations” model prioritizing optimized regional and product mixes to enhance

overall profitability. By implementing a localized brand-building strategy the Company maintained

its leading industry position in Pakistan India and Thailand. We continued to introduce high-

margin solution-based products to global markets successfully moving beyond price competition

to achieve simultaneous growth in volume and price.Haier Smart Home Co. Ltd. Annual Report 2025 33Section III Management Discussion and Analysis

1. Replicating the “Hero Product + Channel” Formula

The Company combined its expertise in creating “Blockbusters” in China with deep local

consumer insights. In South Asia the GRAVITY series drove a significant increase in the

market share of high-energy-efficiency products propelling related categories to the top two

in the Indian market. On the channel side we successfully replicated China’s e-commerce

and franchised store models deepening partnerships with major Southeast Asian

e-commerce platforms and rapidly expanding our offline footprint and flagship image stores

in South Asia the Middle East and Africa.

2. Strengthening Localized Manufacturing and Delivery

The Company innovated its “1+1+N” flexible supply chain system transitioning from a

China-centric supply model to one that emphasizes localization regionalization and global

synergy. Leveraging manufacturing bases in Southeast Asia India and Egypt we achieved

precise R&D and rapid delivery tailored to local climates (e.g. high temperature and

humidity) creating a distinct competitive advantage that radiates into the Middle East and

Africa. In response to complex trade policy shifts we utilized digital models to flexibly

allocate global capacity effectively reducing tariffs and logistics costs while ensuring supply

chain resilience.IV. Business Operation Analysis

(I) Smart Kitchen

(1) Refrigeration

The Company’s refrigerators and freezers maintained their global No.1 positions by retail

volume (for the 18th and 15th consecutive year respectively). With this scale foundation

firmly in place the Refrigeration division pivoted its emphasis toward quality of growth

during the period supported by two differentiating capabilities: a systematic engine that

converts proprietary technology into commercially successful products and a digitally

enabled global operating platform. Revenue for the period totaled RMB84.76 billion up

1.4% year-on-year led by strong momentum in emerging overseas markets. Domestically

offline retail revenue share rose to 47.7% a gain of 3.6 percentage points.Innovation pipeline and technology leadership. The division captured two converging

tailwinds — robust trade-in demand in China and accelerating premiumization in overseas

markets — and converted them into measurable commercial outcomes. Central to this is an

R&D pipeline that has ranked first in the industry by published invention patents for eight

consecutive years. The standout breakthrough was our Magnetic Control Full-Space

Freshness Technology which earned the highest award at China’s National Disruptive

Technology Competition — the only recognition given to the home appliance sector —

achieving cellular-level preservation that keeps chilled meat fresh for 10 days and frozen

seafood for 60 days. This was complemented by advances in ultra-quiet operation (31dB

outperforming the national standard by 10dB) built-in installation via our proprietary

hydraulic self-leveling system and the AI Vision multimodal platform for intelligent food

management.

34 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

Scaling premium across brands and geographies. What distinguishes this division is not just

innovation but the speed and consistency with which new technology reaches consumers

as premium high-volume products. Casarte our premium brand gained 2.5 percentage

points of offline retail revenue share and 0.8 percentage points online. Its Zhijing Series

commanded 53% of retail revenue in the RMB10000-and-above segment. At the volume

end the Haier “Mailang” series topped every price tier with over 600000 units sold.Overseas we pursued targeted brand-building by country and category. In Europe

differentiated multi-door models — including 700L large-capacity units — captured 40% of

the mid-to-high-end multi-door segment while emerging markets delivered strong revenue

growth driven by local product adaptation and expanded distribution.Cost discipline through global coordination. Margin improvement was underpinned by the

division’s global digital coordination platform. On the cost side modular product design and

coordinated cross-regional procurement drove further structural cost reduction more than

offsetting input cost headwinds and contributing to gross margin expansion. On the SG&A

side digital marketing tools improved consumer engagement efficiency while process

optimization in after-sales service lowered the domestic expense ratio year-on-year.Taken together the Refrigeration division’s 2025 performance demonstrates that its

leadership rests on a mutually reinforcing system — proprietary technology premium

branding rapid commercialization and globally coordinated operations — rather than scale

alone. These same capabilities position the division well for the next phase of the

Company’s Smart Kitchen strategy which aims to deepen the convergence of refrigeration

and kitchen appliance solutions.

(2) Kitchen Appliances

Against a backdrop of macroeconomic volatility and trade disruptions that weighed on

global kitchen appliance demand the division delivered revenue of RMB41.54 billion up

0.9% year-on-year — a resilient outcome given the challenging operating environment.

Overseas we maintained leading positions in North America and Australasia. The

performance was underpinned by two engines: effective coordination across our global

premium brand portfolio and the continued strengthening of localized operations.Multi-brand synergies powering overseas leadership. As global kitchen demand shifts from

single-product purchases toward integrated built-in and smart-enabled solutions the

division is well positioned through the combined strengths of GE Appliances (GEA) Fisher

& Paykel (FPA) and Casarte. In North America GEA accelerated the rollout of premium

built-in products under its Profile and Café lines lifting high-end brand revenue by 7% and

retaining the No.1 retail share position with dishwasher and oven shares reaching 26.8%

and 41.6% respectively. In Australasia FPA complemented GEA’s North American strength

with continued premium momentum in its home market. Leveraging a model of global

resource development with local experience delivery we further consolidated our premium

foothold in developed markets while scaling rapidly in emerging regions such as the Middle

East and Africa.Haier Smart Home Co. Ltd. Annual Report 2025 35Section III Management Discussion and Analysis

Premiumization and pre-installation positioning in China. In the domestic market results

improved on the back of two strategic priorities: premiumization and proactive positioning in

the pre-installation channel. As demand for integrated kitchen solutions grows — driven by

pre-fitted housing delivery home renovation and the convergence of furnishing and

appliances — we continued to anchor premium pricing in proprietary technology while

expanding user value through scenario-based offerings. Casarte’s Zhijing series including

fully flush-mounted range hoods and a proprietary drawer-type dishwasher continued to

define the industry’s direction in intelligent functionality and space efficiency. Casarte

kitchen appliance revenue rose 27% year-on-year.Margin expansion supported by supply chain efficiency. Profitability improvement was

reinforced by the division’s integrated global supply chain. Consolidation of procurement

resources and optimization of the local manufacturing footprint helped offset external cost

pressures. On the operating expense side digitally enabled tools continued to improve

efficiency in marketing and service further strengthening the division’s earnings foundation.In summary the Kitchen Appliances division’s 2025 results reflect the combined

contribution of overseas brand leadership and domestic premiumization through Casarte’s

integrated kitchen approach. Both growth quality and earnings visibility improved. The

capabilities developed around integrated kitchen offerings premium built-in products and

the pre-installation channel provide a solid foundation for the Company’s broader Smart

Kitchen strategy.(II) Smart Laundry Care

China’s laundry market came under pressure during the period as government subsidy effects

faded and growth reverted to product-driven fundamentals — an environment that favors

companies with genuine product differentiation. The Laundry Care division delivered global

revenue of RMB65.57 billion up 3.5% year-on-year driven by product innovation channel

transformation and disciplined multi-brand execution.Multi-brand execution in a polarizing market. As market polarization intensified our portfolio

approach proved effective. Casarte our premium brand grew revenue by over 15% establishingitself as a key growth driver. Leader targeting younger consumers leveraged its “EffortlessThree-Drum” washer to gain 2.5 percentage points of online retail revenue share with front-load

washer sales surging over 70%. Domestically offline retail revenue share reached 47.4% up 1.9

percentage points (per GfK). Globally Haier washing machines held the No.1 market share at

14.4% (per Euromonitor) with leading positions in Australia New Zealand Pakistan and

Vietnam.Defining two high-growth categories. The division has taken a defining role in two emerging

segments: multi-drum segmented washing and heat pump integrated washer-dryers.

36 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

In multi-drum washing we were the first to commercialize a latent consumer need — the desire

to wash intimate wear baby clothes and outerwear separately — through a purpose-built

product. The Effortless Three-Drum washer sold over 300000 units during the period making it

the No.1 online new product of the year. This was powered by a closed-loop system that moves

from consumer insight to product launch in roughly half the industry’s typical cycle time. Per AVC

data multi-drum penetration in China rose from 0.9% to 2.4% in 2025; the Company held a

dominant share exceeding 60%.The same product-creation engine extends across categories. In heat pump washer-dryers the

Casarte Neutron F2 deploys our proprietary Dual-Engine Heat Pump technology to resolve the

core trade-offs of conventional condensation systems — delivering gentle 56oC drying that is

40% faster and 30% more energy-efficient while protecting fabric quality. The product quickly

became a premium bestseller. Offline penetration of heat pump washer-dryers exceeded 5%

industry-wide in 2025 with Casarte holding over 30% of the segment.Channel transformation in China. The division moved decisively to capitalize on China’s rapidly

evolving retail landscape. The shift toward direct-to-consumer (DTC) retail operations drove a

22% year-on-year increase in online revenue. On content commerce platforms such as Douyin

(China’s leading short-video platform) partnerships with lifestyle creators to showcase real-use

scenarios — segmented washing luxury garment care — generated over 190% growth. We also

captured emerging opportunities in large-format new-retail stores in lower-tier cities adding 1100

touchpoints and growing county and township retail revenue by 25%. The marketing model has

evolved from traffic acquisition to user co-creation with social media feedback being rapidly

converted into new product iterations.Profitability: channel efficiency and localization gains. The division’s profitability improved during

the period supported by two drivers. Domestically the DTC retail model reduced intermediate

distribution layers lowering channel costs and contributing to expense ratio improvement.Overseas deeper localization yielded a more favorable cost structure: Candy in Europe returned

to profitability through product platform upgrades and management efficiency gains while

strengthened local manufacturing in North America enhanced supply chain resilience and cost

predictability.Overseas: deeper localization broader reach. In 2025 our three-in-one localization model —

local design local manufacturing local marketing — moved into a phase of deeper structural

embedding. In Southeast Asia laundry revenue grew over 25% driven by the introduction of

mid-to-high-end products. Japan delivered revenue growth above 5% led by new premium heat

pump models. In Europe the Candy turnaround also translated into share gains. In North

America we strengthened local manufacturing capacity supporting continued share gains.Market positions advanced across every major region. In the U.S. GE washing machines held a

26.7% share (per AHAM) with large-capacity front-load products maintaining leadership. In

Europe the multi-brand approach navigated tightening energy standards to lift overall share to

12.5% (No.2); in France front-load models entered the top three. In Australia share exceeded

22% (No.1). In Vietnam we held 21.2% (No.1); in Japan our dual-brand share reached 17.7%

advancing from No.3 to No.2. In Pakistan we maintained the No.1 position for multiple

consecutive years.Haier Smart Home Co. Ltd. Annual Report 2025 37Section III Management Discussion and Analysis

(III) Smart HVAC

During the reporting period HVAC business recorded sales revenue of RMB72.356 billion up

10% year on year amongst which smart air solution grew 9.6% to RMB54.392 billion and water

solution grew 11.1% to RMB17.964 billion.

(1) Home Air Conditioning Business

In 2025 the air conditioning business realized its full growth potential driven by

strengthening competitiveness in product technology supply chain integration and channel

transformation. According to China IoL Haier air conditioners defied market trends with

exceptional growth. Global sales volume increased by 14.8% with domestic volume up by

16.3% and overseas volume by 12.6% outpacing the industry in terms of growth.

According to GfK CMM our domestic offline retail sales share reached 21% an increase

of 1.8 percentage points year-on-year; online share rose to 10.9% up 0.6 percentage

points. In overseas markets we ranked first in market share in Thailand Pakistan with

significant market share improvements in other regions.Product Development: Creating best-selling products through original technology delivering

exceptional user experience at optimal cost

Our R&D has been centered on solving real user problems committed to developing

original technology and continuously strengthening the technology foundation of our whole-

house smart air solutions. The Haier air conditioner’s variable diversion technology has

undergone continuous refinement significantly improving cooling and heating efficiency and

achieving an industry first with 24 hours of continuous heating. In 2025 this technology

earned Gold Medals at both the 50th International Exhibition of Inventions of Geneva and

the iENA Nuremberg International Trade Fair for Ideas Inventions and New Products. The

Haier air conditioner’s inverter technology also received a Gold Medal at the Geneva

exhibition and a Silver Medal at iENA Nuremberg recognized for its combined strengths of

precise temperature control high energy efficiency and stable operation. Additionallyseven technological achievements including “Research and Application of Key Technologiesfor AI Smart Energy-Saving Air Conditioners” and “Variable Module Heat ExchangerForward-Cycle Micro-Defrosting Technology for Room Air Conditioners to Achieve HighEfficiency and Comfort” were certified by authoritative institutions as reaching

“internationally leading” levels. In energy conservation and smart technology our end-to-end

AI energy-saving technology has enabled air conditioners to consume as little as 2 kWh of

electricity per day achieving an AI-driven energy saving rate of 46%. The innovative

integration of technologies such as Smart Wind Air Wash and Integrated Sensing and

Communication have seamlessly combined performance comfort health and intelligence to

enhance product experience.

38 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

Guided by our ESG strategy the Company leveraged technological innovation for cost

optimization to build sustainable cost competitiveness. First during new product

development we applied new materials technologies and processes to enhance

modularity allowing cost optimization from the initial product planning stage and quickly

replicating these efficiencies to subsequent new products. Second we leveraged vertical

integration to strengthen manufacturing capabilities continuously advancing our in-house

manufacturing of core components such as compressors and computer boards to enhance

supply chain efficiency and cost control. In 2025 these initiatives resulted in an

approximate 8% reduction in the overall cost of our air conditioners.This synergy of technological innovation and cost advantages has rapidly boosted our

products’ market competitiveness. In 2025 the share of best-selling products continued to

grow driving a 32.7% improvement in platform efficiency and a 22.2% increase in SKU

efficiency. The Little Red Flower Energy Saving series known for its industry-leading energy

efficiency with an APF value of 6.12 achieved annual sales of over 1.6 million units. The

Smart Wind series which featured dual-powered mechanical arm for 270o airflow control

and solved the user pain point of direct drafts sold more than 600000 units during the

year.Domestic Market: Channel Transformation Drove End-to-End Efficiency with Synergistic

Online and Offline Growth.The Company enhanced the competitiveness of our POP (platform open plan) and

e-commerce channels by transforming our digital inventory and digital marketing models

which spurred rapid business development. For the POP channel we helped distributors

establish an asset-light operating model with omnichannel inventory sharing where Haier

manages warehousing logistics and direct-to-consumer delivery. This model accelerated

touchpoint expansion and improved retail efficiency. In 2025 POP channel revenue grew by

over 138% and retail sales by over 120% while distributor inventory turnover efficiency

improved by more than 50%. In our e-commerce channel we focused on best-selling

products and implemented a full-funnel conversion system covering brand awareness user

traffic and product sales which continuously improved our operational efficiency. Sales for

both the ‘Energy Saving’ and ‘Ultra Energy Saving’ series exceeded one million units

boosting the channel’s annual revenue growth by 38%. We also capitalized on the trend of

content-driven e-commerce increasing our market share in these channels by over 5

percentage points and securing a top two ranking. For offline channels we focused on

improving both the quantity and quality of our network while continuously refining

operational capabilities. On the product side we strengthened differentiation in our mid-to-

high-end offerings and optimized our product mix resulting in growth of over 10% for

Casarte’s air conditioners. To enhance distributor experience we streamlined the return and

exchange process implemented digital tools for visible controllable and transferable

inventory management thereby improving inventory turnover and sales efficiency

significantly boosted distributors’ confidence.Haier Smart Home Co. Ltd. Annual Report 2025 39Section III Management Discussion and Analysis

Overseas Markets: Deepening Localization and Supply Chain Development to Unleash

Growth

In overseas markets we optimized regional structure expanded our portfolio of high-

margin solution-based products and advanced the localization of our supply chain. The

Company strengthened the integrated localization of R&D manufacturing and sales in

high-profit regions such as South Asia Europe and Africa.On the product front we created best-selling mid-to-high-end air conditioner products

designed to meet local user needs which strengthened the competitiveness of our mid-

range offerings. In India the launch of the best-selling GRAVITY product line increased our

market share for 4-star and 5-star models to 12% and our high-end market share rose to

3rd in the industry. In terms of brand strategy we increased product and marketing

investments in our secondary brands such as HEC and Candy to capture incremental

growth in markets including Italy Spain Eastern Europe and Central Asia. Our

customization capabilities have steadily improved resulting in faster market response times.We have seen significant improvements in both the quantity and quality of our custom

order clients with customized sales volume increasing by 45% year-on-year.On the supply chain side the Chonburi factory in Thailand officially commenced production

boosting local capacity to 8.3 million units. The facility produced a range of products

including window units dehumidifiers portable units RV air conditioners and split systems.It catered to markets including Thailand Vietnam the U.S. and Turkey to enhance the

resilience and cost-effectiveness of our global supply chain.

(2) Smart Building Business

In 2025 our Smart Building business achieved rapid revenue growth by deepening its

strategic focus on core technologies like magnetic and air suspension advancing strategic

transformation and in-depth scenario applications in the domestic market and accelerating

the development of localized operations and differentiated solutions overseas. According to

data from China IoL our domestic market share for central air conditioning increased by

0.5 percentage points year-on-year to 11.3% placing us among the top two in the

industry. Our export market share rose by 1 percentage point to 15.2% also ranking in the

top two. Overseas we maintained the number one market share in Pakistan ranked first in

the magnetic levitation centrifugal chiller category in Malaysia and held the top share for

multi-split systems in Turkey continuously strengthening our global competitiveness.In R&D the Company remained committed to developing core technologies. By focusing on

magnetic levitation air suspension AI algorithms and new refrigerants we have built

systematic and comprehensive technical capabilities that solidified our leading position in the

HVAC industry.

40 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

Our developed static pressure air suspension technology has successfully filled a gap in the

domestic market for large-capacity cooling. Based on this technology we launched the

industry’s largest single-unit 750RT air suspension centrifugal chiller. It operates completely

oil-free and improves energy efficiency by over 50% offering a green efficient solution for

high-reliability environments like data centers industrial facilities and large hospitals. At the

same time we continued to deepen our expertise in high-efficiency centrifugal chillers and

completed the independent design and development of our 800 to 1200 RT product series

to strengthen the implementation capabilities for large-scale water chiller projects laying a

solid foundation for widespread adoption.As a key proponent of magnetic and air suspension central air conditioning technology theCompany led the formulation of the first national standard “Oil-Free Suspension CentrifugalWater Chiller (Heat Pump) Units” which has now been officially released. This is China’s

first national standard for magnetic and air suspension central air conditioning marking a

crucial step for the industry in establishing standards for energy-efficiency technology. The

implementation of this standard not only set a higher energy-efficiency threshold for the

industry but also guided the market toward greener more energy-saving technologies

helping users make informed decisions on high-efficiency solutions.The Company strategically acquired PROFROID a global brand in CO2 refrigerant

applications and HVAC/R gaining access to its patented CO2 HVAC technologies. With a

Global Warming Potential (GWP) of just 1 CO2 is the industry’s most environmentally

friendly refrigerant option. This acquisition has proactively secured our leading technological

position amid the industry’s transition to new refrigerants. The Company launched the

industry’s first large-scale AI multi-split system. Built on a “chip + algorithm + scenario”

architecture it achieved 15% in operational energy savings and 30% in comprehensive

energy savings. The revolutionized use of Bluetooth connectivity improved operations and

maintenance efficiency by 50%. The system’s single-unit capacity reached an industry-

leading 48 HP which reduced equipment usage by approximately 10%. The product also

received the “Innovative Product Award” at the China Refrigeration Expo.In the domestic market despite an approximate 7.3% overall decline in the central air

conditioning industry the Company achieved growth by strategically transforming from an

equipment supplier into an integrated solution provider for equipment and services.We collaborated with key resource partners including design institutes and industry

associations to provide systematic and customized energy solutions as we shifted from

selling single pieces of equipment to providing full-lifecycle services. For example in Asia-

Pacific Plaza project in Zhengzhou third-party testing of the installed Haier AI IoT multi-split

systems showed a comprehensive energy saving rate of 29.21% compared to conventional

multi-split systems. This result clearly demonstrated the energy-saving effects and practical

value of Haier AI multi-split systems as a trustworthy solution for users.Haier Smart Home Co. Ltd. Annual Report 2025 41Section III Management Discussion and Analysis

The Company actively expanded into specialized markets including smart manufacturing rail

transit data centers precision electronics and high-efficiency equipment rooms

establishing professional reputation in these vertical markets. To address the high-density

heat dissipation challenges from AI computing in data centers where single-rack power

could exceed 100kW we achieved a strategic breakthrough by leveraging core magnetic

and air suspension technology collaborating closely with leading internet companies to co-develop industry-first innovations such as the “Magnetic Levitation Natural Cooling UnitModule” and the “Magnetic Levitation Dual-Source Integrated Cooling Source” which

supported both air and liquid cooling. Through redesigning the cooling architecture with

integrated magnetic levitation and natural cooling technologies these solutions achieved

energy savings of over 50% reduced the equipment floor area by 30% and enabled rapid

30-day delivery through modular prefabrication offering groundbreaking solutions for high-

density computing centers.In overseas markets we accelerated business development by enhancing specialized

solutions strengthening localized operations and diversifying distribution channels.We maintained a high-end strategy building a competitive edge with our highly efficient

magnetic levitation products and new-refrigerant multi-split systems. In Southeast Asia our

magnetic levitation solutions consistently secured data center projects increasing our

market share and building a professional reputation with clients. In Europe our multi-split

systems have successfully entered the high-end market by offering specialized solutions

that are smart energy-efficient comfortable and convenient. In the U.S. our

comprehensive product line featuring multi-voltage outdoor units and diverse indoor unit

options effectively met the needs of local users.To strengthen our local competitiveness we have increased the number of professionals

stationing overseas to deliver exceptional user experience. We have incentivized teams to

secure high-value orders improve operational efficiency and market responsiveness while

responding rapidly to user needs.The Company expanded distribution network by making investments in centralized

procurement professional distributors and engineering projects for our various product

lines. The acquisition of KLIMA KFT a leading HVAC distributor in Hungary has enabled us

to build an extensive network and enhance our professional solution capabilities across

Central and Eastern Europe accelerating growth in the region.

42 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

(3) Water Solution Business

In 2025 China’s water appliance market became highly segmented influenced the national

subsidy policy. While the water heater market faced significant headwinds from the real

estate downturn the water appliance sector evolved as consumers shifted from single

devices to whole-house quality water systems and from basic functionality to health-

conscious experiences. Navigating this complex environment our Water Solution Business

centered its strategy on becoming a whole-house water solutions provider for all home

scenarios. It developed systematic strategies across three key areas: product positioning

channel efficiency and global synergy. According to GfK CMM domestic market share

went up by 3.2 percentage points to 32.5% offline and 46.9% online up 2.1 percentage

points.In response to profound industry changes the Company has been guided by cutting edge

technology and user insight delivering leading product breakthroughs by capitalizing on key

trends including mineral-rich water health-conscious washing and Level 1 energy

efficiency.

1. Advancing health-conscious innovation. In the water purification market mineral-rich

technology has quickly gained popularity. Our advancements in mineralization

technology increased the sales share of mineral-rich water purifiers by 20 percentage

points. Specifically Casarte’s third-generation ore activation technology which offered

an “eight-in-one mineral” effect captured the top market share in the RMB7000+

price segment and earned the industry’s CCLC premium mineral water certification

resulting in a revenue growth for Casarte’s water purification by over 15%. The Haier

Fresh Water 8-Year Long-Life series featuring a long-lasting RO membrane gained

significant online traction and sold over 100000 units ranking first in the RMB2500–

3000 price segment. In the water heater sector “beauty and health washing”

emerged as a new premium market. The Haier “Little Blue Bottle” series has

upgraded three times in three years. The 3.0 model addressed water hardness and

bacterial growth with built-in limescale inhibitors and antibacterial modules. After its

launch in August 2025 over 10000 units were in just 28 hours securing the top

share in the mid-to-high-end market.

2. Integrating scenarios to boost share of whole-house water solution suites. In the point-

of-entry water purification market rising demand for whole-house purification made

mid-to-high-end products like water softeners and central purifiers key growth drivers.The Company introduced scenario-based solutions such as the “Whole-House HotWater Golden Triangle” “Smart Bathroom” and Haier’s whole-house smart water

solution suite (pre-filter central purifier water softener point-of-use purifier and water

heater) to address the demand for one-stop water solutions.

3. Upgrading Energy Efficiency. Guided by a forward-looking technology strategy Casarte

has developed a proprietary aerospace-grade centrifugal atomization technology that

achieves 100% outdoor discharge of condensation. The new Casarte CV6 Ultra

series featuring this Level 1 energy-efficient technology has sold 60000 units

boosting the sales share of our Level 1 energy-efficient products.Haier Smart Home Co. Ltd. Annual Report 2025 43Section III Management Discussion and Analysis

In the domestic market the Company responded to channel diversification by creating

trending events like the ‘Harbin Snow Water Tea Brewing Experience’ and partnering with

Key Opinion Consumers (KOCs) on nationwide co-creation projects. This approach

enhanced direct communication between our leadership and users boosted fan

engagement across all platforms and led to higher conversion rates. While reinforcing our

edge in general e-commerce we also increased investment in content-driven platforms

achieving over 60% growth on Douyin and Kuaishou. To address the large number of

outdated products in lower-tier markets we transformed township franchised stores into

“trade-in service stations”. Our salespersons conducted in-home visits to offer free water

quality testing and replacement services trade-in sales accounted for 40–50% of total

revenue.In overseas markets the Company advanced its three-tiered global strategy of localized

brand building product customization and strategic M&A to deliver strong performance

across all regions.In brand-building markets such as Spain we focused on product competitiveness to

achieve industry leadership in energy efficiency and noise reduction. Our heat pump

category ranked in the Top 2 with a price index over 100 marking a successful entry into

the mid-to-high-end segment. In customization-focused markets like Australia close client

collaboration and R&D synergy propelled our heat pump shipments into the Top 5. By

securing orders through exceptional platform experience and offering tailored solutions the

customization market segment grew by 300% during the period.In 2025 the Company completed the acquisition and integration of Kwikot South Africa’s

leading water heater manufacturer achieving significant synergies across technology

products and channels.* Technology: A localized R&D center was established in South Africa to introduce our

smart and energy-saving technologies improving the Company’s margin by nearly 2

percentage points through process optimization.* Products: Leveraging supply chain integration we expanded the portfolio from electric

water heaters into new energy products like solar water heaters positioning Kwikot as

a leader in Integrated HVAC Solutions.* Channels: We utilized the “Haier + Kwikot” dual-brand synergy to integrate offline

networks and enhance e-commerce and engineering channel layouts using South

Africa as a beachhead to penetrate the broader Southern African market.

44 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

(IV) Commercial Refrigeration Business

2025 marked the first full fiscal year following the acquisition of Carrier Commercial Refrigeration

(CCR) business. The business delivered better-than-expected performance with overall revenue

achieving double-digit growth in USD terms. The business has maintained positive growth for five

consecutive quarters post-acquisition driven primarily by high-quality organic growth. Cabinets

accounted for over 60% of revenue and the share of service-related revenue continued to rise

reflecting a continuous optimization of the business structure.At the operational level the success of the integration was driven by the cross-border

implementation of the “RenDanHeYi” management model. By decentralizing decision-making

adopting bottom-up goal setting and implementing profit-sharing mechanisms we effectively

revitalized the organization. Digital transformation also played a pivotal role; we consolidated

dozens of disparate ERP systems into a unified platform and implemented an independent

“micro-enterprise” accounting model significantly enhancing operational efficiency and P&L

management.In terms of brand and business synergy CCR leveraged our brand equity customer networks

and the supply chain advantages of our Smart Building business to achieve cost and technical

complementarities. Furthermore the CO2 refrigeration and heat pump technologies have

established a robust technological moat to address global carbon reduction trends.IV. ANALYSIS ON CORE COMPETITIVENESS DURING THE REPORTING

PERIOD.√ Applicable □ Not Applicable

The Company has built a robust strategic framework and durable competitive advantages across global

markets. In China the Company maintains full-category leadership in major home appliances.Internationally its commitment to premium brand positioning has driven consistent share gains. The

RenDanHeYi management model provides the organizational foundation for sustainable growth and

enables the Company to replicate proven strategies across markets. Key competitive advantages

include:

(1) Premium Brand Building Through Long-Term Investment

Over a decade ago the Company began building Casarte as a dedicated premium brand in

China — a process requiring sustained investment in technology product differentiation and

service. Casarte integrates the Company’s global R&D capabilities manufacturing excellence

dedicated marketing and premium service to earn the trust of China’s high-end consumers.During the reporting period Casarte’s brand value reached RMB92.8 billion and its overall market

volume exceeded RMB38 billion with a cumulative base of 20 million premium members.According to GfK Casarte maintained its leading position in China’s premium major home

appliance market in 2025: 43% market share in refrigerators priced above RMB10000; 76% in

washing machines above RMB10000; 18% in water heaters by offline retail revenue (No. 1 in the

industry); and 60.8% in air conditioners priced above RMB15000.Haier Smart Home Co. Ltd. Annual Report 2025 45Section III Management Discussion and Analysis

(2) Deep Application of AI in Smart Home

The Company is advancing AI integration across its smart home ecosystem in three dimensions:

Software-defined products. Leveraging its comprehensive appliance portfolio the Company is

driving 100% product intelligence 100% user connectivity on its platform and a 100% open

ecosystem all powered by AI. As the only home appliance company featured at the Ministry of

Housing and Urban-Rural Development’s “Quality Housing Technology Exhibition” the Company

demonstrated AI-powered smart scenarios integrating people vehicles homes and communities.This platform-centric approach enables near-instant responsiveness to user needs across

discovery purchase and after-sales touchpoints.Unified global user access. Global smart home interactions reached 86.1 billion during the

period. In China and Belt and Road markets the Haismart platform connects over 100 million

devices with monthly active users (MAU) exceeding 13 million and over 6600 ecosystem

partners. In Australia Europe and the Americas the SmartHQ platform connects over 21 million

active devices with MAU exceeding 5 million and over 6500 ecosystem partners.Unified AI core capabilities. The Company launched the Xiaoyou AI Agent a multimodal

assistant with voice comprehension visual recognition environmental sensing and contextual

reasoning capabilities and began exploring spatial intelligence. Four domain-specific AI models

were released — covering freshness preservation fabric care cooking and air management —

to deliver professional smart living solutions. The Company’s smart home app now features a 3D

home view and became the first in the domestic industry to receive 3D digital twin interaction

certification enabling an immersive spatially aware user experience.

(3) Extensive Global Footprint and Localized Operations

The Company’s international strategy combines proprietary brand building with strategic M&A

establishing a multi-brand multi-category multi-regional operating model with integrated R&D

manufacturing and marketing capabilities. Deeply localized teams and agile management

structures in each market enable rapid consumer insight and responsiveness.During the reporting period the Company continued to optimize its global manufacturing

footprint. In Southeast Asia the new air conditioning plant in Chon Buri Thailand commenced

production with annual capacity of 6 million units. GE Appliances improved efficiency across all

U.S. factories while advancing production transfers and greenfield projects globally. Fisher &

Paykel relocated freestanding refrigerator production from Thailand to China. The Company

operates a 10+N global innovation ecosystem multiple manufacturing centers and marketing

hubs and an extensive sales network worldwide.

46 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

(4) Comprehensive Multi-Brand Portfolio

Through organic development and acquisitions the Company has assembled a seven-brand

portfolio — Haier Casarte Leader GE Appliances Candy Fisher & Paykel and AQUA — each

positioned to serve distinct consumer segments across global markets. In China Casarte Haier

and Leader address premium mainstream and value segments respectively. In the U.S. GE

Appliances operates six brands — Monogram Café GE Profile GE Haier and Hotpoint —

spanning all price tiers and consumer preferences. The brand matrix was further enriched with

CCR in commercial refrigeration and Kwikot in African water heating.

(5) Cross-Border M&A and Integration Capabilities

The Company has a proven track record in cross-border acquisitions and post-merger

integration: Haier Group’s overseas white goods business (including Sanyo’s Japan and

Southeast Asia operations) in 2015 GE Appliances in 2016 Fisher & Paykel in 2018 Candy in

2019 and CCR and Kwikot in 2024.

During the reporting period CCR integration delivered strong early results: the business turned

profitable in its first quarter post-closing with global revenue growth outpacing the industry and

China revenue growing at multiples of industry rates. On the organizational front the

RenDanHeYi model and ERP system integration were successfully completed establishing a full

end-to-end P&L accountability structure.The Company’s integration approach rests on three pillars. First the RenDanHeYi model — an

incentive mechanism aligning team value-sharing with value creation — energizes acquired

organizations and their people. Second the Company’s global platform enables synergies in

strategy R&D and procurement strengthening acquired businesses’ competitiveness. Third the

Company’s open and inclusive culture supports autonomous flexible management at acquired

entities fostering alignment and accelerating integration outcomes.

(6) Global Synergies and Platform Leverage

The Company harnesses its global platform to replicate proven strategies and drive cross-

regional synergies across the value chain:

* Product synergies: Leveraging global R&D resources to co-develop products aligned with

local consumer preferences. During the period GE Appliances launched the Profile & Café

shallow-depth refrigerator and Monogram wine storage; Fisher & Paykel introduced the

Series 11 ultra-premium heat-pump washer-dryer; and Southeast Asia adopted global

platform products with T-door and TM refrigerator volumes up and front-load washer

volumes up.* Capability synergies: A unified engineering talent development program (GEDP) conducted

at both the Qingdao headquarters and GE Appliances is producing a growing cohort of

high-caliber young engineers who are becoming core contributors to product development

teams. The Company is also adopting advanced automotive-industry development tools and

design methodologies to enhance development precision and product quality.Haier Smart Home Co. Ltd. Annual Report 2025 47Section III Management Discussion and Analysis

* Design synergies: A globally coordinated industrial design system centered on user

experience and brand identity enables cross-regional design collaboration. During the

period the headquarters design team supported a comprehensive brand refresh for Candy

and the New Candy series achieved immediate success at launch — ranking No. 1 on

Spain’s Hitlist and top three in Italy — with a meaningful uplift in Candy’s price index.* Procurement synergies: A Global Procurement Committee coordinates cross-category and

cross-regional sourcing through a digital platform aggregating group-level shared

categories to achieve cost savings at scale. Standardized rules and differentiated sourcing

strategies ensure efficiency and risk mitigation across the global supply chain.* Supply chain synergies: An end-to-end digital supply chain management system — from

market demand through supplier management production and logistics — uses intelligent

algorithms to dynamically optimize global capacity allocation. During the period GE

Appliances completed production transfers for air conditioning and refrigeration lines; Fisher

& Paykel shifted Mexico factory capacity to Thailand for cost optimization; and European

refrigerator and laundry plants in Romania and Italy were closed with capacity fully

consolidated in China.* Marketing and brand synergies: The Company operates a multi-tier global brand portfolio

with coordinated promotion strategies. During the period a sports-marketing-led approach

was deployed globally: in Europe the Haier brand partnered with Liverpool F.C. and Paris

Saint-Germain combining tennis for premium audiences with football for mass reach; in

South Asia cricket sponsorships boosted brand affinity; in Australia and New Zealand the

Australian Open partnership accelerated brand awareness. Successful sales and marketing

models from China’s lower-tier markets have been replicated in India Pakistan and

Thailand.

(7) Industry-Leading R&D and Technology

Backed by a comprehensive industry-leading R&D infrastructure the Company advances high-

end intelligent and sustainable product solutions while delivering customized smart living

experiences.* Proprietary technology leadership: During the period the Company continued to introduce

category-defining innovations: MSA nitrogen-oxygen freshness technology in refrigeration

(99%+ nutrient retention after seven days); three-drum zoned fabric care and heat-pump

washer-dryer technology; “Crystal Tank” zero-corrosion water heater technology with PCC

mineral infusion; and “AI Vision” technology enabling intelligent recognition in range hoods

and ovens.* National-level recognition: As of year-end 2025 the Company had received 17 National

Science and Technology Progress Awards — the most in the industry. During the reporting

period multiple proprietary projects received provincial and ministerial-level first prizes for

science and technology progress.

48 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

* Patent leadership: As of year-end 2025 the Company had filed over 112000 patent

applications globally of which more than 73000 were invention patents (over 60% of total).Haier Smart Home has ranked No. 1 globally on the “Global Smart Home Invention PatentRanking” for 14 consecutive editions.* International standards leadership: As of year-end 2025 the Company had led or

participated in the publication of over 110 international standards and over 788 national/

industry standards. It is the only company in the sector to fully cover IEC ISO IEEE OCF

and Matter smart home standards and the only company globally to serve on both the IEC

CB (Conformity Board) and IEC MSB (Market Strategy Board) enabling deep participation

in shaping international standards.* Design excellence: The Company has received over 600 international design awards

including iF and Red Dot with six international Gold awards — the most in the industry. Itholds three China Ministry of Industry and Information Technology “Excellent IndustrialDesign Gold Awards”—the only company to achieve a three-time Gold streak.

(8) Industry-Leading Logistics and Delivery Capabilities in China

Haier’s RRS (Ri Ri Shun) supply chain demonstrates strong competitive advantages through full-

process multi-scenario supply chain management and a nationwide delivery-and-installation

network. Powered by digital operations the Company integrates warehousing transportation and

service resources into a logistics network reaching every village in China.During the reporting period the Company accelerated digital inventory management and unified-

warehouse (TC model) transformation. On the supply chain side upgraded demand forecasting

and automated replenishment models reduced Haier’s central warehouse inventory turnover days.The unified-warehouse TC model now covers 22000 clients processing an average of 100000

units per day. Direct-to-consumer orders account for 57% of total volume with 24-hour delivery

coverage across 1944 districts and counties and a delivery-and-installation-in-one rate of 97%.RRS is also transitioning from customized client solutions to standardized scalable supply chain

products for omni-channel needs deepening strategic client relationships and improving solution

profitability. Internationally the Company is building a digital cross-border supply chain platform

covering intermodal logistics digital customs clearance and localized warehousing to support

global client expansion.

(9) Sustainability Capabilities

Robust ESG governance and strategic focus. The Company has established an ESG

governance framework with deep board-level engagement and management-level execution

accountability. During the reporting period a double materiality assessment was conducted to

systematically evaluate how ESG topics affect both business performance and stakeholder

interests ensuring alignment between ESG strategy and core business priorities.Haier Smart Home Co. Ltd. Annual Report 2025 49Section III Management Discussion and Analysis

Systematic stakeholder engagement. The Company maintains regular multi-channel

communication with investors customers employees communities and suppliers through ESG

briefings surveys and interviews integrating substantive feedback into ESG target-setting and

performance improvement. During the period the Company surveyed 1543 consumers and

1017 employees and conducted in-depth interviews with 28 representatives from 20 global

institutional investors — informing the identification of key ESG topics strategy development and

disclosure practices.Climate ambition and action. During the reporting period the Company established and

disclosed medium- and long-term carbon targets committing to low-carbon transformation

across both its own operations and the broader value chain. The publication of the Haier Smart

Home Carbon Neutrality White Paper outlines a clear roadmap key initiatives and technology

pathways toward carbon neutrality.Innovative green supply chain. The Company has built an industry-leading “6-Green” supply

chain framework — green design green procurement green manufacturing green logistics green

recycling and green services — embedding sustainability across the full product lifecycle and

driving green transformation throughout the supply chain.Global community impact. The Company actively fulfills its corporate citizenship responsibilities

worldwide through education support disaster relief and community service strengthening ties

with local communities and reinforcing brand trust.In summary the Company has deeply integrated ESG into governance operations and its value

chain — managing material risks while building sustainable competitive advantages that create

long-term value for shareholders and broader stakeholders.

(10) Commitment to “People Value First”

The principle of “People Value First” has guided Haier since its founding — from early self-

managed work teams to the current RenDanHeYi model. RenDanHeYi aligns individual incentives

with user value creation: “Ren” represents entrepreneurial employees “Dan” represents user

value and “HeYi” represents the alignment between the two. Under this framework the

Company cultivates an ownership mindset at every level empowering individuals to act as

entrepreneurs within an open ecosystem platform — driving innovation and accountability in

pursuit of the Company’s ambition to lead the global smart home industry in the IoT era.

50 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

VIII. MAJOR OPERATIONS DURING THE REPORTING PERIODPlease refer to “I. INTRODUCTION OF THE COMPANY’S BUSINESS DURING THE REPORTINGPERIOD” under this section.(I) Analysis of principal business

1. Table of movement analysis on the related items in income statement and cash flow

statement

Unit and Currency: RMB

Corresponding

Items Current Period Period of Last Year Change (%)

Operating revenue 302346783918.30 286015294936.52 5.71

Operating cost 221738754173.11 206439444975.26 7.41

Selling expenses 33877814770.04 33608820300.61 0.80

Administrative expenses 13762454428.58 12134986807.22 13.41

Financial expenses –50959123.75 972078427.22 –105.24

R&D expenses 10095934065.45 10769896196.17 –6.26

Net cash flow from operating

activities 26002941969.92 26318091311.95 –1.20

Net cash flow from investing activities –17075303744.16 –20079272580.76 N/A

Net cash flow from financing activities –17670708963.02 –7703505598.14 N/A

Gain on changes in fair value 91896354.25 47130324.67 94.98

Gain on disposal of assets –31036861.90 –11258612.64 N/A

Loss on credit impairment –25782774.37 –277789750.88 N/A

Non-operating incomes 322171826.28 183940070.88 75.15

Non-operating expenses 568920999.41 362862313.23 56.79

Haier Smart Home Co. Ltd. Annual Report 2025 51Section III Management Discussion and Analysis

Reasons for significant changes in certain indicators:

1) Reasons for the changes in financial expenses: the decrease of 105.24% in financial

expenses over the corresponding period was mainly due to the increase in foreign

exchange gains resulting from the appreciation of foreign currencies during the

current period;

2) Reasons for the changes in net cash flow from financing activities: the increase of

129.39% in net cash outflow from financing activities over the corresponding period

was mainly due to the increase in expenditure for the repayment of borrowings and

dividend payment as well as the repurchase of shares;

3) Reasons for the changes in the gains on changes in fair value: the increase of 94.98%

in the gains on changes in fair value over the corresponding period was mainly due to

the increase in changes in fair value of equity investments over the corresponding

period;

4) Reasons for the changes in gain on disposal of assets: the decrease of 175.67% in

gain on disposal of assets over the corresponding period was mainly due to the year-

on-year increase in losses from the disposal of non-current assets during the current

period;

5) Reasons for the changes in loss on credit impairment: the decrease of 90.72% in loss

on credit impairment over the corresponding period was mainly due to the year-on-

year decrease in bad debt provisions for receivables during the current period;

6) Reasons for the changes in non-operating income: the increase of 75.15% in non-

operating income over the corresponding period was mainly due to the year-on-year

increase in incomes generated during the current period that were not directly related

to the Company’s ordinary operation;

7) Reasons for the changes in non-operating expenses: the increase of 56.79% in non-

operating expenses over the corresponding period was mainly due to the year-on-

year increase in expenses generated during the current period that were not directly

related to the Company’s ordinary operation.Detailed explanation of significant changes in the operation types and the components of

profit or sources of profit of the company during the period

□Applicable √ Not Applicable

52 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

2. Analysis of Income and Cost

√ Applicable □ Not Applicable

(1). Principle Operating Activities by Sector Product Region and Sales Mode

Unit and Currency: RMB

Principal operating activities by product

Operating revenue Operating cost Gross profit

Gross profit increased/ increased/ margin increased/

By product Operating revenue Operating cost margin (%) decreased yoy (%) decreased yoy (%) decreased yoy (%)

Air conditioner 53741784684.04 41684227995.89 22.44 9.55 11.61 –1.43

Refrigerator 84165111116.09 58787968517.39 30.15 1.11 2.02 –0.62

Kitchen appliances 41322769277.57 29515391937.84 28.57 0.51 1.60 –0.76

Water Appliances 17474406595.05 10365942071.42 40.68 10.94 12.72 –0.94

Washing Machine 64984973167.46 44901712864.55 30.90 3.10 3.81 –0.47

Equipment parts and channel

integrated services 38892634649.73 35260348503.79 9.34 19.93 19.28 0.49

Principal operating activities by region

Operating revenue Operating cost Gross profit

Gross profit increased/ increased/ margin increased/

By region Operating revenue Operating cost margin (%) decreased yoy (%) decreased yoy (%) decreased yoy (%)

Domestic 146036314128.81 103958452404.13 28.81 3.05 4.56 decreased by 1.03

percentage points

Overseas 154545365361.13 116557139486.75 24.58 8.15 9.33 decreased by 0.82

percentage points

Principal operating activities by sales mode

Operating revenue Operating cost Gross profit

Gross profit increased/ increased/ margin increased/

Sale mode Operating revenue Operating cost margin (%) decreased yoy (%) decreased yoy (%) decreased yoy (%)

Domestic — direct sale

customers 19240877479.61 11226360416.00 41.65 42.91 50.94 –3.10

Domestic — distribution and

others 126795436649.20 92732091988.00 26.86 –1.14 0.81 –1.41

Overseas — direct sale

customers 7133286244.33 6304420263.00 11.62 14.34 16.40 –1.57

Overseas — trading companies

sales 147412079116.80 1.10253E+11 25.21 7.87 8.95 –0.75

Haier Smart Home Co. Ltd. Annual Report 2025 53Section III Management Discussion and Analysis

(2). Table of production and sales analysis

√ Applicable □ Not Applicable

Production volume Sales volume Inventory

Production increased/ increased/ increased/

Main products Units volume Sales Volume Inventory decreased yoy (%) decreased yoy (%) decreased yoy (%)

Home Appliance 10000 units/sets 13925 13695 2618 10.2 7.9 9.6

(3). Performance of major purchase contracts and major sales contracts

□ Applicable √ Not Applicable

(4). Table of cost analysis

Unit and Currency: RMB0’000

By sector

Percentage of

change of the

amount for the

Percentage of the current period

Percentage of the amount for the compared to the

amount for the Amount for the corresponding corresponding

Amount for the current period in corresponding period of last year period of last year

By sector Cost component current period total costs (%) period of last year in total costs (%) (%)

Home Appliance Industry Primary operation 18525524 100.0 17647017 100.0 4.98

costs

Raw materials 15554203 84.0 14474214 82.0 7.46

Labor 1221894 6.6 1142241 6.5 6.97

Depreciation 336435 1.8 298634 1.7 12.66

Energy 74890 0.4 70537 0.4 6.17

Others 1338102 7.2 1661392 9.4 –19.46

(5). Change of consolidation scope due to changes on shareholdings of major

subsidiaries during the reporting period

□Applicable √ Not Applicable

(6). Relevant information on significant changes or adjustments in the Company’s

business products or services during the reporting period

□ Applicable √ Not Applicable

54 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

(7). Major sales agent customers and major suppliers

Customers or suppliers under the control of the same entity shall be consolidated and

presented as a single customer or supplier except where they are subject to the de

facto control of the same state-owned asset management institution.Information on the following customers and suppliers is consolidated and presented

under the same control criteria:

The Company consolidates Haier Group its subsidiaries and other related parties for

the purpose of determining whether they are the top five suppliers or customers.A. Major sales agent customers and major suppliers of the Company

√ Applicable □Not Applicable

Revenue from the top five sales agent customers was RMB59273.1285 million

representing 19.6% of the total sales for the year; among the revenue from the

top five sales agent customers the revenue from related parties was RMB0

million representing 0% of the total sales for the year.The purchase amount from the top five suppliers amounted to RMB34914.8010

million representing 16.4% of the total purchase amount for the year; among

the purchase amount from the top five suppliers the purchase amount from

related parties was RMB10534.5344 million representing 5.0% of the total

purchase amount for the year.B. The proportion of sales to a single sales agent customers exceeded 50%

of the total during the reporting period and new sales agent customers

or depending heavily on a few sales agent customers were seen among

the top five sales agent customers

□ Applicable √ Not Applicable

The proportion of purchase from a single supplier exceeded 50% of the total

during the reporting period and new supplier or depending heavily on a few

suppliers were seen among the top five suppliers

□ Applicable √ Not Applicable

C. If the Company’s shares were subject to any delisting risk warning or

other risk-related notifications during the reporting period

Top five sales agent customers

□ Applicable √ Not Applicable

Top five suppliers

□ Applicable √ Not Applicable

Haier Smart Home Co. Ltd. Annual Report 2025 55Section III Management Discussion and Analysis

D. Revenue from trading operation of the Company during the reporting

period

√ Applicable □ Not Applicable

Unit and Currency: RMB

Increase/

decrease in

operating

revenue for the

current period

compared with

the

Operating Operating corresponding

Description of trading revenue of the revenue of the period of last

operation current period previous period year (%)

Trading operation 3859830585.13 4147353274.57 –6.93

Top five sales agent customers of trading operation who accounts for more

than 10% of operating revenue

□ Applicable √ Not Applicable

Top five suppliers of trading operation whose revenue accounts for more than

10% of operating revenue

□ Applicable √ Not Applicable

3. Expenses

□ Applicable √ Not Applicable

4. R&D expenditure

(1). Table of R&D expenditure

√ Applicable □ Not Applicable

Unit: RMB

Expensed R&D expenditure for the current period 10095934065.45

Capitalized R&D expenditure for the current period 620666004.20

Total R&D expenditure 10716600069.65

Total R&D expenditure as a percentage in operating

revenue (%) 3.54

Proportion of capitalization of R&D expenditure (%) 5.79

56 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

(2). Table of R&D Personnel

√ Applicable □ Not Applicable

Number of R&D personnel 25913

Percentage of R&D personnel took up in

the total employees (%) 19.2

Educational structure of R&D personnel

Number of

Categories of educational structure personnel

Doctor’s degree 172

Master’s degree 5874

Bachelor’s degree 13264

College Diploma 5562

High School diploma or below 1041

Age structure of R&D personnel

Number of

Categories of age structure personnel

Under 30 years old (not including 30) 7220

30–40 years old (including 30 and not including 40) 11080

40–50 years old (including 40 and not including 50) 5743

50–60 years old (including 50 and not including 60) 1578

60 years old and above 292

(3). Explanation

√ Applicable □ Not Applicable

Haier as a global leader in home appliances has accumulated 40 years of expertise

in technology. Its innovations in R&D are driven by a deep understanding of user

needs and the ability to respond swiftly enabling it to stay ahead of trends and

anticipate future demands in its R&D efforts. This forward-thinking approach fuels

continuous innovation in smart living. With the rise of the AI era Haier leverages AI

technology and a digital R&D platform to further enhance its R&D capabilities in

original technologies. More than 200 of its original technologies have been replicated

across the industry.Haier Smart Home Co. Ltd. Annual Report 2025 57Section III Management Discussion and Analysis

In terms of product intelligence Haier Smart Home utilises AI algorithms and visual

technology to enhance the user experience. For instance the AI refrigerator

equipped with a smart butler can “see” and record the storage time of ingredients

thereby reminding users of their shelf life and consumption order. The AI washing

machine can identify the number and type of clothes automatically adjust the

washing programme to prevent colour bleeding and alert the user if any small items

are left in the machine. The AI-powered ventilator can automatically adjust the heat

level of the linked stove when it is about to overflow ensuring it boils without spilling

over. The AI-equipped oven can identify the type and specifications of ingredients

automatically adjusting the temperature and cooking time to deliver optimal results

allowing users to cook with a single button press or voice command.In terms of green development and the dual carbon goals Haier supports the national

dual-carbon strategy and actively embraces the ESG principles. It has established aa

green design system that integrates both online and offline elements with a global

planning and collaborative R&D approach. Haier continues to introduce more

eco-friendly home appliances driving high-quality green development throughout the

entire industry chain.

(4). Reason for significant change in the composition of R&D personnel and its

impact on the future development of the Company

□ Applicable √ Not Applicable

5. Cash flow

□ Applicable √ Not Applicable

(II) Explanation for major changes in profit caused by non-principal businesses

□ Applicable √ Not Applicable

58 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

(III) Analysis of assets and liabilities

√ Applicable □ Not Applicable

1. Assets and liabilities

Unit: RMB

Change in the

Percentage of Percentage of Amount at the

Amount at the Amount at the end of Current

Amount at the End of Current Amount at the End of Previous Period to the

End of Current Period to Total End of Previous Period to Total End of Previous

Name of Item Period Assets (%) Period Assets (%) Period (%) Description

Financial assets held for 2034270761.53 0.69 1236017839.53 0.43 64.58 Mainly as a result of the

trading increase in short-term

wealth management

products

Derivative financial assets 80641860.30 0.03 142709716.91 0.05 –43.49 Mainly as a result of the

fluctuations in the fair

value of forward foreign

exchange contracts

Bills receivable 6482353046.34 2.19 12179856870.01 4.19 –46.78 Mainly as a result of the

discounting of bills

Financing receivables 1787975081.92 0.60 412922615.25 0.14 333.00 Mainly as a result of the

increase in bills

expected to be

discounted and

endorsed for transfer

Non-current assets due within

one year 8666892203.60 2.93 1439758652.55 0.50 501.97 Mainly as a result of the

increase in time

deposits due within one

year

Long-term receivables 134840798.60 0.05 224724107.31 0.08 –40.00 Mainly as a result of the

recovery of previous

payments

Investment properties 334429715.96 0.11 246161259.83 0.08 35.86 Mainly as a result of the

increase in leases

during the current

period

Development cost 417653270.53 0.14 267267592.92 0.09 56.27 Mainly as a result of the

increase in investment

in development projects

Other non-current assets 2301113869.91 0.78 1759556893.63 0.61 30.78 Mainly as a result of the

increase in

prepayments for

equipment and land

Derivative financial liabilities 190868603.05 0.06 71011310.01 0.02 168.79 Mainly as a result of the

fluctuations in the fair

value of forward foreign

exchange contracts

Non-current liabilities due

within one year 8678897462.98 2.93 16530040461.37 5.69 –47.50 Mainly as a result of the

decrease in long-term

borrowings due within

one year

Other comprehensive income 432012498.23 0.15 825502860.47 0.28 –47.67 Mainly as a result of the

fluctuations in the fair

value of investments in

other equity

instruments

Haier Smart Home Co. Ltd. Annual Report 2025 59Section III Management Discussion and Analysis

2. Overseas Assets

√ Applicable □Not Applicable

(1) Scope of assets

Among the assets overseas assets amounted to 15067500.51 (Unit and Currency:

RMB0’000) representing 50.94% of the total assets.

(2) Explanation of high percentage of overseas assets

√ Applicable □ Not Applicable

Unit and Currency: RMB

Operating revenue

Name of overseas during the reporting Net profit of the

asset Reason for Formation Operating mode period reporting period

Overseas Home Overseas mergers & Localized Operations 155792205647 6810870386

Appliance and acquisitions and the with the integration of

Smart Home Company’s own R&D manufacturing

Business development and marketing

Note: 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 industry operating information

□Applicable √ Not Applicable

(V) Analysis of investment

Overall analysis on external equity investment

√ Applicable □ Not Applicable

1. Significant equity investment

√ Applicable □ Not Applicable

Unit and Currency: RMB’00000000

60 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

Whether

the subject

is

principally Items in Progress Effect

engaged in Whether it is financial as at the of profit

the consolidated statement Investment balance Estimated or loss Whether

Main investment Investment Investment Shareholding financial (if Sources of Partners (if term sheet income for the involved in Disclosure Disclosure index (if

Name of investee business business method amount (%) statement applicable) funding applicable) (if any) date (if any) period litigation date (if any) any)

Haier Group Finance Enterprise group No Other 12.6 42% No / Converting / / Completed / / No 28 March Announcement on the

Co. Ltd. financial undistributed 2025 Capital Increase in

company profits into the Investee Haier

services registered Group Finance Co.capital Ltd. by Converting

Undistributed

Profits into

Registered Capital

in Proportion and

the Related-Party

Transaction of

Haier Smart Home

Co. Ltd.

(Announcement

no.: Lin

2025–008).

Qingdao Haiyunlian Construction No Acquisition 0.68 100% Yes / Proprietary / / Completed / / No 29 August Announcement on the

Industrial sale and funds 2025 Acquisition of All

Development leasing of Equity Interests in

Co. Ltd. (青島海 industrial Qingdao Haiyunlian

云聯產業發展有 plants Industrial

限公司) warehouses Development Co.office Ltd. and Related

buildings Party Transaction

and ancillary of Haier Smart

facilities Home Co. Ltd.

(Announcement

no.: Lin

2025–055).

Total / / / 13.28 / / / / / / / / / /

Haier Smart Home Co. Ltd. Annual Report 2025 61Section 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 of Directors

of the Company considered and approved a new construction project of 3 million units of

washing machines in the SCO Economic Demonstration Zone Jiaozhou Qingdao with an

estimated total investment of RMB1.784 billion. It also considered and approved the

proposed purchase of real estate for Haier White Goods R&D Center for RMB267 million.For details please refer to the Announcement on Investing in Construction of a New

Washing Machine Production Plant with an Annual 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 Haier White Goods R&D Centre and the Related-party

Transaction of Haier Smart Home Co. Ltd. (Announcement no.: Lin 2025–015) disclosed

by the Company on 28 March 2025. For details of other non-equity investment please refer

to “Section VIII Financial Report” for relevant information of items such as construction in

progress.

3. Items measured at fair value

Unit and Currency: RMB

Profits or Losses Cumulative Provision for

of Changes in Changes in Fair Impairment of Purchases Sold/Redeemed

Opening Fair Value during Value Included in during the during the Amount during

Asset Type Balance the Period Equity Period Period the Period Other Changes Closing Balance

Wealth management 746436121.40 402957.13 10733723000.00 9994568574.08 1485993504.45

products

Investment in other equity 6073680870.82 –662056749.56 1000902.32 61337728.97 53814194.72 5405101489.33

instruments

Investment in trading equity 195177368.77 35271695.81 21265660.41 209183404.17

instruments

Investment funds 294404349.36 55251132.65 16060569.86 18338893.63 –8283305.33 339093852.91

Financing receivables 412922615.25 29699807112.45 28324754645.78 1787975081.92

Derivative financial 71698406.90 –147631231.84 –30412731.26 –3881186.55 –110226742.75

instruments

Total 7794319732.50 –56705446.25 –692469480.82 40450591584.63 38420265502.87 41649702.84 9117120590.03

Note: As of 31 December 2025 the aggregate balance of the Company’s foreign exchange derivative transaction

amounted to approximately US$2.616 billion.

62 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

Investment in securities

√ Applicable □ Not Applicable

Unit and Currency: RMB

Profit and loss

arising from Accumulated fair

Carrying amount changes in fair value changes Investment profit Carrying amount

Type of Securities Securities Initial investment Sources of at the beginning value during the included in Purchases during Disposals during or loss during the at the end of the

securities code abbreviation cost funding of the Period Period equity the Period the Period period Period Accounting items

Stock 601328 Bank of 1803769.50 Self-funding 10584698.04 –708371.04 9876327.00 Investments in other

Communications equity instruments

Stock 600827 Bailian Group 154770.00 Self-funding 430510.84 –76412.72 354098.12 Investments in other

equity instruments

Stock 300183 Neusoft Carrier 18713562.84 Self-funding 15125624.10 –3533220.72 11592403.38 Investments in other

equity instruments

Stock 688455 KENGIC 13820053.00 Self-funding 86936035.20 28351163.24 6406851.83 108880346.61 Trading financial assets

Total / / 34492155.34 / 113076868.18 28351163.24 –4318004.48 6406851.83 130703175.11 /

Explanation of investment in securities

□ Applicable √ Not Applicable

Private equity investment

√ Applicable □ Not Applicable

By the end of the reporting period the Company has historically invested in private equity

funds as follows: the Company invested 63.13% share in Qingdao Haier SAIF Smart 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 in Huizhixiangshun 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 private equity 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 (Limited Partnership) (深

圳市投控東海一期基金（有限合伙）) 24% share in Qingdao Haimu Smart 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: 5.272% equity of CMG-SDIC Capital Co. Ltd. (國投招商投

資管理有限公司) 15% equity of Shenzhen TopoScend Capital Co. Ltd. (深圳市投控東海

投資有限公司) 49% equity of Qingdao Haimu Investment Management Co. Ltd. (青島海慕

投資管理有限公司).Haier Smart Home Co. Ltd. Annual Report 2025 63Section 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’0000

Proportion of

closing carrying

amount to net

assets of the

Gains or losses Accumulative Amount Company at the

on fair value changes in fair purchased Amount sold end of the

Type of derivatives Initial investment changes for the value included in during the during the reporting period

investment amount Opening amount current period equity reporting period reporting period Closing amount (%)

Forward foreign exchange 1014344 1014344 –14758 –3041 4918363 4093923 1838784 15.5

contracts

Forward commodity 4213 4213 –5 0 913 5126 0 0

contracts

Total 1018557 1018557 –14763 –3041 4919276 4099049 1838784 15.5

Explanation on any Accounting principles are based on the Accounting Standards for Business Enterprises. The Company carried out the accounting treatment for its business insignificant changes in accordance with the relevant regulations of “Accounting Standards for Business Enterprises No. 22 — Recognition and Measurement of Financialthe accounting policies Instruments” “Accounting Standards for Business Enterprises No. 24 — Hedge Accounting” “Accounting Standards for Business Enterprises No. 37and specific accounting — Presentation of Financial Instruments” and “Accounting Standards for Business Enterprises No. 39 — Fair Value Measurement” published by the

and auditing principles Ministry of Finance and its guidance to reflect the relevant items in the balance sheet and the statement of profit or loss which are consistent with those

for the hedging of the previous reporting period.business during the

reporting period as

compared to the last

reporting period

Explanation on actual profit The actual profit and loss for the reporting period amounted to RMB[–22.1738] million.or loss during the

reporting period

Explanation on the effect of Under the premise of ensuring normal production and operation the Company carried out hedging business to reduce the impact of exchange rate

hedging fluctuations on the Company’s production and operation and to realize the Company’s long-term stable development.Source of funds for Self-owned funds

derivative investments

64 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

Proportion of

closing carrying

amount to net

assets of the

Gains or losses Accumulative Amount Company at the

on fair value changes in fair purchased Amount sold end of the

Type of derivatives Initial investment changes for the value included in during the during the reporting period

investment amount Opening amount current period equity reporting period reporting period Closing amount (%)

Risk analysis and I. Foreign exchange hedging business

explanations on risk

control measures for 1. Risk Analysis

positions in derivatives

during the reporting The Company and its holding subsidiaries conduct foreign exchange derivatives business in accordance with the principle of stability and do not conduct the

period (including but foreign exchange transaction for speculative purposes. All foreign exchange funds businesses are based on normal production and operation and rely on

not limited to market specific business operations to avoid and prevent exchange rate risks. However there are also certain risks in conducting foreign exchange funds

risk liquidity risk credit business:

risk operational risk

legal risk etc.)

(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 of currency exchange. It is effective to resist market

fluctuation risk and ensure a reasonable and stable profit level of the Company through forward settlement of foreign exchange. Forward purchase of

foreign exchange: according to the import contract entered with the customer and exchange rate risk the future currency exchange cost will be fixed

through the unilateral forward purchase of foreign exchange. Although there is a certain risk of loss the forward purchase of foreign exchange will

effectively reduce the market fluctuation risk and fix procurement costs. Other NDF and options businesses are mainly carried out when failed to sign the

ordinary forward settlement/purchase of foreign exchange or the costs are too high only serving as the supplement of the above businesses. Exchange

rate fluctuation risk in currency swap business is avoided by adjusting the currency of assets and liabilities in order to match the currency of the assets

with the currency of liabilities. Interest rate fluctuation risk in interest rate swap business is avoided by transfer the floating-rate business to fix-rate

business 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 the Company’s fixed exchange rate fluctuation the cost of the Company

after fixing the exchange rate expenditure may exceed the cost of not fixing the exchange rate thus forming a loss of the Company. When the foreign

exchange rate changes greatly if the fluctuating direction of the Company’s fixed foreign exchange hedging contract is inconsistent with that of the

foreign exchange rate the foreign exchange loss will be formed; if the exchange rate does not fluctuate in the future the vast 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 of the 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 carried out foreign exchange derivative business term or amount

completely leading to a loss of the Company.Haier Smart Home Co. Ltd. Annual Report 2025 65Section III Management Discussion and Analysis

Proportion of

closing carrying

amount to net

assets of the

Gains or losses Accumulative Amount Company at the

on fair value changes in fair purchased Amount sold end of the

Type of derivatives Initial investment changes for the value included in during the during the reporting period

investment amount Opening amount current period equity reporting period reporting period Closing amount (%)

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 business and 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 shareholders’ meeting of the Company and the Board of Directors delegate the President/President Office

to take responsibility for the operation and management of the foreign exchange derivatives business the Treasury Department shall act as the handling

department and finance department 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 of closing 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 derivatives business must match with the Company’s predicted receipt

time deposit time or payment time of the foreign currency or match 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.

(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 of funds and conduct funding projections while

formulating trading plans to ensure sufficient funds. In the process of business operations 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 Management Measures for Hedging Business of Bulk Raw Materials

which contains clear provisions on the authorization scope approval procedures risk management and other aspects of hedging transactions. The

Company shall strengthen internal control management and improve professionalism implement risk prevention measures and improve the management

standard of hedging business.

66 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

Proportion of

closing carrying

amount to net

assets of the

Gains or losses Accumulative Amount Company at the

on fair value changes in fair purchased Amount sold end of the

Type of derivatives Initial investment changes for the value included in during the during the reporting period

investment amount Opening amount current period equity reporting period reporting period Closing amount (%)

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 will implement 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 trading business.

(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 management procedures and prevent operational risks in the business

in a timely manner.Changes in market price or In respect of changes in market prices or fair value of products gains or losses actually realized from the invested derivatives amounted to RMB[–22.1738]

fair value of invested million during the reporting period. As for the specific methodology used and the related assumptions and parameter settings: Foreign exchange and

derivatives during the interest rate swap forward quotations from financial institutions were used.reporting period where

specific methodology

used and the settings

of relevant assumptions

and parameters should

be disclosed in the fair

value analysis of

derivatives

Litigation case (if N/A

applicable)

Disclosure date of 28 March 2025

announcement in

relation to the

consideration and

approval of derivatives

investment by the

Board (if any)

Disclosure date of 28 May 2025

announcement in

relation to the

consideration and the

approval of derivatives

investment by

shareholders’ general

meeting (if any)

Haier Smart Home Co. Ltd. Annual Report 2025 67Section III Management Discussion and Analysis

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

□ Applicable √ Not Applicable

4. Detailed progression of material asset regrouping and integration during the

reporting period

□ Applicable √ Not Applicable

(VI) Sale of material assets and equity

□ Applicable √ Not Applicable

(VII) Analysis on major subsidiaries and Investees

√ Applicable □ Not Applicable

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

√ Applicable □ Not ApplicableFor details please refer to the relevant contents of “(2) Explanation of high percentage ofoverseas assets” under “(III) Analysis of assets and liabilities” in this section.Acquisition and disposal of subsidiaries during the reporting period

□ Applicable √ Not Applicable

There were no acquisitions or disposals of subsidiaries that had a material impact during the

reporting period. For details of other changes please refer to the relevant contents of sections

headed “CHANGES OF CONSOLIDATION SCOPE” in “Section VIII Financial Report” of this

report.Other explanations

□ Applicable √ Not Applicable

(VIII) Structured entities controlled by the Company

□ Applicable √ Not Applicable

68 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

IX. DISCUSSION AND ANALYSIS ON THE COMPANY’S FUTURE

DEVELOPMENT

(I) Setup and trend of the industry

√ Applicable □ Not ApplicableFor details please refer to the relevant contents of “II. INTRODUCTION OF THE INDUSTRYWHERE THE COMPANY OPERATES DURING THE REPORTING PERIOD” under “Section IIIManagement Discussion and Analysis” in this report.(II) Development strategy of the Company

√ Applicable □ Not Applicable

In an era defined by AI transformation and increasing consumer influence Haier Smart Home is

evolving from a global leader in major home appliances to a platform-based service-oriented

user-centric technology ecosystem enterprise. To realize this long-term vision we haveestablished a strategic framework centered on “One Channel Two Platforms and Six CoreCapabilities”. This framework is designed to drive comprehensive change strengthen our core

competencies foster new avenues for growth and ensure sustainable high-quality development.One Channel: Haier Smart Home

We are positioning the smart home business as our primary global competitive advantage.Focusing on this core channel we are transforming our business service sales and market

operations from end to end. Our goal is to provide users with comprehensive scenario-based

solutions that encompass smart appliances smart homes and smart living. By fully upgrading

the Haier Smart Home App and our overseas SmartHQ platform we are creating a unified portal

for direct user engagement and seamless partner integration. This approach fosters efficient

connections between users and ecosystem resources accelerating the global adoption and

market leadership of our smart home vision.Two Major Platforms: A comprehensive direct-to-consumer platform and a user lifecycle

experience management platform

The Company is committed to a thorough direct-to-customer transformation reshaping our

operations and customer relationships through the development of two platforms.The first is the comprehensive direct-to-consumer distributor platform. We are building a

universal direct-to-consumer model creating the shortest and most efficient path to directly

connect with users. By developing digital capabilities in inventory sales transactions and

logistics we are establishing a direct factory-to-customer channel which reduces intermediate

steps eases financial and inventory burdens for our distributors and improves inventory turnover.The platform serves as a hub for optimizing business processes like product planning and policy

creation while synchronizing information across logistics and service networks resulting in

greater operational efficiency streamlined process for distributors and a superior integrated

delivery and installation experience for users.Haier Smart Home Co. Ltd. Annual Report 2025 69Section III Management Discussion and Analysis

The second is the user lifecycle experience management platform. This platform consolidates

user data to provide continuous service and support throughout the entire customer journey. By

collecting and analyzing user data we can respond to user needs in real-time deliver targeted

services and transform one-time transactions into lasting trust-based relationships.Six Core Capabilities:

Centered on the principle of user-centric management the Company is systematically developing

six strategic capabilities: Globalization Premiumization Digitalization Smart Technology

Ecosystem Development and Green Initiatives. These pillars provide a solid foundation for our

sustainable development.In terms of globalization the Company is committed to global brand-building. We have

established a global presence not only for our brands and products but also by standardizing ten

major capabilities worldwide including sales marketing service logistics procurement R&D

manufacturing finance human resources and IT. This comprehensive strategy ensures leading

product competitiveness rapid market responsiveness and efficient governance. Our goal is to

be a leader in business scale product innovation and operational efficiency in every market we

serve.In terms of premiumization we are committed to a high-end brand strategy rooted in localized

global R&D and feedback-driven innovation to consistently launch best-selling products

worldwide. By focusing on original product technology refining our product suites upgrading

experience centers and optimizing our direct-to-consumer service model we strengthen our

brand influence and solidify a leading price position in the market.For digitalization the Company implements a comprehensive user-centric digital transformation to

enhance operational efficiency and end-to-end user experience. By digitizing the entire processes

of R&D manufacturing marketing and service we continuously optimize key performance

indicators such as model efficiency material utilization and production efficiency. This enables

our transition from experience-based management to data-driven operations.For smart technology we are committed to the comprehensive application of AI. By leveraging

our Smart Home Brain and Uhome large model we are evolving beyond individual smart

products to deliver intelligent scenario-based experiences. We use AI as a core engine to build

an end-to-end marketing system and foster effective human-machine collaboration in R&D

manufacturing and service making smart technology a core driver for enhancing user experience

and corporate efficiency.Regarding ecosystem development the Company is building an open ecosystem to offer users

one-stop services for daily life including clothing food housing and entertainment. By

expanding our network of resource partners we are transforming the smart home from a physical

space filled with appliances into a comprehensive ecosystem that addresses a full range of

service scenarios.For green initiatives we integrate ESG principles into our corporate governance and are

committed to carbon reduction across the entire product lifecycles. As the highest-rated

company in our domestic industry by MSCI ESG we view sustainable and low-carbon

70 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

development as a critical strategy component not a cost. We systematically implement green

practices in product design manufacturing (including energy optimization and the use of recycled

materials) and related industries like large-scale HVAC and recycling to continuously strengthen

our environmental competitiveness.(III) Business plan

√ Applicable □ Not Applicable

2026 marks a critical year in the execution of the Company’s 126 strategy. Priorities center on

deepening the smart home ecosystem completing the rollout of the DTC platform and user

lifecycle management platform and strengthening core capabilities in premiumization

globalization digitalization and ecosystem development.Business Divisions: Sustained Leadership Accelerated Expansion

We will sustain global leadership in refrigeration laundry care and kitchen appliances through

continued technology-led differentiation. At the same time we are accelerating the buildout of our

HVAC business integrating residential air conditioning commercial building solutions and water

solutions into a unified platform spanning technology supply chain manufacturing and

distribution. Starting from real consumer needs this business will offer integrated low-carbon

energy solutions across design installation maintenance and energy management — and is

expected to become a meaningful contributor to the Company’s growth.Having completed its post-acquisition integration into Haier Smart Home the CCR business has

entered a new phase of efficient growth. In 2026 CCR will draw on its exclusive CO2

refrigeration technology license shared R&D resources and digital efficiency gains — alongside

ongoing global expansion — to deliver stronger revenue growth and further operating margin

improvement.Looking further ahead we are pursuing a vision of zero-effort housework through group

intelligence that connects home appliances with service robots. Through proprietary R&D

partnerships and strategic investments we will increase our commitment to home robotics —

leveraging our strengths in home-scenario data appliance-level task coordination and precision

manufacturing — to deliver products that understand the home and can act on it.China: Full-Scale Consumer-Centric Transformation

Channel network upgrade. We plan to open over 3000 new specialty stores in county and

township markets and upgrade more than 6000 existing locations into integrated experience

centers. An additional 1000 Smart Kitchen experience stores will shift the in-store model from

product display to lifestyle-driven presentation with the aim of increasing bundled purchases.Operating model transformation. We will complete the rollout of our DTC model targeting

100% direct delivery to end consumers in 2026—further reducing handling steps optimizing

inventory lowering channel costs and improving overall efficiency.Haier Smart Home Co. Ltd. Annual Report 2025 71Section III Management Discussion and Analysis

AI-driven product innovation. Our AI Vision platform is driving home appliances toward

proactive autonomous service. In 2026 we will launch next-generation smart appliances

equipped with AI Vision 2.0 enabling machines to perceive their environment — identifying

ingredients anticipating laundry color-bleeding risks — bringing us closer to truly hands-free

home management.Expanding premium reach. Casarte will deepen its presence in Tier 1–3 cities with 100 new

experience centers and 300 flagship stores increasing the proportion of bundled-set sales and

reinforcing our premium market leadership.Overseas: Deepening Localization Across Global Markets

Developed markets. In North America and Europe we will transition from single-product

penetration to integrated solutions and deeper brand engagement leveraging our multi-brand

portfolio to expand coverage while building B2B capabilities for commercial applications.Emerging markets. We will deepen local manufacturing and premium brand-building combining

global coordination with local agility. Accelerated capacity deployment and full-lifecycle service

offerings are expected to drive gains in both share and profitability.(IV) Potential risks of the Company

√ Applicable □ Not Applicable

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

and home appliances exhibit inherent cyclicality tied to discretionary consumer spending

patterns and their expectations of future disposable income growth. Economic downturn will

reduce consumer spending and cause headwinds to industry growth. In addition the

persistent sluggish property market will also indirectly affect market demand for home

appliances negatively.

2. Risk of price war caused by intensified industry competition. As the industry concentration

level has continued to increase in recent years the white goods industry is highly

competitive with persistent commoditization pressures across core product categories.However the increase in inventory levels in specific verticals due to demand-supply

imbalance may lead to price wars. Furthermore rapid technological development scarcity

of talent in the industry shortened product life cycles and the relative ease of copycatting

increase the difficulty of maintaining margin levels. Nevertheless new products services

and technologies are often associated with higher selling prices. The Company will actively

invest more in R&D to sustain the product roll-out attract more users through continuous

innovation and maintain our brand awareness.

72 Haier Smart Home Co. Ltd. Annual Report 2025Section III Management Discussion and Analysis

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

use metals such as steel aluminium and copper as well as commodities such as plastics

and foams. If raw material prices continue to increase it will put certain pressure on

production and operations. In addition the Company relies on third-party manufacturers

and suppliers for selected raw materials components and manufacturing equipment. Any

disruption in the supply chain or significant price increases will hurt the Company’s

business. As a leader in the industry the Company will take actions and have contingency

plans including volume and price adjustments mechanisms and hedging to reduce the

volatility of raw material prices.

4. Operational risks in overseas markets. As evidenced by the growing share of revenue from

overseas markets the Company has expanded its global business to a certain extent and

established production bases R&D centres and marketing centres in key international

regions. Overseas markets are subject to political and economic events (including events

such as military conflicts and wars) different legal systems and regulatory regimes of those

countries and regions. Significant changes in these factors will pose particular risks to the

Company’s local operations. The Company has taken various measures to mitigate the

relevant impacts including collaborating with suppliers and distributors improving

production efficiency to offset the selling expenses potentially expanding the Company’s

supply resources to other countries and adopting safety measures to protect our

employees 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 the

industry and the global home appliance players. Higher tariffs would incur extra costs for

export and import reduce profit margins weaken consumer sentiment and demand and

intensify market competition in target markets. The increasing uncertainties regarding tariff

policies would force home appliance players to reevaluate their supply chain strategies and

footprints increase operational complexities and management costs. To cope with the

potential tariff shocks the Company will actively leverage our localised supply chain

resources in respective markets further optimise supply chain management enhance

production flexibilities and strengthen regional manufacturing and collaboration capabilities.

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 and cross-

border settlements are denominated in foreign currencies including but not limited to the

US Dollar (USD) Euro (EUR) and Japanese Yen (JPY). If the exchange rates of these

currencies fluctuate to a certain extent it will impact the Company’s financial performance

and potentially increase the economic costs. In addition the Company’s consolidated

financial statements are denominated in Renminbi while subsidiaries’ financial statements

are measured and reported in the local currencies where they operate. To mitigate these

exposures the Company maintains a structured currency risk management program

utilising authorised hedging instruments.Haier Smart Home Co. Ltd. Annual Report 2025 73Section III Management Discussion and Analysis

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

consumer market and the property market. Changes in macroeconomic policies

consumption and investment policies property policies and relevant laws and regulations

will affect demand and in turn the sales of the Company. The Company will closely

monitor changes in applicable policies rules and regulations and make forecasts of

market changes to ensure the Company’s further development.

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

trade receivables promptly. If that is the case the Company’s business financial status

and operational performance may be affected negatively. To mitigate this risk the Company

will maintain flexibility by offering a credit period of 30 to 90 days to certain distributors

based on their credit history and transaction amount.

9. Inventory risk. Excess inventory may occur because the Company cannot always accurately

predict trends and events which can lead to suboptimal inventory levels. Therefore the

Company may be forced to offer discounts or promotions to accelerate the slow-moving

inventory in these extreme cases. On the other hand an inventory shortage may lead to a

loss of revenue. The Company will actively manage its inventory and adjust levels according

to market demand movements in addition to the regular impairment tests.

10. Capital expenditure risk. In the current macroeconomic environment characterised by a

slowing global economy and declining consumer demand the existing production

capacities may overwhelm the market in extreme cases. This could lead to a low utilisation

rate across the industry which in turn would lower profitability and ROEs. The Company

will actively manage the changes in the macroeconomic environment by forecasting and

recalibrating market demand trends optimising capacity footprint and improving existing

utilisation rate to minimise capital expenditure risks.(V) Others

√ Applicable □ Not Applicable

VII. EXPLANATION OF CIRCUMSTANCES AND REASONS FOR NON- DISCLOSURE BY THE

COMPANY IN CONSIDERATION OF INAPPLICABLE REGULATIONS STATE SECRETS

AND COMMERCIAL SECRETES

□ Applicable √ Not Applicable

74 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance

Environment and Society

I. EXPLANATION OF CORPORATE GOVERNANCE

√ Applicable □ Not Applicable

During the reporting period the Company has strictly complied with the requirements of the relevant

laws and regulations including the Company Law of the People’s Republic of China Securities Law of

the People’s Republic of China Code of Corporate Governance of Listed Companies and the listing

rules of its listed jurisdictions. While maintaining high quality development in terms of performance the

Company has been continuously improving its governance structure regulating its operation enhancing

the transparency and quality of its information disclosure treating various investors fairly focusing on

shareholder return implementing its equity incentive mechanism and upgrading the level of its

corporate governance.

1. Scientific and standardized governance structure

The Company has set up a standardized and orderly corporate governance structure composed

of the general meeting of shareholders the Board of Directors and its special committees

(including the Strategy Committee Audit Committee Nomination Committee Remuneration and

Assessment Committee and ESG Committee (i.e. Environmental Social and Governance

Committee)) and the senior management. We have established a governance mechanism with

clear lines of authority and responsibility mutual coordination and checks and balances which

ensures the transmission of responsibilities and the execution of tasks thereby guaranteeing

efficient and compliant corporate governance.During the reporting period the Company has convened a total of eight shareholders’ meetings

five Board meetings one meeting of the Strategy Committee five meetings of the Audit

Committee two meetings of the Remuneration and Assessment Committee two meetings of the

Nomination Committee and two meetings of the ESG Committee. All meetings and voting

procedures complied with relevant provisions specified in laws and regulations the Articles of

Association and rules of negotiation and all voting results were legal and valid. These laid a solid

foundation for the Company’s standardized operation.Haier Smart Home Co. Ltd. Annual Report 2025 75Section IV Corporate Governance Environment and Society

2. Full protection of shareholders’ right

The Company has established open and effective communication channels with shareholders to

ensure their rights to be informed participate in decision-making and exercise oversight over

major corporate matters. During the reporting period the Company strengthened communication

and exchange with investors in an active open innovative and professional manner so as to

enhance investors’ understanding and recognition of the Company and safeguard the legal rights

of investors. In accordance with guideline of the Management System for Investor Relation the

Company integrated business and financial resources by the office of the board of Directors and

realized positive and all-around access to investors in a multi-layer and diversified format through

introduction reference result announcement conference and online forum. Meanwhile the

Company replied investors on a timely basis by ways of interview e-mail phone fax and the

website (http://sns.sseinfo.com) and enhanced interaction with investors so as to respect and

protect the interests of investors with the aim of achieving harmonious and mutual success with

the Company staff and investors. During the reporting period the Company has strictly complied

with the provisions of the Articles of Association and the Rules of Procedure for the

Shareholders’ Meetings in convening and holding general meetings. Shareholders’ meetings are

witnessed by lawyers on site and legal opinions are issued on their legality. During the reporting

period the Company convened a total of eight shareholders’ meetings to deliberate on matters

such as financial matters related-party transactions external guarantees and share repurchases.Major shareholders abstained from voting on proposals involving their own interests. For

significant matters the Company separately tallied the votes of small and medium-sized investors

to further safeguard their rights and interests.The Company has formulated and consistently implemented a sustainable stable and reasonable

profit distribution policy to create value for its shareholders. As at 31 December 2025 the

Company had achieved cumulative cash dividends of approximately RMB48.7 billion since the

listing of A-share in 1993 with a dividend payout ratio exceeding 30%. During the reporting

period the Company also launched its first interim dividend enhancing shareholders’ sense of

gain by increasing the frequency of dividend distributions. Meanwhile the Company continued to

advance its share repurchase repurchasing A shares totaling RMB1.20 billion and H shares

totaling HK$100 million during the reporting period. Looking ahead the Company will continue to

strictly follow the requirements set out in the Articles of Association and in the Shareholder

Return Plan for the Next Three Years of the Company maintaining policy consistency

reasonableness and stability.

76 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

3. Professional and efficient operation of the Board of Directors

The Board of Directors is mainly responsible for deciding the Company’s operational and

investment plans formulating the Company’s annual financial budget and final account plans

formulating the Company’s profit distribution plan and loss recovery plans formulating the

Company’s plans for the increase or reduction of registered capital issuance of bonds or other

securities and listing as well as the powers as stipulated in other laws and regulations and the

Articles of Association. During the reporting period the Board of Directors has held five

meetings. The Board of Directors operated in accordance with rules and were able to perform

their duties under Articles of Association and relevant laws and regulations and practically

implement relevant decisions at the shareholders’ meetings. The decision-making procedure and

particulars of the resolutions of the Board of Directors were in compliance with Articles of

Association and relevant requirements under laws and regulations and the resolutions made were

legal and valid.

(1) Diverse and professional Board of Directors

The Company is fully aware that board diversity will help to improve the efficiency in

decision-making of the Board of Directors reduce management risks and make better

decisions for the sustainable and healthy development of the Company. In determining the

composition of the Board of Directors the Company took full account of the diversity of the

members of the Board including but not limited to gender age culture education

background industry experience professional skills knowledge term of service and other

relevant factors. The Nomination Committee is responsible for reviewing the effectiveness

and implementation of the Board Diversity Policy and conducting regular annual diversity

assessments.During the reporting period the term of the Company’s Board of Directors expired and a

new session of Board was re-elected which consists of 11 directors including 2 executive

directors 4 non-executive directors 1 employee director and 4 independent directors. The

Board of Directors now includes 1 foreign member further enhancing its international

diversity. The members of the Board of Directors have extensive knowledge and experience

in AI technology digitalization industry experience corporate governance global market

experience financial management and risk management which will help the Board of

Directors to make the best decisions and promote the sustainable and healthy development

of the Company.Haier Smart Home Co. Ltd. Annual Report 2025 77Section IV Corporate Governance Environment and Society

(2) Compliance of Special Committees and Independent Performance of Duties by

Independent Directors

All special committees of the Company are established in accordance with regulations.Except for the Strategy Committee and the ESG Committee the chairpersons of all other

special committees are Independent Directors. The chairperson of the ESG Committee is a

non-executive director. The number of independent directors present at the meetings of the

Audit Committee the Remuneration and Assessment Committee the Nomination

Committee and the Strategy Committee accounted for at least one-half of the quorum of

such meeting (inclusive). Each special committee has established comprehensive systems

with specific working procedures that clearly define their terms of reference and rules of

procedure. The committees conduct their meetings with comprehensive agendas and

exhaustive deliberations. Furthermore to strengthen the support for the committees’

performance of their duties the Company has designated specific departments to assist

each special committee. These departments promptly provide committee members with the

information required for their duties ensuring the compliant and effective operation of

special committees and enhancing corporate governance standards. During the reporting

period with the implementation of the new Company Law the Board of Supervisors has

been abolished and its oversight functions have been transferred. The Company’s Audit

Committee and other relevant bodies have promptly and effectively assumed all

responsibilities previously held by the Board of Supervisors. By operating in compliance

with the new rules of procedure the Company has further leveraged its internal supervisory

advantages thereby achieving a significant improvement in supervisory effectiveness.The independent directors of the Company are all senior professionals with expertise in

accounting finance and AI technology. During the reporting period the independent

directors of the Company performed specific duties in accordance with the Articles of

Association and the listing rules of its listed jurisdictions including participating in the

meetings of the Board of Directors special meetings of independent directors and

meetings of each of the Company’s special committees providing advice to the Company

on its operation and management; and expressing opinion on significant matters of the

Company. By performing their duties as mentioned above the independent directors help

protect the interests of the Company and the shareholders as a whole and promote the

development of the Company. 3. An aligned incentive and disciplinary mechanism

(3) A Balance between Incentives and Constraints

The Company has been adhering to the management model of “RenDanHeYi” and taking

the “maximization of the value of people” as the core. In line with the global landscape of

the capital market the Company has established a short-term plus mid to long-term

incentive system which aligns the interests of employees and all shareholders. During the

reporting period the Company has continued its incentive plan for the previous period and

continued to introduce domestic and overseas incentive plans with various appraisal cycle

multi-level and all-round benefits and to establish an incentive mechanism that links

remuneration to corporate and individual performance including A-Share Core Employee

Stock Ownership Plan H-Share Core Employee Stock Ownership Plan H-Share Overseas

Trust Incentive Plan and A-Share Option Incentive Scheme. The Company has

setcompetitive assessment indicators for such schemes to ensure a deeper and more

effective alignment of interests between the participants and the Company.

78 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

4. Transparent and Comprehensive Information Disclosure

The Company is listed on the A-share H-share and D-share markets and is therefore required

to comply with the information disclosure regulations in both domestic and international markets

fulfilling its disclosure obligations accordingly. The Company ensures that its information

disclosure is synchronous comprehensive and compliant: it discloses significant information

simultaneously across all markets to avoid any information asymmetry caused by time differences

or procedural delays ensuring synchronisation; the content of the disclosures integrates

requirements from all listing jurisdictions addressing any differences in disclosure scope and

standards to ensure comprehensiveness; and the Company adheres to a unified information

disclosure management system to ensure the disclosures are truthful accurate and procedurally

sound ensuring compliance. Additionally recognising the differences in language and reading

habits across various listing locations the Company has formed a dedicated team to develop

tailored solutions for each market. In summary through internal coordination mechanisms the

Company ensures that its disclosures across all listing locations are fully compliant with

regulatory requirements while maintaining consistency on key information thereby safeguarding

investor confidence and ensuring market fairness globally.

5. In-depth Upgrading of ESG Governance

Haier Smart Home has strengthened its global three-tier ESG governance framework by adding

multiple execution chains to provide organisational support for ESG management. The Company

has implemented the “6 Green” strategy covering the entire product lifecycle to promote

low-carbon operations and industrial upgrades. The Company actively fulfils its social

responsibilities globally by carrying out charitable and public welfare projects. Haier Smart

Home’s outstanding ESG practices have earned recognition with leading ratings from

authoritative institutions such as MSCI.Whether there is a significant difference between the corporate governance and requirements in

respect of corporate governance of listed companies of laws administrative regulations and the

CSRC; if so the reasons should be explained

□ Applicable √ Not Applicable

II. SPECIFIED MEASURES ADOPTED BY THE CONTROLLING

SHAREHOLDERS AND ULTIMATE CONTROLLERS TO MAINTAIN

INDEPENDENCE WITH RESPECT TO ASSETS PERSONNEL FINANCE

ORGANIZATION BUSINESS AND THE SOLUTIONS ADOPTED

WORKING PROGRESS AND SUBSEQUENT WORKING PLANS IN CASE

OF THE COMPANY’S INDEPENDENCE BEING AFFECTED

□ Applicable √ Not Applicable

Controlling shareholders ultimate controllers and other parties controlled by them engaged in business

that are same as or similar to the company peer competition and impact of significant changes in

peer competition on the company solutions adopted working progress and subsequent solution plans

□ Applicable √ Not Applicable

Haier Smart Home Co. Ltd. Annual Report 2025 79Section IV Corporate Governance Environment and Society

III. DIRECTORS AND SENIOR MANAGEMENT

(I) Changes of shareholding and remuneration of current and retired directors and

senior management during the reporting period

√ Applicable □Not Applicable

Unit: share

Total

remuneration

received from

the Company Whether

during the receive

Increase/ reporting remuneration

Shareholdings Shareholdings decrease in period from the

Appointment Expiration date at the beginning at the end of shares for the Reason for increase/ (RMB0’000) Company’s

Name Title Gender Age date of appointment of the year the year year decrease (before tax) related party

Li Huagang Chairman Chief Executive M 57 29 May 2025 28 May 2028 1050444 1156699 106255 Employee stock 355 NO

Officer ownership plan vested

Gong Wei Vice Chairman M 53 29 May 2025 28 May 2028 2072527 2124906 52379 Employee stock 41 YES

ownership plan vested

LI Shaohua Director M 63 29 May 2025 28 May 2028 30729 30729 Employee stock YES

ownership plan vested

Kevin Nolan Director vice president M 60 29 May 2025 28 May 2028 1951 NO

Sun Danfeng Director vice president Chief F 50 29 May 2025 28 May 2028 42563 42563 Employee stock 106 NO

Digital Officer ownership plan vested

Yu Hon To Director M 78 29 May 2025 28 May 2028 41.5 NO

Chien Da-chun Director M 73 29 May 2025 28 May 2028 51.5 NO

Wong Hak Kun Independent director M 70 29 May 2025 2 June 2026 44.0 NO

Li Shipeng Independent director M 59 29 May 2025 4 March 2027 47.0 NO

Wu Qi Independent director M 59 29 May 2025 24 June 2027 46.0 NO

Wang Hua Independent director M 49 29 May 2025 28 May 2028 18.0 NO

Shao Xinzhi (retired Vice Chairman F 56 28 June 2022 28 May 2028 25558 25558 YES

following

election)

Li Kam Fun (retired Director F 74 28 June 2022 28 May 2028 23.0 NO

following

election)

Liu Dalin (retired Chairman of the Board of M 46 28 June 2022 28 May 2028 68391 68391 YES

following Supervisors

election)

Yu Miao (retired Employee supervisor M 44 28 June 2022 28 May 2028 13648 13648 10 NO

following

election)

Liu Yongfei (retired Supervisor M 41 21 June 2024 28 May 2028 30 NO

following

election)

Xie Juzhi (retired Vice president M 60 28 June 2022 28 May 2028 180808 180808 39 NO

following

election)

Li Pan (resigned) Vice president M 50 28 June 2022 30 December 664375 688586 24211 Employee stock 149 NO

2025 ownership plan vested

Zhao Yanfeng Vice president M 49 29 May 2025 28 May 2028 247484 302988 55504 Employee stock 225 NO

ownership plan vested

Li Yang Vice president M 50 29 May 2025 28 May 2028 151252 196668 45416 Employee stock 142 NO

ownership plan vested

Song Yujun Vice president M 51 29 May 2025 28 May 2028 287478 321621 34143 Employee stock 189 NO

ownership plan vested

Guan Jiangyong Vice president M 48 29 May 2025 28 May 2028 264867 324177 59310 Employee stock 203 NO

ownership plan vested

Wu Yong Vice president M 48 29 May 2025 28 May 2028 334166 383053 48887 Employee stock 174 NO

ownership plan vested

80 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

Total

remuneration

received from

the Company Whether

during the receive

Increase/ reporting remuneration

Shareholdings Shareholdings decrease in period from the

Appointment Expiration date at the beginning at the end of shares for the Reason for increase/ (RMB0’000) Company’s

Name Title Gender Age date of appointment of the year the year year decrease (before tax) related party

Huang Xiaowu Chief Sustainable M 49 29 May 2025 28 May 2028 110695 110695 118 NO

Development Officer vice

president

Liu Xiaomei Secretary to the Board of F 41 29 May 2025 28 May 2028 24919 38439 13520 Employee stock 44 NO

Directors ownership plan vested

Sun Jiacheng Chief Financial Officer vice M 44 29 May 2025 28 May 2028 33256 33256 Employee stock 107 NO

president ownership plan vested

Fu Songhui Vice president M 54 29 May 2025 28 May 2028 42946 42946 Employee stock 149 NO

ownership plan vested

Huang Decheng Vice president M 52 29 May 2025 28 May 2028 39013 39013 Employee stock 282 NO

ownership plan vested

JAMES QUN LIU Chief Compliance Officer M 55 29 May 2025 28 May 2028 34919 34919 Employee stock 214 NO

vice president ownership plan vested

Total / / / / / 5496612 6159663 663051 / 4799 /

Note: (1) all the shares in the above table are A-shares: (2) for new directors supervisors and senior management who joined

during the reporting period their shareholdings at the beginning of the year are based on the first day of their

appointment and for directors supervisors and senior management who left office during the reporting period their

shareholdings at the end of the year are based on the date they left office.Name Major working experience

Li Huagang Male born in 1969. He graduated from Huazhong University of Science

and Technology in 1991 with a Bachelor’s degree of Economics and

from China Europe International Business School in 2014 with a degree

of Executive Master of Business Administration (EMBA). He is currently

chairman and president of Haier Smart Home Co. Ltd. Mr. Li Huagang

joined Haier in 1991 and served as the sales head of the Marketing and

Promotion Division of Haier (海爾商流本部銷售事業部長) and the general

manager of China operations of Haier Smart Home. From August 2017 to

March 2019 he served as the chief executive officer of Haier Electronics.Since March 2019 Mr. LI has been appointed as an executive director of

Haier Electronics. He has been an executive director and president of the

Company since 2019. Mr. Li Huagang has extensive experience in the

fields of corporate management marketing brand operation and global

business operation. Mr. Li Huagang was successively honoured with

several prestigious awards including the Award of Outstanding

Contribution in 40-Years Development of China’s Home Appliance

Industry 2018 2019 Person of the Year of China’s Top Ten Brands

2021 Taishan Industry Leading Talent 2023 Model Worker in Shandong

Province recognition in the Forbes 2024 China’s Best CEO List and the

2023–2024 Outstanding Entrepreneur of the Year

Haier Smart Home Co. Ltd. Annual Report 2025 81Section IV Corporate Governance Environment and Society

Name Major working experience

Gong Wei Male born in 1973. He graduated from the University of International

Business and Economics in 2011 and obtained a degree of Executive

Master of Business Administration. He is also a member of the Chartered

Institute of Management Accountants (CIMA) and an International Certified

Public Accountant (ICPA). Mr. Gong Wei served as the financial manager

of Haier Smart Home Co. Ltd the senior finance manager and senior

financial analyst of Haier Group the Chief Financial Officer of Haier

Washing Machine Division the Chief Financial Officer of Haier Air

Conditioning Division the Chief Financial Officer of Haier White Goods

Group the Chief Financial Officer and vice president of Haier Smart

Home with extensive experience in financial management. Mr. Gong Wei

was granted honorary titles such as Young Post Expert in Qingdao City

(青 島 市 青 年 崗 位 能 手) Qingdao Top Talent (青 島 市 拔 尖 人 才)

Outstanding Accounting Workers in Shandong Province (山東省優秀會計

工作者) and National Outstanding Accounting Workers (全國優秀會計工

作者) and received several awards including Top Ten CFO in China by

“New Money” Magazine 《( 新 理 財 雜 志》) and International Finance

Leaders of the Year in China. He is currently the vice president and the

Chief Financial Officer of Haier Group and the Vice Chairman of Haier

Smart Home Co. Ltd.LI Shaohua Make born in 1963. Mr. LI graduated from Ohio State University and

Georgia State University in the United States and obtained a MA and a

MBA degree respectively. He holds various international professional

certifications such as CPA (Certified Public Accountant) CIA (Certified

Internal Auditor) CISA (Certified Information Systems Auditor) CRMA

(Certification in Risk Management Assurance) and CRISC (Certified in Risk

and Information Systems Control). Mr. LI has over 30 years of working

experience in internal and external auditing risk management compliance

governance financial and operational management. He has worked for

Deloitte (one of the Big Four accounting firms) and held important

positions in various institutions including AKZO Nobel (a Fortune Global

500 company) and Trina Solar (a listed company). Moreover he has

served as a director and vice president of internal audit and internal

control of Haier Electronics Group Co. Ltd. and is currently the Vice

President and Chief Audit and Risk Control Officer of Haier Group the

general manager of Haier Group’s Audit and Risk Control Committee the

chairman of the Haier Group’s ESG execution committee and a Director

of Haier Smart Home.

82 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

Name Major working experience

Kevin Nolan Male born in 1966. Mr. Nolan graduated magna cum laude with a

Bachelor of Science in Mechanical Engineering from the University of

Connecticut in 1989 where he was also a member of the Honors

Scholar Program. He currently serves as a Vice President of Haie Smart

Home and the Chief Executive Officer of GE Appliances a subsidiary of

the company. After Mr. Nolan joined GE he held multiple engineering and

manufacturing roles across GE ED&C. He later advanced through

leadership positions within GE’s appliance lighting and industrial

divisions. From 2001 to 2006 he led sourcing and new product

introduction efforts launching over 150 products annually while

establishing global sourcing capabilities notably in China to enhance

profitability and drive operational efficiency. He was instrumental in

developing new NPI processes and building a quality-focused culture

across GE Consumer and Industrial Products. As Vice President of

Technology from 2006 to 2016 Mr. Nolan led GE Appliances’ global

engineering organization guiding the business through a billion-dollar

transformation of its U.S. manufacturing and product leadership. He

founded FirstBuild a groundbreaking open innovation platform and drove

the internal capability shift from outsourced to in-house manufacturing.Following Haier’s acquisition of GE Appliances in 2016 and since

becoming CEO of GE Appliances in 2017 Mr. Nolan has restructured the

business to emphasize customer value and employee empowerment

introducing a microenterprise model to encourage entrepreneurship while

leveraging scale. Under his leadership the company doubled in size

within five years becoming the fastest-growing and largest appliance

company in the U.S. He has championed a culture of innovation

diversity and inclusion entering new markets and reinvigorating GE

Appliances as a nimble consumer-driven organization. Mr. Nolan has

received numerous honors throughout his career including the 2014 GE

Chairman’s Award six consecutive Haier CEO Special Awards (2018–

2023) and the 2019 Business First Most Admired CEO. He is a Six

Sigma Master Black Belt and a founding member of the Lean Institute for

Product and Process Development. In recognition of his leadership

innovation and commitment to public education Mr. Nolan was awarded

an honorary Doctor of Science degree from the University of Louisville in

2022.

Haier Smart Home Co. Ltd. Annual Report 2025 83Section IV Corporate Governance Environment and Society

Name Major working experience

Sun Danfeng Female born in 1976. Ms. SUN is currently an Employee Representative

Director Vice President the Chief Digital Officer and the general

manager of digital transformation of Haier Smart Home Co. Ltd. Ms.SUN graduated from China Agricultural University in 1998 with a

Bachelor’s degree in Economics and joined Haier in August of the same

year. She graduated from Renmin University of China in 2015 and

obtained an Executive Master of Business Administration (EMBA) degree.Ms. SUN has been working in the home appliance industry for many

years specialising in the building and operation of user digitisation

employee digitisation and customer digitisation systems. She has served

as strategic director of the business flow promotion division general

manager of the mega business exchange platform and general manager

of digital marketing for the China platform. She has extensive experience

in digital system research system construction digital transformation

technology management and decision-making consulting. During her

tenure she has made remarkable achievements in big data analysis

transformation of scientific and technological achievements and digital

transformation and upgrading of industries. She has won the 2021 ICT

industry Mulan Award and the title of Shandong Province Big Data

Industry Leader in 2022. She is a management expert of scientific and

technological expert pool in Shandong Province.Yu Hon To Male born in 1948. He holds a Bachelor of Social Science degree from

Chinese University of Hong Kong. He is a Fellow of the Institute of

Chartered Accountants in England and Wales and an Associate Member

of Hong Kong Institute of Certified Public Accountants. Mr. Yu is a

chartered accountant with over 40 years’ experience in the fields of

auditing corporate finance (including advisory on IPO mergers &

acquisitions and financial restructuring) financial investigation and

corporate governance. Mr. Yu was formerly a partner of a renowned

international accounting firm with extensive experience in the corporate

finance advisory assignments in Greater China for Hong Kong

corporations private equity groups and multinationals. He is currently a

director of 12th session of the Board of Directors of Haier Smart Home.Chien Da-chun Male born in 1953. He served as Chief Executive Officer of IBM ASEAN/

South Asia Chairman and Chief Executive of IBM Greater China region.He graduated from the Department of Mathematics of Tamkang

University of Taiwan and studied advanced management courses in the

Institute of Business Administration of Harvard University as well as the

global senior manager courses of International Business Machines

Corporation (IBM). He was a director of ENN Group an independent

director of Haier Smart and a professor of Management Practice at the

School of Business of Renmin University of China/Academic Director of

EE Centre. He is currently a Director of Haier Smart Home.

84 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

Name Major working experience

Wong Hak Kun Male born in 1956. He received a Bachelor’s of Social Science degree

from University of Hong Kong. He has over 36 years of experience in

auditing assurance and management in Deloitte China. He has been a

partner of Deloitte China since 1992 and served as a member of the

board of directors of Deloitte China from 2000 to 2008. Prior to his

retirement in May 2017 he was Deloitte China’s National Managing

Partner of Audit & Assurance. Mr. Wong is an associate of the Hong

Kong Institute of Certified Public Accountants (HKICPA) an associate of

the Association of Chartered Certified Accountants (ACCA) an associate

of the Chartered Institute of Management Accountants (CIMA) an

associate of The Chartered Governance Institute (previously known as

“The Institute of Chartered Secretaries and Administrators”). He currently

serves as an independent non-executive director of Yue Yuen Industrial

Holdings (Limited) Lung Kee (Bermuda) Holdings Limited Guangzhou

Automobile Group Co. Ltd. Hangzhou SF Intra-City Industrial Co. Ltd.and Haier Smart Home Co. Ltd.Li Shipeng Male born in 1967. He holds a bachelor’s and Master’s degree from

University of Science and Technology of China and a PhD degree from

Lehigh University USA. Mr. Li has extensive experience in Internet of

Things technology and artificial intelligence. Mr. Li is currently a chair

scientist at the International Digital Economy Academy and an executive

director of the Low Altitude Economic Branch. Prior to that he served as

the Chief Researcher and Deputy Dean of Microsoft Research Asia Chief

Technology Officer of Cogobuy Group Vice President of iFlytek Group

Executive President and Chief Scientist of Shenzhen Institute of Artificial

Intelligence and Robotics. Mr. Li is a member of the International

Eurasian Academy of Sciences and a fellow of the International Institute

of Electrical and Electronics Engineers (IEEE fellow). He was listed as one

of the world’s top 1000 computer scientists by Guide2Research and

ranked top 20 in Mainland China in 2020. Mr. Li is a renowned expert in

Internet computer vision cloud computing Internet of Things and

artificial intelligence. He is currently an independent director of the 12th

Board of Directors of Haier Smart Home Co. Ltd.Haier Smart Home Co. Ltd. Annual Report 2025 85Section IV Corporate Governance Environment and Society

Name Major working experience

Wu Qi Male born in 1967. He has 25 years of (New PCEBG) experience in

world-class management and consulting companies. He is currently an

independent director of the 12h session of the Board of Haier Smart

Home Co. Ltd. He served as the vice president (Global) and vice

chairman (Greater China) of Accenture and the chairman of Shun Zhe

Technology Development Co. Ltd. He was a member and the president

(Greater China) of Roland Berger’s Global Management Committee a

member of Roland Berger’s Global Supervisory Board a senior

consultant for Foxconn’s D sub-business group strategy and intelligent

manufacturing and a consultant of Xnode a famous accelerator for

startups. Mr. Wu’s experience in consulting industry involves

transportation/logistics high-tech manufacturing tourism finance

consumer goods real estate government departments and other

industries. His has extensive experience in development strategy

organizational change sales and brand strategy corporate innovation

digital transformation and intelligent manufacturing post-merger

integration regional industrial and economic development and upgrading.He is a well-known expert in China in Industry 4.0 transportation and

regional planning and development. He served as a consultant for

Hangzhou Bay Development Planning a member of the Intelligent

Manufacturing Expert Committee of Municipal Government deputy head

of the 13th Five-Year Planning Expert Committee of Zhengzhou City

Henan Province vice chairman of China Cold Chain Alliance.

86 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

Name Major working experience

Wang Hua Male born in 1977. Mr. WANG Hua graduated from Shanghai University

of Electric Power with a Bachelor’s degree in automation in July 1999

and from Stanford University California the United States with a

Master’s degree in business administration in June 2006. Mr. WANG Hua

is the co-founder of Sinovation Ventures an established technology

investment company in China and currently serves as the co-CEO and

Managing Partner of the investment department of Sinovation Ventures.Mr. WANG Hua has extensive experience in capital investment and

information technology industry mainly focusing on AI and cutting-edge

technologies and expanding to the upstream and downstream industrial

chains. He led investments in technology projects such as 4Paradigm

AInnovation WeRide Horizon Robotics Zhihu Waterdrop Inc Momenta

Luchen and Silicon Mobility. From September 2006 to October 2009

Mr. WANG Hua worked at Google China’s Business Development

Headquarters where he built Google China’s premium ad network. He

was also responsible for managing investments during his three years at

Google China. Prior to joining Google China he founded Shanghai Yinda

Technology Group Co. Ltd. a company that provides technology

solutions to telecommunications operators and equipment providers. In

addition Mr. WANG Hua has been appointed as an independent non-

executive director of AInnovation since 6 February 2018. He has been

appointed as an independent non-executive director of Maoyan

Entertainment since 22 August 2018.Shao Xinzhi (retired During the reporting period she served as the Vice Chairman of Haier

following election) Smart Home and resigned following the Company’s Board election in

May 2025. For her detailed biography please refer to the relevant

disclosures in the Company’s 2024 Annual Report.Li Kam Fun (retired During the reporting period she served as a Director of Haier Smart

following election) Home and resigned following the Company’s Board election in May

2025. For her detailed biography please refer to the relevant disclosures

in the Company’s 2024 Annual Report.Liu Dalin (retired During the reporting period he served as the Chairman of the Board of

following election) Supervisors of Haier Smart Home and resigned in May 2025 when the

company decided to abolish the Board of Supervisors. For his detailed

biography please refer to the relevant disclosures in the Company’s

2024 Annual Report.

Yu Miao (retired During the reporting period he served as an Employee Supervisor of

following election) Haier Smart Home and resigned in May 2025 when the company

decided to abolish the Board of Supervisors. For his detailed biography

please refer to the relevant disclosures in the Company’s 2024 Annual

Report.Liu Yongfei (retired During the reporting period he served as a Supervisor of Haier Smart

following election) Home and resigned in May 2025 when the company decided to abolish

the Board of Supervisors. For his detailed biography please refer to the

relevant disclosures in the Company’s 2024 Annual Report.Haier Smart Home Co. Ltd. Annual Report 2025 87Section IV Corporate Governance Environment and Society

Name Major working experience

Xie Juzhi (retired During the reporting period he served as a Vice President Haier Smart

following election) Home mong other roles and resigned following the Company’s Board

election in May 2025. For his detailed biography please refer to the

relevant disclosures in the Company’s 2024 Annual Report.Li Pan (resigned) During the reporting period he served as a Vice President of Haier Smart

Home among other roles and resigned from his senior executive

positions at the end of December 2025. For his detailed biography

please refer to the relevant disclosures in the relevant disclosures in the

Company’s announcement of the resolution of the first meeting of the

12th Session of the Board of the Company

ZhaoYanfeng Male born in 1977. He graduated from Tianjin Institute of Light Industry

and obtained a Bachelor’s degree in Mechanical and Electronic

Engineering in 2001. He graduated from Renmin University of China and

obtained an Executive Master degree in Business Administration in 2019.He is currently the vice president the general manager of China Region

and the general manager of the LC business of Haier Smart Home Co.Ltd. Mr. Zhao joined Haier in 2001 and has successively served multiple

positions including the general manager of the refrigeration business and

the general manager of the washing business of Haier. He possesses

whole-process management experience in product planning research and

development manufacturing and marketing.Li Yang Male born in 1976 is a senior engineer. He currently serves as a Vice

President and the general manager for global procurement of Haier Smart

Home. Mr. Li Yang graduated from Qingdao University of Science &

Technology in 1998 and obtained a Bachelor’s degree in Fine Chemical

Engineering and obtained a degree of Executive Master of Business

Administration from Xi’an Jiaotong University in 2022. He joined Haier in

1998 and has held positions of the head of the quality department of

Haier Smart Home the manufacturing director the general manager of

the internet of clothing platform the general manager of the integrated

supply chain. He has served as the general manager for global

procurement of Haier Smart Home since 2025 and has been involved in

management related to the digital transformation of global procurement

at Haier Smart Home. He has extensive experience in full-process

management covering product development marketing planning

research and development manufacturing and procurement. He has alsobeen honoured with titles such as the “Most Promising Entrepreneur inQingdao in 2018” and the “Advanced Individual in ManagementInnovation of National Light Industry Enterprises”.

88 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

Name Major working experience

Song Yujun Male born in 1975. He graduated from Shandong University of

Technology with a bachelor’s degree in equipment engineering and

management in 1998 and received a degree of Executive Master of

Business Administration from Tsinghua University in 2015. Mr. Song Yujun

joined Haier in 1998 and served as general manager of the Operation

Department of Haier Overseas Promotion Headquarters director and

general manager of Haier Pakistan Company executive director of Haier

India Company director of Haier Overseas businesses in South Asia and

Southeast Asia region and vice president of Haier Home Appliance

Industry Group. Since 1998 he has held various important positions in

Haier overseas companies and has rich experience in product

manufacturing R&D and marketing. He has been honoured with several

prestigious awards includingthe Labor Model of Qingdao City the

Outstanding Talent in Professional Technology in Qingdao City Qingdao

High-level Service Talent the first prize of the 2023 Science and

Technology Advancement Award of China National Light Industry Council

(2023年度中國輕工業聯合會科技進步獎) the first prize of the Innovation

Award 2023 of Energy Conservation Association (2023年節能協會創新

獎) and the Top Ten “Civilized Citizens” of Qingdao in 2024 and the

First-Class Science and Technology Progress Award from Shandong

Province in 2025. He is currently Vice President and the general manager

of overseas market of Haier Smart Home.Guan Jiangyong Male born in 1978. He graduated from Tsinghua University in 2024 with

a Master’s degree in Advanced Business Administration. Mr. Guan joined

Haier in 2001 and currently serves as a Vice President of Haier Smart

Home the general manager of the HVAC business and the general

manager of the Haier Air Industry Group of Haier Smart Home. Since Mr.Guan Jiangyong joined Haier he has been responsible for product

management production and manufacturing product marketing and

industrial pipeline management and has served as a regional general

manager the market director of the water heater business the general

manager of the water heater business the general manager of the water

business the general manager of the HAVC business and the general

manager of the Air Industry Group. He possesses whole-process

management experience in product manufacturing marketing corporate

planning management and industrial platforms.Haier Smart Home Co. Ltd. Annual Report 2025 89Section IV Corporate Governance Environment and Society

Name Major working experience

Wu Yong Male born in 1978. He graduated from Tianjin College of Commerce in

2001 and obtained a Bachelor’s degree in Heat Supply Ventilation and

Air-conditioning Engineering. He obtained the double degree of Executive

Master of Business Administration from the School of Economics and

Management of Tsinghua University and the INSEAD in 2015.He has also

been recognised as a Mount Tai Industrial Leader of Shandong Province

by the Communist Party of China (中共山東省泰山產業領軍人才). Mr.WU Yong joined Haier in 2001 and currently serves as the vice president

and the general manager of the refrigeration business at Haier Smart

Home. He is also responsible for the management of the kitchen

appliances business. Mr. WU has served as the general manager of the

PRC Region on manufacturing and production of refrigerators overseas

marketing and the air-conditioning business as well as the general

manager of the kitchen appliances business since joining the Group and

possesses whole-process management experience in high-end

manufacturing marketing and industrial platforms.Huang Xiaowu Male born in 1977. He graduated from the College of Photoelectric

Engineering Chongqing University with a Bachelor’s degree in

engineering in 1998 and graduated from the Faculty of Business and

Economics of the University of Hong Kong with a master’s degree in

business administration in 2004. Mr. Huang has over 20 years of

extensive working experience in commercial banking strategic

investment industrial fund corporate finance and capital market

operation and management and has participated in and led important

strategic investment and financing projects involving numerous fields such

as marketing channels logistics home appliances and technology

industry. Mr. Huang was appointed as the vice president of the Company

in 2021 responsible for amongst others investor relations capital

market equity financing and strategic investment and served as the

Chief Sustainable Development Officer of Haier Smart Home. Prior to

that Mr. Huang worked as the deputy general manager of Haier

Electronics Group Co. Ltd. a company listed on the Stock Exchange

which is controlled by the Company. Before joining Haier Group Mr.Huang Xiaowu worked at the Ningbo branch and Shanghai branch of the

Industrial and Commercial Bank of China Investment Banking Division of

Guosen Securities and Anglo Chinese Investment Banking Group (英高投

資銀行集團).

90 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

Name Major working experience

Liu Xiaomei Female born in 1985. She graduated from the Law School of Minzu

University of China with a double bachelor’s degree in law and literature

in 2009 and graduated from the Department of International Law of the

China Foreign Affairs University with a master’s degree in international

law in 2011 and is qualified to practice law in China. Ms. Liu joined the

Company in June 2015 and has been in charge of legal and compliance

matters of corporate governance capital market M&A and corporate

finance at Haier Electronics Group Co. Ltd. and Haier Smart Home. She

is currently the Board Secretary of Haier Smart Home. Prior to joining the

Company Ms. Liu worked for Jingtian & Gongcheng in Beijing. Ms. Liu

has accumulated extensive work experience in corporate governance

capital market industrial fund and investment and financing.Sun Jiacheng Male born in 1982. Mr. Sun Jiacheng joined Haier in 2005. He

graduated from Renmin University of China with an Executive Master of

Business Administration degree and was recognised as a certified

Australian accountant in 2016. Mr. Sun Jiacheng joined Haier’s financial

management department in August 2005 where he has held various

management positions including the financial manager of Haier’s washing

machine product division the financial director of its white goods supply

chain platform the financial director of its housing facilities business

division the China region financial director of Haier Smart Home and the

vice financial director of Haier Smart Home. During his tenure as the

financial director for the China region he built a budgeting accounting

and p ro f i t -and- loss management sys tem fo r sub-c lus te rs

microenterprises and product models and established a sub-cluster

digital contract platform aligning Haier Smart Home’s strategic objectives

with the smallest business units. As the vice financial director for Haier

Smart Home he developed an integrated digital platform for operations

and finance upgraded operational and financial processes and standards

and facilitated the platformisation of financial management and decision-

making analysis supporting the efficient operation of the listed company.Mr. Sun Jiacheng has received numerous accolades including Advanced

Financial Management Professional of Shandong Province’s Light

Industry Business Leader of the Year 2020 by the China CFO

Development Centre and was named China CFO of the Year by

Corporate Finance 《( 新理財》) in both 2016 and 2022.Haier Smart Home Co. Ltd. Annual Report 2025 91Section IV Corporate Governance Environment and Society

Name Major working experience

Fu Songhui Male born in 1972. Mr. Fu Songhui is a senior engineer. He graduated

from Nanjing University in 1996 with a Bachelor’s degree in Applied

Physics from the Department of Physics. He further obtained an

Executive Master of Business Administration degree from the University of

International Business and Economics in 2010 and an Executive Master

of Business Administration degree from Renmin University of China in

2018. Fu Songhui joined Haier in 1996 and currently serves as a Vice

President of Haier Smart Home and the general manager of its

commercial HVAC division. He has held key positions including a

manager of Haier’s commercial flow headquarters the marketing director

of Mitsubishi Heavy Industries Haier the marketing director of Haier’s

commercial air-conditioning division and the deputy general manager of

Haier Air Industry Group. He possesses extensive experience in full-cycle

management across product development marketing corporate planning

research and development and manufacturing. He has been recognised

with numerous awards including the Third Prize of the China Machinery

Industry Science and Technology Progress Award the First Prize of the

China Commercial Federation Science and Technology Award the First

Prize of the Shandong Province Enterprise Modern Management

Innovation Award and the First Prize of the Qingdao Science and

Technology Progress Award.Huang Decheng Male born in 1974. Mr. Huang Decheng graduated from Hubei University

of Automotive Technologywith a Bachelor’s degree in Hot Processing

Technology and Equipment in 1998. In January 2025 he obtained a dual

Executive Master of Business Administration degrees from Peking

University Guanghua School of Management and Kellogg School of

Management Northwestern University. Mr. Huang Decheng joined Haier

in 1998 and currently serves as a Vice President of Haier Smart Home

and the Haier’s South Asia Region CEO. He was awarded the Quality

Management Black Belt in 2011 and led the development of the

“Refrigerator Monitoring Device” which was granted a utility model patent

in 2019. Since joining Haier he has held diverse roles spanning domestic

marketing domestic manufacturing overseas production and

international sales gaining extensive end-to-end experience in managing

overseas operations across the three key major functions.

92 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

Name Major working experience

JAMES QUN LIU Male born in 1971. Mr. JAMES QUN LIU holds a Bachelor’s degree in

Electrical Engineering from the University of California Los Angeles and a

Juris Doctor from Pepperdine University. Early in his career he served as

Legal Counsel and Senior Legal Counsel at Philips Electronics and ABB.He subsequently held the position of Chief Legal Counsel at several

technology companies including Spreadtrum Communications and Meizu

Technology. Mr. JAMES QUN LIU joined Haier Smart Home in 2019 and

since late 2019 has been responsible for overseeing the its global legal

and compliance affairs. Leveraging his technical background and

extensive experience in technology enterprises he has developed

substantial cross-disciplinary expertise and skills in technology and law.He has applied these expertise and skills to Haier’s product intelligence

initiatives and enterprise digital transformation making a distinctive

contribution to the company’s development. Drawing on his extensive

overseas experience and solid grounding in traditional Chinese culture

Mr. JAMES QUN LIU has actively supported Haier’s internationalisation

strategy acting as a bridge across diverse countries and cultures and

making a significant contribution to corporate mergers acquisitions and

overseas governance. He has extensive experience in intellectual property

litigation and has led multiple high-profile intellectual property cases over

the course of his career. In the mergers and acquisitions domain he has

led and participated in major strategic projects of the Haier Smart Home

including its acquisition of Carrier Commercial Refrigeration and the

South African Kwikot and has actively contributed to and promoted Haier

Smart Home’s D-share and H-share listings. In 2019 Mr. JAMES QUN

LIU was appointed the Vice Chairman of the Internet Committee of the

China Intellectual Property Society. He currently serves as a Vice

President and the Chief Compliance Officer of Haier Smart Home.Other information

□Applicable √ Not Applicable

Haier Smart Home Co. Ltd. Annual Report 2025 93Section IV Corporate Governance Environment and Society

(II) Appointment of current and departing of Directors and Senior Management

during the reporting period

1. Appointment in shareholder units

√ Applicable □ Not Applicable

Start date of End date of

Name Name of shareholder unit Position appointment appointment

Shao Xinzhi Haier Group Corporation Vice president and Chief 2020 2025

Financial Officer

Shao Xinzhi Qingdao Haier Venture & Supervisor 2025

Investment Information

Co. Ltd.Liu Dalin Haier Group Corporation Executive director of the 2022

Employee Care

Committee

Gong Wei Haier Group Corporation Vice president and Chief 2025

Financial Officer

Gong Wei Qingdao Haier Venture & Supervisor 2025

Investment Information

Co. Ltd.Li Shaohua Haier Group Corporation Vice president 2026

Li Shaohua Haier Group Corporation Chief Audit and Risk 2020

Control Officer

Li Shaohua Haier Group Corporation General manager of Audit 2022

and Risk Control

Committee and

Chairman of ESG

Execution Committee

Explanation of Nil

appointment in

shareholder

units

94 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

2. Appointment in other units

√ Applicable □ Not Applicable

Start date of End date of

Name Name of other unit Position appointment appointment

Yu Hon To Keck Seng Investments Independent non- April 2013

(Hong Kong) Limited executive director

Yu Hon To MS Group Holdings Limited Independent non- May 2018

executive director

Yu Hon To China Resources Gas Independent non- December 2012

Group Limited executive director

Yu Hon To One Media Group Limited Independent non- June 2005

executive director

Yu Hon To Playmates Toys Limited Independent non- May 2021

executive director

Wong Hak Kun Yue Yuen Industrial Independent director June 2018

(Holdings) Limited

Wong Hak Kun Lung Kee (Bermuda) Independent director June 2018

Holdings Limited

Wong Hak Kun Guangzhou Automobile Independent director May 2020

Group Co. Ltd.Wong Hak Kun Hangzhou SF Intra-City Independent director December 2021

Industrial Co. Ltd.Wang Hua AInnovation Independent non- 6 February 2018

executive director

Wang Hua Maoyan Entertainment Independent non- 22 August 2018

executive director

Li Shipeng Applied Artificial Intelligence Director (concurrently) August 2020 2025

Research Center Of the

Suzhou Industrial

Technology Research

Institute

Li Shipeng The Chinese University of Visiting Professor February 2021 To date

Hong Kong (Shenzhen) (concurrently)

Li Shipeng ENN Group Co. Ltd. Director June 2024 May 2026

Li Shipeng International Digital Chair scientist May 2022 To date

Economy Academy

(Futian)

Li Shipeng Communication University of Director of the February 2023 February 2026

Zhejiang Engineering

Department

(concurrently)

Li Shipeng Jiangsu Hichain Logistics Chief Scientist October 2023 To date

Co. Ltd. (concurrently)

Explanation of Nil

appointment in

other units

Haier Smart Home Co. Ltd. Annual Report 2025 95Section IV Corporate Governance Environment and Society

(III) Remuneration of Directors and Senior Management

√ Applicable □ Not Applicable

Decision-making process of The Remuneration and Assessment Committee of the

remuneration of Directors and Company shall formulate the standards adjust principles

Senior Management and assess and implement the principles of the

remuneration of directors supervisors and senior

management personnel and submit to the Board of

Directors for consideration and approval.Directors abstain from discussions Yes

on their remuneration at the

Board of Directors

The Remuneration and During the reporting period the Remuneration and

Assessment Committee or Assessment Committee of the Company considered and

special meeting of independent approved the 2025 Annual Report of Haier Smart Home

directors provided Co. Ltd. on Incentives for Senior Management of the

recommendation on Company and Imp lementa t ion o f Remunera t ion

remuneration of Directors and Assessment for Directors and Senior Management and

Senior Management considered that the incentive mechanism for senior

management of the Company and the implementation of

Remuneration Assessment for Directors and Senior

Management in 2025 were effectively carried out in

accordance with the pr inciples and mechanisms

established by the Board of Directors at the beginning of

the year; the 2026 Remuneration and Assessment Scheme

of Senior Management of Haier Smart Home Co. Ltd. was

considered and approved and arrangements were made for

the 2026 Remuneration and Assessment Scheme of Senior

Management with proposed resolution submitted to the

Board of Directors for consideration and approval.

96 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

Determining basis of matrix The cash remuneration of executives in 2025 consists of

remuneration of Directors and monthly remuneration bonuses and sharing and is linked

Senior Management to orders triggered by the upgrade of the Company’s

Internet of Things from “high-end brands” to “scenariobrands” to “ecological brands”. Focusing on the rapid

improvement of prof i tabi l i ty and through dig i ta l

transformation the Company enhanced its competitiveness

in the whole process and achieved sharing of high added-

value. Through the innovation of the mechanism the

Company encouraged its executives to achieve higher

market goals thus achieving a win-win situation for users

employees enterprises and stakeholders. At the same

t ime the Company cont inues to promote the

implementation of the employee stock ownership and other

long-term incentive plans; multiple incentive tools will be

effectively utilised to mobilise competent management

frontline managers and business and technical backbones

on a wider scale further aligning the interests of

shareholders the Company and incentive recipients and

bringing more efficient and sustainable returns to

shareholders. After the approval by the general meeting

the allowance for directors consisted of three components:

fixed remuneration job-related remuneration and variable

allowances. The travelling expenses of directors attending

Board meetings and general meetings and the expenses

required for performing their duties and according to the

Articles of Association will be reimbursed.Actual remuneration paid to Paid as prescribed

Directors and Senior

Management

Total of actual remuneration RMB47.99 million

received by all Directors and

Senior Management at the end

of the reporting period

Haier Smart Home Co. Ltd. Annual Report 2025 97Section IV Corporate Governance Environment and Society

Assessment criteria and Non-executive Directors’ remuneration has been paid in

implementation status for the accordance with the fixed remuneration position-based

actual remuneration received by remuneration and variable allowance standards determined

all Directors and Senior by the shareholders’ meeting taking into account factors

Management at the end of the such as the Directors’ actual attendance at meetings. Non-

reporting period executive Directors who have an employment contract with

Haier Group or its subsidiaries do not receive directors’

remuneration from the Company. Executive Directors and

senior management received annual performance appraisalsbased on the ‘User-Payment” assessment system for

personnel order and remuneration utilising evaluation

tools such as the Value-Added Table and the

“RenDanHeYi” scorecard. Performance bonuses for

management are paid in accordance with pre-agreed rules

with the amount matched to the performance of each

business sector. This flexible remuneration mechanism

provides an incentive for management innovation

embodying the unity of value sharing and value creation.Deferred payment arrangement for Nil

the actual remuneration received

by all Directors and Senior

Management at the end of the

reporting period

Stop payment recourse for the Nil

actual remuneration received by

all Directors and Senior

Management at the end of the

reporting period

98 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

(IV) Changes in of Directors and senior management of the Company

√ Applicable □Not Applicable

Description of Reason of

Name Position held Change Change

Li Huagang Chairman Chief Executive Officer Elected Re-election

Kevin Nolan Director vice president Elected Re-election

Sun Danfeng Director vice president Chief Digital Elected Re-election

Officer

Gong Wei Vice Chairman Elected Re-election

Li Shaohua Director Elected Re-election

Yu Hon To Director Elected Re-election

David

Chien Da- Director Elected Re-election

chun

Wong Hak Independent director Elected Re-election

Kun

Li Shipeng Independent director Elected Re-election

Wu Qi Independent director Elected Re-election

Wang Hua Independent director Elected Re-election

Shao Xinzhi Vice Chairman Resigned Re-election

Li Kam Fun Director Resigned Re-election

Liu Dalin Chairman of the Board of Supervisors Resigned Re-election

Yu Miao Employee supervisor Resigned Re-election

Liu Yongfei Supervisor Resigned Re-election

Xie Juzhi Vice president Resigned Re-election

Li Pan Vice president Resigned Personal reasons

Zhao Yanfeng Vice president Appointed Re-election

Li Yang Vice president Appointed Re-election

Song Yujun Vice president Appointed Re-election

Guan Vice president Appointed Re-election

Jiangyong

Wu Yong Vice president Appointed Re-election

Fu Songhui Vice president Appointed Re-election

Huang Vice president Appointed Re-election

Decheng

Sun Jiacheng Vice president Chief Financial Officer Appointed Re-election

JAMES QUN Vice president Chief Compliance Officer Appointed Re-election

LIU

Huang Xiaowu Vice president Chief Sustainable Appointed Re-election

Development Officer

Liu Xiaomei Secretary to the Board of Directors Appointed Re-election

Haier Smart Home Co. Ltd. Annual Report 2025 99Section IV Corporate Governance Environment and Society

(V) Explanation of penalties imposed by securities regulators in the past three years

□Applicable √ Not Applicable

(VI) Others

□Applicable √ Not Applicable

IV. PERFORMANCE OF DUTIES BY DIRECTORS

(I) Attendance of board meetings and general meetings by directors

Whether an Attendances at

Independent general

Name of director director or not Attendance of Board meetings meetings

Absence from Number of

Required two consecutive attendance of

attendances of Attendance in Attendance by Attendance by meetings in general

Board meetings person telecommunication proxy Absence person or not meetings

Li Huagang No 5 5 1 0 0 No 8

Gong Wei No 5 5 0 0 0 No 8

Li Shaohua No 3 3 0 0 0 No 4

Kevin Nolan No 3 3 0 0 0 No 4

Sun Danfeng No 3 3 0 0 0 No 4

Yu Hon To David No 5 5 1 0 0 No 8

Chien Da-chun No 5 5 0 0 0 No 8

Wong Hak Kun Yes 5 5 0 0 0 No 8

Li Shipeng Yes 5 5 2 0 0 No 8

Wu Qi Yes 5 5 1 0 0 No 8

Wang Hua Yes 3 3 0 0 0 No 4

Shao Xinzhi No 2 2 0 0 0 No 4

Explanation for absence from two consecutive Board meetings in person

□ Applicable √ Not Applicable

Number of Board meetings held in the year 5

Of which: Number of on-site meetings 2

Number of meetings held by telecommunication 0

Number of meetings held both on site and by telecommunication 3

(II) Directors’ objection to the relevant matters of the Company

□ Applicable √ Not Applicable

(III) Others

□ Applicable √ Not Applicable

100 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

V. THE SPECIAL COMMITTEES ESTABLISHED UNDER THE BOARD

√ Applicable □ Not Applicable

(I) Personnel of The Special Committees of the Board

Categories of

The Special Committees Name of Personnel

Audit Committee Wong Hak Kun Yu Hon To David Wang Hua Wu Qi LI

Shaohua

Nomination Committee Li Shipeng Wu Qi Sun Danfeng Wong Hak Kun

Remuneration and Appraisal Wu Qi Li Shipeng Wang Hua

Committee

Strategy Committee Li Huagang Wu Qi Li Shipeng Gong Wei Chien Da-chun Kevin

Nolan Wang Hua

ESG Committee Chien Da-chun LI Shaohua Wu Qi Gong Wei

Haier Smart Home Co. Ltd. Annual Report 2025 101Section IV Corporate Governance Environment and Society

(II) The Company convened 5 Audit Committee meetings during the reporting period

Major Opinions and Other Notes on

Date of Meeting Contents of Meeting Suggestions Performance of Duty

26 March 2025 Considered and approved the following resolutions: Report on No Objections Nil

the 2024 Annual Financial Statements of Haier Smart Home

Co. Ltd. 2024 Report on Internal Control Assessment of

Haier Smart Home Co. Ltd. 2024 Report on Internal Control

Audit of Haier Smart Home Co. Ltd. the 2024 Performance

Evaluation Report on the Accountant Firm and the Report on

the Supervision Obligation of the Aduit Committee of the

Board of the Director on the Accountant Firm of Haier Smart

Home Co. Ltd. the Proposal on Re- appointment of PRC

GAAP Auditor of Haier Smart Home Co. Ltd. the Proposal

on Re-appointment of IFRS Auditor of Haier Smart Home Co.Ltd. the Resolution on the Anticipated Guarantees’ Amounts

for Haier Smart Home Co. Ltd. and its Subsidiaries in 2025

2024 Annual Profit Distribution Plan of Haier Smart Home

Co. Ltd. the Resolution on the Capital Increase by

Acquisition of Haier Group Finance Co. Ltd. and Related-

Party Transaction of Haier Smart Home Co. Ltd. the Risk

Assessment Report on Haier Group Finance Co. Ltd. in 2024

of Haier Smart Home Co. Ltd. the Resolution on the

Renewal of the Products and Materials Procurement

Framework Agreement between Haier Smart Home Co. Ltd.and Haier Group Corporation of Haier Smart Home Co. Ltd.the Resolution on the Renewal of the Services Procurement

Framework Agreement between Haier Smart Home Co. Ltd.and Haier Group Corporation of Haier Smart Home Co. Ltd.the Resolution on the Renewal of the Products and Materials

Sales Framework Agreement between Haier Smart Home Co.Ltd. and Haier Group Corporation of Haier Smart Home Co.Ltd. the Resolution on the Renewal of the Service Provision

Framework Agreement between Haier Smart Home Co. Ltd.and Haier Group Corporation of Haier Smart Home Co. Ltd.the Resolution on the Continued Entrusted Management of

Qingdao Haier Optoelectronics Co. Ltd. and Related-Party

Transaction of Haier Smart Home Co. Ltd. the Resolution

on the Acquisition of the Real Estate of Haier White Goods

R&D Centre and Related-party Transaction of Haier Smart

Home Co. Ltd. the Resolution on the Conduct of Foreign

Exchange Fund Derivatives Business of Haier Smart Home

Co. Ltd. the Feasibility Analysis Report on Conducting

Foreign Exchange Fund Derivatives Business of Haier Smart

Home Co. Ltd the Resolution on Conducting Bulk Raw

Materials Hedging Business of Haier Smart Home Co. Ltd.the Feasibility Analysis Report on Conducting Bulk Raw

Materials Hedging Business of Haier Smart Home Co. Ltd.

2024 Annual Report on Performance of Duties of the Audit

Committee of the Board of Haier Smart Home Co. Ltd.

102 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

Major Opinions and Other Notes on

Date of Meeting Contents of Meeting Suggestions Performance of Duty

29 April 2025 Considered and approved the following resolution: the 2025 First No Objections Nil

Quarter Financial Report of Haier Smart Home Co. Ltd.

27 August 2025 Considered and approved the following resolutions: the 2025 No Objections Nil

Interim Financial Report of Haier Smart Home Co. Ltd. the

2025 Interim Ongoing Risk Assessment Report on Haier

Group Finance Co. Ltd. by Haier Smart Home Co. Ltd. the

2025 Half-year Profit Distribution Plan of Haier Smart Home

Co. Ltd. the Resolution on the Acquisition of 100% Equity

Interest of Qingdao Haiyunlian Industrial Development Co.Ltd. and Related-party Transaction of Haier Smart Home Co.Ltd.

29 October 2025 Considered and approved the following resolution: the 2025 No Objections Nil

Third Quarter Financial Report of Haier Smart Home Co. Ltd.

11 December 2025 Considered and approved the following resolution: the 2025 No Objections Nil

Annual Report on Audit Work Plan of Haier Smart Home Co.Ltd.(III) The Company convened 2 Nomination Committee meeting during the reporting

period

Other Notes on

Major Opinions Performance of

Date of Meeting Contents of Meeting and Suggestions Duty

25 March 2025 Considered and approved the following resolutions: the No Objections Nil

Report on the Performance of Duty of Current

Directors of Haier Smart Home Co. Ltd. Supervisors

and Senior Management the 2024 Annual Report on

the Performance of Duty of the Nomination Committee

of the Board of Haier Smart Home Co. Ltd.

18 April 2025 Considered and approved the following resolutions: the No Objections Nil

Resolution on Proposed Candidates of Independent

Directors for the 12th Session of the Board of Haier

Smart Home Co. Ltd. the Resolution on Proposed

Candidates of Non-independent Directors for the 12th

Session of the Board of Haier Smart Home Co. Ltd.Haier Smart Home Co. Ltd. Annual Report 2025 103Section IV Corporate Governance Environment and Society

(IV) The Company convened 2 Remuneration and Appraisal Committee meetings

during the reporting period

Other Notes on

Major Opinions Performance of

Date of Meeting Contents of Meeting and Suggestions Duty

25 March 2025 Considered and approved the following resolutions: the No Objections Nil

2024 Annual Report on Incentives for Senior

Management of the Company and Implementation of

Remuneration Assessment for Directors and Senior

Management the 2025 Annual Report on

Remuneration and Assessment Scheme of Directors

and Senior Management the 2024 Annual Report on

Performance of Duties of the Remuneration and

Appraisal Committee of the Board

18 April 2025 Considered and approved the following resolutions: the No Objections Nil

2025 A Share Core Employee Stock Ownership Plan

(draft) of Haier Smart Home Co. Ltd. and its

Summary the 2025 H Share Core Employee Stock

Ownership Plan (draft) of Haier Smart Home Co. Ltd.and its Summary the Resolution on Partial

Cancellation of Share Options under the 2021 A-share

Option Incentive Scheme of Haier Smart Home Co.Ltd. the Resolution on Partial Cancellation of Share

Options under the 2022 A-share Option Incentive

Scheme of Haier Smart Home Co. Ltd. the

Resolution on the Vesting of the Second Phase of the

2023 A Share and H Share Core Employee Stock

Ownership Plan of Haier Smart Home Co. Ltd. the

Resolution on the Vesting of the First Phase of the

2024 A Share and H Share Core Employee Stock

Ownership Plan of Haier Smart Home Co. Ltd.

104 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

(V) The Company convened 1 Strategy Committee meeting during the reporting

period

Other Notes on

Major Opinions Performance of

Date of Meeting Contents of Meeting and Suggestions Duty

27 March 2025 Considered and approved the following resolutions: No Objections Nil

Resolution on the Investment in Construction of a New

Project with an Annual Capacity of 3 Million Washing

Machines of Haier Smart Home Co. Ltd. the 2024

Annual Report on the Performance of Duties of the

Strategy Committee of the Board of Haier Smart

Home Co. Ltd.(VI) The Company convened 2 meetings of the ESG Committee during the reporting

period

Other Notes on

Major Opinions Performance of

Date of Meeting Contents of Meeting and Suggestions Duty

25 March 2025 Considered and approved the following resolutions: the No Objections Nil

2024 ESG Report and 2025 ESG Work Plan of Haier

Smart Home Co. Ltd. 2024 Annual Report on the

Performance of Duties of the ESG Committee of Haier

Smart Home Co. Ltd.

19 August 2025 Discussed the following issues: Global Carbon Project No Objections Nil

Progress: Scope 1 and Scope 2 Target Setting in

China Research Insights and Findings on Dual

Materiality Assessment

(VII) Details of Disagreements

□ Applicable √ Not Applicable

VI. AUDIT COMMITTEE’ EXPLANATION ON RISKS ABOUT THE COMPANY

□ Applicable √ Not Applicable

Audit Committee had no objections to the supervising items during the reporting period.Haier Smart Home Co. Ltd. Annual Report 2025 105Section IV Corporate Governance Environment and Society

VII. INFORMATION ON STAFF OF THE PARENT COMPANY AND PRINCIPAL

SUBSIDIARIES AT THE END OF THE REPORTING PERIOD

(I) Staff Information

Number of staff of the parent company 26

Number of staff of principal subsidiaries 134969

Total number of staff 134995

Number of employees whose retirement expenses are borne by the parent 0

company and the principal subsidiaries

Breakdown by Function

Function Number

Production 81728

Sales 22693

Technical 25913

Financial 1966

Administrative 2695

Total 134995

Breakdown by Education Background

Education Number (person)

Bachelor and above 44057

College diploma 72626

Secondary vocational training diploma and below 18312

Total 134995

(II) Remuneration policies

√ Applicable □ Not Applicable

Under the guidance of the “RenDanHeYi” management model the Company adheres to the

remuneration philosophy of uniting user pay value creation and value sharing and provides

employees with a short medium and long-term remuneration incentive system that combines

labour income super-profit sharing and capital gain as well as all-rounded welfare policies and

employee caring schemes. The Company encourages its employees to work with an

entrepreneurial mindset aligning employee value with company value and shareholder value

continuously improving user experience and achieving a win-win development for both the

Company and its employees.The Company has established a rich and multi-dimensional incentive mechanism and continues

to implement the “A+H” global incentive system covering both domestic and overseas employees

to attract motivate and stabilise the Company’s core talent.

106 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

(III) Personnel Training

√ Applicable □ Not Applicable

The Company has established a comprehensive and hierarchical system for talent training that

covers all employees including those based overseas. By providing employees with rich and

diverse learning resources through a wide range of methods such as course training special

training and temporary exchange the Company promotes talent growth in multiple dimensions for

employees with different needs thus assisting them in improving their professionalism expertise

and leadership skills. For example during the reporting period in order to deepen the integration

of industry and education and explore new models for talent development the Company

collaborated with prestigious universities to establish ‘Maker Classes’. These classes aim to

identify and nurture high-potential talent aligned with Haier’s development strategy at an early

stage through systematic empowerment and practical business experience whilst simultaneously

enhancing students’ overall employability thereby achieving a win-win-win situation for the

university the enterprise and the students. Furthermore in response to current developmentsand future trends in AI and digitalisation the Company has launched the “Smart HomeDigitalisation 2025 AI Talent Development Programme”. This initiative focuses on the transition of

internal digital talent towards becoming AI-specialised professionals. Elite product anddevelopment personnel were selected from various fields and organised into separate “AI ProductManager Camp” and “Large Model Development Camp”. The programme comprised several

months of online learning offline workshops and an “Extreme Innovation Competition” driving the

deep integration of AI talent development with manufacturing scenarios to provide robust support

for the Company’s intelligent transformation. Furthermore the Company has launched a

development programme for senior engineers responsible for the research of smart

manufacturing which focuses on enhancing the technical innovation capabilities of manufacturing

engineers. Through a system of ranking technical projects to compete for excellence the

programme selected young engineers with high potential. Centred on practical experience with

key technical projects participants are paired one-to-one with mentors who are experts from the

platform and industry. Utilising training methods such as action learning workshops innovation

empowerment through common projects tailored mentoring and stage-based performance

evaluations the programme enabled participants to learn by doing and do whilst learning thereby

achieving both capability enhancement and value creation through practical application.(IV) Labor Outsourcing

□ Applicable √ Not Applicable

Haier Smart Home Co. Ltd. Annual Report 2025 107Section IV Corporate Governance Environment and Society

VIII. PROPOSAL OF PROFIT DISTRIBUTION OR CAPITALIZATION OF

CAPITAL RESERVE

(I) Formulation implementation or adjustment of the cash dividend policies

√ Applicable □ Not Applicable

The Company’s 2024 profit distribution plan was passed on its 2024 Annual General Meeting

held on 28 May 2025: based on the Company’s total existing shares (deducting the repurchased

shares) of 9322644064 (including 6194231825 A shares 271013973 D shares and

2857398266 H shares) it was proposed that the Company would distribute cash dividends of

RMB9.6504 (tax inclusive) per 10 shares to all shareholders with a total amount before tax of

RMB8996688692.76 (tax inclusive). The plan was implemented and completed in July 2025.Details were set out in the Announcement on Implementation of Rights and Interests Distribution

of A-shares for 2024 of Haier Smart Home Co. Ltd. (No.: Lin 2025–049) published by the

Company on the four major securities newspapers and the website of Shanghai Stock Exchange

on 19 July 2025 and relevant announcements in respect of dividend distribution of D shares and

H shares published on the Company’s website Hong Kong Stock Exchange and other

publication platforms.The Company’s 2025 Half-year profit distribution plan was passed on its 2025 First Extraordinary

General Meeting held on 16 October 2025: based on the Company’s total existing shares

(deducting the repurchased shares) of 9311542364 (including 6185580125 A shares

271013973 D shares and 2854948266 H shares) it was proposed that the Company would

distribute cash dividends of RMB2.692 (tax inclusive) per 10 shares to all shareholders with a

total amount before tax of RMB2506684210.62 (tax inclusive). The plan was implemented and

completed in November 2025. Details were set out in the Announcement on Implementation of

2025 Half-year Rights and Interests Distribution of A-shares of Haier Smart Home Co. Ltd. (No.:

Lin 2025–067) published by the Company on the four major securities newspapers and the

website of Shanghai Stock Exchange on 1 November 2025 and relevant announcements in

respect of dividend distribution of D shares and H shares published on the Company’s website

Hong Kong Stock Exchange and other publication platforms.

108 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

The Company has always applied a stable and sustainable profit distribution policy. During the

reporting period the Company strictly followed the requirements set out in the Articles of

Association and in the Shareholder Return Plan for the Next Three Years of the Company. During

the formulation of the profit distribution plan the Company took full account of return for

investors the long-term interests of the Company overall interests of all shareholders and

sustainable development of the Company and continued to implement the stable dividend

distribution policy with addition of interim dividends to provide investors an opportunity to share

the growth of value and enhance shareholder returns so that investors could form the

expectation of a stable return. The procedures and mechanisms for decision-making such as

Articles of Association and planning of return of shareholders implemented by the Company were

complete in compliance with laws and regulations. The process was open and transparent while

the standard and ratio of dividends was clear. Responsibilities of independent directors were

clear during the policy-making process and independent directors were given the opportunities

to play their roles. Minority shareholders were also given the opportunity to fully express their

views and demands and the legitimate interests of minority shareholders were adequately

protected.The dividend distribution plan of 2025 of the Company: based on the total number of shares

after deducting the repurchased shares on equity interest record date for future profit

distribution it is proposed that the Company will distribute cash dividend of RMB8.867 per 10

shares (tax inclusive) with cash dividend of RMB8248280749.27. The retained undistributed

profit would be for the Company’s principal business in order to maintain sustainable and stable

development and to create more value for investors. The amount of this distribution combined

with the interim dividend already paid for the 2025 financial year represents 55.0% of the net

profit attributable to owners’ parent company in 2025 (In addition during the reporting period

the Company spent RMB1200 million on the purchase of A shares and HKD100 million on the

repurchase of H shares; if this is included in cash dividends the ratio of cash dividends to net

profit attributable to owners’ parent company for the year would be over 61.6%).100% dividend

is paid in cash. If there is any change in the total share capital of the Company during the period

from the date of this report to the record date of the equity distribution the total distribution

amount will remain unchanged with corresponding adjustment to the proportion of distribution per

share.(II) Notes to the cash dividend policies

√ Applicable □ Not Applicable

Whether in compliance with regulations of the Articles of Association and √Yes? □No

Requirements of the resolutions of the general meeting

Whether the standard and ratio of dividends were clear √Yes? □No

Whether relevant procedures and mechanisms for decision-making were √Yes? □No

complete

Whether independent directors performed their duties and responsibilities √Yes? □No

Whether minority shareholders were given the opportunity to fully express their √Yes? □No

views and demands and whether their legitimate interests were adequately

protected

Haier Smart Home Co. Ltd. Annual Report 2025 109Section IV Corporate Governance Environment and Society

(III) The Company made profits and the profits for distribution to the owners’ Parent

Company was positive during the reporting period but no cash profit

distribution plan was proposed; the Company should disclose the reasons in

detail and the purpose of undistributed profits

□Applicable √ Not Applicable

(IV) Plan for profit distribution and conversion of capital reserve into share capital

for the reporting period

√ Applicable □Not Applicable

Unit and Currency: RMB

Number of shares to be distributed for every ten shares (share) 0

Amount to be distributed for every ten shares (RMB) (tax inclusive) 8.867

Number of shares to be converted into share capital for every ten 0

shares (share)

Amount of cash dividend (tax inclusive) 8248280749.27

Net profit attributable to ordinary shareholders of listed company in the 19552798222.85

consolidated financial statement

Percentage of the amount of cash dividend to the net profit attributable 42.18

to the ordinary shareholders of the listed companies in the

consolidated financial statement (%)

Repurchase of shares by cash included in the amount of cash dividend 1291628876.21

Total dividend amount (tax inclusive) 9539909625.48

Percentage of total dividend amount to the net profit attributable to the 48.79

ordinary shareholders of the listed companies in the consolidated

financial statement (%)

Note: The aforementioned “Repurchase of shares by cash included in the amount of cash dividend” refers to the value of

shares repurchased during the reporting period specifically RMB1.2 billion on the purchase of A-shares and HKD100

million on the repurchase of H-shares.

110 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

(V) Cash dividend for the past three accounting years

√ Applicable □Not Applicable

Unit and Currency: RMB

Cumulative amount of cash dividend for the past three accounting years 27223126644.87

(tax inclusive) (1)

Cumulative amount of repurchase and cancellation for the last three 1830157279.16

accounting years (2)

Cumulative amount of cash dividend and repurchase and cancellation 29053283924.03

for the last three accounting years (3) = (1)+(2)

Average annual net profit for the last three accounting years (4) 18296844463.88

Cash dividend ratio for the last three accounting years (%) (5) = (3)/(4) 158.79

Net profit attributable to the ordinary shareholders of the listed 19552798222.85

companies in the consolidated financial statement for the last

accounting year

Year-end undistributed profit in the parent company’s financial 11632101669.43

statement for the last accounting year

IX. THE COMPANY’S SHARE OPTION INCENTIVE SCHEME EMPLOYEE

SHAREHOLDING PLAN OR OTHER EMPLOYEE INCENTIVE MEASURES

AND ITS INFLUENCE

(I) Matters disclosed in temporary announcements and without any subsequent

progress or change

√ Applicable □Not Applicable

Summary of matters Query index

Cancellation of certain 2021 and 2022 For details please refer to the

equity incentive options: In view of the fact Announcement of Haier Smart Home Co.that the fourth exercise period of the first/ Ltd. on the Cancellation of Certain Share

reserved grant portion of the 2021 A-share Options Granted under the 2021 A-share

Option Incentive Scheme and the third Option Incentive Scheme the 2022

exercise period of the 2022 A-share Option A-share Option Incentive Scheme

Incentive Scheme of the Company did not disclosed by the Company on 30 April

meet the exercise conditions and due to the 2025 the Announcement of Haier Smart

resignation or reassignment of some of the Home Co. Ltd. on the Completion of

participants the Company cancelled the Cancellation of Certain Share Options

corresponding 9652135 share options and Granted under the 2021 A-share Option

25262727 share options that had been Incentive Scheme the 2022 A-share

granted but had not yet been exercised. Option Incentive Scheme and relevant

contents disclosed by the Company on

10 May 2025.

Haier Smart Home Co. Ltd. Annual Report 2025 111Section IV Corporate Governance Environment and Society

Summary of matters Query index

Introduction of New Phase of A Share and For details please refer to the 2025 A

H Share Employee Stock Ownership Share Core Employee Stock Ownership

Plan: In order to further improve the Plan of Haier Smart Home Co. Ltd

governance mechanism of the Company (Draft) the 2025 H Share Core Employee

create shareholder value and promote the Stock Ownership Plan of Haier Smart

comprehensive implementation of the Home Co. Ltd (Draft) the

Company’s IoT smart home ecological brand Announcement of Resolutions at the

strategy the Company considered and General Meeting disclosed on 29 May

introduced the 2025 H Share Core 2025 the Announcement of the

Employee Stock Ownership Plan of Haier Completion of the Establishment of

Smart Home Co. Ltd (Draft) and the 2025 A Positions for A Share Employee Stock

Share Core Employee Stock Ownership Plan Ownership Plan disclosed on 21 June

of Haier Smart Home Co. Ltd (Draft) at the 2025 the Announcement of the

14th meeting of the 11th session of the Completion of the Establishment of

Board of Directors held by the Company on Positions for H Share Employee Stock

29 April 2025 and the 2024 Annual General Ownership Plan disclosed on 3 July

Meeting held by the Company on 28 May 2025 and relevant contents.

2025. During the reporting period the

establishment of positions for both 2025 A

Share and H Share Employee Stock

Ownership Plans have been completed.(II) Incentive events not disclosed in provisional announcements or with subsequent

development

Equity incentive

□Applicable √ Not Applicable

Other explanations

□Applicable √ Not Applicable

Employee stock ownership plan

□Applicable √ Not Applicable

Other Incentives

□Applicable √ Not Applicable

112 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

(III) Share option granted to directors and senior management during the reporting

period

√ Applicable □Not Applicable

Unit: 0000 shares

Number of Shares Number of

Number of new stock subject to stock

stock options Exercisable stock option options held Market value

options held granted shares exercised Stock at the ending at the end of

at the during the during the during the options of the the reporting

beginning of reporting reporting reporting exercise reporting period

Name Position the year period period period price (RMB) period (RMB)

Li Huagang Director 36.56 0 0 –18.28 / 18.28 26.09

Gong Wei Director 18.28 0 0 –9.14 / 9.14 26.09

Li Shaohua Director 6.24 0 0 –3.12 / 3.12 26.09

Sun Danfeng Director 3.75 0 0 –1.87 / 1.87 26.09

Li Pan Senior management 18.28 0 0 –9.14 / 9.14 26.09

Zhao Yanfeng Senior management 18.73 0 0 –9.36 / 9.36 26.09

Li Yang Senior management 18.28 0 0 –9.14 / 9.14 26.09

Song Yujun 12.49 0 0 –6.24 / 6.24 26.09

Guan Jiangyong Senior management 9.14 0 0 –4.57 / 4.57 26.09

Wu Yong Senior management 9.14 0 0 –4.57 / 4.57 26.09

Fu Songhui Senior management 7.49 0 0 –3.75 / 3.75 26.09

Huang Decheng Senior management 9.99 0 0 –4.99 / 4.99 26.09

Sun Jiacheng Senior management 9.99 0 0 –4.99 / 4.99 26.09

JAMES QUN LIU Senior management 10.24 0 0 –10.24 / 0 26.09

Huang Xiaowu Senior management 18.28 0 0 –9.14 / 9.14 26.09

Liu Xiaomei Senior management 5.82 0 0 –2.91 / 2.91 26.09

Total / 212.70 0 0 –111.45 / 101.21 /

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) Matters disclosed in temporary announcements and without any subsequent progress orchange” in this section.Haier Smart Home Co. Ltd. Annual Report 2025 113Section IV Corporate Governance Environment and Society

(IV) Establishment and implementation of appraisal and incentive mechanism for

senior management during the reporting period

√ Applicable □ Not Applicable

The cash remuneration of executives in 2025 consists of monthly remuneration bonuses and

sharing and is linked to orders triggered by the upgrade of the Company’s Internet of Things

from “high-end brands” to “scenario brands” to “ecological brands”. Focusing on the rapid

improvement of profitability and through digital transformation the Company enhanced its

competitiveness in the whole process and achieved sharing of high added-value. Through the

innovation of the mechanism the Company encouraged its executives to achieve higher market

goals thus achieving a win-win situation for users employees enterprises and stakeholders. At

the same time the Company continues to promote the implementation of the employee stock

ownership and other long-term incentive plans; multiple incentive tools will be effectively utilised

to mobilise competent management frontline managers and business and technical backbones

on a wider scale further aligning the interests of shareholders the Company and incentive

recipients and bringing more efficient and sustainable returns to shareholders.X. CONSTRUCTION AND IMPLEMENTATION OF INTERNAL CONTROL

SYSTEM DURING THE REPORTING PERIOD

√ Applicable □ Not ApplicableIn accordance with the “Rules for the Preparation and Reporting of Information Disclosure by ListedIssuers of Securities No. 21— General Provisions on the Annual Internal Control Assessment Report”

jointly issued by the China Securities Regulatory Commission and the Ministry of Finance the“Guidelines for Self-regulation of Listed Companies on the Shanghai Stock Exchange No. 1 —Regulation of Operations” the “Guidelines for Self-Regulation of Listed Companies on the ShanghaiStock Exchange No. 2 — Business Handling” and other relevant guidelines and requirements the

Company has conducted a self-assessment of its internal control work. Based on the identification of

significant deficiencies in the Company’s internal control of financial reporting no significant

deficiencies in the Company’s internal control of financial reporting were identified as at the basis date

of the internal control assessment report and the Company had maintained effective internal control of

financial reporting in all material respects in accordance with the requirements of the internal control

regulatory system and relevant regulations. Based on the identification of significant deficiencies in the

Company’s internal control of non-financial reporting no significant deficiencies in the Company’s

internal control of non-financial reporting were identified as at the basis date of the internal control

assessment report. No events have occurred between the basis date of the internal control

assessment report and the date of issuance of the internal control assessment report that would affect

the effectiveness of the internal control assessment.For details please refer to the 2025 Internal Control Assessment Report of Haier Smart Home Co.Ltd. disclosed on the same day of this report.Explanations on material defects found in internal control during the reporting period

□ Applicable √ Not Applicable

114 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

XI. CONTROL OVER MANAGEMENT OF SUBSIDIARIES DURING THE

REPORTING PERIOD

√ Applicable □ Not Applicable

The listed company established an internal control and management system covering all subsidiaries

within the scope of consolidated statement which included four major areas of strategy finance

operation and compliance with a total of 22 primary business processes and control metrics. In

particular:

1. Unified control environment such as strategy and culture risk management system internal control

manual Rendanheyi remuneration system unified accounting and information system in the

financial sharing center etc.

2. The listed company has clear selection methods and terms of reference in respect of appointment

of directors supervisors and important senior management to their controlling subsidiaries.Meanwhile relevant departments of the parent company stipulate the criteria and scope of

authorization for major decision and important events formulate the approval procedure for major

decision and important events beyond the scope of authorization. The management of

subsidiaries at different levels shall exercise their authority and take responsibility within the

scope of authorization.

3. Management of major events of subsidiaries: The relevant authority of the parent company of the

listed company stipulates the criteria and scope of authorization for major decision and important

events formulate the approval procedure for major decision and important events beyond the

scope of authorization. If the Company and its subsidiaries provide external guarantees the total

amount of which shall propose for consideration at the general meetings after approval by the

Board. Subject to the authorization by the general meetings the Board decides the Company’s

external investment acquisition and disposal of assets external guarantees entrusted wealth

management related-party transactions and other events.

4. Management of budget: The finance and budget center formulates the budget preparation policy

and guidance for the following year at the end of each year and distributes them to each

subsidiary together with the budget template requiring the preparation of a comprehensive

budget in accordance with the unified budget preparation policy and guidance which contains

details of the preparation principles explanation of filling the template submission process and

examination. Each subsidiary has prepared a comprehensive budget in accordance with the

unified budget preparation policy and guidance. Annual budgeting of the following year is

commenced in the third quarter every year by making profit and loss budgets for each industry

and subsidiaries based on market forecasts to ensure accurate estimation in advance. The

execution and adjustment of budgets are regularly monitored and evaluated.Haier Smart Home Co. Ltd. Annual Report 2025 115Section IV Corporate Governance Environment and Society

For non-fixed assets investment projects the person in charge of fund of each subsidiary will

summarize the actual investment situation and report it to the manager of the investment

financing and fund management department of Haier Smart Home. The manager of the

investment financing and fund management department will monitor the execution of the budget

of investment and financing by comparing the report with the corresponding budget of the

investment plan.

5. Operation analysis and performance evaluation: The Company regularly convenes global and

industry-specific performance and operations meetings to discuss the operations and

performance and carries out performance evaluation.

6. Information transmission: The Company widely collects macroeconomic and industry development

information market information regulatory compliance and other external information through

various channels and analyzes and organizes the collected information into research reports

every month which are submitted to different levels of management after review. The

management of the parent company holds regular meetings with industries and segments to

convey the management requirements of the parent company and to be aware of the operation

status of subsidiaries in a timely manner. At the same time the Company has formulated the

information security and internal report confidentiality system which specifies the confidentiality

content confidentiality measures confidentiality level and transmission scope to prevent the

disclosure of commercial secrets.

7. Test and audit of internal control: During the reporting period the parent company conducts test

and audit of internal control for subsidiaries which account for more than 87% and 89% of

revenue and assets of the parent Company in aggregate respectively to identify problems in a

timely manner and facilitate the closed-loop rectification of problems.Risk Warning Regarding Abnormal Management Control Over Subsidiaries

□ Applicable √ Not Applicable

XII. RELEVANT EXPLANATIONS ON THE AUDIT REPORT OF INTERNAL

CONTROL

√ Applicable □ Not Applicable

Nil

Whether to disclose the audit report on internal control: Yes

Type of opinion on the audit report on internal control: Standard unqualified opinion

116 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

XIII. RECTIFICATION OF THE SELF-ASSESSMENT PROBLEMS UNDER THE

GOVERNANCE SPECIAL ACTION OF THE LISTED COMPANY

Not Applicable

XIV. ENVIRONMENTAL INFORMATION OF LISTED COMPANIES AND THEIR

MAJOR SUBSIDIARIES INCLUDED IN THE LIST OF ENTERPRISES

THAT DISCLOSE ENVIRONMENTAL INFORMATION IN ACCORDANCE

WITH THE LAW

√ Applicable □ Not Applicable

Number of enterprises included in the list of 6

enterprises that disclose environmental information

in accordance with the law (unit)

Query index for reports on legal

disclosure of environmental

No. Name of enterprise information

1 Hefei Haier Refrigerator Co. Ltd. https://39.145.37.16:8081/zhhb/

yfplpub_html/#/home

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

EnvironmentDisclosure/

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

EnvironmentDisclosure/

4 Qingdao Economic and Technological http://221.214.62.226:8090/

Development Zone Haier Water Heater Co. Ltd. EnvironmentDisclosure/

5 Qingdao Haier Smart Electrics Equipment Co. Ltd. http://221.214.62.226:8090/

EnvironmentDisclosure/

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

home

Other explanations

□ Applicable √ Not Applicable

Haier Smart Home Co. Ltd. Annual Report 2025 117Section IV Corporate Governance Environment and Society

XV. PERFORMANCE OF SOCIAL RESPONSIBILITIES

(I) Whether the social responsibility report sustainable development report or ESG

report is disclosed individually

√ Applicable □Not Applicable

The Company will disclose its 2025 Sustainability Report within the stipulated timeframe to which

investors are advised to pay attention.(II) Details of social responsibility works

√ Applicable □Not Applicable

External donation public welfare projects Quantity/Content

Total Contribution (RMB0’000) 788.18

Among which: Funds (RMB0’000) 788.18

Specifications

□ Applicable √ Not Applicable

XVI. PARTICULARS ON THE EFFORTS TO CONSOLIDATE AND EXPAND ITS

ACHIEVEMENTS IN POVERTY ALLEVIATION AND RURAL AREA

INVIGORATION

√ Applicable □ Not Applicable

Poverty alleviation and rural revitalization projects Quantity/Content Description

Total Contribution (RMB0’000) 60.70

Among which: Funds (RMB0’000) 60.70

Forms of assistance (such as poverty alleviation through industry development poverty alleviation

through employment poverty alleviation through education etc.) Pove r t y a l l e v i a t i on th rough

education etc.Specifications

√ Applicable □Not Applicable

The Company places high importance on poverty alleviation and rural revitalization efforts. In

accordance with national planning documents and policy requirements and within the scope of

authorization granted by the shareholders’ meeting for matters such as donations it provides targeted

assistance to support technological advancement and rural revitalization. During the reporting period

the company allocated funds for targeted poverty alleviation initiatives to support technological

innovation and education-based poverty reduction. This actively responds to government calls and

fulfills social responsibilities.

118 Haier Smart Home Co. Ltd. Annual Report 2025Section IV Corporate Governance Environment and Society

For instance during the reporting period an earthquake struck Dingri County in Shigatse City Tibet

Autonomous Region leaving local residents in urgent need of essential cold-weather supplies and food

which drew widespread public attention. Haier responded immediately by formulating a relief plan.Collaborating with the Tibet Kezhong Technology Haier Store the Company rushed aid to the disaster

area donating electric water heaters and daily necessities to the Shigatse Red Cross Society. Working

against the clock to assist affected residents Haier helped the people of Dingri County restore their

daily lives and rebuild their homes. In addition during the reporting period the Company continued to

fulfil its social responsibilities by supporting the construction of Hope Primary School and contributing

to the growth of technology funds.XVII. OTHERS

□ Applicable √ Not Applicable

Haier Smart Home Co. Ltd. Annual Report 2025 119Section V Significant Events

I. FULFILLMENT STATUS OF UNDERTAKINGS

(I) The undertakings made by the ultimate controller shareholders related parties

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

reporting period

√ Applicable □Not Applicable

Whether

Any performed in

Background of Date of deadline for Term of a timely and

undertakings Type of undertakings Covenanter Contents of undertakings undertakings performance undertakings strict way

Undertaking Eliminate the right defects Haier Group During the period from September 2006 to 27 September Yes Long-term Yes

related to in land property etc. Corporation May 2007 the Company issued shares 2006significant to Haier Group Corporation (“Haierreorganization Group”) to purchase the controlling

equity in its four subsidiaries namely

Qingdao Haier Air-Conditioner

Electronics Co. Ltd. (青島海爾空調電

子有限公司) Hefei Haier Air-

conditioning Co. Limited (合肥海爾空

調器有限公司) Wuhan Haier Electronics

Holding 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 required

in the operation of three companies

namely Qingdao Haier Air-Conditioner

Electronics Co. Ltd. (青島海爾空調電

子有限公司) Hefei Haier Air-

conditioning Co. Limited (合肥海爾空

調器有限公司) Wuhan Haier Electronics

Holding Co. Ltd. (武漢海爾電器股份有

限公司) (the “Covenantees”) HaierGroup made an undertaking (the “2006Undertaking”). According to the content

of 2006 Undertaking and current

condition of each Covenantee Haier

Group will constantly assure that

Covenantees will lease the land and

property owned by Haier Group for free.Haier Group will make compensation in

the event that the Covenantees suffer

loss due to the unavailability of such

land and property.Address peer competition Haier Smart Home Prior to the Transaction (hereinafter “the 31 July 2020 Yes Long-term YesCo. Ltd. Transaction” refers to the transaction in

relation to the privatization of Haier

Electronics by Haier Smart Home) Haier

Electric was a controlling subsidiary of

the Company and did not have peer

competition with the Company; after the

completion of the Transaction Haier

Electric became a wholly-owned or

controlling subsidiary of the Company

and no new peer competition with the

Company existed or will arise. There is

no new peer competition or potential

competition between the Company and

other related parties controlled by the

controlling shareholders or the de facto

controller of the Company.

120 Haier Smart Home Co. Ltd. Annual Report 2025Section V Significant Events

Whether

Any performed in

Background of Date of deadline for Term of a timely and

undertakings Type of undertakings Covenanter Contents of undertakings undertakings performance undertakings strict way

Address connected Haier Group 1. The Transaction constitutes a connected 29 July 2020 Yes Long-term Yes

transactions Corporation transaction and the connected

transaction procedures performed under

the Transaction are in compliance with

the relevant regulations. The pricing of

the connected transaction is fair and

there are no circumstances under which

the interests of the listed company and

the non-connected shareholders are

prejudiced. 2. Upon completion of the

Transaction the Company and its

affiliates will take lawful and effective

measures to minimize and regulate the

connected transactions with the listed

company take the initiative to

safeguard the interests of the listed

company and all shareholders and

refrain from taking advantages of

connected transactions for improper

benefits. 3. Provided that there is no

conflict with laws and regulations if

connected transactions between the

Company and its affiliates and the listed

company occur or exist which cannot

be avoided or for which there are

reasonable reasons the Company and

its affiliates will legally enter into a

transaction agreement with the listed

company to ensure strict compliance

with the procedures of connected

transactions required by the laws

regulations regulatory documents and

the articles of association of the

Company conduct transactions in

accordance with the principles of

marketability and fair prices to ensure

the fairness and compliance of

connected transactions and refrain from

taking advantages of such connected

transactions to engage in any acts that

are detrimental to the interests of the

listed company or its minority

shareholders and at the same time

comply with the information disclosure

obligations in accordance with relevant

regulations.Haier Smart Home Co. Ltd. Annual Report 2025 121Section V Significant Events

Whether

Any performed in

Background of Date of deadline for Term of a timely and

undertakings Type of undertakings Covenanter Contents of undertakings undertakings performance undertakings strict way

Address peer competition Haier Group 1. The Company and its controlling 29 July 2020 Yes Long-term Yes

Corporation subsidiary Haier COSMO Co. Ltd.were principally engaged in investment

business during the reporting period

and the Company and its controlling

subsidiary Haier COSMO Co. Ltd.(including its subsidiaries and entities

with more than 30% shareholding) have

no real or potential per competition with

Haier Smart Home; 2. the domestic and

overseas white goods businesses and

assets held by the Company (including

the Company’s subsidiaries and entities

with more than 30% shareholding) have

been injected into Haier Smart Home

through asset consolidation and equity

transfer in accordance with the

commitments made by the Company in

January 2011 and the requirements for

adjusting such commitments as

considered and approved by Haier

Smart Home at its 2014 annual general

meeting; 3. Since the acquisition of

100% of Haier New Zealand Investment

Holding Company Limited (which holds

100% of the shares in Fisher & Paykel

Appliances Holdings Limited) by Haier

Smart Home’s offshore subsidiary Haier

Singapore Investment Holding Co. Ltd.following the completion in July 2018

the Company (including the Company’s

subsidiaries and entities with more than

30% shareholding) and Haier Smart

Home do not have any peer competing

relationship in any business areas both

within and outside the PRC. During the

reporting period the Company

(including the Company’s subsidiaries

and entities with more than 30%

shareholding) did not have any new

peer competition with Haier Smart

Home; 4. Upon completion of the

Transaction the Company (including the

Company’s subsidiaries and entities with

more than 30% shareholding) and its

affiliates do not have any new or

potential peer competition with Haier

Smart Home; 5. During the period when

the company is the controlling

shareholder of Haier Smart Home and

the shares of Haier Smart Home are

listed on the Hong Kong Stock

Exchange the company and its other

subsidiaries and entities with more than

30% shareholding will not operate any

business that competes with the

business engaged by Haier Smart Home

and will not engage in real or potential

peer competition with Haier Smart

Home.

122 Haier Smart Home Co. Ltd. Annual Report 2025Section V Significant Events

Whether

Any performed in

Background of Date of deadline for Term of a timely and

undertakings Type of undertakings Covenanter Contents of undertakings undertakings performance undertakings strict way

Others Haier Group Upon completion of the Transaction the 29 July 2020 Yes Long-term Yes

Corporation company will strictly comply with the

Company Law the Securities Law the

relevant regulations of the China

Securities Regulatory Commission the

Shanghai Stock Exchange and the

articles of association of Haier Smart

Home etc. fairly exercise shareholders’

rights and fulfill shareholders’

obligations refrain from taking

advantage of its shareholding position

for improper benefits ensure the listed

company will continue to be completely

separate from the company and other

enterprises on which the company

exercises control and exerts significant

influence in terms of management

personnel assets finance organization

and business operations and maintain

the continued independence of the

listed company in terms of

management personnel assets

finance organization and business

operations. Upon completion of the

Transaction the company will comply

with the provisions of the Notice on

Several Issues concerning Regulating

Fund Transactions between Listed

Companies and Their Affiliates and the

External Guarantee of Listed Companies

and the Circular of China Securities

Regulatory Commission and China

Banking Regulatory Commission on

Regulating the External Guaranties

Provided by Listed Companies to

regulate the external guarantees by

listed companies and their subsidiaries

and will not misappropriate the funds of

the listed company and their

subsidiaries. The company undertakes

to strictly fulfill the above commitments.In the event that the interests of the

listed company are damaged as a result

of any breach of the above

commitments by the company and other

enterprises on which the company

exercises control and exerts significant

influence the company will legally bear

the corresponding liability for damage.Haier Smart Home Co. Ltd. Annual Report 2025 123Section V Significant Events

Whether

Any performed in

Background of Date of deadline for Term of a timely and

undertakings Type of undertakings Covenanter Contents of undertakings undertakings performance undertakings strict way

Address connected HCH (HK) 1. The Transaction constitutes a connected 29 July 2020 Yes Long-term Yes

transactions INVESTMENT transaction and the connected

MANAGEMENT transaction procedures performed under

CO. LIMITED the Transaction are in compliance with

the relevant regulations. The pricing of

the connected transaction is fair and

there are no circumstances under which

the interests of the listed company and

the non-connected shareholders are

prejudiced. 2. Upon completion of the

Transaction the company and other

enterprises on which the company

exercises control will take lawful and

effective measures to minimize and

regulate the connected transactions with

the listed company take the initiative to

safeguard the interests of the listed

company and all shareholders and

refrain from taking advantages of

connected transactions for improper

benefits. 3. Provided that there is no

conflict with laws and regulations if

connected transactions between the

company and other enterprises on

which the company exercise control and

the listed company occur or exist which

cannot be avoided or for which there

are reasonable reasons the company

and other enterprises on which the

company exercises control will legally

enter into a transaction agreement with

the listed company to ensure strict

compliance with the procedures of

connected transactions required by the

laws regulations regulatory documents

and the articles of association of the

company conduct transactions in

accordance with the principles of

marketability and fair prices and refrain

from taking advantages of such

connected transactions to engage in any

acts that are detrimental to the interests

of the listed company or its minority

shareholders and at the same time

comply with the information disclosure

obligations in accordance with relevant

regulations. 4. Any covenants and

arrangements between the company

and other enterprises on which the

company exercise control and the listed

company in relation to connected

transactions shall not prevent the other

party from conducting business or

dealing with any third party for its own

benefit and on equal competitive terms

in the market.

124 Haier Smart Home Co. Ltd. Annual Report 2025Section V Significant Events

Whether

Any performed in

Background of Date of deadline for Term of a timely and

undertakings Type of undertakings Covenanter Contents of undertakings undertakings performance undertakings strict way

Undertaking Eliminate the right defects Haier Group Haier Group Corporation undertakes that it 24 December Yes Long-term Yes

related to in land property and Corporation will assure Haier Smart Home and its 2013

refinancing etc. subsidiaries of the constant stable and

unobstructed use of the leased

property. In the event that Haier Smart

Home or any of its subsidiaries suffers

any economic loss due to the fact that

leased property has no relevant

ownership certificate Haier Group

Corporation will make compensation to

impaired party in a timely and sufficient

way and take all reasonable and

practicable measures to support the

impaired party to recover to normal

operation before the occurrence of loss.Upon the expiration of relevant leasing

period Haier Group Corporation will

grant or take practicable measures to

assure Haier Smart Home and its

subsidiaries of priority to continue to

lease the property at a price not higher

than the rent in comparable market at

that time. Haier Group Corporation will

assure Haier Smart Home and its

subsidiaries of the constant stable free

and unobstructed use of self-built

property and land of the Group. In the

event that Haier Smart Home or any of

its subsidiaries fails to continue to use

self-built property according to its own

will or in original way due to the fact

that self-built property has no relevant

ownership certificate Haier Group

Corporation will take all reasonable and

practicable measures to eliminate

obstruction and impact or will support

Haier Smart Home or its affected

subsidiary to obtain alternative property

as soon as possible if Haier Group

Corporation anticipates it is unable to

cope with or eliminate the external

obstruction and impact with its

reasonable effort. For details please

refer to the Announcement of Qingdao

Haier Co. Ltd. on the Formation

Current Situation of the Defective

Property the Influence on Operation of

Issuer Caused by Uncertainty of

Ownership Solution for the Defect and

Guarantee Measures (L2014–005)

published by the Company on the four

major securities newspapers and the

website of Shanghai Stock Exchange

on 29 March 2014.Haier Smart Home Co. Ltd. Annual Report 2025 125Section V Significant Events

Whether

Any performed in

Background of Date of deadline for Term of a timely and

undertakings Type of undertakings Covenanter Contents of undertakings undertakings performance undertakings strict way

Undertakings Others Haier Smart Home The Company will not provide loans or any 15 September Yes The completion of Yes

related to Co. Ltd. other forms of financial assistance 2021/28 equity incentive

Equity including guaranteeing their loans to June 2022 implementation

incentive any incentive recipient for acquiring

relevant stock options under this

incentive plan.Other Asset injection Haier Group Inject the assets of Haier Photoelectric to December Yes 30 June 2030 Yes

undertakings Corporation the Company or dispose such assets 2015/

through other ways according to the March

requirements of the domestic 2025

supervision before June 2030. For more

details please refer to the

Announcement of Haier Smart Home

Co. Ltd. on the Changes of Some

Commitments on Asset Injection (Lin

2025- 013) published on the four major

securities newspapers and the website

of Shanghai Stock Exchange on 28

March 2025 as well as the

announcement of relevant shareholders’

meeting resolutions disclosed on 29

May 2025.(II) The Company’s explanation on whether the earnings forecast on assets or

projects was met and its reasons in the situation that earnings in the

Company’s assets or projects have a forecast and the period of which

includes the reporting period

□ Reached □ Not Reached √ Not Applicable

(III) Performance commitments

□ Applicable √ Not Applicable

Changes in performance commitments

□ Applicable √ Not Applicable

Other explanations

□ Applicable √ Not Applicable

126 Haier Smart Home Co. Ltd. Annual Report 2025Section V Significant Events

II. NON-OPERATING UTILIZATION OF FUNDS BY CONTROLLING

SHAREHOLDERS AND OTHER RELATED PARTIES DURING THE

REPORTING PERIOD

□ Applicable √ Not Applicable

III. INFORMATION ON NON-COMPLIANCE GUARANTEES

□ Applicable √ Not Applicable

IV. EXPLANATION OF THE BOARD OF THE COMPANY ON THE

‘NON-STANDARD AUDIT REPORT’ ISSUED BY THE ACCOUNTING

FIRM

□ Applicable √ Not Applicable

V. EXPLANATION OF THE COMPANY’S ANALYSIS ON REASONS AND

EFFECTS OF CHANGES IN ACCOUNTING POLICIES AND

ACCOUNTING ESTIMATES OR CORRECTION OF SIGNIFICANT

ACCOUNTING ERRORS

(I) Explanation of the Company’s analysis on reasons and effects of changes in

accounting policies and accounting estimates

□Applicable √ Not Applicable

(II) Explanation of the Company’s analysis on reasons and effects of correction of

significant accounting errors

□Applicable √ Not Applicable

(III) Communication with former accounting firm

□ Applicable √ Not Applicable

(IV) Approval processes and other explanations

□ Applicable √ Not Applicable

Haier Smart Home Co. Ltd. Annual Report 2025 127Section V Significant Events

VI. APPOINTMENT AND DISMISSAL OF ACCOUNTING FIRM

Unit and Currency: RMB0’000

Current appointment

Name of domestic accounting firm Hexin Certified Public Accountants LLP

Remuneration of domestic accounting firm 655

Audit period of domestic accounting firm 13 years

Names of certified public accountants of domestic Zhang Jun Li Xiang Zhi

accounting firm

Number of accumulative years of audit services of certified 1 years 4 years

public accountants in domestic accounting firms

Name of overseas accounting firm HLB Hodgson Impey Cheng Limited

Remuneration of overseas accounting firm 389

Audit period of overseas accounting firm 6 years

Name Remuneration

Accounting firm for Internal control audit Hexin Certified Public Accountants LLP 223

Explanation of appointment and dismissal of accounting firm

□ Applicable √ Not Applicable

Explanation of change of accounting firm during the auditing period

□ Applicable √ Not Applicable

Explanation of audit fees falling by more than 20% (inclusive) compared with the previous year

□ Applicable √ Not Applicable

128 Haier Smart Home Co. Ltd. Annual Report 2025Section V Significant Events

VII. POSSIBILITY OF DELISTING

(I) Reasons of warning for delisting risks

□ Applicable √ Not Applicable

(II) Response measures to be taken by the Company

□ Applicable √ Not Applicable

(III) Circumstances and reasons for termination of listing

□ Applicable √ Not Applicable

VIII. MATTERS RELATING TO BANKRUPTCY AND RESTRUCTURING

□ Applicable √ Not Applicable

IX. MATERIAL LITIGATION AND ARBITRATION MATTERS

□ Material litigation and arbitration matters during the year

√ No material litigation and arbitration matters during the year

X. PUNISHMENT AND CORRECTION ON THE LISTED COMPANY AND ITS

DIRECTORS SENIOR MANAGEMENT CONTROLLING SHAREHOLDERS

AND ULTIMATE CONTROLLERS DUE TO SUSPECT OF LAW

VIOLATIONS AND THE ISSUE OF RECTIFICATION

□ Applicable √ Not Applicable

XI. EXPLANATION OF THE INTEGRITY STATUS OF THE COMPANY AND

ITS CONTROLLING SHAREHOLDERS AND ULTIMATE CONTROLLER

DURING THE REPORTING PERIOD

□ Applicable √ Not Applicable

Haier Smart Home Co. Ltd. Annual Report 2025 129Section V Significant Events

XII. SIGNIFICANT RELATED-PARTY TRANSACTIONS

(I) Related-party transactions from daily operation

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

subsequent progress or change

√ Applicable □Not Applicable

Summary of matters Query index

Renewal of the Framework Agreement on For details please refer to the

Regular Related-Party Transaction and Announcement on the Renewal of the

the Estimated Related-Party Transaction Framework Agreement on Regular

Limit: During the reporting period the Related-Party Transaction and the

Company renewed its regular related- Estimated Related-Party Transaction

party transaction with the related parties Limit of Haier Smart Home Co. Ltd.for the procurement of products and disclosed by the Company on 28

materials for the period from 2026 to March 2025 and other related

2028 which was approved by the announcements as well as the

shareholders’ meeting. Announcement of Resolutions at the

Shareholders’ Meeting disclosed on 29

May 2025.

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

subsequent progress or change

√ Applicable □Not ApplicablePursuant 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 approved

at 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 of

the Board of Directors and the 2022 Annual General Meeting the Company has made

estimation on the connected transactions for the next three years (including 2025) as

detailed in the aforesaid announcements regarding the resolutions of the meetings.For the actual performance of the Company’s connected transactions during the year of

2025 please refer to “Related parties and related-party transactions” under Section VIII.

Financial Report set out in this regular report.

130 Haier Smart Home Co. Ltd. Annual Report 2025Section V Significant Events

3. Matters not disclosed in temporary announcements

□ Applicable √ Not Applicable

(II) Related-party transactions regarding acquisition or disposal of assets/equity

1. Matter disclosed in temporary announcements and with no subsequent progress or

change

√ Applicable □ Not Applicable

Summary of matters Query index

Acquisition of the Real Estate of Haier For details please refer to the

White Goods R&D Centre and Related- Announcement on the Acquisition of the

party Transaction: Qingdao Haier Air Real Estate of Haier White Goods R&D

Conditioner Gen Corp. Ltd. the Centre and Related-party Transaction of

Company’s wholly-owned subsidiary Haier Smart Home Co. Ltd. disclosed

purchased the Real Estate of Haier by the Company on 28 March 2025.White Goods R&D Centre from Haier

Group Corporation to meet its office

needs. The purchase price was RMB267

million.Acquisition of 100% Equity Interest of For details please refer to the

Qingdao Haiyunlian Industrial Announcement on the Acquisition of

Development Co. Ltd.: 100% Equity Interest of Qingdao

Haiyunlian Industrial Development Co.Qingdao Haier Carrier Refrigeration Ltd. and Related-party Transaction of

Equipment Co. Ltd. the Company’s Haier Smart Home Co. Ltd. disclosed

wholly-owned subsidiary proposed to by the Company on 29 August 2025.acquire 100% equity interest of Qingdao

Haiyunlian Industrial Development Co.Ltd. from Qingdao Haier Industrial

Development Co. Ltd. to meet its

needs of business development. The

purchase price was RMB68 million.

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

Haier Smart Home Co. Ltd. Annual Report 2025 131Section V Significant Events

(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

Summary of matters Query index

Haier Group Finance Co. Ltd. (hereinafter For more details please refer to the

the “Finance Company”) planned to Announcement on the Proportional

increase its capital by converting Capital Increase of the Joint-stock

undistributed profits into capital with a Company Haier Group Finance Co.total capital increase of RMB3 billion. Ltd. by Converting Undistributed Profits

Upon completion of the capital increase into Capital and Related-Party

Qingdao Haier Air-Conditioner Transaction of Haier Smart Home Co.Electronics Co. Ltd. and Qingdao Haier Ltd. (Lin 2025—008) disclosed by the

Air Conditioner Gen Corp. Ltd. the Company on 28 March 2025.Company’s subsidiaries as well as

Haier Group Corporation and Qingdao

Haikeda Electronics Co. Ltd. the

Company’s related parties will increase

their capital contributions to the Finance

Company in proportion to their existing

shareholding and the shareholding of

each party in the Finance Company will

remain unchanged.

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

(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 that haven’t been disclosed in temporary announcements

□ Applicable √ Not Applicable

132 Haier Smart Home Co. Ltd. Annual Report 2025Section V Significant Events

(V) Financial business between the Company and the finance company with which

it has a related relationship or it is the company’s controlling finance company

and related parties

√ Applicable □Not Applicable

1. Deposit business

√ Applicable □Not Applicable

Unit and Currency: RMB

Changes of the period

Balance as at the Total amount Total amount

Maximum daily Range of deposit beginning of the deposited during withdrawn during Balance as at the

Related party Relationship deposit limit interest period the period the period end of the period

Haier Group Finance A subsidiary of 34 billion 0.0001% to 4.1% 33951519130.81 560821356900.08 560798441894.77 33974434136.12

Co. Ltd. Haier Group

Total / / / 33951519130.81 560821356900.08 560798441894.77 33974434136.12

2. Lending business

√ Applicable □Not Applicable

Unit and Currency: RMB

Changes of the period

Balance as at the Total loan Total repayment

Range of loan beginning of the amount for the amount for the Balance as at the

Related party Relationship Loan limit interest period period period end of the period

Haier Group Finance A subsidiary of 10 billion 1.828%–4.9% 196200183.66 3691420649.45 121047120.59 3766573712.52

Co. Ltd. Haier Group

Total / / / 196200183.66 3691420649.45 121047120.59 3766573712.52

3. Credit business or other finance businesses

√ Applicable □Not Applicable

Unit and Currency: RMB

Actual amount

Related party Relationship Type of business Total amount of occurrence

Haier Group A subsidiary of Foreign exchange 5500000000 2507682748.01

Finance Haier Group derivatives

Co. Ltd.Haier Group A subsidiary of Service fees 80000000 8596687.62

Finance Haier Group

Co. Ltd.Haier Smart Home Co. Ltd. Annual Report 2025 133Section V Significant Events

4. Other explanations

□ Applicable √ Not Applicable

(VI) Others

□ Applicable √ Not Applicable

XIII. SIGNIFICANT CONTRACTS AND THEIR EXECUTION

(I) Trusteeship contracting and leasing

1. Trusteeship

□ Applicable √ Not Applicable

During the reporting period the Company had no material escrow matters. Up to now the

following entrusted assets that have been approved by the Company’s shareholders’

meeting are still in effect:

According to Haier Group’s commitment on further supporting the development of Qingdao

Haier and resolving peer competition to reduce connected transactions based on the fact

that Qingdao Haier Optoelectronics Co. Ltd. (青島海爾光電有限公司) and its subsidiaries

the main body of Haier Group engaging in the color television business are still in a period

of transformation and integration and their financial performance has not yet met the

Company’s expectations Haier Group is unable to complete the transfer before the

aforesaid commitment period. Haier Group intends to entrust the Company with the

operation and management of the escrow assets and pay the Company an annual escrow

fee of RMB1 million during the escrow period.

2. Contracting

□ Applicable √ Not Applicable

3. Leasing

□ Applicable √ Not Applicable

134 Haier Smart Home Co. Ltd. Annual Report 2025Section V Significant Events

(II) Guarantee

√ Applicable □ Not Applicable

Unit and Currency: RMB0’000

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

Date of

Relationship occurrence Whether

between the of the Whether the Overdue Whether Related-

guarantor and guarantee Commencement Expiration guarantee Whether the amount of there is a party

the listed Secured Amount of (date of date of date of Type of Collateral (if has been guarantee is the counter- guarantee

Guarantor company party guarantee agreement) guarantee guarantee guarantee any) fulfilled overdue guarantee guarantee or not Relationship

Total 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 subsidiaries

Total amount of guarantees for subsidiaries occurred during the reporting period 705170

Total balance of guarantees for subsidiaries at the end of the reporting period (B) 721348

Total amount of guarantees provided by the Company (including guarantees for subsidiaries)

Total amount of guarantee (A + B) 721348

Ratio of total amount of guarantees to net assets of the Company (%) 6.1

Including:

Amount of guarantees for shareholders ultimate controllers and their related parties(C) 0

Amount of debt guarantees provided directly or indirectly for the secured party with asset-liability ratio exceeding 70% (D) 94060

The amount of total amount of guarantee in excess of 50% of net assets (E) 0

Total amount of the above three guarantees (C + D + E) 94060

Explanation of possibly bearing related discharge duty for premature guarantees Nil

Explanation of guarantee status Nil

(III) Entrusted others to manage cash assets

1. Entrusted wealth management

(1) Overall of entrusted wealth management

√ Applicable □ Not Applicable

Unit and Currency: RMB

Past due

Premature uncollected

Type Risk characteristics balance amount

Brokerage wealth management Low risk 49708806

product

Bank wealth management product Low risk 1434000000.00

Others

□ Applicable √ Not Applicable

Haier Smart Home Co. Ltd. Annual Report 2025 135Section V Significant Events

(2) Individual entrusted wealth management

√ Applicable □ Not Applicable

Unit and Currency: RMB

Commencement

Amount of date of entrusted Expiration date of Past due

entrusted wealth wealth entrusted wealth Whether there Actual gains Undue uncollected

Trustee Type of entrusted wealth management Risk characteristics management management management Investment are restrictions or losses amount amount

Asset management account of Brokerage wealth management product Low risk 49708806 Money market fund NO 49708806

Industrial Bank CO. LTD.Haier Road sub-branch of Bank wealth management product Low risk 134000000 2025/11/21 2026/1/8 Managed by deposit NO 134000000

Construction Bank

Haier Road sub-branch of Bank wealth management product Low risk 300000000 2025/9/18 2026/3/18 Managed by deposit NO 300000000

Construction Bank

Minsheng Bank Bank wealth management product Low risk 1000000000 2025/12/31 2026/2/4 Managed by deposit NO 1000000000

Others

□ Applicable √ Not Applicable

(3) Provisions for impairment of entrusted wealth management

□ Applicable √ Not Applicable

2. Entrusted loans

(1) Overall entrusted loans

□ Applicable √ Not Applicable

Others

□ Applicable √ Not Applicable

(2) Individual entrusted loans

□ Applicable √ Not Applicable

Others

□ Applicable √ Not Applicable

(3) Provisions for impairment of entrusted loans

□ Applicable √ Not Applicable

3. Others

□ Applicable √ Not Applicable

136 Haier Smart Home Co. Ltd. Annual Report 2025Section V Significant Events

(IV) Other Major Contracts

□ Applicable √ Not Applicable

XIV. EXPLANATION OF PROGRESS IN USE OF PROCEEDS

□ Applicable √ Not Applicable

XV. EXPLANATION OF OTHER SIGNIFICANT MATTERS THAT HAVE A

SIGNIFICANT IMPACT ON THE VALUE JUDGMENTS AND INVESTMENT

DECISIONS OF INVESTORS

□ Applicable √ Not Applicable

Haier Smart Home Co. Ltd. Annual Report 2025 137Section VI Changes in Shares and

Information about Shareholders

I. CHANGES IN SHARE CAPITAL

(I) Table of Changes in shares

1. Table of Changes in shares

Unit: share

Prior to the change Increase and decrease of the change (＋-) After the change

Shares

Percentage New shares Bonus converted Percentage

Number (%) issued shares from reserve Others Subtotal Number (%)

I. Shares with selling

restrictions

1. Shares held by

the state

2. Shares held by

the state-owned

legal entities

3. Shares held by

other domestic

investors

Including:

shares held

by Domestic

non-state-

owned legal

entities

Shares held by

domestic

individuals

4. Shares held by

foreign investors

Including:

shares held

by foreign

legal entities

Shares held by

foreign

individuals

II. Tradable shares

without selling

restrictions

1. RMB ordinary

shares 6254501095 66.66 –1472684 –1472684 6253028411 66.68

2. Domestic listed

foreign shares

3. Overseas listed

foreign shares 3128412239 33.34 –3811000 –3811000 3124601239 33.32

4. Others

III. Total shares 9382913334 100.00 –5283684 –5283684 9377629650 100.00

138 Haier Smart Home Co. Ltd. Annual Report 2025Section VI Changes in Shares and Information about Shareholders

2. Statement on the changes in shares

√ Applicable □ Not Applicable

(1) Cancellation of A share repurchase: The Resolution on the Change of Use and

Cancellation of Partial Repurchased Shares of Haier Smart Home Co. Ltd. was

considered and approved by the Company at the 2025 First Extraordinary General

Meeting 2025 Second A Share Class Meeting 2025 Second D Share Class Meeting

and 2025 Second H Share Class Meeting held on 16 October 2025. The Company

proposes to change the use of the repurchased shares under the Company’s 2022

Annual Repurchase Plan from “for equity incentives/employee stock ownership plan”

to “for cancellation to reduce registered capital” i.e. all 1472684 shares in the

designated securities repurchase account under the 2022 Annual Repurchase Plan is

proposed to be canceled and the registered capital of the Company is proposed to

be reduced accordingly. This cancellation was completed on 5 December 2025. For

details please refer to the Announcement on the Completion of Cancellation of Partial

Repurchased Shares and Share Changes of Haier Smart Home Co. Ltd.

(Announcement No.: Lin 2025–071) disclosed by the Company on 5 December

2025.

(2) Cancellation of H share repurchase: On 20 June 2024 the Resolution on Proposing

the General Meeting to Grant the General Mandate to the Board of Directors to

Repurchase not more than 10% of the Total Number of H shares of the Company in

Issue of Haier Smart Home Co. Ltd. was considered and approved by the Company

at the 2023 Annual General Meeting 2024 First A Share Class Meeting 2024 First D

Share Class Meeting and 2024 First H Share Class Meeting. The Company intends to

repurchase H shares and cancel them within the agreed period. During the reporting

period the Company repurchased a total of 3811000 H shares which have been

cancelled. For details please refer to the Announcement on Changes in Share ofOverseas Listed Foreign Shares (H Shares) of Haier Smart Home Co. Ltd. 《( 海尔智家股份有限公司關於境外上市外資股（H股）股份变动情況的公告》) (No.: Lin 2025–

072) disclosed by the Company on 18 December 2025.

Based on the above during the reporting period the share capital of the Company

was changed from 9382913334 shares at the beginning of the reporting period to

9377629650 shares.

Haier Smart Home Co. Ltd. Annual Report 2025 139Section VI Changes in Shares and Information about Shareholders

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

and net assets per share (if any) over the last year and the last reporting period

√ Applicable □ Not Applicable

In 2025 the Company achieved net profit attributable to shareholders of the Parent

Company of RMB19552798222.85 equity attributable to owners of the Parent Company

of RMB118698401416.58 in terms of total share capital of 9382913334 shares at the

beginning of the period profit per share was RMB2.084 and net asset was RMB12.650 per

share accordingly; in terms of total share capital of 9377629650 shares at the end of the

period profit per share was RMB2.085 and net asset was RMB12.658 per share

accordingly.

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

regulatory authorities

□ Applicable? √ Not Applicable

(II) Changes in shares with selling restriction

□ Applicable? √ Not Applicable

II. ISSUANCE AND LISTING OF SECURITIES

(I) Issuance of securities as of the reporting period

□ Applicable? √ Not Applicable

Details of issuance of securities as of the reporting period (please specify separately for bonds

with different interest rates within the duration):

□ Applicable? √ Not Applicable

(II) Changes in total shares and shareholder structure as well as assets and liabilities

structure of the Company

√ Applicable □ Not Applicable

For the total number of ordinary shares of the Company and changes in shareholder structure

please refer to the relevant explanations in “I. Changes in share capital” and “III. Information onshareholder and ultimate controllers” in this section. For the impact of the aforesaid changes on

“Paid-in capital (or share capital)” in the Company’s balance sheet and other items please refer

to the relevant content in “Section VIII Financial Report” of this report.(III) Information on existing shares specifically issued for staff

□ Applicable √ Not Applicable

140 Haier Smart Home Co. Ltd. Annual Report 2025Section VI Changes in Shares and Information about Shareholders

III. INFORMATION ON SHAREHOLDERS AND ULTIMATE CONTROLLERS

(I) Total number of shareholders

Total number of ordinary shareholders up to the end of 156478

the reporting period

Total number of ordinary shareholders as at the end of 182481

the last month prior to the disclosure day of the

annual report

(II) Table of top ten shareholders top ten common shareholders (or the shareholders

not subject to selling restrictions) by the end of the reporting period

Unit: share

Shareholdings of top ten shareholders (excluding the lending of shares under refinancing)

Increase/

decrease Number of Number of

during the shares held shares held

Name of shareholder reporting at the end of Percentage with selling Status of shares pledged Nature of

(full name) period the period (%) restrictions marked or frozen shareholder

Status Number

HKSCC NOMINEES LIMITED 2312302816 24.66 Unknown Foreign legal entity

Haier COSMO Co. Ltd. 1258684824 13.42 None Domestic non-state-

(海爾卡奥斯股份有限公司) owned legal entity

Haier Group Corporation 1072610764 11.44 None Domestic non-state-

owned legal entity

HCH (HK) INVESTMENT 538560000 5.74 None Foreign legal entity

MANAGEMENT CO.LIMITED

Hong Kong Securities Clearing 343466764 3.66 None Unknown

Co. Ltd.China Securities Finance 182592654 1.95 None State-owned legal

Corporation Limited entity

Qingdao Haier Venture & 172252560 1.84 None Domestic non-state-

Investment Information Co. owned legal entity

Ltd. (青島海爾創業投資諮詢

有限公司)

Qingdao Haichuangzhi 133791058 1.43 None Domestic non-state-

Management Consulting owned legal entity

Enterprise (Limited

Partnership) (青島海創智管

理諮詢企業（有限合夥）)

National Social Security Fund 73000090 0.78 None Unknown

Investment Portfolio 113

Industrial and Commercial Bank 69411792 0.74 None Unknown

of China — Shanghai 50

Exchange-traded Open-End

Index Securities 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)

Haier Smart Home Co. Ltd. Annual Report 2025 141Section VI Changes in Shares and Information about Shareholders

Shareholdings of top ten shareholders not subject to selling restrictions

(excluding the lending of shares under refinancing)

Number of

tradable shares

without selling

Name of shareholder restrictions Class and number of shares

Class Number

HKSCC NOMINEES 2312302816 Overseas listed foreign 2312302816

LIMITED shares

Haier COSMO Co. Ltd. 1258684824 RMB ordinary 1258684824

(海爾卡奥斯股份有限

公司)

Haier Group 1072610764 RMB ordinary 1072610764

Corporation

HCH (HK) INVESTMENT 538560000 Overseas listed foreign 538560000

MANAGEMENT CO. shares

LIMITED

Hong Kong Securities 343466764 RMB ordinary 343466764

Clearing Co. Ltd.China Securities Finance 182592654 RMB ordinary 182592654

Corporation Limited

Qingdao Haier Venture & 172252560 RMB ordinary 172252560

Investment

Information Co. Ltd.(青島海爾創業投資諮

詢有限公司)

Qingdao Haichuangzhi 133791058 RMB ordinary 133791058

Management

Consulting Enterprise

(Limited Partnership)

(青島海創智管理諮詢企業（有限合夥）)

National Social Security 73000090 RMB ordinary 73000090

Fund Investment

Portfolio 113

142 Haier Smart Home Co. Ltd. Annual Report 2025Section VI Changes in Shares and Information about Shareholders

Shareholdings of top ten shareholders not subject to selling restrictions

(excluding the lending of shares under refinancing)

Number of

tradable shares

without selling

Name of shareholder restrictions Class and number of shares

Class Number

Industrial and 69411792 RMB ordinary 69411792

Commercial Bank of

China — Shanghai 50

Exchange-traded

Open-End Index

Securities 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)

Explanation on As at the end of the reporting period the Company’s repurchase

repurchase account of account held 69791486 shares.top ten shareholders

Explanation on Nil

delegated voting

rights entrusted

voting rights

abstained voting

rights of the aforesaid

shareholders

Related parties or (1) Haier COSMO Co. Ltd. (海爾卡奥斯股份有限公司) is a holding

parties acting in subsidiary of Haier Group Corporation. Haier Group

concert among the Corporation holds 51.20% of its equity. Each of Qingdao Haier

aforesaid Venture & Investment Information Co. Ltd.(青島海爾創業投資

shareholders 諮詢有限公司) HCH (HK) INVESTMENT MANAGEMENT CO.LIMITED and Qingdao Haichuangzhi Management ConsultingEnterprise (Limited Partnership) (青島海創智管理諮詢企業（有限合夥）) is a party acting in concert with Haier Group

Corporation; (2) The Company is not aware of the existence of

any connections of other shareholders.Haier Smart Home Co. Ltd. Annual Report 2025 143Section VI Changes in Shares and Information about Shareholders

Shareholdings of top ten shareholders not subject to selling restrictions

(excluding the lending of shares under refinancing)

Number of

tradable shares

without selling

Name of shareholder restrictions Class and number of shares

Class Number

Explanation of Not Applicable

preferential

shareholders with

restoration of voting

rights and their

shareholdings

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 merger

according to local market practices and technical settings not representing the ultimate shareholder.Shareholders holding more than 5% of the shares the top ten shareholders and the top ten

holders of tradable shares without selling restrictions who have participated in the lending of

shares under the refinancing business

□ Applicable √ Not Applicable

Changes in the top ten shareholders and the top ten holders of tradable shares without selling

restrictions compared with the previous period due to the lending/returning of shares under the

refinancing business

□ Applicable √ Not Applicable

Number of shares held by the top ten shareholders with selling restrictions and their selling

restrictions

□ Applicable √ Not Applicable

(III) Strategic investors or general legal persons who became the top ten shareholders due to

placing of new shares

□ Applicable √ Not Applicable

144 Haier Smart Home Co. Ltd. Annual Report 2025Section VI Changes in Shares and Information about Shareholders

IV. CONTROLLING SHAREHOLDER AND THE ULTIMATE CONTROLLER

(I) Status of controlling shareholder

1. Legal person

√ Applicable □ Not Applicable

Name Haier COSMO Co. Ltd. (海爾卡奥斯股份有限公司)

Person in charge of the Zhou Yunjie (周云杰)

Company or legal

representative

Establishment date 1988–06–30

Principal business Information technology integration and Internet of

Things technology services: industrial automation

technology research and development technical

consulting; research and development and

manufacturing of electrical appliances electronic

products mechanical products communication

equipment and related accessories industrial

automation control equipment computer hardware

and software and auxiliary equipment; import and

export business (operated within the scope

approved by MOFCOM); wholesale and retail:

domestic commerce (except for merchandises

prohibited by the state); investment in medical

industry; investment advisory services; enterprise

management consulting. (For projects subject to

approval business activities can only be carried out

after the approval by relevant departments)

Shareholding of other controlling Indirect/direct control of/participation in the Company:

and participating domestic and ‘Qingdao Haier Biomedical Co. Ltd.’ (青島海爾生

overseas listed companies in 物醫療股份有限公司) (stock name: ‘Haier

the reporting period Biomedical’ stock code: 688139) Yingkang Life

Technology Co. Ltd. (盈康生命科技股份有限公司)

(stock name: ‘Yingkang Life’ stock code: 300143)

‘Qingdao Bank Co. Ltd.’ (青島銀行股份有限公司)

(stock name: ‘Bank of Qingdao’ stock code:

002948 and 3866.HK) etc.

Other explanation Nil

Haier Smart Home Co. Ltd. Annual Report 2025 145Section VI Changes in Shares and Information about Shareholders

2. Natural person

□ Applicable √ Not Applicable

3. Explanation on the absence of controlling shareholders of the Company

□ Applicable √ Not Applicable

4. Explanation on the change in controlling shareholders during the reporting period

□ Applicable √ Not Applicable

5. Framework of the ownership and controlling relationship between the Company and

its controlling shareholder

√ Applicable □ Not Applicable

Haier COSMO Co. Ltd.(海尔卡奥斯股份有限公司)

13.42%

Haier Smart Home Co. Ltd.(II) Status of the ultimate controller

1. Legal person

√ Applicable □ Not Applicable

Name Haier Group Corporation

Person in charge of the Zhou Yunjie (周云杰)

Company or legal

representative

Establishment date 1980–03–24

146 Haier Smart Home Co. Ltd. Annual Report 2025Section VI Changes in Shares and Information about Shareholders

Principal business Technology development technology consultation

technology transfer and technology services

(including industrial Internet etc.); data processing;

digital technology intelligent technology software

technology; research and development sales and

after-sales service of robots and automation

equipment products; logistics information service;

research and development and sales of software

technology for smart home products and solutions

systems; manufacturing of household appliances

electronic products communication equipment

electronic computers and accessories general

machinery kitchen utensils industrial robots;

wholesale and retail of domestic commerce (except

for the national dangerous prohibition franchise

exclusive control merchandises); import and export

business (see the foreign trade enterprise finalized

certification for details); economic and technological

consultation; research and development and

transfer of technological achievements; rental of

owned properties. (For projects subject to approval

business activities can only be carried out after the

approval by relevant departments)

Shareholding of other controlling Indirect/direct control of/participation in the Company:

and participating domestic and ‘Qingdao Haier Biomedical Co. Ltd.’ (青島海爾生

overseas listed companies in 物醫療股份有限公司) (stock name: ‘Haier

the reporting period Biomedical’ stock code: 688139) Yingkang Life

Technology Co. Ltd. (盈康生命科技股份有限公司)

(stock name: ‘Yingkang Life’ stock code: 300143)

‘Qingdao Bank Co. Ltd.’ (青島銀行股份有限公司)

(stock name: ‘Bank of Qingdao’ stock code:

002948 and 3866.HK) ‘Qingdao Thunderobot

Technology. Co. Ltd.’ (stock name:

‘THUNDEROBOT’ stock code: 872190) Shanghai

Raas Blood Products Co.Ltd (上海萊士血液製品股

份有限公司) (stock name: ‘SHANGHAI RAAS’

stock code: 002252) Zhongmiao Holdings

(Qingdao) Co. Ltd. (stock name: ‘ZHONGMIAO

HOLDINGS’ stock code: 1471.HK) Autohome Inc.(stock name: ‘Autohome’ stock code: 2518.HK

and ATHM.N) Shanghai STEP Electric Corporation

(stock name: ‘STEP’ stock code: 002527.SZ) etc.Other explanation Nil

Haier Smart Home Co. Ltd. Annual Report 2025 147Section VI Changes in Shares and Information about Shareholders

2. Natural person

□ Applicable √ Not Applicable

3. Explanation on the absence of ultimate controller of the Company

□ Applicable √ Not Applicable

4. Explanation on the change in control over the Company during the reporting period

□ Applicable √ Not Applicable

5. Framework of ownership and controlling relationship between the Company and the

ultimate controllers

√ Applicable □ Not Applicable

Haier Group Corporation

100% parties 13% 100%

in concert 51.20%

Qingdao Haier Venture & Qingdao Haichuangzhi

Investment Information Management Consulting Haier COSMO 67% HCH (HK) Enterprise (Limited Co. Ltd. INVESTMENT Haier Co. Ltd. International

(青島海爾創業投資 Partnership) (海爾卡奥斯 MANAGEMENT Co. Limited

諮詢有限公司) (青島海創智管理 股份有限公司) CO. LIMITED諮詢企業（有限合夥）)

1.84%1.43%11.43%13.41%5.74%0.62%

(A Shares) (A Shares) (A Shares) (A Shares) (H Shares) (D Shares)

Haier Smart Home Co. Ltd.

6. The ultimate controller controls the Company by way of Trust or other assets

management

□ Applicable √ Not Applicable

(III) Introduction of controlling shareholders and ultimate controllers

√ Applicable □ Not Applicable

Haier Group Company is registered as a joint-stock enterprise. According to the statement

issued by the State-owned Assets Management Office of Qingdao on 1 June 2002 it is believed

that the enterprise nature of Haier Group Company is a collective owned enterprise.

148 Haier Smart Home Co. Ltd. Annual Report 2025Section VI Changes in Shares and Information about Shareholders

V. THE PROPORTION OF THE ACCUMULATED NUMBER OF SHARES

PLEDGED BY THE CONTROLLING SHAREHOLDERS OR THE LARGEST

SHAREHOLDER OF THE COMPANY TOGETHER WITH THE PARTIES

ACTING IN CONCERT WITH THEM TO THE NUMBER OF SHARES OF

THE COMPANY HELD BY THEM AMOUNTS TO MORE THAN 80%

□ Applicable √ Not Applicable

VI. OTHER CORPORATE SHAREHOLDERS WITH A SHAREHOLDING

PERCENTAGE OVER 10%

□ Applicable √ Not Applicable

VII. EXPLANATION OF RESTRICTIONS ON SHAREHOLDING REDUCTION

□ Applicable √ Not Applicable

VIII. SPECIFIC IMPLEMENTATION OF SHARE REPURCHASE DURING THE

REPORTING PERIOD

√ Applicable □ Not Applicable

Unit and Currency: RMB

Name of share repurchase plan Haier Smart Home Co. Ltd.’s public share proposal in relation

to the partial repurchase of A Shares

Date of disclosure of the share 28 March 2025

repurchase plan

Number of shares proposed to be 25.00 million shares to 50.00 million shares 0.27 to 0.53

repurchased and its percentage

to the total share capital (%)

Proposed amount of repurchase RMB1.0–2.0 billion

Proposed period of repurchase 28 March 2025–27 March 2026

Purpose of repurchase Used for employee share ownership plans

Amount repurchased (share) 42825700

Repurchased amount as a Not Applicable

percentage to the underlying

shares covered by the equity

incentive scheme (%) (if any)

Progress of the Company’s Not Applicable

reduction of its holdings of

repurchased shares by way of

centralised biddingNote: During the reporting period the Company also implemented the H-share repurchase scheme. For details please refer to “2.Statement on the changes in shares” under “Section VII Changes in Shares and Information about Shareholders” of this

report and the Announcement on the Changes in Shares of Overseas Listed Foreign Shares (H Shares) of Haier Smart Home

Co. Ltd. 《( 海尔智家股份有限公司關於境外上市外資股（ H股）股份变动情況的公告》) (No.: Lin 2025–072) disclosed by the

Company on 18 December 2025.Haier Smart Home Co. Ltd. Annual Report 2025 149Section VI Changes in Shares and Information about Shareholders

IX. RELEVANT INFORMATION OF PREFERRED SHARES

□ Applicable √ Not Applicable

150 Haier Smart Home Co. Ltd. Annual Report 2025Section VII Relevant Information of

Corporate Bonds

I. CORPORATE BOND (INCLUDING ENTERPRISE BOND) AND

NON-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.

(1) Funds raised for specific projects

□ Applicable √ Not Applicable

(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

Haier Smart Home Co. Ltd. Annual Report 2025 151Section VII Relevant Information of Corporate Bonds

(V) Debt financing instruments of non-financial enterprises in the interbank bond

market

√ Applicable □ Not Applicable

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

Unit and Currency: RMB’00000000

Whether there is

Investor a risk of

Principal and suitability termination of

Release Bond Interest interest repayment arrangements Trading listing and

Bond name Abbreviation Code date Interest date Expiration date balance rate (%) method Trading venues (if any) mechanism trading

2025 First Tranche of Green 25 Haier Smart Home MTN001 102580830 25 February 26 February 26 February 15 1.99 Annual interest Interbank bond market None / NO

two-New Medium-term Notes of (Green Two-New) 2025 2025 2028 payment with the

Haier Smart Home Co. Ltd. principal

repayment at

maturity

2025 Second Tranche of Green 25 Haier Smart Home MTN002 102582498 17 June 18 June 2025 18 June 2028 20 1.66 Annual interest Interbank bond market None / NO

Two-new Science and (Science and Innovation Bond) 2025 payment with the

Technology Innovation Bonds principal

Haier Smart Home Co. Ltd. repayment at

maturity

The Company’s response to the risk of termination of listing and trading of bonds

□ Applicable √ Not Applicable

Overdue bonds

□ Applicable √ Not Applicable

The interest payments and redemptions of bonds during the reporting period

□ Applicable √ Not Applicable

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

protection clauses

□ Applicable √ Not Applicable

3. Intermediary institutions providing services for bond issuance and duration business

Nil

Changes in the above intermediary institutions

□ Applicable √ Not Applicable

152 Haier Smart Home Co. Ltd. Annual Report 2025Section VII Relevant Information of Corporate Bonds

4. Utilisation of raised funds as at the end of the reporting period

□ Applicable √ Not Applicable

Progress of construction projects financed by the raised funds and operational benefits

□ Applicable √ Not Applicable

Explanation of changes in the use of raised funds from the above bonds during the

reporting period

□ Applicable √ Not Applicable

Other explanations:

□ Applicable √ Not Applicable

5. Adjustment of credit rating results

□ Applicable √ Not Applicable

Other explanations:

□ Applicable √ Not Applicable

6. 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

7. 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

(VII) Overdue interest-bearing liabilities (excluding bonds) as at the end of the

reporting period

□ Applicable √ Not Applicable

(VIII) Impact on the rights and interests of bond investors during the reporting period

arising from violations of laws and regulations the Company’s articles of

association provisions of the information disclosure management system or

agreements and undertakings in the bond prospectus

□ Applicable √ Not Applicable

Haier Smart Home Co. Ltd. Annual Report 2025 153Section VII Relevant Information of Corporate Bonds

(IX) Accounting data and financial indicators of the Company for the last two years

as at the end of the reporting period

√ Applicable □ Not Applicable

Unit and Currency: RMB

Increase/decrease

for the period

compared with

the corresponding

period of last year

Main indicators 2025 2024 (%)

Net profit attributable to shareholders of

the listed company excluding non-

recurring gains and losses 18603631637.54 17804732809.63 4.49

Current ratio 1.07 1.02 5.70

Quick ratio 0.74 0.73 2.37

Gearing ratio (%) 57.41 59.14 –2.92

EBITDA to total debt ratio 38.71% 37.89% 2.16

Interest coverage ratio 9.76 9.33 4.62

Cash interest coverage ratio 9.70 9.65 0.57

EBITDA interest coverage ratio 13.03 12.30 5.90

II. CONVERTIBLE CORPORATE BOND

□ Applicable √ Not Applicable

154 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

I. AUDIT REPORT

√ Applicable □ Not Applicable

Audit Report

He Xin Shen Zi. (2026) No.000296

To all shareholders of Haier Smart Home Co. Ltd.:

I. AUDIT OPINION

We have audited the financial statements of Haier Smart Home Co. Ltd. (hereinafter referred to as the

‘Haier Smart Home Co.’) which comprise the Consolidated and the Company’s Balance Sheet as at

31 December 2025 the Consolidated and the Company’s Income Statement the Consolidated and the

Company’s Cash Flow Statement the Consolidated and the Company’s Statement of Changes in

Shareholders’ Equity for the year 2025 and notes related to the financial statements.In our opinion the accompanying financial statements present fairly in all material respects the

Consolidated and the Company’s financial position of the Haier Smart Home Co as at 31 December

2025 and the Consolidated and the Company’s financial performance and cash flow for the year 2025

in accordance with the requirements of Accounting Standards for Business Enterprises.II. BASIS OF OUR AUDIT OPINION

We conducted our audit in accordance with China Standards on Auditing. Our responsibilities under

those standards are further described in Auditor’s responsibilities for the Audit of Financial Statements

section of the report. We are independent of Haier Smart Home Co in accordance with the CICPA’s

Code of Ethics for Professional Accountants (the Code) and we have fulfilled our other ethical

responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our opinion.III. KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgment were of most significance in our

audit of the financial statements for the current period. These matters were addressed in the context

of our audit of the financial statements as a whole and in forming our opinion thereon and we do not

provide a separate opinion on these matters. We identify the following matters as the key audit

matters that need to be communicated in the audit report:

Haier Smart Home Co. Ltd. Annual Report 2025 155Section VIII Financial Report

Key Audit Matters Audit Response

(I) Provision for impairment of goodwill and intangible assets with indefinite useful lives

Relevant disclosures are included in Note V. 30 We mainly implemented the following audit

Other significant accounting policies and accounting procedures on the provisions for the impairment of

estimates and Note V.20 Impairment of long-term goodwill and intangible assets with indefinite useful

assets to the financial statements. life:

As of 31 December 2025 the book value of (1) Compared the actual operating results of the

goodwill was RMB27.300 billion and the book related assets group with previous year’s

value of intangible assets with indefinite useful lives forecasted figures to assess the reliability of

was RMB2.705 billion without any provision for the management forecast on cash flow;

asset impairment. Whether the provision for

impairment of long-term assets was sufficient had (2) Compared the input of cash flow forecast with

great influence to the financial statements. historical data approved budget and business

plan;

Significant management judgments are involved in

calculation of asset group’s recoverable amount (3) Tested the calculation accuracy of the

such as revenue growth rate gross margin discounted cash flow model;

discount rate etc.

(4) Assessed the appropriateness of parameters

Provision for impairment of goodwill and intangible in the cash flow conversion model such as

assets with indefinite useful lives is considered as the discount rate and the perpetual growth

the key audit matter due to the significant amount ra te . The assessment i s based our

and management judgement involved in calculation. understanding of the Company’s businesses

and the industry.

156 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

Key Audit Matters Audit Response

(II) Provision for impairment of inventory

Relevant disclosures are included in Note VII.9 We mainly implemented the following audit

Inventory to the financial statements. procedures on the provision for impairment of

inventories:

The Company’s inventories are measured at the

lower of cost and net realizable value. As of 31 (1) Obtained the calculation table for provision for

December 2025 the inventory balance was impairment of inventory of the Company and

RMB48.747 billion and the provision for impairment reviewed the conditions and aging of the

of inventory was RMB1.898 billion and the book products models stated in the table to see

value was RMB46.849 billion. Whether the provision whether they are consistent with the

for the impairment of inventories was sufficient and informat ion obtained through physical

accurate had great influence to the financial inventory on a sample basis;

statements.

(2) Compared the major parameters estimated by

The Company determines the net realizable value of management with historical data and

inventory based on the estimated selling price assessed the appropriateness;

minus the estimated selling expenses and related

taxes. (3) Assessed the selling price estimated by the

management and checked the inventory

Management estimates the selling price based on against the actual selling price after the

the status of inventory. The estimation process balance sheet date on a sample basis;

involves significant management judgments such as

inventory status repair rate discount rate etc. (4) Assessed selling expenses and related tax

estimated by management and compared with

Provision for inventories is considered as the key actual amounts incurred.audit matter due to the significant amount and

management judgement involved in calculation.IV. OTHER INFORMATION

The management of Haier Smart Home Co (hereinafter referred to as the “Management”) is responsible

for other information. Other information includes the information covered in the 2025 annual report of

Haier Smart Home Co but does not include the financial statements and our audit reports.Our opinion on the financial statements does not cover the other information and we do not express

any form of assurance conclusion thereon.In connection with our audit of the financial statements our responsibility is to read the other

information and in doing so consider whether the other information is materially inconsistent with the

financial statements or our knowledge obtained in the audit or otherwise appears to be materially

misstated.If based on the work we have performed we conclude that there is a material misstatement of this

other information we are required to report that fact. We have nothing to report in this regard.Haier Smart Home Co. Ltd. Annual Report 2025 157Section VIII Financial Report

V. RESPONSIBILITIES OF THE MANAGEMENT AND THOSE CHARGED

WITH GOVERNANCE FOR THE FINANCIAL STATEMENTS

The Management is responsible for the preparation of the financial statements that give a true and fair

view in accordance with the requirements as set out in the Accounting Standards for Business

Enterprises and for such internal control as necessary to enable the preparation of financial

statements that are free from material misstatement whether due to fraud or error.In preparing the financial statements the Management are responsible for assessing the ability of Haier

Smart Home Co to continue as a going concern disclosing as applicable matters related to going

concern and using the going concern basis of accounting unless the management either intends to

liquidate Haier Smart Home Co or to cease operations or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the financial reporting process of Haier

Smart Home Co.VI. AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF FINANCIAL

STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole

are free from material misstatement whether due to fraud or error and to issue an audit report that

includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that

an audit conducted in accordance with auditing standards will always detect a material misstatement

when it exists. Misstatements can arise from fraud or error and are considered material if individually

or in the aggregate they could reasonably be expected to influence the economic decisions of users

taken on the basis of these financial statements.As part of an audit in accordance with auditing standards we exercise professional judgment and

maintain professional skepticism throughout the audit. We also perform the following tasks:

(I) Identify and assess the risks of material misstatement of the financial statements whether due to

fraud or error design and perform audit procedures responsible to those risks and obtain audit

evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not

detecting a material misstatement resulting from fraud is higher than for one resulting from error

as fraud may involve collusion forgery intentional omissions misrepresentations or the override

of internal control.(II) Obtain an understanding of internal control relevant to the audit in order to design audit procedures

that are appropriate in the circumstances.(III) Evaluate the appropriateness of accounting policies used by the Management and the

reasonableness of accounting estimates and related disclosures made by the Management.

158 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

(IV) Conclude on the appropriateness of the Management’s use of the going concern basis of

accounting and based on the audit evidence obtained whether a material uncertainty exists

related to events or conditions that may cause significant doubt on the ability of Haier Smart

Home Co to continue as a going concern. If we conclude that a material uncertainty exists we

are required by the auditing standards to draw attention in our audit report to the related

disclosures in the financial statements or; if such disclosures are inadequate to modify our

opinion. Our conclusions are based on the audit evidence obtained up to the date of our audit

report. However future events or conditions may cause Haier Smart Home Co to cease to

continue as a going concern.(V) Evaluate the overall presentation structure and content of the financial statements and whether

the financial statements represent the underlying transactions and events in a manner that

achieves fair presentation.(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities

or business activities within Haier Smart Home Co to express an opinion on the financial

statements. We are responsible for the direction supervision and performance of the group

audit and remain solely responsible for our audit opinion.We communicate with those charged with governance regarding among other matters the planned

scope and timing of the audit and significant audit findings including any significant deficiencies in

internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant

ethical requirements regarding independence and communicate with them all relationships and other

matters that may reasonably be thought to bear on our independence and where applicable related

safeguards.From the matters communicated with those charged with governance we determine those matters that

are of most significance in the audit of the financial statements of the current period and therefore

constitute the key audit matters. We describe these matters in our audit report unless law or

regulation precludes public disclosure about the matter or when in extremely rare circumstances we

determine that a matter should not be communicated in our audit report because the adverse

consequences of doing so would reasonably be expected to outweigh the public interest benefits of

such communication.Hexin Certified Public Accountants LLP

Certified Public Accountant: Zhang Jun (Engagement Partner)

Certified Public Accountant: Li Xiang Zhi

Jinan China

26 March 2026

Haier Smart Home Co. Ltd. Annual Report 2025 159Section VIII Financial Report

II. FINANCIAL STATEMENTS

Consolidated Balance Sheet

31 December 2025

Prepared by: Haier Smart Home Co. Ltd.Unit and Currency: RMB

31 December 31 December

Items Notes 2025 2024

Current assets:

Monetary funds VII.1 47621657441.30 55597554622.83

Provision of settlement fund

Funds lent

Financial assets held for trading VII.2 2034270761.53 1236017839.53

Derivative financial assets VII.3 80641860.30 142709716.91

Bills receivable VII.4 6482353046.34 12179856870.01

Accounts receivable VII.5 27065839108.45 26494845510.56

Financing receivables VII.6 1787975081.92 412922615.25

Prepayments VII.7 2846387274.70 2378144459.47

Premiums receivable

Reinsurance accounts receivable

Reinsurance contract reserves receivable

Other receivables VII.8 3096465068.39 3601357495.02

Including: Interest receivables 342158094.18 771591076.67

Dividends receivables

Financial assets purchased under resale

agreements

Inventories VII.9 46848790687.12 43189855697.96

Including: Data resources

Contract assets VII.10 1007695591.67 997963705.67

Assets held for sale

Non-current assets due in one year VII.11 8666892203.60 1439758652.55

Other current assets VII.12 5294521861.08 4443274038.03

Total current assets 152833489986.40 152114261223.79

160 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

31 December 31 December

Items Notes 2025 2024

Non-current assets:

Loans and advances granted

Debt investments VII.13 16383203551.26 15474759856.99

Other debt investments

Long-term receivables 134840798.60 224724107.31

Long-term equity investments VII.14 21756902299.19 20932439255.93

Investments in other equity instruments VII.15 5405101489.33 6073680870.82

Other non-current financial assets

Investment properties VII.16 334429715.96 246161259.83

Fixed assets VII.17 40353013813.33 37613215769.46

Construction in progress VII.18 4885331872.38 5686050990.48

Biological assets for production

Oil and gas assets

Right-of-use assets VII.19 6024233315.08 5841869564.36

Intangible assets VII.20 14224842429.14 14042940068.17

Including: Data resources

Development cost VIII.2 417653270.53 267267592.92

Including: Data resources

Goodwill VII.21 27300229637.37 27384007599.06

Long-term prepaid expenses VII.22 661484963.82 598216433.64

Deferred income tax assets VII.23 2779197579.27 2477206492.36

Other non-current assets VII.24 2301113869.91 1759556893.63

Total non-current assets 142961578605.17 138622096754.96

Total assets 295795068591.57 290736357978.75

Haier Smart Home Co. Ltd. Annual Report 2025 161Section VIII Financial Report

31 December 31 December

Items Notes 2025 2024

Current liabilities:

Short-term borrowings VII.25 17420784420.86 13784367443.93

Borrowings from central bank

Funds borrowed

Financial liabilities held for trading

Derivative financial liabilities VII.26 190868603.05 71011310.01

Bills payable VII.27 23870662224.10 21220364311.81

Accounts payables VII.28 53544741780.87 54665277420.32

Receipts in advance

Contract liabilities VII.29 8534516748.92 10865337767.67

Disposal of repurchased financial assets

Absorbing deposit and deposit in inter-

bank market

Customer deposits for trading in securities

Amounts due to issuer for securities

underwriting

Payables for staff’s remuneration VII.30 5617781339.32 5057260277.99

Taxes payable VII.31 3393123835.23 3915219916.17

Other payables VII.32 19493605624.57 21746135764.08

Including: Interest payables

Dividends payables 54860109.41 14082609.41

Fees and commissions payable

Reinsurance Accounts payables

Liabilities held for sale

Non-current liabilities due within one year VII.33 8678897462.98 16530040461.37

Other current liabilities VII.34 1601301581.05 1899945460.39

Total current liabilities 142346283620.95 149754960133.74

162 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

31 December 31 December

Items Notes 2025 2024

Non-current liabilities:

Deposits for insurance contracts

Long-term borrowings VII.35 11165886169.09 9665074313.67

Bonds payable VII.36 3500000000.00 -

Including: Preference shares

Perpetual bonds

Lease liabilities VII.37 4551410567.84 4480895997.36

Long-term payables VII.38 167862276.79 188220056.59

Long-term payables for staff’s

remuneration VII.39 2443566578.23 2561647446.35

Estimated liabilities VII.40 2490370063.63 2386261752.92

Deferred income VII.41 1441477536.11 1252216590.03

Deferred income tax liabilities VII.23 1631293729.71 1547287169.00

Other non-current liabilities 79916734.11 98073333.45

Total non-current liabilities 27471783655.51 22179676659.37

Total liabilities 169818067276.46 171934636793.11

Owners’ equity (or shareholders’

equity):

Paid-in capital (or share capital) VII.42 9377629650.00 9382913334.00

Other equity instruments

Including: Preference shares

Perpetual bonds

Capital reserve VII.43 20366679277.75 20310218222.04

Less: treasury stock VII.44 4261082044.07 3510728776.44

Other comprehensive income VII.45 432012498.23 825502860.47

Special reserve

Surplus reserve VII.46 5296602892.45 5296602892.45

General risk provisions

Undistributed profits VII.47 87486559142.22 79474366234.70

Total equity attributable to owners (or

shareholders) of the Parent Company 118698401416.58 111778874767.22

Minority shareholders’ interests 7278599898.53 7022846418.42

Total owners’ equity (or shareholders’

equity) 125977001315.11 118801721185.64

Total liabilities and owners’ equity (or

shareholders’ equity) 295795068591.57 290736357978.75

Person in charge of the Company: Li Huagang

Person in charge of accounting function: Sun Jiacheng

Person in charge of accounting department: Ying Ke

Haier Smart Home Co. Ltd. Annual Report 2025 163Section VIII Financial Report

Balance Sheet of the Parent Company

31 December 2025

Prepared by: Haier Smart Home Co. Ltd.Unit and Currency: RMB

31 December 31 December

Items Notes 2025 2024

Current Assets:

Monetary funds 6823857021.79 8721089765.37

Financial assets held for trading

Derivative financial assets

Bills receivable 85102.59

Accounts receivable XIX.1 3380866320.45 2089263590.36

Financing receivables

Prepayments - 3124793.19

Other receivables XIX.2 86288251654.38 35309208101.73

Including: Interest receivables 3164444.44 137951583.62

Dividends receivables 5764255305.39 955746044.23

Inventories 8771266.45 9092410.78

Including: Data resources

Contract assets

Assets held for sale

Non-current assets due within one year 1934770698.92 1105291666.67

Other current assets 1006425692.53 174671080.16

Total current assets 99443027757.11 47411741408.26

164 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

31 December 31 December

Items Notes 2025 2024

Non-current assets:

Debt investments 7032941801.07 7243616935.47

Other debt investments

Long-term receivables

Long-term equity investments XIX.3 72677530760.67 62193654756.17

Investments in other equity instruments 1602333806.12 1602852951.00

Other non-current financial assets

Investment properties

Fixed assets 20054479.76 131874644.27

Construction in progress 4712836.53 490452.83

Biological assets for production

Oil and gas assets

Right-of-use assets

Intangible assets 30071927.84 35196337.86

Including: Data resources

Development cost

Including: Data resources

Goodwill

Long-term prepaid expenses 870249.60 3502636.81

Deferred income tax assets

Other non-current assets 2170292448.68 1738121667.23

Total non-current assets 83538808310.27 72949310381.64

Total assets 182981836067.38 120361051789.90

Current liabilities:

Short-term borrowings 2001113555.55 2000000000.00

Financial liabilities held for trading

Derivative financial liabilities

Bills payable

Accounts payables 2753829826.14 1526611034.49

Receipts in advance

Contract liabilities 12672460.67 12597148.63

Payables for staff’s remuneration 11844528.82 7798419.39

Taxes payable 11647239.66 884572.31

Other payables 119944998021.77 63004946189.17

Including: Interest payable - 1234444.45

Dividends payable

Liabilities held for sale

Non-current liabilities due within one year 1730066805.56 1495350000.00

Other current liabilities 6034650.00 18881166.43

Total current liabilities 126472207088.17 68067068530.42

Haier Smart Home Co. Ltd. Annual Report 2025 165Section VIII Financial Report

31 December 31 December

Items Notes 2025 2024

Non-current liabilities:

Long-term borrowings 2312000000.00 3292370000.00

Bonds payable 3500000000.00 -

Including: Preference shares

Perpetual bonds

Lease liabilities

Long-term payable

Long-term payables for staff’s

remuneration

Estimated liabilities

Deferred income 15705919.40 14265249.50

Deferred income tax liabilities 393898743.39 394292088.98

Other non-current liabilities

Total non-current liabilities 6221604662.79 3700927338.48

Total liabilities 132693811750.96 71767995868.90

Owners’ equity (or Shareholders’

equity):

Paid-in capital (or share capital) 9377629650.00 9382913334.00

Other equity instruments

Including: Preference shares

Perpetual bonds

Capital reserve 25710105926.41 25680561451.57

Less: treasury stock 1715665009.44 1467523464.56

Other comprehensive income 592395413.02 618368749.67

Special reserve

Surplus reserve 4691456667.00 4691456667.00

Undistributed profits 11632101669.43 9687279183.32

Total owners’ equity (or shareholders’

equity) 50288024316.42 48593055921.00

Total liabilities and owners’ equity (or

shareholders’ equity) 182981836067.38 120361051789.90

Person in charge of the Company: Li Huagang

Person in charge of accounting function: Sun Jiacheng

Person in charge of accounting department: Ying Ke

166 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

Consolidated Profit Statement

January-December 2025

Unit and Currency: RMB

Items Notes 2025 2024

I. Total operating revenue VII.48 302346783918.30 286015294936.52

Including: Operating revenue VII.48 302346783918.30 286015294936.52

Interest income

Insurance premiums earned

Fee and commission income

II. Total cost of operations 280753746329.95 265203050750.74

Including: Operating cost VII.48 221738754173.11 206439444975.26

Interest expenses

Fee and commission expenses

Insurance withdrawal payment

Net payment from indemnity

Net provisions withdrew for

insurance contract liability

Insurance policy dividend paid

Reinsurance cost

Taxes and surcharges VII.49 1329748016.52 1277824044.26

Selling expenses VII.50 33877814770.04 33608820300.61

Administrative expenses VII.51 13762454428.58 12134986807.22

R&D expenses VII.52 10095934065.45 10769896196.17

Financial expenses VII.53 -50959123.75 972078427.22

Including: Interest expenses 2679484195.35 2727313494.33

Interest income 1719937738.86 1898277571.88

Add: Other income VII.54 1881559430.00 1715831425.30

Investment income

(losses are

represented by ‘-’) VII.55 1529885600.02 1916147612.42

Including: in vestment income of

associates and

joint ventures 1327576097.46 1816477749.42

Income generated

from the

derecognition of

financial assets

measured at

amortized cost

Exchange gain

(losses are

represented by

‘-’)

Haier Smart Home Co. Ltd. Annual Report 2025 167Section VIII Financial Report

Items Notes 2025 2024

Gains on net

exposure hedges

(losses are

represented by

‘-’)

Income from change

in fair value

(losses are

represented by

‘-’) VII.56 91896354.25 47130324.67

Loss on credit

impairment

(losses are

represented by

‘-’) VII.57 -25782774.37 -277789750.88

Loss on assets

impairment

(losses are

represented by

‘-’) VII.58 -1314066363.00 -1300664363.61

Gain from disposal

of assets (losses

are represented

by ‘-’) VII.59 -31036861.90 -11258612.64

III. Operating profit (losses are represented

by ‘-’) 23725492973.35 22901640821.04

Add: non-operating income VII.60 322171826.28 183940070.88

Less: non-operating expenses VII.61 568920999.41 362862313.23

IV. Total profit (total losses are represented

by ‘-’) 23478743800.22 22722718578.69

Less: income tax expense VII.62 3315650253.71 3157179926.77

V. Net profit (net losses are represented by

‘-’)20163093546.5119565538651.92

(1) Classification by continuous operation

1. Net profit from continuous operation

(net losses are represented by ‘-’) 20163093546.51 19565538651.92

2. Net profit from discontinued

operation (net losses are

represented by ‘-’)

(2) Classification by ownership of the

equity

1. Net profit attributable to

shareholders of the Parent

Company (net losses are

represented by ‘-’) 19552798222.85 18731046273.17

2. Profit or loss attributable to minority

shareholders (net losses are

represented by ‘-’) 610295323.66 834492378.75

168 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

Items Notes 2025 2024

VI. Other comprehensive income net of tax VII.63 -401706337.42 -1157895472.07

(I) Other comprehensive income

attributable to owners of the Parent

Company net of tax -393629381.46 -1159823186.95

1. Other comprehensive income that

cannot be reclassified into the profit

or loss -354082798.93 -269291725.03

(1) Changes arising from re-

measurement of defined benefit

plans 191778591.61 -1011523.04

(2) Other comprehensive income

that cannot be transferred into

profit or loss under equity

method

(3) Changes in fair value of

investments in other equity

instruments -545861390.54 -268280201.99

(4) Changes in fair value of credit

risks of the enterprise

2. Other comprehensive income to be

reclassified into the profit or loss -39546582.53 -890531461.92

(1) Other comprehensive income

that can be transferred into profit

or loss under equity method -346140938.77 -16560814.12

(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 -10380671.02 -27453055.10

(6) Exchange differences on

translation of financial statements

denominated in foreign

currencies 316975027.26 -846517592.70

(7) Others

(II) Other comprehensive income

attributable to minority shareholders

net of tax -8076955.96 1927714.88

Haier Smart Home Co. Ltd. Annual Report 2025 169Section VIII Financial Report

Items Notes 2025 2024

VII. Total comprehensive income 19761387209.09 18407643179.85

(I) Total comprehensive income

attributable to the owners of Parent

Company 19159168841.39 17571223086.22

(II) Total comprehensive income

attributable to the minority

shareholders 602218367.70 836420093.63

VIII. Earnings per share:

(I) Basic earnings per share (RMB/share) XXI.1 2.12 2.02

(II) Diluted earnings per share (RMB/share) XXI.1 2.10 2.02

For business combination under common control occurring in the current period the net profit of the

acquiree before the combination was RMB3593306.97 and the net profit of the acquiree for the

previous period was RMB-10073849.76.Person in charge of the Company: Li Huagang

Person in charge of accounting function: Sun Jiacheng

Person in charge of accounting department: Ying Ke

170 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

Profit Statement of the Parent Company

January-December 2025

Unit and Currency: RMB

Items Notes 2025 2024

I. Operating income XIX.4 1230501895.97 494626718.01

Less: operating cost XIX.4 1161203478.66 435635653.30

Taxes and surcharges 8712750.61 4150024.06

Selling expenses 11171168.43 9832864.30

Administration expenses 558198850.39 582561636.48

R&D expenses 17009609.00 13959129.62

Financial expenses -156601090.20 -345610897.81

Including: interest expenses 197420778.57 119101225.24

Interest income 350633204.65 429448235.99

Add: other income 31648738.57 3266837.73

Investment income (losses are

represented by ‘-’) XIX.5 13782362130.40 10349967347.91

Including: in vestment income of

associates and joint

ventures 268977218.78 330033883.50

Derecognition income on financial

assets measured at amortized

cost

Gains on net exposure hedges

(losses are represented by ‘-’)

Income from change in fair value

(losses are represented by ‘-’)

Loss on credit impairment (losses

are represented by ‘-’) -393796.83 -1138.93

Loss on assets impairment (losses

are represented by ‘-’)

Gain from disposal of assets

(losses are represented by ‘-’) 4768220.45 6653.71

II. Operating profit (losses are represented

by ‘-’) 13449192421.67 10147338008.48

Add: non-operating income 9273.90 3053172.00

Less: non-operating expenses 159474.27 566088.28

III. Total profit (total losses are represented

by ‘-’) 13449042221.30 10149825092.20

Less: income tax expenses 2993973.46 -21659242.84

IV. Net profit (net losses are represented by

‘-’)13446048247.8410171484335.04

(I) Net profit from continuous operations

(net losses are represented by ‘-’) 13446048247.84 10171484335.04

Haier Smart Home Co. Ltd. Annual Report 2025 171Section VIII Financial Report

Items Notes 2025 2024

(II) Net profit from discontinued operations

(net losses are represented by ‘-’)

V. Other comprehensive income net of tax -25973336.65 -12305942.28

(I) Other comprehensive income that

cannot be reclassified into the profit or

loss -389358.66 -12305942.28

1. Changes arising from re-

measurement of defined benefit

plans

2. Other comprehensive income that

cannot be transferred into profit or

loss under equity method

3. Changes in fair value of investments

in other equity instruments -389358.66 -12305942.28

4. Changes in fair value of credit risks

of the enterprise

(II) Other comprehensive income to be

reclassified into the profit or loss -25583977.99

1. Other comprehensive income that

can be transferred into profit or loss

under equity method -25583977.99

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 income 13420074911.19 10159178392.76

VII. Earnings per share:

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

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

Person in charge of the Company: Li Huagang

Person in charge of accounting function: Sun Jiacheng

Person in charge of accounting department: Ying Ke

172 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

Consolidated Cash Flow Statement

January-December 2025

Unit and Currency: RMB

Items Notes 2025 2024

I. Cash flow from operating activities:

Cash received from the sale of goods and

rendering services 324589571682.81 306985299086.99

Net increase in distributor and inter-bank

deposits

Net increase in borrowing from the central

bank

Net cash increase in borrowing from other

financial institutes

Cash received from premiums under original

insurance contract

Net cash received from reinsurance business

Net increase in deposits of policy holders and

investment

Cash received from interest fee and

commissions

Net increase in cash borrowed

Net increase in cash received from

repurchase operation

Net cash received from customer deposits for

trading in securities

Refunds of taxes 2311107616.27 1923571144.49

Cash received from other related operating

activities VII.64 3560390629.88 2792106587.46

Sub-total of cash inflows from operating

activities 330461069928.96 311700976818.94

Cash paid on purchase of goods and

services 225694889868.36 211867902901.68

Net increase in loans and advances of

distributors

Net increase in deposits in the PBOC and

inter bank

Cash paid for compensation payments under

original insurance contact

Net increase in cash lent

Cash paid for interest bank charges and

commissions

Cash paid for insurance policy dividend

Cash paid to and on behalf of employees 35347931318.35 31660676554.63

Haier Smart Home Co. Ltd. Annual Report 2025 173Section VIII Financial Report

Items Notes 2025 2024

Cash paid for all types of taxes 17078199542.31 16333908098.41

Cash paid to other operation related activities VII.64 26337107230.02 25520397952.27

Sub-total of cash outflows from operating

activities 304458127959.04 285382885506.99

Net cash flow from operating activities VII.65 26002941969.92 26318091311.95

II. Cash flow from investing activities:

Cash received from recovery of investments 44866454240.51 17220575654.67

Cash received from return on investments 635778699.78 769074464.07

Net cash received from the disposal of fixed

assets intangible assets and other long-

term assets 118334499.36 42340809.10

Net cash received from disposal of

subsidiaries and other operating entities

Other cash received from investment activities VII.64 130700686.64

Sub-total of cash inflows from investing

activities 45751268126.29 18031990927.84

Cash paid on purchase of fixed assets

intangible assets and other long-term

assets 8851563940.89 10080067313.04

Cash paid for investments 53975007929.56 23621681494.71

Net increase in secured loans

Net cash paid on acquisition of subsidiaries

and other operating entities 4409336291.58

Other cash paid on investment activities 178409.27

Sub-total of cash outflows from investing

activities 62826571870.45 38111263508.60

Net cash flow from investing activities -17075303744.16 -20079272580.76

III. Cash flow from financing activities:

Cash received from capital contributions 65230000.00 268823131.22

Including: cash received from capital

contributions by minority shareholders of

subsidiaries

Cash received from borrowings 29647961681.36 13648752061.24

Cash received from bond issuance 3500000000.00

Other cash received from financing activities VII.64 111646384.65 338116773.45

Sub-total of cash inflows from financing

activities 33324838066.01 14255691965.91

Cash paid on repayment of loans 31629212927.73 9568987868.67

Cash paid on distribution of dividends profits

or repayment of interest expenses 13873428690.71 10091640214.86

Including: dividend and profit paid to minority

shareholders by subsidiaries

Other cash paid to financing activities VII.64 5492905410.59 2298569480.52

174 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

Items Notes 2025 2024

Sub-total of cash outflows from financing

activities 50995547029.03 21959197564.05

Net cash flow from financing activities -17670708963.02 -7703505598.14

IV. Effect of fluctuations in exchange rates on

cash and cash equivalents 16163321.54 -256390521.12

V. Net increase in cash and cash equivalents -8726907415.72 -1721077388.07

Add: balance of cash and cash equivalents at

the beginning of the period VII.65 54994595280.18 56715672668.25

VI. Balance of cash and cash equivalents at

the end of the period VII.65 46267687864.46 54994595280.18

Person in charge of the Company: Li Huagang

Person in charge of accounting function: Sun Jiacheng

Person in charge of accounting department: Ying Ke

Haier Smart Home Co. Ltd. Annual Report 2025 175Section VIII Financial Report

Cash Flow Statement of the Parent Company

January-December 2025

Unit and Currency: RMB

Items Notes 2025 2024

I. Cash flow from operating activities:

Cash received from the sale of goods

and rendering of services 90013623.99 79770736.65

Refunds of taxes

Other cash received from operating

activities 183524291.92 242684813.63

Sub-total of cash inflows from operating

activities 273537915.91 322455550.28

Cash paid on purchase of goods and

services 19475837.30 11757139.14

Cash paid to and on behalf of

employees 17298543.41 59924608.57

Cash paid for all types of taxes 22549973.59 15354015.14

Other cash paid to operation activities 64163764.66 331913231.15

Sub-total of cash outflows from operating

activities 123488118.96 418948994.00

Net cash flow from operating activities 150049796.95 -96493443.72

II. Cash flow from investing activities:

Cash received from recovery of

investments 33752000000.00 15046000000.00

Cash received from return on

investments 128798687.92 9817956966.61

Net cash received from the disposal of

fixed assets intangible assets and

other long-term assets 1768672.96 74850.43

Net cash received from disposal of

subsidiaries and other operating

entities

Other cash received from investment

activities 1726491699.58 417440719.28

Sub-total of cash inflows from investing

activities 35609059060.46 25281472536.32

Cash paid on purchase of fixed assets

intangible assets and other long-term

assets 7253193.42 4791247.35

Cash paid for investments 36945553819.26 25143152357.00

Net cash paid on acquisition of

subsidiaries and other operating

entities

176 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

Items Notes 2025 2024

Other cash paid on investment activities 2769000000.00 30000000.00

Sub-total of cash outflows from investing

activities 39721807012.68 25177943604.35

Net cash flow from investing activities -4112747952.22 103528931.97

III. Cash flow from financing activities:

Cash received from capital injections

Cash received from borrowings 5110000000.00 2940000000.00

Cash received from bond issuance 3500000000.00

Other cash received from financing

activities 12289306155.96 6347134479.62

Sub-total of cash inflows from financing

activities 20899306155.96 9287134479.62

Cash paid on repayment of borrowings 5899350000.00 65780000.00

Cash paid on distribution of dividends

profits or repayment of interest

expenses 11695479744.62 7631548707.92

Other cash paid on financing activities 1233677136.83 491581396.89

Sub-total of cash outflows from financing

activities 18828506881.45 8188910104.81

Net cash flow from financing activities 2070799274.51 1098224374.81

IV. Effect of fluctuations in exchange

rates on cash and cash equivalents -5333862.82 36189377.52

V. Net increase in cash and cash

equivalents -1897232743.58 1141449240.58

Add: balance of cash and cash

equivalents at the beginning of the

period 8721089765.37 7579640524.79

VI. Balance of cash and cash equivalents

at the end of the period 6823857021.79 8721089765.37

Person in charge of the Company: Li Huagang

Person in charge of accounting function: Sun Jiacheng

Person in charge of accounting department: Ying Ke

Haier Smart Home Co. Ltd. Annual Report 2025 177Section VIII Financial Report

178 Haier Smart Home Co. Ltd. Annual Report 2025

Consolidated Statement of Changes in Owner’s Equity

January-December 2025

Unit and Currency: RMB

2025

Equity attributable to owners of the Parent Company

Other equity instruments

Other Minority

Paid-in capital (or Less: treasury comprehensive General risk Undistributed shareholders’ Total owners’

Items share capital) Preference shares Perpetual bonds Others Capital reserve stock income Special reserve Surplus reserve provision profits Others Sub-total interests equity

I. Closing balance for the previous year 9382913334.00 20115358921.93 3510728776.44 793828357.47 5296602892.45 79288144269.76 111366118999.17 7022846418.42 118388965417.59

Add: changes in accounting policies

Error correction for prior period

Business combination under common

control 194859300.11 31674503.00 186221964.94 412755768.05 412755768.05

Others

II. Opening balance for the current year 9382913334.00 20310218222.04 3510728776.44 825502860.47 5296602892.45 79474366234.70 111778874767.22 7022846418.42 118801721185.64

III. Increase/decrease for the current period

(decrease is represented by ‘-’) -5283684.00 56461055.71 750353267.63 -393490362.24 8012192907.52 6919526649.36 255753480.11 7175280129.47

(I) Total comprehensive income -393629381.46 19552798222.85 19159168841.39 602218367.70 19761387209.09

(II) Capital injection and reduction by owners -5283684.00 56600074.93 750353267.63 -699036876.70 -260125854.18 -959162730.88

1. Ordinary shares invested by owners -260125854.18 -260125854.18

2. Capital contribution by holders of other

equity instruments

3. Share-based payment included in

owners’ equity 102327780.32 102327780.32 102327780.32

4. Others -5283684.00 -45727705.39 750353267.63 -801364657.02 -801364657.02

(III) Profit distribution -11482394628.83 -11482394628.83 -86339033.41 -11568733662.24

1. Withdrawal of surplus reserves

2. Withdrawal of general risk provision

3. Distribution to owners (or shareholders) -11482394628.83 -11482394628.83 -86339033.41 -11568733662.24

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 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 -139019.22 139019.22 -58210686.50 -58210686.50 -58210686.50

IV. Closing balance for the period 9377629650.00 20366679277.75 4261082044.07 432012498.23 5296602892.45 - 87486559142.22 118698401416.58 7278599898.53 125977001315.11Section VIII Financial Report

Haier Smart Home Co. Ltd. Annual Report 2025 179

2024

Equity attributable to owners of the Parent Company

Other equity instruments

Other Minority

Paid-in capital Preference Less: treasury comprehensive General risk Undistributed shareholders’ Total owners’

Items (or share capital) shares Perpetual bonds Others Capital reserve stock income Special reserve Surplus reserve provision profits Others Sub-total interests equity

I. Closing balance for the previous year 9438114893.00 21514544884.54 5034065107.42 1969365062.65 4842338543.80 - 68535686494.60 101265984771.17 6264355202.17 107530339973.34

Add: changes in accounting policies

Error correction for prior period

Business combination under

common control 194859300.11 15856718.90 306295814.70 517011833.71 517011833.71

Others -

II. Opening balance for the current year 9438114893.00 21709404184.65 5034065107.42 1985221781.55 4842338543.80 68841982309.30 101782996604.88 6264355202.17 108047351807.05

III. Increase/decrease for the current period

(decrease is represented by ‘-’) -55201559.00 -1399185962.61 -1523336330.98 -1159718921.08 454264348.65 10632383925.40 9995878162.34 758491216.25 10754369378.59

(I) Total comprehensive income -1159823186.95 18731046273.17 17571223086.22 836420093.63 18407643179.85

(II) Capital injection and reduction by

owners -55201559.00 -1399081696.74 -1523336330.98 69053075.24 31960403.41 101013478.65

1. Ordinary shares invested by owners 31960403.41 31960403.41

2. Capital contribution by holders of

other equity instruments

3. Share-based payment included in

owners’ equity 374067374.04 374067374.04 374067374.04

4. Others -55201559.00 -1773149070.78 -1523336330.98 -305014298.80 -305014298.80

(III) Profit distribution 454264348.65 -7898653350.24 -7444389001.59 -107636353.38 -7552025354.97

1. Withdrawal of surplus reserves 454264348.65 -454264348.65

2. Withdrawal of general risk provision

3. Distribution to owners (or

shareholders) -7444389001.59 -7444389001.59 -107636353.38 -7552025354.97

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 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 -104265.87 104265.87 -200008997.53 -200008997.53 -2252927.41 -202261924.94

IV. Closing balance for the period 9382913334.00 20310218222.04 3510728776.44 825502860.47 5296602892.45 79474366234.70 111778874767.22 7022846418.42 118801721185.64

Person in charge of the Company: Person in charge of accounting function: Person in charge of accounting department:

Li Huagang Sun Jiacheng Ying KeSection VIII Financial Report

Statement of Changes in Owners’ Equity of the Parent Company

January-December 2025

Unit and Currency: RMB

2025

Other equity instruments

Other

Paid-in capital (or Preference Less: treasury comprehensive Undistributed Total owners’

Items share capital) shares Perpetual bonds Others Capital reserve stock income Special reserve Surplus reserve profits equity

I. Closing balance for the previous

year 9382913334.00 25680561451.57 1467523464.56 618368749.67 4691456667.00 9687279183.32 48593055921.00

Add: changes in accounting

policies

Error correction for prior

period

Others

II. Opening balance for the current

year 9382913334.00 25680561451.57 1467523464.56 618368749.67 4691456667.00 9687279183.32 48593055921.00

III. Increase/decrease for the current

period (decrease is represented

by ‘-’) -5283684.00 29544474.84 248141544.88 -25973336.65 1944822486.11 1694968395.42

(I) Total comprehensive income -25973336.65 13446048247.84 13420074911.19

(II) Capital injection and reduction

by owners -5283684.00 29544474.84 248141544.88 -223880754.04

1. Ordinary shares invested by

owners

2. Capital contribution by

holders of other equity

instruments

3. Share-based payment

included in owners’ equity 92421973.76 92421973.76

4. Others -5283684.00 -62877498.92 248141544.88 -316302727.80

(III) Profit distribution -11501225761.73 -11501225761.73

1. Withdrawal of surplus

reserves

2. Distribution to owners (or

shareholders) -11501225761.73 -11501225761.73

3. Others

(IV) I nternal 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 period 9377629650.00 25710105926.41 1715665009.44 592395413.02 4691456667.00 11632101669.43 50288024316.42

180 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

2024

Other equity instruments

Other

Paid-in capital (or Preference Less: treasury comprehensive Undistributed Total owners’

Items share capital) shares Perpetual bonds Others Capital reserve stock income Special reserve Surplus reserve profits equity

I. Closing balance for the previous

year 9438114893.00 27263651777.44 3175293942.36 630674691.95 4237192318.35 7484026291.62 45878366030.00

Add: changes in accounting

policies

Error correction for prior

period

Others

II. Opening balance for the current

year 9438114893.00 27263651777.44 3175293942.36 630674691.95 4237192318.35 7484026291.62 45878366030.00

III. Increase/decrease for the current

period (decrease is represented

by ‘-’) -55201559.00 -1583090325.87 -1707770477.80 -12305942.28 454264348.65 2203252891.70 2714689891.00

(I) Total comprehensive income - -12305942.28 10171484335.04 10159178392.76

(II) Capital injection and reduction

by owners -55201559.00 -1583090325.87 -1707770477.80 69478592.93

1. Ordinary shares invested by

owners

2. Capital contribution by

holders of other equity

instruments

3. Share-based payment

included in owners’ equity 389757180.67 389757180.67

4. Others -55201559.00 -1972847506.54 -1707770477.80 -320278587.74

(III) Profit distribution 454264348.65 -7968231443.34 -7513967094.69

1. Withdrawal of surplus

reserves 454264348.65 -454264348.65

2. Distribution to owners (or

shareholders) - -7513967094.69 -7513967094.69

3. Others

(IV) I nternal 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 period 9382913334.00 25680561451.57 1467523464.56 618368749.67 4691456667.00 9687279183.32 48593055921.00

Person in charge of the Company: Person in charge of accounting Person in charge of accounting

Li Huagang function: Sun Jiacheng department: Ying Ke

Haier Smart Home Co. Ltd. Annual Report 2025 181Section 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) was

Qingdao Refrigerator Factory which was established in 1984. As permitted to offering by

People’s Bank of China Qingdao Branch on 16 December 1989 with the document of Qing Ti

Gai [1989] No. 3 issued on 24 March 1989 based on the reconstruction of the original Qingdao

Refrigerator 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. 2

and No. 9 issued by the pilot leading team of Qingdao joint stock company the Company was

converted from a directional offering company to a public subscription company and issued

additional 50 million shares to the public and listed with trading on Shanghai Stock Exchange in

November 1993. In October 2018 D-shares in issue of the Company were listed on the China

Europe International Exchange AG. In December 2020 H-shares in issue of the Company were

listed 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 Innovation

Ecological Park of Laoshan District Qingdao Shandong Province and the headquarters is

located 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 home

appliances including refrigerators/freezers kitchen appliances air-conditioners laundry appliances

and water appliances and other smart home business as well as providing smart home

packaged 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 on

26 March 2026.

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 this

note.

182 Haier Smart Home Co. Ltd. Annual Report 2025Section 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 to

the transactions and matters actually occurred in accordance with the Accounting Standards for

Enterprises — Basic Standards published by the Ministry of Finance specific accounting

standards and guidance on application of accounting standards for enterprises interpretations to

accounting standards for enterprises and other relevant requirements (hereinafter collectively

referred to as the “Accounting Standards for Enterprises”) which issued subsequently and in

combination with the disclosure provisions of the Rules for the Information Disclosure and

Compilation of Companies Publicly Issuing Securities No. 15: General Provisions for Financial

Report (Revised in 2023) of CSRC as well as the following significant accounting policies and

accounting estimation.

2. Going Concern

√ Applicable □ Not Applicable

The Company has ability to continue its operation for at least 12 months since the end of the

reporting period and there are no significant events affecting its ability to continue as a going

concern.V. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES

√ Applicable □ Not Applicable

According to the characteristics of its production and operation the Company formulated a series of

specific accounting policies and accounting estimates including the provisions for impairment for

accounts receivable (Note V.11); the measurement of inventories (Note V.12); the depreciation and

amortization of the investment properties (Note V.15); the depreciation of fixed assets (Note V.16) the

amortization of intangible assets (Note V.19) the criterion for determining of long-term assets

impairment (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 Accounting

Standards for Enterprises which accurately and completely reflected information relating to the

financial position results of operations changes in shareholders’ equity and cash flows of the

Company.

2. Accounting period

The accounting year of the Company is from 1 January each year to 31 December of the same

year in solar calendar.Haier Smart Home Co. Ltd. Annual Report 2025 183Section VIII Financial Report

3. Operating period

√ Applicable □ Not Applicable

The Company takes the period from the acquisition of assets for processing to the ultimate

realization of cash or cash equivalents as a normal operating cycle. The Company takes 12

months as an operating period which is also the classification basis for the liquidity of its assets

and liabilities.

4. Recording currency

Renminbi is the recording currency of the Company.

5. Materiality criteria determination method and selection basis

√ Applicable □ Not Applicable

Case Materiality criteria

Material receivables for The amount of provision on an individual basis accounts for

which bad debt more than 10% of the total bad debt provisions for various

provision is individually types of receivables and is greater than RMB100 million

assessed

Material receivables and The amount of recovery or reversal on an individual basis

bad debt provisions accounts for more than 10% of the total amount of various

which are recovered or types of receivables and is greater than RMB100 million

reversed

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

accounts receivable more than 10% of the total bad debt provisions of various

types of receivables and is greater than RMB100 million

Material prepayments aged Prepayment aged more than 1 year on an individual basis

more than one year accounts for more than 10% of the total prepayments and is

greater than RMB100 million

Material projects under The ending balance of a project on an individual basis is

construction greater than RMB100 million

Material capitalized R&D The ending balance of a project on an individual basis

projects accounts for more than 10% of the ending balance of

development expenditure and is greater than RMB100 million

Material accounts payable Accounts payable/other payables with aged more than 1 year

and other payables aged on an individual basis account for more than 10% of the total

more than one year accounts payable/other payables and are greater than

RMB100 million

Material contract liabilities Contract liabilities aged more than 1 year on an individual basis

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

year are greater than RMB100 million

Material non-wholly owned The net assets of the subsidiaries account for more than 5% of

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

associates 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

184 Haier Smart Home Co. Ltd. Annual Report 2025Section 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 separate

entities into one reporting entity. Business combinations are classified into business combinations

under 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 of

the combining entities are ultimately controlled by the same party or parties both before

and after the combination and that control is not transitory. For business combination

under common control the party that obtains the control over the other parties on the

combination date is the acquirer and other parties involving in the business combination

are the transferors. The combination date is the date on which the acquiring party

effectively obtains the control over the party being acquired.For business combination under common control the transferor’s assets and liabilities

obtained by the Company (as the acquirer) in a business combination are accounted for at

the carrying amount of the transferor in the ultimate controller’s consolidated financial

statements as at the date of combination except for adjustments due to differences in

accounting policies. The difference between the carrying amount of the combination

consideration paid by the Company (or the aggregate nominal value of shares issued) and

the carrying amount of net assets obtained in a business combination shall be adjusted to

capital reserve in case the capital reserve is insufficient for the elimination the retained

earnings shall be adjusted.Intermediary fees (such as audit legal services and valuation consultancy) and other

relevant management fees incurred in the business combination by the Company (as the

acquirer) are credited in profit or loss in the period when they occurred. Trading expenses

in direct relation to the issuance of equity instrument as the consideration for the

combination is written down to the capital reserve (share premium) where the capital

reserve (share premium) is insufficient and to surplus reserves and undistributed profits in

order. Trading expenses in direct relation to the issuance of debt instrument as the

consideration for the combination is included in the initial recognition amount of the debt

instrument.Haier Smart Home Co. Ltd. Annual Report 2025 185Section VIII Financial Report

(2) Business combinations involving entities not under common control

A business combination not under common control is a business combination in which all

of the combining entities are not ultimately controlled by the same party or parties both

before and after the combination. For business combination not under common control the

party 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 combination

date is the date on which the acquirer effectively obtains control of the transferors.In business combination involving entities not under common control the cost of

combination 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 the

Company for obtaining control of the transferor at the date of acquisition. Intermediary fees

(such as audit legal services and valuation consultancy) and other relevant management

fees incurred by the Company for the purpose of business combination are credited in

profit or loss in the period when they occurred. Transaction fees for the equity instruments

or debt instruments issued by the Company as combination consideration is included in the

initial recognition amount of such equity instruments or debt instruments. Contingent

consideration involved shall be recorded as the combination cost based on its fair value on

the acquisition date. Should any new or further evidence arise within 12 months after the

acquisition date and makes it necessary to adjust the contingent consideration on the

acquisition date the goodwill arising from the business combination shall be amended

accordingly.The cost of combination and identifiable net assets obtained by the Company (as the

acquirer) in a business combination involving entities not under common control are

measured at fair value on the acquisition date. Where the cost of the combination exceeds

the acquirer’s interest in the fair value of the transferor’s identifiable net assets the

difference is recognized as goodwill; where the cost of combination is lower than the

acquirer’s interest in the fair value of the transferor’s identifiable net assets the difference

is initially recognized in profit or loss for the current year after the Company conducted a

review of computation for the identifiable assets liabilities or fair value of contingent

liabilities and combination cost and where the combination cost is still lower than the fair

value of the identifiable net assets of the transferor obtained during the course of

combination then the difference is recorded in the profit and loss.

186 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

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. Control

means that the Company has the power over the investee enjoys variable returns by

participating in relevant activities of the investee and has the ability to use its power over the

investee to influence the amount of its return. Control refers to the Company’s right over the

investee to enjoy variable returns through involvement in the investee and have the ability to exert

the right to affect those returns The Company will reassess when changes in relevant facts and

circumstances result in changes in the relevant elements involved in the definition of control.Preparation method of consolidated statements:

(1) Scope of consolidated financial statements

The Company incorporated all subsidiaries under its control (including the separate entities

controlled by the Company) into the scope of consolidation financial statements including

the enterprises under the Company’s control divisible part in the investees and structured

entities. Control refers to the Company having power over the investee and is entitled to

variable returns from its involvement with the investee and has the ability to use its power

over 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 subsidiaries

When preparing consolidated financial statements adjustments are made if subsidiaries’

accounting policies or accounting periods are different from that of the Company in

accordance with the Company’s accounting policies and accounting periods.Haier Smart Home Co. Ltd. Annual Report 2025 187Section VIII Financial Report

(3) Offset matters in the consolidated financial statements

The consolidated financial statements shall be prepared by the Company on the basis of

the financial statements of the Company and subsidiaries and based on other relevant

information. In preparing the consolidated financial statements all significant balances

transactions and unrealized profits between the Company and subsidiaries and among

subsidiaries are eliminated. In preparing the consolidated financial statements the Company

treats the entire enterprise group as one accounting entity and reflects the overall financial

position operating results and cash flows of the Group in accordance with the

requirements for recognition measurement and presentation of relevant accounting

standards for enterprises and consistent accounting policies. The owner’s equity of the

subsidiaries not attributable to the Company shall be presented separately as ‘minority

equity’ under the owner’s equity item in the consolidated balance sheet. The minority equity

attributable 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 the

amount of loss of a subsidiary attributable to the minority shareholders exceeds their share

of the opening balance of owner’s equity of the subsidiary the excess shall be allocated

against minority equity. The long-term equity investment of the Company held by the

subsidiaries deemed as treasury stock of the corporate group as well as the reduction of

owners’ equity shall be presented as ‘Less: Treasury stock’ under the owner’s equity item

in the consolidated balance sheet.

(4) Accounting treatment of subsidiaries acquired from combination

For subsidiaries acquired from business combination under common control of the

Company the opening amount of the consolidated balance sheet is adjusted as if the

business combination has taken place since the ultimate controller began its control. The

income expenses and profits of subsidiaries or business combinations from the beginning

of the current period to the end of the reporting period are included in the consolidated

profit statement. The cash flows from the beginning of the current period to the end of the

reporting period of a subsidiary or business combination are included in the consolidated

cash flow statement and the related items in the comparative statements are adjusted

Where control can be exercised over the investee under the same control due to additional

investment and other reasons the Company shall deem the parties participating in the

business combination to have made adjustments in their current status when the ultimate

controller began its control. Equity investments held by the Company before control of the

transferor are recognised for profit or loss other comprehensive income and other changes

in net assets between the later of the date on which the original equity interest is acquired

and the date on which the Company and the transferor are under the same control and the

date of combination which are offset against the opening retained earnings or current profit

or loss respectively in the period of the comparative statements.

188 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

For subsidiaries acquired from business combination under non-common control the

opening amount of the consolidated balance sheet is not adjusted. The income expenses

and profits of the subsidiary or business from the date of purchase to the end of the

reporting period are included in the consolidated profit statement. The cash flows of the

subsidiary or business from the date of purchase to the end of the reporting period are

included in the consolidated statement of cash flows. Where control can be exercised over

an investee that is not under the same control due to additional investment or other

reasons the Company remeasures the equity interest of the investee held before the

purchase date based on the fair value of the equity interest at the purchase date and the

difference between the fair value and its carrying amount is included in the current

investment income. Where the equity interest in the transferor held before the purchase

date relates to other comprehensive income under the equity method and other changes in

owner’s equity other than net profit or loss other comprehensive income and profit

distribution other comprehensive income and other changes in owner’s equity relating

thereto 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 or

changes in net assets of defined benefit plans by the investee.

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

* General treatment

During 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 of

the period to the date of disposal are included in the consolidated income statement

of the Company; The cash flows from the beginning of the period to the disposal

date of the subsidiary or operation are included in the consolidated statement of cash

flows of the Company.When control over the investee is lost due to the disposal of part of the equity

investment or other reasons the Company remeasures the remaining equity

investment after disposal at its fair value at the date when control is lost. The

difference between the sum of the consideration obtained on disposal of the equity

interest and the fair value of the remaining equity interest less the sum of the share

of the net assets of the original subsidiary calculated by the Company based on the

original shareholding ratio and goodwill calculated on a continuing basis from the date

of purchase or consolidation is included in investment income in the period in which

control is lost and goodwill is written off. The Company converts other comprehensive

income relating to the equity investment in the original subsidiary etc to investment

income in the current period when control is lost.Haier Smart Home Co. Ltd. Annual Report 2025 189Section VIII Financial Report

* Disposal of subsidiaries step by step

Where the Company disposed of equity investment in a subsidiary step by step

through multiple transactions until control is lost for example the terms conditions

and economic impact of each transaction that disposes of the equity investment in a

subsidiary meet one or more of the following conditions the Company accounts for

multiple transactions as a single transaction:

i. The transactions were entered into simultaneously or with mutual influence in

mind;

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.Where each transaction that disposes of an equity investment in a subsidiary until

control is lost is a blanket transaction the Company accounts for each transaction as

a transaction that disposes of the subsidiary and loses control; However the

Company recognises the difference between each disposal price before the loss of

control and the share of net assets of the subsidiary corresponding to the disposal of

the investment as other comprehensive income in the consolidated financial

statements and is transferred to profit or loss in the period in which control is lost

when control is lost.Where each transaction that disposes of an equity investment in a subsidiary until the

loss of control is not a blanket transaction the relevant policy for partial disposal of

an equity investment in a subsidiary without loss of control is accounted for before

the loss of control by the Company; When control is lost accounting is performed in

the 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 equity

investment resulting from the purchase of minority interests and the share of net assets

attributable to the subsidiary calculated on an ongoing basis from the date of purchase (or

the date of combination) based on the newly increased shareholding ratio the equity

premium in the capital reserve in the consolidated balance sheet is adjusted and if the

equity premium in the capital reserve is insufficient to offset the retained earnings is

adjusted.

190 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

(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 balance

sheet for the difference between the disposal price obtained from the partial disposal of the

long-term equity investment in the subsidiary without loss of control and the share of the

net assets of the subsidiary that would continue to be calculated from the purchase date or

the combination date corresponding to the disposal of the long-term equity investment or

adjust the retained earnings if the equity premium in the capital reserve is insufficient to

offset.

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. In

accordance with the Company’s rights and obligations under a joint arrangement the Company

classifies 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 is

entitled to relevant assets and obligations of this arrangement.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 business

enterprises: * recognize the assets held solely by the Company and recognize assets

held jointly by the Company in appropriation to the share of the Company; * recognize the

obligations assumed solely by the Company and recognize obligations assumed jointly by

the Company in appropriation to the share of the Company; * recognize revenue from

disposal of joint operations in appropriation to the share of the Company; * recognize

revenue 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 in

appropriation to the share of the Company.When the Company as a joint venture invests or sells assets to or purchase assets (the

assets do not constitute a business the same below) from joint operations the Company

shall only recognize the part of profit or lost from this transaction attributable to other

parties of joint operations before these assets are sold to a third party. In case of an

impairment loss incurred on these assets which meets the requirements as set out in

Accounting Standards for Business Enterprises No. 8 — Asset Impairment the Company

shall full recognize the amount of this loss in relation to its investment in or sale of assets

to joint operations or recognize the loss according to the Company’s share of commitment

in 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 net

assets 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.Haier Smart Home Co. Ltd. Annual Report 2025 191Section VIII Financial Report

9. Recognition standard for cash and cash equivalents

Cash recognized in the cash flow statements represents the cash on hand and deposits available

for payment of the Company at any time.Cash equivalents recognized in the cash flow statements refer to short-term highly liquid

investments held by the Company that are readily convertible to known amounts of cash and

which 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 functional

currency by applying the exchange rate at the transaction date.Monetary items denominated in foreign currencies are translated by the Company into

functional currencies at the rates of exchange ruling at the balance sheet date. All foreign

exchange difference are credited in the profit or loss of the current period except those

arising from the funds denominated in foreign currency specially borrowed for the

establishment of the qualifying assets are treated based on the principal of capitalization of

borrowing costs.Non-monetary items in foreign currency measured at historical cost are translated by the

Company using the spot exchange rate prevailing on the date when transaction occurred

and its functional currency shall remain unchanged. Non-monetary items denominated in

foreign currencies that are measured at fair value are translated using the foreign exchange

rate at the date the fair value is determined; the exchange differences between the

translated and original amounts of functional currencies are recognized in the statement of

profit or loss or other comprehensive income as changes in fair value (including changes in

exchange rate).

(2) Translation of foreign currency financial statements

If the functional currencies used as the bookkeeping base currency by the subsidiaries joint

ventures and associates under the control of the Company are different from that of the

Company their financial statements denominated in foreign currencies shall be translated to

perform accounting and prepare the consolidated financial statements.The assets and liabilities of the foreign currency balance sheet of the Company are

translated 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 the

transaction date. The revenue and expenses in the foreign currency income statement of

the Company are translated using the approximate rate of the spot exchange rate on the

transaction date. Exchange differences on translation of financial statements denominated in

foreign currencies are presented as the ‘other comprehensive income’ in the owner’s equity

of the balance sheet.

192 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

Foreign currency cash flow and cash flows of a foreign subsidiary of the Company is

translated using the approximate rate of the spot exchange rate on the date of the cash

flows. The impact of exchange rate changes on cash amount is regarded as a

reconciliation item and reflected separately in the cash flow.When disposing overseas operations the translation difference in the foreign currency

financial statements as shown in the owner’s equity of the balance sheet and related to the

overseas operation shall be transferred from owner’s equity to profit or loss in the current

period of disposal. If part of the overseas operations is disposed of the translation

difference in the foreign currency financial statements of the disposal part shall be

calculated based on the proportion of the disposal and transferred to profit or loss in the

current period of disposal.

11. Financial instruments

√ Applicable □ Not Applicable

A financial instrument refers to any contract that gives rise to a financial asset of one entity and

a financial liability or equity instrument of another entity. A financial asset or financial liability and

equity instrument is recognized when the Company becomes a party to the contract of a

financial instrument.

(1) Classification recognition and measurement of financial assets

On initial recognition of a financial asset according to the business model for managing

financial assets and the contractual cash flow characteristics of financial assets the

Company classifies financial assets into: Financial assets measured at amortized cost;

financial assets measured at fair value through other comprehensive income; financial

assets measured at fair value through profit or loss of the current period.Financial assets are measured at fair value upon initial recognition. For financial assets

measured at fair value through profit and loss of the current period related transaction

costs are directly included in profit and loss of the current period; for other types of

financial 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 the

provision of labor services that do not contain or consider the significant financing

components etc the Company shall take the consideration amount entitled to be received

as the initial recognized amount.Haier Smart Home Co. Ltd. Annual Report 2025 193Section VIII Financial Report

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 the

aim of obtaining contractual cash flow the contractual cash flow characteristics

of 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 the

principal and the interest based on the outstanding principal amount. For such

financial assets the Company recognizes the interest income in accordance

with the effective interest method. Such financial assets are subsequently

measured at amortised cost. The gains or losses arising from amortisation or

impairment are recognised in profit or loss of the current period. Such financial

assets of the Company mainly include cash and cash equivalents bills

receivable accounts receivable other receivables creditor’s right investment

and long-term receivables. The Company lists the creditor’s rights investments

and long-term receivables matured within one year (including one year) from the

balance sheet date as non-current assets matured within one year; the

creditor’s rights investments matured within one year (including one year) when

being obtained are listed as other current assets.* Financial assets measured at fair value through other comprehensive income

The Company’s business mode for managing such financial assets is: With the

aim of obtaining contractual cash flow and selling the financial assets the

contractual cash flow characteristics of such financial assets shall be consistent

with the basic lending arrangements. Such financial assets are measured at fair

value through other comprehensive income but impairment gains and losses

exchange gains and losses and interest income calculated by the effective

interest method are included in profit and loss of the current period. Such

financial assets of the Company mainly include financing receivables and other

creditor’s rights investments. The Company lists other creditor’s rights

investments matured within one year (including one year) from the balance

sheet date as non-current assets matured within one year; other creditor’s

rights investments matured within one year (including one year) when being

obtained are listed as other current assets.* Financial assets measured at fair value through profit or loss of the current period

The Company classifies financial assets other than those above measured at

amortized cost and those measured at fair value through other comprehensive

income as financial assets measured at fair value through profit or loss of the

current period. In addition at the time of initial recognition in order to eliminate

or significantly reduce accounting mismatch the Company designated some

financial assets as financial assets measured at fair value through profit or loss

of the current period. Such financial assets are subsequently measured at fair

value and changes in fair value are included in profit or loss of the current

period. Such financial assets that are matured more than one year and are

expected to be held for more than one year from the balance sheet date are

listed as other non-current financial assets.

194 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

2) Equity instrument investments of the Company:

The Company classifies equity instrument investments that have no control joint

control and significant influence on itself as financial assets measured at fair value

through profit or loss of the current period; investments that are expected to be held

for more than one year from the balance sheet date are listed as other non-current

financial assets.In addition the Company designated some non-trading equity instrument investments

as financial assets measured at fair value through other comprehensive income which

are listed as other equity instrument investments. Such designation cannot be

revoked once made. The Company includes the relevant dividends and interest

income of such financial assets in profit and loss of the current period and changes

in fair value are included in other comprehensive income. When the financial asset is

derecognised the Company transfers the cumulative gain or loss previously included

in other comprehensive income directly to retained earnings and is not included in

profit or loss of the current period.

(2) Classification recognition and measurement of financial liabilities

On initial recognition financial instruments or their components issued by the Company are

classified into financial liabilities or equity instruments based on the contractual terms of the

financial instruments and the economic nature rather than solely on its legal form together

with the definition of financial liability and equity instruments.The Company classifies financial liabilities as financial liabilities at fair value through profit

and 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 are

subsequently measured at fair value. Any gains or losses arising from changes in the fair

value and any interest expenses related to the financial liabilities are recognized in profit or

loss of the current period. The financial liabilities at fair value through profit and loss of the

current period of the Company mainly consist of financial liabilities held for trading.Other financial liabilities are subsequently measured at amortized costs using effective

interest method. Other financial liabilities of the Company are financial liabilities measured at

amortized cost including bills payable accounts payable other payables borrowings

bonds payable etc. Such financial liabilities are recognized initially at fair value less

transaction costs and subsequently measured using the effective interest method. Financial

liabilities with a maturity of less than one year (including one year) are listed as current

liabilities: those with maturity of more than one year but are mature within one year from

the balance sheet date (including one year) are listed as non-current liabilities due within

one year; the rest are presented as non-current liabilities.Haier Smart Home Co. Ltd. Annual Report 2025 195Section VIII Financial Report

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

The Company classifies financial liabilities and equity instruments on the following

principles: (1) Where the Company is unable to unconditionally avoid delivering cash or

another financial asset to fulfil a contractual obligation the contractual obligation meets the

definition of a financial liability. Although some financial instruments do not explicitly include

the terms and conditions imposing the contractual obligation to deliver cash or another

financial asset they may indirectly give rise to the contractual obligation through other

terms and conditions. (2) Where a financial instrument shall or may be settled in the

Company’s own equity instrument consideration shall be given to whether the Company’s

own equity instrument as used to settle the instrument is a substitute of cash or another

financial asset or the residual interest in the assets of the Company after deducting all of its

liabilities. In the former case the instrument shall be the Company’s financial liability; in the

latter case the instrument shall be the equity instrument of the Company. Under certain

circumstances whereby a financial instrument contract stipulates that the Company shall or

may use its own equity instrument to settle the financial instrument and the amount of the

contractual right or obligation equal to the number of its own equity instruments to be

received or delivered multiplied by their fair value at the time of settlement the contract

shall be classified as a financial liability regardless of whether the amount of the

contractual right or obligation is fixed or fluctuates in full or in partly in response to

changes 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).When classifying a financial instrument (or a component thereof) in consolidated financial

statements the Company shall consider all terms and conditions agreed between members

of the Group and the holders of the financial instrument. If the Group as a whole has an

obligation in respect of the instrument to settle it by delivering cash or another financial

asset or in such a way that it would be a financial liability such instrument shall be

classified as a financial liability.If the financial instrument or its component is attributable to the financial liability the

relevant interests dividends gains or losses and gains or losses arising from redemption

or 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 the

Company 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 the

Company. Transaction costs related to equity transactions are deducted from equity. The

Company recognizes the distribution to holders of the equity instruments as distribution of

profits and dividends paid do not affect total amount of shareholders’ equity.

196 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

(4) Recognition and measurement on transfer of financial assets

A financial asset shall be de-recognized when one of the following conditions is met: * the

contractual right for receiving cash flows from the financial asset is terminated; * the

financial asset is transferred and the risk and rewards of ownership of the financial asset

have been substantially transferred to the transferee; and * the financial asset is

transferred; the Company neither transfers nor retains substantially all the risks and rewards

of ownership of the financial asset but ceases the control over the financial asset. If the

Company neither transfers nor retains substantially all the risks and rewards of ownership of

the financial asset and the control over the financial asset is not ceased the financial asset

and the related financial liabilities should be recognized based on the degree of continuing

involvement. The degree of continuing involvement means the level of risks borne by the

Company resulting from the change in value of the financial asset.On de-recognition of other equity instruments investment the difference between the

carrying amount and the sum of the consideration received and the cumulative changes in

fair value that had been recognized directly in other comprehensive income is recognized in

the retained earnings. On de-recognition of other financial assets the difference between

the carrying amount and the sum of the consideration received and the cumulative changes

in fair value that had been recognized directly in other comprehensive income is recognized

in current profit or loss.For financial assets that are sold with recourse or endorsement the Company needs to

determine whether the risk and rewards of ownership of the financial asset have been

substantially transferred. If the risk and rewards of ownership of the financial asset have

been substantially transferred the financial asset shall be derecognized. If the risk and

rewards of ownership of the financial asset have been substantially retained the financial

asset shall not be de-recognized. If the Company neither transfers nor retains substantially

all the risks and rewards of ownership of the financial asset the Company shall assess

whether the control over the financial asset is retained and the financial assets shall be

accounted 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 the

Company 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 liability

in the form of a new financial liability and if the new financial liability is substantially

different from the original financial liability the original financial liability is derecognized and

the new financial liability is recognized. If the Company makes substantial changes to the

contractual terms of the original financial liability (or a part thereof) the original financial

liability is derecognized and the new financial liability is recognized in accordance with the

revised terms.If the financial liability (or a part thereof) is derecognized the difference between the

carrying amount and the consideration paid (including the transferred non-cash assets or

liabilities assumed) is recognized in current profit or loss.Haier Smart Home Co. Ltd. Annual Report 2025 197Section VIII Financial Report

(6) Offsetting financial assets and financial liabilities

When the Company has the legal right to offset recognized financial assets and financial

liabilities and the legal right can be executed at present and the Company has a plan to

settle the financial assets and financial liabilities at the same time or at net amount the

financial assets and financial liabilities can be presented in the balance sheet at net amount

after offsetting. Except for the above circumstances financial assets and financial liabilities

cannot be offset and shall be presented separately in the balance sheet.

(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 transferred

between willing parties in an orderly transaction on a measurement date. The fair value of a

financial instrument that is traded in an active market is determined at the quoted price in

the active market. Quoted price in the active market represents quoted price which can be

easily obtained periodically from exchange market brokers industry associations or pricing

services agency etc. which is the transactions amount in arm’s length transactions. The

fair value of a financial instrument that is not traded in an active market is determined by

using a valuation technique. Valuation techniques include using prices of recent market

transactions between knowledgeable and willing parties reference to the current fair value

of another financial asset that is substantially the same with this instrument discounted

cash flow analysis and option pricing models etc. During the valuation the Company

adopts an applicable valuation technique under current conditions and there are enough

available data and other information to support. Those inputs should be consistent with the

inputs a market participant would use when pricing the asset or liability and the Company

should maximize the use of relevant observable inputs. When related observable inputs

can’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 levels

and 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 the

asset or liability either directly or indirectly. Level 3: unobservable inputs for the asset or

liability.

(8) Impairment of financial assets

For financial assets measured at amortized cost and debt instrument investments measured

at fair value through other comprehensive income contract assets and financial guarantee

contracts the Company recognizes the loss provision based on the expected credit losses.The Company considers reasonable and reliable information about past events current

conditions and forecasts of future economic conditions and takes the risk of default as a

weight and calculates the probability-weighted amount of the present value of the

difference between the cash flow receivable and the cash flow expected to be received of

the contract to confirm the expected credit losses.

198 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

On each balance sheet date the Company measures the expected credit losses of

financial instruments in different phases. If the credit risk has not increased significantly

since the initial recognition the financial instruments are in the first phase. The Company

measures 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 the

initial recognition the financial instruments are in the second phase. The Company

measures the loss provision according to the expected credit losses of the instruments

during the entire duration; if credit impairment has occurred since the initial recognition the

financial instruments are in the third phase. The Company measures the loss provision

according to the expected credit losses of the instruments during the entire duration.For financial instruments with lower credit risk on the balance sheet date the Company

measures 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 with

relatively lower credit risk the Company calculates interest income based on their book

balance before the deduction of provisions and effective interest rate. For financial

instruments in the third phase the Company calculates interest income based on their

amortized cost after the impairment provision has been deducted from the book balance

and effective interest rate.For bills receivable accounts receivable and contract assets whether there exist significant

financing components the Company measures loss provision based on expected credit

loss over the entire duration.The Company classifies accounts receivable into groups on the basis of shared credit risk

characteristics and calculates the expected credit losses on groups the bases of group

determination are as follows:

For each group of bills receivable the Company applies exposure at default and expected

credit losses rate over the entire duration to calculate the expected credit losses by taking

into account the historical credit losses experience the existing conditions and forecast of

future economic conditions.For each group of accounts receivable the Company makes the comparison of expected

credit losses rates of accounts receivable in overdue days and over the entire duration to

calculate the expected credit losses by taking into account the historical credit losses

experience the existing conditions and forecast of future economic conditions.For each group of other accounts receivable the Company applies exposure at default and

expected credit losses rate within the next 12 months or over the entire duration to

calculate the expected credit losses by taking into account the historical credit losses

experience the existing conditions and forecast of future economic conditions.Haier Smart Home Co. Ltd. Annual Report 2025 199Section VIII Financial Report

The Company recognizes the loss impairment provision or reversed in profit or loss of the

current period. For held debt instruments at fair value through other comprehensive

income the Company recognizes loss/gain on impairment in profit or loss of the current

period and adjusts other comprehensive income at the same time.

12. Inventory

√ Applicable □ Not Applicable

(1) Classification of inventory

√ Applicable □ Not Applicable

Inventory refers to finished products and commodities held by the Company in daily

activities for sale products in progress materials and supplies consumed in the process of

production or provision of labour services including mainly raw materials turnover

materials materials for commissioned processing work packaging materials products in

progress semi-finished products through in-house manufacturing finished products

(products in stock) and project construction among others.

(2) Pricing of dispatch of inventory

√ Applicable □ Not Applicable

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

method.

(3) Impairment provision for inventory

At the balance sheet date inventory is measured at the lower of cost and net realisable

value.The net realisable value of inventories that can be directly put to sale including finished

products commodities and materials for sale is determined as the estimated selling price of

such inventory less estimated selling expenses and related tax expenses; the net realisable

value of or inventories held for production is determined as the estimated selling price of

finished products manufactured less estimated cost incurred upon completion estimated

selling expenses and related tax expenses; the net realisable value of inventory held for the

execution of sales contract or labour contract is computed on the basis of the contract

price. If the quantity of inventories held by the Company is more than the quantity ordered

under a sales contract the net realisable value of the inventories in excess is computed on

the basis of the general selling price.Inventory impairment provision is made on the basis of individual inventory items provided

that if certain inventories are related to a series of products manufactured and sold in the

same region with identical or similar end uses or purposes and are difficult to measure

separately with other items their cost and net realisable value may be measured on an

aggregate basis. Inventories The cost and net realizable value of inventories in large

quantity with low unit prices are measured according to inventory types.

200 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

At the balance sheet date if the cost of inventory of the Company is higher than its net

realisable value impairment provision is made and charged to current profit or loss. If the

factor causing the write-down of inventory value has been removed the amount of

write-down should be reversed and transferred out of the previous inventory impairment

provision amount. The reversed amount is included in current profit or loss.

(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 packaging

materials.

13. Contract assets

√ Applicable □ Not Applicable

The Company presents the right of the Company to charge consideration from the customer

unconditionally (i.e. only depends on the passage of time) as a receivable while the

consideration that the Company has the right (and this right depends on factors other than

passage of time) to receive for goods transferred to customers is presented as a contract

assets. If the Company sells two clearly distinguishable goods to the customer and it has the

right to receive payment because one of the goods has been delivered but the receipt of such

payment is conditioned on the delivery of another goods the Company shall recognise such right

to receive payment as contract asset.For the determination and accounting treatment methods of the expected credit loss of contract

assets 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 the

Company 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 the

carrying value of the owner’s equity of the acquired party; the initial cost of long-term

equity investments acquired through business combination involving parties not under

common control should be recognised as the combination costs determined at the

date of acquisition;

Haier Smart Home Co. Ltd. Annual Report 2025 201Section VIII Financial Report

* The Company invested in other equity investment other than long-term equity

investments acquired through combination the initial investment cost of long-term

equity investments acquired with cash payment is the acquisition price actually paid;

the initial investment cost of long-term equity investments acquired with the issuance

of 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

investment cost acquired in exchange for non-monetary assets shall be determined in

accordance with relevant provisions of the standard.

(2) Subsequent measurement and recognition of profit or loss

* Cost method

Long-term equity investments in which the Company is able to exercise control over

the investee is accounted for using the cost method. Under the cost method the

carrying value of long-term equity investments other than additional investment or

recouped investment shall remain constant. The Company declared the distribution of

profit or cash dividend to the investee and calculated the portion of entitlement

which is recognised as investment income.* Equity method

The equity method is used by the Company to account for long-term equity

investments in associates and joint ventures. Under the equity method the initial

investment cost is not adjusted for any excess of the initial investment cost over the

share of the net fair value of the investee’s identifiable assets. When the initial

investment cost is less than the share of the fair value of the investment’s identifiable

net assets the difference is recognised in current profit or loss and the cost of

long-term equity investment is adjusted accordingly.Under the equity method share of net profit or losses and other comprehensive

income of the investee are recognised by the Company as investment income and

other comprehensive income respectively and the carrying amount of the long-term

equity investment is adjusted accordingly. Share of profit or cash dividend declared

by the investee is charged against the carrying value of the long-term equity

investment; changes in owners’ equity of the investee other than net profit or loss

other comprehensive income and profit distribution are adjusted against the carrying

value of long-term equity investment and included in capital reserve. Share of net

profit or loss of the investee is recognised by the Company on the basis of the fair

value of the identifiable assets of the investee when the investment is acquired and

adjusted against the net profit of the investee. If the accounting policy and

accounting period of the investee are inconsistent with those of the Company the

financial statements of the investee is adjusted to align with the accounting policy and

accounting period of the Company and investment income and other comprehensive

income is recognised accordingly.

202 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

Net losses of the investee is recognised by the Company by deducting the carrying

value of the long-term equity investment together with long-term equity that in

substance 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 the

investee estimated liabilities are recognised according to the obligation expected to

be assumed and charged to current investment loss. If the investee records net profit

in future periods the Company shall recognise its share of gains after applying such

share of gains to make up for the unrecognised share of loss.

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

* Change from fair value measurement to the equity method: If an equity investment in

the investee not previously affording control joint control or significant influence and

accounted for in accordance with the standard for recognition and measurement of

financial instruments becomes capable of affording joint control or significant influence

over the investee as a result of increased shareholding following additional

investment the accounting method should be changed to the equity method and the

fair value of the original equity investment determined according to the standard for

recognition and measurement of financial instruments plus the fair value of

consideration paid for the acquisition of the new investment shall be changed the

initial 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 control

or significant influence and accounted for in accordance with the standard for

recognition and measurement of financial instruments or a long- term equity

investment previously held in associates or joint ventures becomes capable of

affording control over the investee it is accounted for long-term equity investment

formed 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 to

afford joint control or significant influence as a result of decrease in shareholding

percentage following partial disposal the remaining equity investment is recognised in

accordance with the standard for recognition and measurement of financial

instruments and the difference between the fair value at the date of loss of joint

control or significant influence and the carrying value is included in current profit or

loss.Haier Smart Home Co. Ltd. Annual Report 2025 203Section VIII Financial Report

* 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 to

disposal of some equity-based investment and other reasons the Company accounts

for the remaining equity affording joint control or significant influence over an investee

as a result of disposal based on the equity method and the remaining equity will be

adjusted as if it is accounted for using the equity method from the date of

acquisition; for the remaining equity not affording joint control or significant influence

over an investee as a result of disposal it is accounted for in accordance with

relevant requirements of Accounting Standards for Business Enterprises No. 22—

Recognition and measurement of financial assets and the differences between the fair

value 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 in

accordance with relevant requirements of Accounting Standards for Business

Enterprises No.33— Consolidated financial statements.

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

Joint control is the contractually agreed sharing of control over an arrangement which

relevant activities of such arrangement must be decided by unanimously agreement from

parties who share control. If all the parties or a group of parties must act in concert to

decide on the relevant activities of certain arrangement it can be considered that all parties

or a group of parties have collective control over the arrangement. When determining if

there is any joint control it should first be determined if the arrangement is controlled

collectively by all parties or a combination of parties and then determined whether

decisions about activities related to the arrangement must be made by the unanimous

agreement of those parties who have collective control over the arrangement. If there are

two or more party groups that can collectively control certain arrangement it does not

constitute joint control. When determining if there is any joint control the relevant

protection rights will not be taken into account.Significant influence is the power of the investor to participate in the decision-making of an

investee’s financial and operational policies but neither control nor jointly control the

formulation of such policies with other parties. When determining if there is any significant

influence on the investee the influence of the voting shares of the investee held directly or

indirectly and the potential voting rights held by the Company and other parties which are

exercisable in the current period and converted to the equity of the investee including the

warrants stock options and convertible bonds that are issued by the investee and can be

converted in the current period shall be taken into account by the Company.When the Company holds directly or indirectly through the subsidiary 20% (inclusive) to

50% of the voting shares of the investee it is generally considered to have significant

influence on the investee unless there is concrete evidence to prove that it cannot

participate in the production and operational decisions of the investee and cannot pose

significant influence in this situation.

204 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

The Company usually determines whether there is significant influence on the investee

through 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 must

have significant influence on the investee. The Company needs to comprehensively

consider all the facts and circumstances to make an appropriate judgment.

(5) Methods for impairment test and impairment provision

At the balance sheet date the Company inspects whether there are indications of possible

impairment of a long-term equity investment. If there are indications of impairment an

impairment test should be performed to ascertain its recoverable amount and an

impairment provision equivalent to the margin by which the recoverable amount is lower

than the carrying value should be made. Once recognised impairment loss will not be

reversed in subsequent accounting periods. The recoverable amount is determined as the

higher of net fair value of the long-term equity investment on disposal and present value of

estimated future cash flow.

(6) Disposal of long-term equity investments

Upon the Company’s disposal of long-term equity investments the difference between the

carrying value and consideration actually acquired is included in current profit or loss. Upon

disposal of long-term equity investment the portion previously included in other

comprehensive income is accounted for according to the relevant percentage on the same

basis adopted in the direct disposal of the relevant assets or liabilities by the investee.Haier Smart Home Co. Ltd. Annual Report 2025 205Section VIII Financial Report

15. Investment properties

(1) Types and measurement models of investment properties

The Company’s investment properties include the following types: leased land-use rights

and leased buildings.The Company’s investment properties are initially measured at cost and subsequently on a

cost basis.

(2) Adoption of cost model as accounting policy

Among the Company’s investment properties leased buildings are subject to depreciation

on a straight-line basis in accordance with accounting policies identical with accounting

policies for fixed assets. Leased land-use rights and land-use rights held for disposal after

appreciation land- use rights in investment properties are amortised using the straight-line

method in accordance with accounting policies identical with fixed asset accounting

policies for intangible assets.At the balance sheet date the Company inspects whether there are indications of possible

impairment of an investment property. If there are indications of impairment an impairment

test should be performed to ascertain its recoverable amount and an impairment provision

equivalent to the margin by which the recoverable amount is lower than the carrying value

should be made. Once recognised impairment loss will not be reversed in subsequent

accounting periods.Where the investment properties are sold transferred retired or damaged the differences

from disposal after deducting the carrying amount and related taxes are recognised in profit

or loss for the current period by the Company. When the Company has evidence indicating

the self-occupied houses and buildings are converted to leasing or leasing out its

properties held for sale under operating leases the carrying amount of such fixed assets

intangible assets or inventories before the conversion are transferred to investment

properties. When the Company has evidence indicating the property held to earn rentals or

for capital appreciation are converted to self-occupation or the property intended for

operating lease purpose are open for sale the carrying amount of such properties before

the conversion are transferred to fixed assets intangible asset or inventories.

206 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

16. Fixed assets

(1) Recognition criteria and measurement of fixed assets

√ Applicable □ Not Applicable

Fixed assets of the Company refer to tangible assets held for the production of

commodities provision of labour services lease or operational management with a useful

life of more than one accounting year. Fixed assets are recognised if all of the following

conditions 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 shall

be included in the cost of the fixed asset and the carrying amount of the component of

the fixed asset that is replaced shall be derecognised. Otherwise such expenditure shall be

recognised 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 fixed

asset comprises its purchase price related taxes and any directly attributable expenditure

for bringing the asset to its working condition for its intended use such as transportation

costs and installation expenses. If the payment for a purchased fixed asset is deferred

beyond the normal credit terms the cost of the fixed asset shall be determined based on

the present value of the instalment payments. The difference between the actual payment

and the present value of the purchase price is recognised in profit or loss over the credit

period except for such difference that is capitalised according to Accounting Standard for

Business Enterprises No. 17 — Borrowing Costs.

(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 a

straight-line basis. The useful life and estimated net residual value of fixed assets are

determined based on the nature and use of the fixed assets. At the end of the year the

useful life and estimated residual value of and depreciation method for fixed assets are

reviewed 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 is

separately priced and recorded the Company measures depreciation for all fixed assets.Haier Smart Home Co. Ltd. Annual Report 2025 207Section VIII Financial Report

The type depreciation method estimated useful lives estimated residual values and yearly

depreciation of the Company’s fixed assets are as follows:

Depreciation Residual

Type Depreciation method lives (years) values

Buildings Life average method 8–40 0–5%

Machinery equipment Life average method 4–20 0–5%

Transportation equipment Life average method 5–10 0–5%

Office and other equipment Life average method 3–10 0–5%

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

At the balance sheet date the Company inspects whether there are indications of possible

impairment of fixed assets. If there are indications of impairment an impairment test should

be performed to ascertain its recoverable amount and an impairment provision equivalent

to the margin by which the recoverable amount is lower than the carrying value should be

made. Once recognised impairment loss will not be reversed in subsequent accounting

periods.

(4) Disposal of fixed assets

Fixed assets are derecognised upon disposal or when no economic benefits are expected

from use or disposal. The difference between gains on disposal transfer retirement or

damage of fixed assets net of their book value and related taxes are included in profit and

loss.

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 construction

expenses including all necessary construction expenses incurred during the construction

and borrowing costs capitalized before the work reaches the expected conditions for use

and other related costs.

(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 is

completed and reaches the expected conditions for use. The criteria for judgement of

expected conditions for use should meet one of the following:

* The physical construction (including installation) of fixed assets has been completed in

full or substantially completed in full;

208 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

* Trial production or operation has commenced and the result indicates that the asset

can 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 possible

impairment of construction in progress. If there are indications of impairment an

impairment test should be performed to ascertain its recoverable amount and an

impairment provision equivalent to the margin by which the recoverable amount is lower

than the carrying value should be made. Once recognised impairment loss will not be

reversed in subsequent accounting periods.The recoverable amount is determined as the higher of net fair value of the asset less

disposal 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 acquisition

or production of assets qualified for capitalisation are capitalised and included in relevant

asset costs; other borrowing costs are recognised as cost at the amount incurred at the

time of incurrence and charged to current profit or loss. Assets qualified for capitalisation

refer to fixed assets investment properties and inventory that require a considerably long

period of acquisition or production activities to reach the expected conditions for use or

sale.

(2) Computation of capitalised amounts

Capitalisation period: from the point of time at which the capitalisation of borrowing costs

begins to the point of time at which capitalisation ceases. The period of suspension of

capitalisation of borrowing costs is not included.Period of suspension of capitalisation: In case of abnormal disruption during the acquisition

or production process for a consecutive period of more than 3 months the capitalisation

period for borrowing costs should be suspended.Haier Smart Home Co. Ltd. Annual Report 2025 209Section VIII Financial Report

Computation of capitalised amount: * For specific borrowings the amount is determined

as interest expense incurred for the period in respect of the specific borrowing less interest

income received through the deposit of unutilised borrowed funds or investment gains

received through provisional investments; * For general borrowings utilised the amount is

determined as the weighted average amount of the portion of cumulative asset expenses in

excess of the asset expense of specific borrowings multiplied by the capitalisation rate for

the general borrowings utilised where the capitalisation rate is the weighted average

interest rate of general borrowings; * where there is a discount or premium in the

borrowings the amortisation of such discount or premium for each accounting period is

determined according to the effective interest rate and the interest amount for each period

is adjusted accordingly.

19. Intangible assets

Intangible assets are the identifiable non-monetary assets which have no physical form and are

possessed or controlled by the Company and are recognized when the following conditions are

met:

* 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.Subsequent measurement of intangible assets of the Company: * Intangible assets with

finite useful lives are amortized on a straight-line basis; their useful lives and amortization

methods are reviewed at the end of each year and adjusted accordingly if there is any

variance with the previous estimates; * Intangible assets with indefinite useful lives are not

amortized and their useful lives are reviewed at the end of each year. If there is an

objective evidence that the useful life of an intangible asset is finite an estimation should

be made on the useful life and the intangible asset should be amortized using the straight-

line method.

210 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

(2) Criterion of determining indefinite useful life

The useful life of an intangible asset is indefinite if the period in which the asset brings

economic benefits for the Company is unforeseeable or the useful life could not be

ascertained.Criterion of determining indefinite useful lives: * the period is derived from contractual

rights or other legal rights and there are no explicit years of use stipulated in the contract

or laws and regulations; * the period in which the intangible assets generate benefits for

the Company still could not be estimated after considering the industrial practice or

relevant expert opinions.At the end of each year the Company reviews the useful lives of the intangible assets with

indefinite useful lives. The assessment is primarily reviewed by relevant departments that

use the intangible assets using the down-to-top approach to determine if there are

changes 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 there

is any sign of impairment. If yes the recoverable amount is recognized through an

impairment test and provision for impairment is made based on the difference between the

carrying value and the recoverable amount.Impairment loss will not be reversed in subsequent accounting periods once provision is

made for it. The recoverable amount of intangible assets should be based on the higher of

the net fair value of the assets less the disposal expense and the present value of

estimated future cash flow of the assets.

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

project and basis for capitalization of expenditure incurred in development stage

As for an internal research and development project expenditure incurred in the research

stage is recognized in the profit or loss as incurred. Expenses incurred in the development

stage are capitalized only if all of the following conditions are met: * the technical

feasibility of completing the intangible assets so that they will be available for use or for

sale; * the intention to complete the intangible assets for use or for sale; * how the

intangible assets will generate economic benefits including there is evidence that the

products produced by the intangible assets has a market or the intangible assets

themselves have a market; if the intangible assets are for internal use there is evidence

that 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 or

sell the intangible assets; * the capability to reliably measure the expenditures attributable

to the development stage of the intangible assets.Haier Smart Home Co. Ltd. Annual Report 2025 211Section VIII Financial Report

Specific standards for distinguishing research stage and development stage of an internal

research and development project: the Company refers to the research stage as the stage

of planned investigation and search for obtaining new technology and knowledge which

features planning and exploration; before commercial production or other uses the

Company regards the stage of applying the research achievements and other knowledge in

a plan or design to produce new or substantially improved materials equipment and

products as development stage which features pertinence and is very likely to form

results.All the expenditures incurred on research and development which cannot be distinguished

between 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 impairment

if there is any sign of impairment at the balance sheet date. If the result of the impairment test

indicates that the recoverable amount of the assets is less than the carrying amount a provision

for impairment will be made based on the difference and will be recorded in impairment loss. The

recoverable amount is the higher of the net fair value of the assets less the disposal expense

and the present value of estimated future cash flow of the assets. Provision for asset impairment

is calculated and recognized on the individual asset basis. If it is not possible to estimate the

recoverable amount of an individual asset the recoverable amount of the asset group to which

the asset belongs is determined. An asset group is the smallest asset portfolio that can generate

cash inflows independently.Goodwill arising from a business combination and an intangible asset with an indefinite useful life

is tested for impairment at least at each year end irrespective of whether there is any indication

that the asset may be impaired. Intangible assets that have not been ready for intended use are

tested for impairment each year.When the Company carries out impairment test of the goodwill the carrying amount of the

goodwill arising from business combination shall be allocated to the related asset groups on

reasonable basis since the acquisition date or to the related asset group portfolios if it is difficult

to be allocated to the related asset groups. When the carrying amount of the goodwill is

allocated to the related asset groups or asset group portfolios it shall be allocated in the

proportion of the fair value of each asset group or asset group portfolio against the total fair

value of related asset groups or asset group portfolios. If it is difficult to measure the fair value

reliably it shall be allocated in the proportion of the carrying amount of each asset group or

asset group portfolio against the total carrying amount of related asset groups or asset group

portfolios.

212 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

When impairment test is made by the Company to the related asset groups or asset group

portfolios including goodwill if there is a sign that the related asset groups or asset group

portfolios are prone to impair the Company shall first conduct impairment test on the asset

groups or asset group portfolios excluding goodwill calculate the recoverable amount and

recognize the corresponding impairment loss by comparing with its carrying amount. The

Company shall then conduct impairment test on the asset groups or asset group portfolios

including goodwill and compare the carrying amount (including the carrying amount of allocated

goodwill) 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 recoverable

amount of the related asset groups or asset group portfolios is lower than the carrying amount

thereof. The amount of the impairment loss is first reduced by the carrying amount of the

goodwill allocated to the asset group or set of asset groups and then the carrying amount of

other assets (other than the goodwill) within the asset group or set of asset groups pro rata

based on the carrying amount of each asset.Once the above impairment loss on assets is recognized it shall not be reversed by the

Company 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 the

benefit period of which is more than one year (exclusive). They are amortized by installments over

the benefit period based on each item under the expenses. If items under the long-term pre-paid

expenses are no longer beneficial to the subsequent accounting periods the amortized value of

such unamortized items is then fully transferred to the profit or loss.

22. Contract liabilities

√ Applicable □ Not Applicable

A contract liability represents the Company’s obligation to transfer goods to a customer for

which the Company has received consideration (or an amount of consideration is due) from the

customer. If the customer has already paid the contract consideration before the Company

transfers 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 of

the actual payment by the customer or the amount payable becoming due. Contract assets and

contract liabilities under the same contract are presented on a net basis and contract assets

and contract liabilities under different contracts are not offset.Haier Smart Home Co. Ltd. Annual Report 2025 213Section VIII Financial Report

23. Staff’s remuneration

Staff’s remunerations are all forms of compensation and other relevant expenditure given by the

Company 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 and

education fee medical insurance premiums work-related injury insurance premiums

maternity insurance premiums short-term compensated leave short-term profit-sharing

plans etc. During the accounting period when employees render services the Company

shall recognize short-term remunerations that actually incurred as liabilities and credited into

the current profit or loss or the cost of relevant assets on an accrual basis by the benefit

objects.

(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 the

post-employment benefits are classified as defined contribution plans and defined benefit

plans.Defined contribution plans: the Company shall recognize the sinking funds paid on the

balance sheet date to individual entities in exchange for services from employees in the

accounting period as liabilities and shall credit such funds into the profit or loss or the cost

of relevant assets in accordance with the benefit objects.Defined benefit plans: the Company determines the cost for providing benefits using the

expected cumulative welfare unit method with actuarial valuations being carried out by

independent actuary at the interim and annual balance sheet date. The costs for staff’s

remunerations incurred by the defined benefit plans of the Group are categorized as

follows: (1) service cost including current period service cost past service cost and

settlement profit or loss. Specifically current period service cost means the increase of the

present value of defined benefit obligations resulted from the current period services offered

by employees. Past service cost means the increase or decrease of the present value of

defined benefit obligations resulted from the revision of the defined benefit plans related to

the prior period services offered by employees; (2) interest expenses of defined benefit

plans; (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 employee

welfare into the cost of assets the Company will credit (1) and (2) above into the profit or

loss; and recognize (3) above as other comprehensive income and will not transfer it back

to the profit or loss in subsequent accounting periods.

214 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

(3) Accounting treatment of termination benefits

√ Applicable □ Not Applicable

Termination benefits are the indemnity proposal provided by the Company for employees

for the purpose of terminating labor relations with employees before expiry of the labor

contracts or encouraging employees to accept downsizing voluntarily. When the Company

could not unilaterally withdraw the termination benefits provided as a result of plan for

termination of labor relations or the redundancy offer or upon recognition of costs or

expenses related to a restructuring involving the payment of termination benefits whichever

is earlier the staff’s remuneration liabilities arising from such termination benefits are

recognized 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 of

commercial acceptance bills pending litigation or arbitration and product quality assurance

is the present obligation of the Company and the performance of such obligation is likely to

lead to an outflow of economic interests and its amount can be reliably measured such

obligation 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 the

necessary expenses for the performance of the present obligation. If there is a continuous

range for the necessary expenses and if all the outcomes within this range are equally likely

to occur the best estimate shall be determined according to the middle estimate within the

range.; if there are two or more items involved the best estimate should be determined

according to all possible outcomes and relevant probabilities.At the balance sheet date the carrying value of estimated liabilities should be reviewed. If

there is objective evidence that the carrying value could not reflect in the current best

estimate 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 be

compensated by the third party the amount of compensation is separately recognized as

an asset when it is basically determined to be recoverable and the recognized amount of

the compensation shall not exceed the carrying amount of the provisions.Haier Smart Home Co. Ltd. Annual Report 2025 215Section VIII Financial Report

25. Share-based payments

√ Applicable □ Not Applicable

Share-based payments of the Company are transactions in which equity instruments are granted

to employees in exchange for services rendered by employees or for the assumption of liabilities

based on equity instruments. Share-based payments of the Company are equity-settled

share-based payments and cash-settled share-based payments.For equity-settled share-based payment transaction in return for services from employees it shall

be measured at the fair value of equity instruments granted to the employees at the date of

grant by the Company. On each balance sheet date within the vesting period the Company

makes the best estimation of the number of vested equity instruments based on subsequent

information such as the updated changes in the number of employees who are granted to vest

and the achievement of specified performance conditions. Based on the above results the

services received in the current period are included in the relevant cost or expenses based on

the fair value on the date of grant with the increase in the capital reserve accordingly. The

recognized relevant cost or expenses and the total amount of owners’ interest shall no longer be

adjusted after the vesting date. However equity instruments vested immediately after the date of

grant shall be included in the relevant cost or expenses based on its fair value on the date of

grant with the increase in the capital reserve accordingly.The cash-settled share-based payment shall be measured at the fair value of liability assumed by

the Company which is determined based on the shares or other equity instruments. For the

cash-settled share-based payment that may be exercised immediately after the grant the fair

value of the liability assumed by the Company shall on the date of the grant be recognized in

relevant costs or expenses and the liabilities shall be increased accordingly. For cash-settled

share-based payment that may be exercised if services are fulfilled during the vesting period or

the specified performance condition is achieved on each balance sheet date within the vesting

period 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 the

Company and the liabilities shall be adjusted correspondingly. At each balanced sheet date and

the settlement date prior to the settlement of liabilities the fair value of the liability is

re-measured with its change consolidated in profit/loss.

216 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

When there is changes to the Company’s share-based payment plans if the modification

increases the fair value of the equity instruments granted corresponding recognition of service

increase in accordance with the increase in the fair value of the equity instruments; if the

modification increases the number of equity instruments granted the increase in fair value of the

equity instruments is recognized as a corresponding increase in service achieved. Increase in the

fair value of equity instruments refer to the difference between the fair values of the equity

instrument on the modified date before or after the modification. If the Company modifies the

vesting conditions in such manner conductive to the employees including the shortening of the

vesting period change or cancellation of the performance conditions (rather than market

conditions) the modified vesting conditions are considered upon the disposal of vesting

conditions. If the modification reduces the total fair value of shares paid or the Company uses

other methods not conductive to employees to modify the terms and conditions of share-based

payment plans the Company will continue to be accounted for the services obtained in the

accounting treatment as if the change had not occurred unless the Company cancelled some or

all of the equity instruments granted.During the vesting period if the Company cancel equity instruments granted which will be treated

as accelerating the exercise of rights and any amount to be charged over the remaining vesting

period should be recognized immediately in the profit or loss while at the same time recognize

the capital reserve. Employees or other parties can choose to meet non-vesting conditions but

for those that are not met in the vesting period the Company will treat it as cancellation of

equity instruments granted.

26. Revenue

Revenue is the total inflow of economic benefits formed by the Company and its subsidiaries

during day-to-day operations which might lead to increase of shareholders’ equity and be

irrelevant 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 the

contract the Company and its subsidiaries allocate transaction price to various single

performance obligation in accordance with the relevant proportion of separate selling price of

goods or services promised by various single performance obligation and measure revenue in

accordance with transaction price allocated to various single performance obligation.Transaction price is the amount of consideration that the Company and its subsidiaries are

expected 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 the

Company and its subsidiaries does not exceed the amount of recognized revenue when relevant

uncertainties are eliminated and might not incur material carrying back. The amount that is

expected to be returned to the client is taken as liability of returned goods and is not recorded

in transaction price.Haier Smart Home Co. Ltd. Annual Report 2025 217Section VIII Financial Report

When one of the following conditions is met the Company and its subsidiaries perform

performance obligations during a certain time horizon otherwise it belongs to fulfilling

performance obligations at a certain time point:

* The client simultaneously obtains and consumes economic benefits as the Company and its

subsidiaries perform the contract;

* The client is able to control goods under construction during the process of performance of

the Company and its subsidiaries;

* Goods produced by the Company and its subsidiaries during the process of performance

have no alternative use and the Company and its subsidiaries are entitled to collect the

amount for the cumulative completed and performed portion to date during the entire

contractual period.For the performance obligations performed during a certain time horizon the Company and its

subsidiaries recognize revenue in accordance with the schedule of performance during such time

horizon. When the schedule of performance can’t be reasonably recognized where the costs that

have 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 until

the schedule of performance can be reasonably confirmed.For performance obligations performed at a certain time point the Company and its subsidiaries

recognize revenue at the time point when the client obtains the control right of relevant goods or

services. When judging whether the client has obtained control right over goods or services the

Company 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 to

the client;

* The Company and its subsidiaries have transferred statutory ownership right of the goods

or 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 for

having transferred goods or services to the client (and such right depends on other factors other

than time lapse) is presented as contract asset and contract asset is provisioned impairment on

the basis of expected credit losses. The right owned by and unconditionally collected from the

client by the Company and its subsidiaries (only depend on time lapse) shall be presented as

accounts receivable. Obligations that the Company and its subsidiaries have collected or shall

collect consideration from the client and shall transfer goods or services to the client are

presented as contractual obligations.

218 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

Specific accounting policies relating to major activities that the Company and its subsidiaries

obtain revenue are described as follows:

(1) Sale of goods

Generally contracts for sale of goods between the Company and its clients only include

performance obligation of transferring the whole machine of home appliance. Generally on

the basis of taking into account the following factors comprehensively the Company

recognizes the revenue at the time point of transfer of control right of goods: the right of

instant collection for obtaining goods transfer of major risks and rewards on ownership of

goods transfer of statutory ownership of goods transfer of assets of material objects of

goods the client’s acceptance of such goods.

(2) Construction contract income

Construction contract between the Company and the client generally includes performance

obligations of construction and installation of commercial air-conditioner and smart home

because the client is able to control goods under construction during the Company’s

performance process the Company takes them as performance obligations performed

during a certain time horizon and recognizes revenue in accordance with the schedule of

performance and it is an exemption when the schedule of performance can’t be

reasonably confirmed. The Company confirms the schedule of performance of services

provided in accordance with the input method. When the schedule of performance can’t be

reasonably confirmed where the costs that have been incurred by the Company are

estimated to be compensated the revenue will be recognized in accordance with the

amount of costs that has been incurred until the schedule of performance can be

reasonably confirmed.

(3) Warranty obligations

According to contractual agreement and regulations of laws the Company provides quality

assurance for goods sold and project constructed. For guarantee-type quality assurance in

order to ensure the client that goods sold comply with existing standards the Company

conducts accounting treatment in accordance with estimated liabilities. For service-type

quality assurance in order to ensure the client that we also provide a separate service other

than that the goods sold comply with existing standards the Company takes it as a

separate performance obligation and allocates partial transaction price to service-type

quality assurance in accordance with the relevant proportion of separate selling price of

goods and service-type quality assurance and recognizes revenue when the client obtains

control right over services. When assessing whether quality assurance provides a separate

service 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 under

statutory requirements or industrial practices the term of quality assurance and the nature

of the Company’s commitment to perform the tasks.Haier Smart Home Co. Ltd. Annual Report 2025 219Section 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 assets

obtained by the Company from the government excluding the capital invested by the

government as an owner. The government grants are mainly divided into asset-related

government 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 or

loss on an even basis over the useful life of relevant assets; government grants measured

at nominal amount shall be recognized directly in current profit or loss. Revenue-related

government grants shall be treated as follows: * those used to compensate relevant

expenses or losses to be incurred by the enterprise in subsequent periods are recognized

as deferred income and recorded in current profit or loss when such expenses are

recognized; * those used to compensate relevant expenses or losses that have been

incurred by the enterprise are recorded directly in current profit or loss.

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

government grant

If the government grant received by the Company is used for purchase construction or

other project that forms a long-term asset it is recognized as asset-related government

grant.If the government grant received by the Company is not asset-related it is recognized as

revenue-related government grant.Government grant received without clear objective shall be classified as asset-related

government 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 shall

be reviewed and modified if necessary on each balance sheet date;

* Government grant shall be categorized as revenue-related if its usage is described in

general statement and no specific project is specified in the relevant government

document.

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

related to government grants

Asset-related government grant received by the Company is recognized as deferred

revenue and is evenly amortized to the profit or loss in the current period over the

estimated useful life of the relevant asset starting from the date when the asset is available

for use.

220 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

(5) Recognition of government grants

Government grant measured at the amounts receivable is recognized at the end of the

period when there is clear evidence that the relevant conditions set out in the financial

subsidy policies and regulations are fulfilled and the receipt of such financial subsidy is

assured.Other government grants other than those measured at the account receivable is

recognized 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 and

recognized based on the differences between the tax bases and the carrying amounts of assets

and 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 temporary

differences can be utilized. For deductible losses and tax credits that can be carried

forward to future years deferred income tax assets shall be recognized to the extent that it

is probable that taxable profit will be available in the future to offset the deductible losses

and tax credits. Save as the exceptions deferred income tax liabilities shall be recognized

for 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 balance

sheet date if there is sufficient evidence that there will be enough taxable income in the

future for the deduction of the deductible temporary difference the deferred income tax

asset not recognized in previous accounting period is recognized. If there is no sufficient

evidence that there will be enough taxable income in the future for the deduction of the

deferred 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 could

control the time of reversal of the temporary differences and the temporary differences

would not be probably reversed in the foreseeable future. The Company recognizes

deferred income tax asset for deductible temporary differences arising from investments in

subsidiaries and associated companies if the temporary difference will be very probably

reversed in the foreseeable future and it is highly probable that taxable income will be

available in the future to deduct the deductible temporary difference.Haier Smart Home Co. Ltd. Annual Report 2025 221Section 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 deferred

income tax liability is recognized for the temporary differences resulting from the initial

recognition 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 the

balance sheet date deferred income tax assets and deferred income tax liabilities of the

Company are measured at the tax rates that apply to the period when the asset is

expected 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; and

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 identified

asset or several identified assets under control for the exchange or payment of consideration

within a certain period of time. At inception of a contract the Company assesses whether a

contract is or contains a lease.

(1) The Company as the lessee

√ Applicable □ Not Applicable

1) Initial measurement

On the commencement date of the lease term the Company recognizes its right to

use leased assets over the lease term as right-of-use assets and recognizes the

present 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 are

discounted using the implicit interest rate in the lease when calculating the present

value of the lease payments. If that rate cannot be readily determined the Company

uses 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;

222 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

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.

2) Subsequent measurement

If the Company accrues depreciation for right-of-use assets by reference to the

depreciation policy for fixed assets (see this Note V.16 “Fixed assets” for details) and

can reasonably determine that the ownership of the leased asset can be acquired at

the expiration of the lease term the Company shall depreciate the leased asset within

its remaining useful life. If the Company cannot reasonably determine that the

ownership of the leased asset can be acquired at the expiration of the lease term the

Company shall depreciate the leased asset within the lease term or its remaining

useful life whichever is shorter. For lease liabilities the Company shall calculate the

interest expenses for each period over the lease term at the fixed periodic interest

rate and recognize it in current profit or loss or the cost of relevant assets. Variable

lease payments that are not included in the measurement of lease liabilities are

recognized in current profit or loss or the cost of relevant assets when they are

actually incurred. After the commencement date of the lease term in the event that

there is a change in the substantive fixed payments a change in expected payment

under a guaranteed residual value a change in an index or rate used in determining

the lease payments or a change in the evaluation result or actual exercise of

purchase option extension option or termination option the Company remeasures the

lease liabilities based on the present value of the lease payments after the change

and adjusts the carrying value of the right-of-use asset accordingly. If the carrying

amount of the right-of-use asset has been reduced to zero but a further reduction in

the measurement of the lease liabilities is still warranted the Company recognizes the

remaining 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 lease

commencement date) and leases of low-value assets the Company adopts a

simplified approach by not recognizing the right-of-use assets and lease liabilities and

instead recognizes the cost of relevant assets or current profit or loss on a

straight-line basis for each period over the lease term.Haier Smart Home Co. Ltd. Annual Report 2025 223Section VIII Financial Report

(2) The Company as the lessor

The Company classifies leases into finance leases and operating leases based on the

substance of the transaction at the inception date of the lease. A finance lease is a lease

that transfers substantially all the risks and rewards incidental to ownership of the leased

asset. 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 under

operating leases as rental income for each period during the lease term. Variable

lease payments relating to operating leases that are not recognized as lease receipts

are recognized in current profit or loss when they are actually incurred.

2) Finance leases

On the commencement date of the lease term the Company recognizes finance lease

receivables and derecognizes finance lease assets. Finance lease receivables are

initially measured at the net investment in the lease (the sum of the unguaranteed

residual value and the present value of the lease receipts not yet received on the

commencement date of the lease term discounted at the interest rate embedded in

the lease) and interest income is recognized over the lease term calculated at a fixed

periodic interest rate. Variable lease payments acquired by the Company that are not

included in the measurement of the net investment in the lease are recognized in

current 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-purpose

entities which would issue such securities to investors. As asset service provider the

Company is responsible for the provision of maintenance and daily management of the

assets formulation of annual asset disposal plans formulation and implementation of asset

disposal plan signing of relevant asset disposal agreements and preparation asset service

reports on a regular basis.In applying the accounting policy for the securitisation of financial assets the Company has

considered the extent to which the risk and reward of the assets have been transferred to

other 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 the

ownership of a financial asset such financial asset is derecognised;

* When the Company retains substantially all risk and reward relating to the ownership

of a financial asset the Company continues to recognise such financial asset;

224 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

* If the Company neither transfers nor retains substantially all risk and reward relating to

the ownership of a financial asset the Company considers whether it has control over

the financial asset. If the Company does not retain control the financial asset is

derecognised and the rights and obligations arising from or retained the transfer are

recognised as assets and liabilities respectively. If the Company retains control the

financial asset is recognised according to the extent of continued involvement in the

financial assets.

(2) Hedge accounting

Hedge refers in respect of the risk exposure arising from the company’s management of

specific risks such as foreign exchange risks interest rate risks price risks and credit risks

to risk management activity of designating financial instruments as hedging instruments

such that the change in the fair value or cash flow of the hedging instruments can be

expected to set off the change in the fair value or cash flow of the hedged item.The hedged item refers to an item designated for hedge against the risk of change in fair

value or cash flow that can be reliably measured.Hedging instruments are financial instruments designated for hedge the change in fair value

or cash flow of which is expected to set off the change in the fair value or cash flow of the

hedged item.The Company assesses whether the hedge relationship fulfills the requirement for hedge

effectiveness 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 or

cash flow of the hedging instruments can offset the change in the fair value or cash flow of

the hedged item caused by the risk against which the hedge is made. The change in the

fair value or cash flow of a hedging instrument in excess or shortfall of the change in the

fair value or cash flow of the hedging instruments can offset the change in the fair value or

cash 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 make

judgements estimations and assumptions on the carrying values of statement items that

cannot be accurately measured owing to uncertainties to which operating activities are

subject. Such judgements estimations and assumptions are made based on the past

experience of the management and taking into consideration of other relevant factors. Such

judgements estimations and assumptions affect the reported amounts of income

expenses assets and liabilities and the disclosure of contingent liabilities as at the balance

sheet date. However the actual outcome resulting from the uncertainty of such estimates

could be different from the current estimates of the management thereby resulting in

significant adjustments to the carrying value of the future assets or liabilities affected. The

Company regularly reviews such judgements estimations and assumptions on a going

concern basis. If the change in accounting estimates affects only the current period in

which the change occurs the affected amount is recognized for the period in which the

change occurs; if both the current period and future periods are affected the affected

amount is recognised for the current period and the future periods.Haier Smart Home Co. Ltd. Annual Report 2025 225Section VIII Financial Report

At the balance sheet date important aspects in which the Company is required to make

judgements estimations and assumptions on the amount of items on the financial

statements are as follows:

* Estimated liabilities

The Company estimates and makes provision for product warranty and estimated

contract loss according to contract terms existing knowledge and historical

experience. When such contingencies have given rise to a present obligation and the

performance of such present obligation is likely to result in the outflow of economic

benefit from the Company the Company recognises estimated liabilities for the

contingencies based on the best estimates of expenses required for the performance

of relevant present obligations. The recognition and measurement of estimated

liabilities is dependent to a large extent on management judgement. In the course of

judgement the Company is required to assess factors such as risks uncertainties

and the time value of currency relating to such contingencies. In particular the

Company recognises estimated liabilities in respect of after-sales undertaking to

customers for return and replacement maintenance and installation of goods sold.The recognition of estimated liabilities has taken into account the maintenance

experience and data of the Company for recent years although past experience in

maintenance may not reflect maintenance in the future. Any increase or decrease in

this provision might affect the profit or loss of future years.* Provision for ECL

The Company measures ECL through default risk exposure and the ECL rate which

is determined based on the default probability rate and default loss rate. In

determining the ECL rate the Company uses data such as internal historic credit loss

experience and adjusts the historic data taking into consideration current conditions

and prospective information. When considering prospective information indicators

adopted by the Company include the risk of economic downside expected growth in

unemployment rate and changes in external market conditions technical conditions

and customer conditions. The Company monitors and reviews the assumptions

relating to ECL computation on a regular basis. There was no significant change to

aforesaid estimation technique and key assumptions during the year.* Impairment provisions for inventory

The Company makes impairment provisions for inventory of which cost is higher than

net realisable value and obsolete and slow-moving inventory based on the lower of

cost and net realisable value according to its inventory accounting policy. The

impairment of inventory to its net realisable value is based on assessment of the

sellability of inventory and its net realisable value. The authentication of inventory

impairment requires the management to obtain conclusive evidence and make

judgment and estimates taking into consideration factors such as the purpose of

inventory and post-balance sheet date events. Any difference between the actual

outcome and the previous estimate will affect the carrying value of inventory and the

charge or reversal of impairment provisions for inventory during the period in which

the estimates are modified.

226 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

* Fair value of financial instruments

For financial instruments without an active trading market the Company determines

its fair value using valuation techniques. Such valuation techniques include discounted

cash flow model analysis and others. During the assessment the Company is

required to make estimates on future cashflow credit risk market volatility rate and

relevance and select an appropriate discount rate. Such relevant assumptions are

subject to uncertainty and any change will affect the fair value of financial

instruments.* Impairment of other equity instrument investments

The Company’s determination of impairment for other equity instrument investments is

largely dependent on the management’s judgment and assumptions to determine

whether impairment should be recognised. In the course of making judgments and

assumptions the Company is required to assess the extent and duration of the fair

value of the investment being lower than cost as well as the financial conditions and

short-term business prospects of the investee including industry conditions

technological revolution credit rating default rate and counterparty risks.* Impairment provision for long-term assets

At the balance sheet date the Company assesses whether there are indications of

possible impairment of non-current assets other than financial assets. In addition to

the annual impairment test intangible assets with indefinite useful life are also tested

for impairment when there are indications of the same. Impairment tests on non-

current assets other than financial assets are conducted when there are indications

that its carrying value may not be recoverable. An impairment has occurred when the

carrying value of an asset or asset group is higher than the recoverable amount (the

higher of net fair value less disposal cost and the present value of estimated future

cash flow). The net fair value less disposal cost is determined with reference to the

agreed selling price of similar assets in a fair transaction or observable market prices

less incremental costs attributable directly to the disposal of such asset. In estimating

the present value of future cashflow significant judgement is required to be made in

respect 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. The

Company takes into consideration all available relevant information when making

estimates on the recoverable amount including forecasts on production volume

selling price and relevant operating costs based on reasonable and justifiable

assumptions. The Company conducts goodwill impairment tests at least annually. This

requires estimates on the present value of future cashflow of asset group or portfolio

of asset groups to which goodwill has been allocated. When making estimates on the

present value of future cashflow the Company is required to make estimates on

cashflow generated from future asset group or portfolio of asset groups and at the

same time select an appropriate discount rate to determine the present value of

future cashflow.Haier Smart Home Co. Ltd. Annual Report 2025 227Section VIII Financial Report

* Depreciation and amortisation

Depreciation and amortisation of investment properties fixed assets and intangible

assets is charged on a straight-line basis over their useful life after taking their

residual values into account. The Company reviews the useful life on a regular basis

to determine the amount of depreciation and amortisation charge to be allocated to

each reporting period. The useful life is determined based on past experience relating

to similar assets taking into consideration expected technological upgrades. If there

are significant changes in previous estimates the depreciation and amortisation

charge for future periods will be adjusted.* Deferred income tax assets

The Company recognises deferred income tax assets in respect of all unutilised tax

losses to the extent that it is probable that sufficient taxable profit will be available to

offset the loss. This requires the exercise of significant judgement by the Company’s

management to estimate the timing and amount of future taxable profit taking into

account its tax planning strategy to determine the amount of deferred income tax

assets to be recognised.* Income tax

In the Company’s usual operating activities the final tax treatment and computation

of certain transactions are subject to uncertainty. Whether certain items can be

presented on a pretax basis is subject to approval of the competent taxation

authority. If the final confirmed outcome of such taxation matters is different from the

amount of the initial estimates such difference will affect the current income tax and

deferred income tax for the period of final confirmation.* Provision for sales rebate

The Company and its subsidiaries adopt a sales rebate policy for sales agent

customers. Based on relevant provisions of the sales agreements vetting of specific

transactions market conditions channel inventory level and past experience with

reference to the status of completion of agreed appraisal indicators by sales agent

customers the Company and its subsidiaries makes estimates on and provision for

sales rebate on a regular basis. The provision of sales rebate involves judgment and

estimation by the management. In the event of any material change in previous

estimates the aforesaid difference will affect the sales rebate for the period for which

the estimates are changed.

31. Changes in significant accounting policiesFor details please refer to “EXPLANATION OF THE COMPANY’S ANALYSIS ON REASONS ANDEFFECTS OF CHANGES IN ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES ORCORRECTION OF SIGNIFICANT ACCOUNTING ERRORS” under the section of “SIGNIFICANTEVENTS”.

228 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

32. Adjustments made to the financial statements as at the beginning of the year of

the initial adoption of new accounting standard or interpretation of standards

since 2025

□ Applicable √?Not Applicable

33. Others

□ Applicable √?Not Applicable

VI. TAXATION

1. Main tax categories and rates

√ Applicable □ Not Applicable

Tax types Basis of taxation Tax rate

Value-added tax Taxable revenue from sales of 6% 9% 13%

goods and rendering services

City maintenance and construction tax Circulation tax payable 7%

(Local) education surcharge Circulation tax payable 1% 2% 3%

EIT Taxable income Statutory tax rate

or preferential

rates as follows

2. Preferential tax

√ Applicable □ Not Applicable

Companies subjected to preferential tax and preferential tax rate:

Company Tax rate Preferential tax

Qingdao Haier Refrigerator Co. Ltd. 15.00% entitled to the preferential

taxation policies as a hi-tech

enterprise

Qingdao Haier Special Refrigerator 15.00% entitled to the preferential

Co. Ltd. taxation policies as a hi-tech

enterprise

Qingdao Haier Dishwasher Co. Ltd. 15.00% entitled to the preferential

taxation policies as a hi-tech

enterprise

Qingdao Haier Special Freezer Co. 15.00% entitled to the preferential

Ltd. taxation policies as a hi-tech

enterprise

Qingdao Haier Intelligent Home 15.00% entitled to the preferential

Appliance Technology Co. Ltd. taxation policies as a hi-tech

enterprise

Haier Smart Home Co. Ltd. Annual Report 2025 229Section VIII Financial Report

Company Tax rate Preferential tax

Wuhan Haier Electronics Holding Co. 15.00% entitled to the preferential

Ltd. taxation policies as a hi-tech

enterprise

Wuhan Haier Freezer Co. Ltd. 15.00% entitled to the preferential

taxation policies as a hi-tech

enterprise

Hefei Haier Refrigerator Co. Ltd. 15.00% entitled to the preferential

taxation policies as a hi-tech

enterprise

Qingdao Haier Air Conditioner Gen 15.00% entitled to the preferential

Corp. Ltd. taxation policies as a hi-tech

enterprise

Hefei Haier Air-conditioning Co. 15.00% entitled to the preferential

Limited taxation policies as a hi-tech

enterprise

Zhengzhou Haier Air-conditioning Co. 15.00% entitled to the preferential

Ltd. taxation policies as a hi-tech

enterprise

Shenyang Haier Refrigerator Co. Ltd. 15.00% entitled to the preferential

taxation policies as a hi-tech

enterprise

Qingdao Haier Air-Conditioner 15.00% entitled to the preferential

Electronics Co. Ltd. taxation policies as a hi-tech

enterprise

Qingdao Meier Plastic Powder Co. 15.00% entitled to the preferential

Ltd. taxation policies as a hi-tech

enterprise

Qingdao Hai Gao Design and 15.00% entitled to the preferential

Manufacture Co. Ltd. taxation policies as a hi-tech

enterprise

Qingdao Hairi High Technology Co. 15.00% entitled to the preferential

Ltd taxation policies as a hi-tech

enterprise

Qingdao Haier (Jiaozhou) Air- 15.00% entitled to the preferential

conditioning Co. Limited taxation policies as a hi-tech

enterprise

Qingdao Haier Intelligent Technology 15.00% entitled to the preferential

Development Co. Ltd. taxation policies as a hi-tech

enterprise

Foshan Haier Freezer Co. Ltd. 15.00% entitled to the preferential

taxation policies as a hi-tech

enterprise

230 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

Company Tax rate Preferential tax

Qingdao Haier Central Air Conditioning 15.00% entitled to the preferential

Co. Ltd. taxation policies as a hi-tech

enterprise

Haier U+smart Intelligent Technology 15.00% entitled to the preferential

(Beijing) Co. Ltd. taxation policies as a hi-tech

enterprise

Qingdao Haier Electronic Plastic Co. 15.00% entitled to the preferential

Ltd. taxation policies as a hi-tech

enterprise

Qingdao Wei Xi Intelligent Technology 15.00% entitled to the preferential

Co. Ltd. taxation policies as a hi-tech

enterprise

Qingdao Haier Special Refrigerating 15.00% entitled to the preferential

Appliance Co. Ltd. taxation policies as a hi-tech

enterprise

Qingdao Haier Smart Kitchen 15.00% entitled to the preferential

Appliance Co. Ltd. taxation policies as a hi-tech

enterprise

Hefei Haier Air Conditioning 15.00% entitled to the preferential

Electronics Co. Ltd. taxation policies as a hi-tech

enterprise

Shanghai Haier Medical Technology 15.00% entitled to the preferential

Co. Ltd. taxation policies as a hi-tech

enterprise

Shanghai Haier Smart Technology Co. 15.00% entitled to the preferential

Ltd. taxation policies as a hi-tech

enterprise

Qingdao Yunshang Yuyi IOT 15.00% entitled to the preferential

Technology Co. Ltd. taxation policies as a hi-tech

enterprise

Haier (Shanghai) Home Appliance 15.00% entitled to the preferential

Research and Development Center taxation policies as a hi-tech

Co. Ltd. enterprise

Haier (Shenzhen) R&D Co. Ltd. 15.00% entitled to the preferential

taxation policies as a hi-tech

enterprise

Laiyang Haier Smart Kitchen Appliance 15.00% entitled to the preferential

Co. Ltd. taxation policies as a hi-tech

enterprise

Guangdong Haier Intelligent 15.00% entitled to the preferential

Technology Co. Ltd taxation policies as a hi-tech

enterprise

Haier Smart Home Co. Ltd. Annual Report 2025 231Section VIII Financial Report

Company Tax rate Preferential tax

Dalian Haier Refrigerator Co. Ltd. 15.00% entitled to the preferential

taxation policies as a hi-tech

enterprise

Qingdao Jijia Cloud Intelligent 15.00% entitled to the preferential

Technology Co. Ltd. taxation policies as a hi-tech

enterprise

COSMOPlat Mould (Qingdao) Co. Ltd. 15.00% entitled to the preferential

taxation policies as a hi-tech

enterprise

Hefei Haier Washing Machine Co. Ltd. 15.00% entitled to the preferential

taxation policies as a hi-tech

enterprise

Qingdao Haier Washing Machine Co. 15.00% entitled to the preferential

Ltd. taxation policies as a hi-tech

enterprise

Qingdao Haier Laundry Appliances 15.00% entitled to the preferential

Co. Ltd. taxation policies as a hi-tech

enterprise

Foshan Shunde Haier Electric Co. 15.00% entitled to the preferential

Ltd. taxation policies as a hi-tech

enterprise

Tianjin Haier Cleaning Electrical 15.00% entitled to the preferential

Appliances Co. Ltd. taxation policies as a hi-tech

enterprise

Qingdao Economic and Technological 15.00% entitled to the preferential

Development Zone Haier Water taxation policies as a hi-tech

Heater Co. Ltd. enterprise

Wuhan Haier Water Heater Co. Ltd. 15.00% entitled to the preferential

taxation policies as a hi-tech

enterprise

Foshan Haier Drum Washing Machine 15.00% entitled to the preferential

Co. Ltd. taxation policies as a hi-tech

enterprise

Qingdao Haier Strauss Technology 15.00% entitled to the preferential

Co. Ltd. taxation policies as a hi-tech

enterprise

Qingdao Haier New Energy Electric 15.00% entitled to the preferential

Appliance Co. Ltd. taxation policies as a hi-tech

enterprise

Qingdao Haier Washing Appliance Co. 15.00% entitled to the preferential

Ltd. taxation policies as a hi-tech

enterprise

232 Haier Smart Home Co. Ltd. Annual Report 2025Section VIII Financial Report

Company Tax rate Preferential tax

Qingdao Haier Lexin Cloud Technology 15.00% entitled to the preferential

Co. Ltd. taxation policies as a hi-tech

enterprise

Hefei Haier Drum Washing Machine 15.00% entitled to the preferential

Co. Ltd. taxation policies as a hi-tech

enterprise

Qingdao Haier Smart Electrics 15.00% entitled to the preferential

Equipment Co. Ltd. taxation policies as a hi-tech

enterprise

Qingdao Haier Smart Living Appliance 15.00% entitled to the preferential

Co. Ltd. taxation policies as a hi-tech

enterprise

Qingdao RRS Lejia IoT Technology 15.00% entitled to the preferential

Co. Ltd. taxation policies as a hi-tech

enterprise

Tonghai Energy Technology 15.00% entitled to the preferential

Development Co. Ltd. taxation policies as a hi-tech

enterprise

Jiangxi Haier Medical Technology Co. 15.00% entitled to the preferential

Ltd. taxation policies under the

Western Development initiative

of the PRC

Chongqing Haier Electrical Appliance 15.00% entitled to the preferential

Sales Co. Ltd. and some Western taxation policies under the

companies Western Development initiative

of the PRC

Chongqing Haier Air-conditioning Co. 15.00% entitled to the preferential

Ltd. taxation policies under the

Western Development initiative

of the PRC

Chongqing Haier Refrigeration 15.00% entitled to the preferential

Appliance Co. Ltd. taxation policies under the

Western Development initiative

of the PRC

Chongqing Haier Washing Machine 15.00% entitled to the preferential

Co. Ltd. taxation policies under the

Western Development initiative

of the PRC

Guizhou Haier Electronics Co. Ltd. 15.00% entitled to the preferential

taxation policies under the

Western Development initiative

of the PRC

Haier Smart Home Co. Ltd. Annual Report 2025 233Section VIII Financial Report

Company Tax rate Preferential tax

Chongqing Hairishun Home Appliance 15.00% entitled to the preferential

Sales Co. Ltd. taxation policies under the