虹美菱B：2020年半年度报告（英文版）

CHANGHONG MEILING CO. LTD.

Semi-Annual Report 2020

August 2020

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Section I. Important Notice Contents and Interpretation

Board of Directors Supervisory Committee all directors supervisors and senior executives of Changhong

Meiling Co. Ltd. (hereinafter referred to as the Company) hereby confirm that there are no any fictitious

statements misleading statements or important omissions carried in this report and shall take all responsibilities

individual and/or joint for the reality accuracy and completion of the whole contents.Mr. Wu Dinggang Chairman of the Company Mr. Pang Haitao person in charge of accounting work and Mr.Yang Jun person in charge of accounting organ (accountant in charge) hereby confirm that the Financial Report of

Semi-Annual Report 2020 is authentic accurate and complete.The Company did not have directors supervisors and senior executives of the Company could not guarantee the

reality accuracy and completion of the whole contents or have objections.

All the directors attended the board meeting on deliberating the Report on site and by communication.

Modified audit opinions notes

□ Applicable √ Not applicable

Risk warning of concerning the forward-looking statements with future planning involved in semi-annual report

√ Applicable □Not applicable

Concerning the forward-looking statements with future planning involved in the Report they do not constitute a

substantial commitment for investors investors and the person concerned should maintain adequate risk

awareness furthermore differences between the plans forecast and commitments should be comprehended.Investors are advised to exercise caution of investment risks.Investors are advised to read the full text of semi-annual report and pay particular attention to the following risk

factors:

More details about the possible risks and countermeasures in the operation of the Company are described in the

report “X. Risks and countermeasures” of “Section IV Discussion and Analysis of the Operation” investors are

advised to read the relevant content.Securities Times China Securities Journal Hong Kong Commercial Daily and Juchao Website

(www.cninfo.com.cn) are the media for information disclosure for year of 2020 that appointed by the Company.

All public information under the name of the Company disclosed on the above said media and website shall

prevail and investors are advised to exercise caution.

Does the Company need to comply with disclosure requirements of the special industry: No

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Profit distribution pre-plan or capitalizing of common reserves pre-plan deliberated by the Board in the

semi-annual period

□Applicable √Not applicable

The Company has no plans of cash distribution bonus shares and capitalizing of common reserves either.

Directors and senior executives of the Company respectively signed Written Confirmation Opinions for 2020

Semi-Annual Report.Supervisory Committee of the Company formed Written Examination Opinions for 2020 Semi-Annual Report.

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Contents

Section I. Important Notice Contents and Interpretation ............................................................. 1

Section II Company Profile and Main Financial Indexes .............................................................. 5

Section III. Summary of Company Business ................................................................................... 9

Section IV. Discussion and Analysis of the Operation .................................................................. 14

Section V. Important Events ............................................................................................................ 35

Section VI. Changes in shares and particular about shareholders .............................................. 96

Section VII. Preferred Stock ......................................................................................................... 102

Section VIII. Convertible Bonds ................................................................................................... 103

Section IX. Particular about Directors Supervisors and Senior Executives ............................ 104

Section X. Corporate Bonds .......................................................................................................... 105

Section XI. Financial Report ......................................................................................................... 106

Section XII. Documents available for Reference ......................................................................... 270

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Interpretation

Items Refers to Contents

Company The Company Changhong

Meiling (CHML)

Refers to CHANGHONG MEILING CO.LTD.Sichuan Changhong or controlling

shareholder

Refers to Sichuan Changhong Electric Co. Ltd.

Changhong Group Refers to Sichuan Changhong Electronics Holding Group Co. Ltd.

Hong Kong Changhong Refers to CHANGHONG (HK) TRADING LIMITED

Industry Investment Group Refers to Hefei Industry Investment Holding (Group) Co. Ltd.Meiling Group Refers to Hefei Meiling Group Holdings Limited

Zhongke Meiling Refers to Zhongke Meiling Cryogenic Technology Co. Ltd.

Changhong Air-conditioner Refers to Sichuan Changhong Air-conditioner Co. Ltd.

Jiangxi Meiling Refers to Jiangxi Meiling Electric Appliance Co. Ltd.Zhongshan Changhong Refers to Zhongshan Changhong Electric Co. Ltd.Ridian Technology Refers to Changhong Meiling Ridian Technology Co. Ltd.

Changhong Huayi Refers to Changhong Huayi Compressor Co. Ltd.

Shine Wing Refers to Shine Wing Certified Public Accountants (LLP)

CSRC Refers to China Securities Regulatory Commission

Anhui Securities Bureau

Refers to China Securities Regulatory Commission Anhui Province

Securities Regulatory Bureau

SSE Refers to Shenzhen Stock Exchange

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Section II Company Profile and Main Financial Indexes

I. Company profile

Short form of the stock CHML Hongmeiling B Stock code 000521 200521

Short form of the Stock after

changed (if applicable)

N/A

Stock exchange for listing Shenzhen Stock Exchange

Name of the Company (in

Chinese)长虹美菱股份有限公司

Short form of the Company (in

Chinese if applicable)长虹美菱

Foreign name of the Company

(if applicable)

CHANGHONG MEILING CO.LTD.

Abbr. of English name of the

Company (if applicable)

CHML

Legal representative Wu Dinggang

II. Person/Way to contact

Secretary of the Board Rep. of security affairs

Name Li Xia Zhu Wenjie

Contact add.

No. 2163 Lianhua Road Economic

and Technology Development Zone

Hefei

No. 2163 Lianhua Road Economic

and Technology Development Zone

Hefei

Tel. 0551-62219021 0551-62219021

Fax. 0551-62219021 0551-62219021

e-mail lixia@meiling.com wenjie.zhu@meiling.com

III. Others

(1) Way of contact

Whether registrations address offices address and codes as well as website and email of the Company changed in

reporting period or not

□ Applicable √ Not applicable

Registrations address offices address and codes as well as website and email of the Company has no change in

reporting period found more details in Annual Report 2019.

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

(2) Information disclosure and preparation place

Whether information disclosure and preparation place changed in reporting period or not

□ Applicable √ Not applicable

The newspaper appointed for information disclosure website for semi-annual report publish appointed by CSRC

and preparation place for semi-annual report have no change in reporting period found more details in Annual

Report 2019.

(3) Other relevant information

Whether other relevant information has changed in reporting period or not

□Applicable √Not applicable

IV. Main accounting data and financial indexes

Whether it has retroactive adjustment or re-statement on previous accounting data or not

□Yes √No

Current period Same period last year Changes +/-

Operating income (RMB) 6795860736.99 9133162680.94 -25.59%

Net profit attributable to shareholders

of the listed company (RMB)

-210130580.93 54334022.57 -486.74%

Net profit attributable to shareholders

of the listed company after deducting

non-recurring gains and losses (RMB)

-257134663.36 4475396.85 -5845.52%

Net cash flow arising from operating

activities (RMB)

-388104958.41 373484000.19 -203.91%

Basic earnings per share (RMB/Share) -0.2012 0.0520 -486.92%

Diluted earnings per share

(RMB/Share)

-0.2012 0.0520 -486.92%

Weighted average ROE -4.29% 1.08% a decrease of 5.37 percent

End of current period End of last year Changes +/-

Total assets (RMB) 15065140923.67 14202233615.47 6.08%

Net assets attributable to shareholder of

listed company (RMB)

4741397306.92 5004947673.36 -5.27%

V. Accounting data difference under domestic and foreign accounting standards

1. Difference of the net profit and net assets disclosed in financial report under both IAS (International

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable

The Company has no difference of the net profit and net assets disclosed in financial report under both IAS

(International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles) in reporting

period.

2.Difference of the net profit and net assets disclosed in financial report under both foreign accounting

rules and Chinese GAAP (Generally Accepted Accounting Principles)

√ Applicable □ Not applicable

In RMB

Net profit attributable to shareholders of

listed company

Net assets attributable to shareholders of

listed company

Amount in this

period

Amount in last period

Amount at

period-end

Amount at

period-begin

Chinese GAAP -210130580.93 54334022.57 4741397306.92 5004947673.36

Items and amount adjusted by foreign accounting rules

Foreign accounting rules -210130580.93 54334022.57 4741397306.92 5004947673.36

The Company had no difference of the net profit or net assets disclosed in financial report under either foreign

accounting rules or Chinese GAAP (Generally Accepted Accounting Principles) in the period.

3.Reasons for the differences of accounting data under accounting rules in and out of China

√ Applicable □ Not applicable

The “Notice of Relevant Issues of Audit for Company with Domestically Foreign Shares Offering” was issued

from CSRC dated 12 September 2007 since the day issuing cancel the previous “dual audit” requirement for

companies who offering domestically listed foreign shares (B-share enterprise) while engaging securities practice

qualification CPA for auditing. The Company did not compile financial report under foreign accounting rulessince 2007 the financial report of the Company is complying on the “Accounting Standard for Business

Enterprise” in China and therefore there are no differences of accounting data under accounting rules in and out

of China at period-end.

VI. Quarterly main financial index

In RMB

Q 1 Q 2

Operating income 2281578242.02 4514282494.97

Net profit attributable to shareholders of the listed

company

-270008124.67 59877543.74

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Net profit attributable to shareholders of the listed

company after deducting non-recurring gains and

losses

-282956643.92 25821980.56

Net cash flow arising from operating activities -1003451132.76 615346174.35

VII. Items and amounts of non-recurring profit (gains)/losses

√ Applicable □ Not applicable

In RMB

Item Amount Note

Gains/losses from the disposal of non-current asset

(including the write-off that accrued for impairment of

assets)

-178704.98

Found more in “Incomefrom assets disposal”

Governmental subsidy reckoned into current

gains/losses (not including the subsidy enjoyed in quota

or ration according to national standards which are

closely relevant to enterprise’s business)

52704872.66

Found more in “Otherincome”

Losses/gains from changes of fair values occurred in

holding Tradable financial assets derivative financial

assets trading financial liabilities and derivative

financial liabilities and investment income obtaining

from the disposal of Tradable financial assets derivative

financial assets trading financial liability derivative

financial liability and other debt investment excluded

effective hedging business relevant with normal

operations of the Company

-2782746.40

Found more in “Income offair value changes”

“Investment income”

Reversal of the account receivable subject to separate

impairment test

1809494.78

Found more in “Accountreceivable”

Other non-operating income and expenditure except for

the aforementioned ones

2486055.08

Found more in“Non-operation income &Non-operation expenditure”

Less: impact on income tax 6716413.17

Impact on minority shareholders’ equity (post-tax) 318475.54

Total 47004082.43 --

Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies

Offering Their Securities to the Public --- Extraordinary Profit/loss and the items defined as recurring profit (gain)/loss according to

the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their

Securities to the Public --- Extraordinary Profit/loss explain reasons

□ Applicable √ Not applicable

The Company has no items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A

Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss in

the period.

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Section III. Summary of Company Business

I. Main businesses of the company in the reporting period

The Company is one of China's major electric appliance manufacturers possesses four major domestic

manufacturing bases in Hefei Mianyang Jingdezhen and Zhongshan and two overseas manufacturing bases in

Indonesia and Pakistan. Currently we have completed the industry layout of white electricity basically covering

the full product line including refrigerator (freezer) washing machine air conditioner kitchen and bath small

household appliances and others at the same time the Company enters the new industrial fields as bio-medical

and with certain achievements made.Over the past 30 years the Company has always been adhering to the "independent innovation created in China"

and always focus on refrigeration industry without stop elaborately building the core competitiveness of

enterprises by technological innovation and product innovation. The company has set up the first RoHS public

testing center in Anhui Province the national-standard enterprise technology center and national-standard

industrial design center. With the cutting-edge R&D team and advanced technology accumulation Meiling has

continuously achieved breakthrough results in various fields such as frequency conversion intelligence

fresh-keeping thin-wall odor purification energy saving air cooling and deep cooling. In recent years the

company has successively won many national-level honorary titles such as "Smart Refrigerator Intelligent

Manufacturing Pilot Demonstration Project" "National Green Factory" "National Industrial Design Center" and

so on; in 2020 the company was awarded as the social welfare demonstration enterprise of China Household

Electrical Appliances Association. At the same time a number of Meiling products entered the national green

product list and won a number of domestic and international innovation awards once again demonstrating the

capabilities and strength of Meiling's intelligent manufacturing and Meiling brand intelligent innovation

technology. In the 2020 China Refrigerator Industry Summit Forum Meiling Refrigerator stood out with its

leading fresh-keeping technology and excellent quality "M-Fresh" Liulizi products 415WQ3S won the

"Long-lasting Fresh-keeping Star" and BCD-432WPU9CX won the "Outstanding Channel Performance Product"

at the same time the company won the honor of "Special Charity Contribution Award" for its outstanding

contribution to social welfare.In recent years driven by the industry transformation and upgrades and consumption upgrades the Company has

adhered to the strategy of smart and variable frequency products promoted the Company’s products to transform

and upgrade to become intelligent and high-end and comprehensively enhanced the competitiveness of products in

the industry by grasping the opportunities of refreshment thin-wall odor purification air cooling and energy

efficiency upgrades and effectively resolving the pain points of customers. Under the guidance of the “intelligent”

strategy in recent year the Company has released and listed a number of CHiQ series of smart refrigerators and

air-conditioning products “M-Fresh” refrigerators and “M-Fresh” comprehensive thin series products Meiling

always leads the trend of the industry by solving the pain points of users effectively. In June 2020 Meiling's very

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

clean series of refrigerators which adopted Meiling's original MNC+ odor purification technology made its world

debut representing the company's third differentiated business card after Meiling Fresh and Meiling Thin. In July

2020 Meiling’s “very thin” front loading washing machine made its world debut which not only refreshed the

ultra-thin record of 10kg front loading washing machine but also showed that from the full thin refrigerators to

very thin washing machines Meiling has been focusing on user needs and accelerating to realize the integrated

market layout of refrigerators air conditioners and washing machines and finally realized the implementation of

Meiling's quality taste and brand and injected new vitality into the high-end consumer market.

Facing the future the Company will further improve the home internet layout accelerate the intelligentization of

home appliances form a dual-growth engine of “hardware + services” drive the transformation and upgrading of

the Company’s profitability model investigate the new value-added service models for home appliance

enterprises meet new competition pattern in the industry and achieve its own sustainable and stable development

under the guidance of the core values of “professionalism and shared development”. Meanwhile based on the

“Smart Home Eco-system Project” and the existing products the company will enhance the R&D manufacturing

sales and cooperative capabilities of integrated white goods so as to provide users with a complete set of smart

white goods system solutions.In reporting period main income of the Company coming from refrigerator (freezer) air conditioner washing

machine kitchen & toilet and small home appliances products total amounting to 6268.4911 million Yuan a

92.24% of the operating income.

II. Major changes in main assets

(1) Major changes in main assets

Major assets Note of major changes

Equity assets No major changes

Fixed assets Mainly due to the transfer-in from construction in progress

Intangible assets No major changes

Construction in progress

Due to the transfer-in from construction in progress to fixed assets in the

period

(2) Main overseas assets

√ Applicable □ Not applicable

Content of assets

Reas

on for

the

forma

Asset size Location

Oper

ation

mode

Control measure to ensure

the security of assets

Income (RMB)

Foreign

assets

accounted

for net

Whether

exist

significa

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

tion assets of the

Company

impairm

ent risk

(Y/N)

60% equity of

Changhong Ruba

Trading

Company

(Private) Limited

Inves

tment

establ

ishme

US$ 7.803

million

Pakistan Sales

Details of risks control

measures have been

disclosed by the Company by

way of announcement on

appointed media (No.

2011-028 No. 2011-032 No.

2014-023 No. 2014-026 No.

2016-027 No. 2016-032 No.

2017-053 and No. 2017-059)

on 28 May 2011 19 April

2014 25 March 2016 and 10

August 2017

-5646797.98 0.13% N

40% equity of

Changhong Ruba

Electric

Company

(Private) Limited

Inves

tment

establ

ishme

US$ 6.9761

million

Pakistan

Manu

factur

Details of risks control

measures have been

disclosed by the Company by

way of announcement on

appointed media (No.

2011-028 No. 2011-032 No.

2014-023 No. 2014-026 No.

2017-053 and No. 2017-059)

on 28 May 2011 19 April

2014 and 10 August 2017

-75548.73 0.00% N

100% equity of

CHANGHONG

MEILING

ELECTRIC

INDONESIA. PT

Inves

tment

establ

ishme

US$ 6 million

KELAPA

GADING

JKT

Indonesia

Sales

Details of risks control

measures have been

disclosed by the Company by

way of announcement on

appointed media (No.

2016-027 and No. 2016-033)

on 25 March 2016

241880.55 0.51% N

Other notes N/A

III. Core Competitiveness Analysis

(1) Brand capacity

The Company is one of the famous home appliances manufacturers in China owns several product lines such as

refrigerator freezing box air conditioner washing machine and small household appliances. “Meiling” brand is

listed as one of the most valuable brands in China. In recent years the Company has create the competitiveness of

the brand by continuously reshaping its brand image innovating core technology and developing high-end

intelligent products. In terms of reshaping brand image in order to enhance the brand image and further expand

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

the market influence the Company reposition the brand by implanting the corporate culture into the brand

construction. The new LOGO “ ” representing the brand proposition of “Meiling let the goodcomes”. At the same time the Company carry out the brand strategy of "Good Trilogy" including the direct

sensory experience of “experience the good" the spirit soul enjoyment of “enjoy the good” and the lifestyle faith

of “believe in the good”.In terms of continuous innovation of core technologies on the one hand the company continuously promoted the

innovation of intelligent and frequency conversion technologies to maintain the leading position in the industry in

order to meet the needs of industry and market development; on the other hand in the boosting of consumption

upgrades in order to meet consumers’ individualized differentiated and diversified needs the company returnedto the fresh-keeping nature of refrigerator through the application of “water molecule-activated fresh-keepingtechnology”; created the first “1 cm free-embedded refrigerator” through research and development of full-thinGLS integration technology achieved thin body and thin cabinet and thin door; at the same time the original

"multi-metal nano-catalyzed odor purification technology" continuously purifies a variety of odor molecules and

decomposes them into carbon dioxide and water through physical adsorption and chemical catalysis thereby

achieving long-term odor purification and active sterilization and achieving greater faster better more

economical and very clean results. It takes ten minutes to complete the odor purification of the refrigerator which

overcomes the shortcomings of slow odor purification speed poor effect and short life of traditional refrigerators.Through the development of three black technologies including the cone-shaped expansion technology of the

inner barrel the inclined barrel stabilization technology and the cloud disk condensation technology the company

has developed the "very thin" front-loading washing machine to provide users with a new embedded experience

program. The continuous innovation of the company's key core technologies highlighted Meiling’s professional

capabilities.In terms of high-end intelligent product development the company promoted product innovation through

continuous technological innovation. In recent years the company has successively released CHiQ intelligent

series products “M-Fresh” refrigerators and “M-Fresh” full-thin series products and “very-clean” refrigerator

products and created three brand business cards i.e. “Meiling Fresh” and “Meiling Thin” and “Meiling Clean”

through the introduction of the aforementioned high-end intelligent products which not only met market demand

in a timely manner but also enriched and enhanced the brand image.Promoting the remodeling of brand ability through the continuous upgrading of products Meiling will realize a

young international and professional brand image. Through gradual construction of the ideas of Wonderful Start

Point Wonderful Life Circle and Wonderful Ecology Circle Meiling has become a people-oriented artist

specializing in white appliances a smarter scientific expert and a more reliable house keeper.

(2) Product capacity

In more than 30 years the Company always focus on the refrigeration industry has developed a variety of

different types of refrigerator products including three serial produces as “MELNG 美菱 CHiQ and Athena”.Mainly include the "M-Fresh" series fresh-keeping refrigerators equipped with water molecule activation and

fresh-keeping technology the "Very Clean" series fresh-keeping and odor purification refrigerators the 503 series

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

refrigerators extending from full thin products CHiQ series high-end intelligent refrigerators and air conditioners

and 0.1 degree double precision inverter refrigerators North American air-cooled products vertical display

cabinets YC-90EL low-temperature medical refrigerators etc. Especially the "Very Clean" series clean odor

refrigerators released by the company use the "multi-metal nano-catalyzed odor purification technology" to

efficiently catalyze the active oxygen generated by the air by using a catalyst made of a special process to quickly

purify unpleasant odor and kill bacteria.The Company owned advanced development and quality assurance systems passed management system

certification of ISO9001 ISO14001 and OHSAS18001 and products are characterized by excellent quality and

reliable performance. As for technology development the Company has a national-standard technology center and

national-standard industrial design center and vigorously invest in basic technology research; and in the field of

intelligence air cooling refreshment odor purification frequency conversion thin-wall and copious cooling

we have an advance core technology that leading the industry. As for product development combine the R&D

results and consumption upgrading demand the Company renewal its outline of product planning and

development for the year products structure is escalating. Putting more efforts on the middle & high-end products

in field of air patenting large-size frequency conversion intelligence refreshment odor purification thin-wall

and copious cooling developing core products with competitive the product has obvious upgrade in structures.

(3) Operation capacity

The company continuous to conducted “benchmark” works and improve internal management ability

continuously.A performance review and sharing system has been established with clear target and quantity index

based on performance and layered incentive sharing system thus to inspire the internal production capacity. Under

the mainline of value chain management the Company continued to carry out value creation and improve its

competitiveness. Its ability to prevent risks has been also strengthened through continuous improvement of

internal control system.

(4) Marketing ability

The company has established a relatively complete sales network and service system to accelerate marketing

transformation and achieve the marketing transformation from product line-oriented sales management to

channel- and user-oriented business services from single-category marketing to full-category marketing. The

company worked on organizations systems institutions procedures account sets etc. actively study smart

trading patterns and building up strength for subsequent development; In overseas markets the company

increased the investments in private brands overseas marketing agencies research and development bases

production bases etc. cooperated with internationally renowned household appliance brands and distributors

optimize the customer structure and enhance the product structure grab orders to develop overseas markets

actively.

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Section IV. Discussion and Analysis of the Operation

I. Introduction

Under the influence of the novel coronavirus epidemic the home appliance industry faced unprecedented

challenges in 2020. Although the domestic economic situation improved in the second quarter the impact in the

first quarter was indelible the entire home appliance market remained pessimistic in the first half of the year. In

terms of domestic sales factors such as the decline in consumer income on the demand side the fall in confidence

and the downturn in the real estate market have inhibited the purchase of home appliances; the competitive

pressure on the supply side has increased significantly and the prices of products have changed from continuously

declining to continuously rising coupled with the impact of epidemic prevention and transportation costs the

profitability of the company has significantly weakened. As the "home economy" heats up the impact of

consumers' health demands and more rational consumption behaviors has forced companies to accelerate

adjustments in product structure product quality and service capabilities and channel changes to accelerate

innovation. In terms of exports the global epidemic has spread rapidly since March many countries have begun

to adopt closed measures global trade activities have almost stagnated and the uncertain risks of Sino-US

relations have increased which has adversely affected the exports of the home appliance industry; the cancellation

or delay of large-scale exhibitions has hindered export companies from expanding new customers and some

countries have also adopted policies to restrict imports and impose tariffs. However the epidemic has also brought

opportunities. The epidemic in major overseas manufacturing countries is still severe orders are gradually being

shifted to China. Demands from different countries are very different and segmented products are facing growth

opportunities.

During the reporting period the company took "one side and two points" as its guiding ideology that is using

commercial inventory as the core to drive supply chain manufacturing logistics etc. so as to improve overall

efficiency; through competition against benchmarking output online and offline competition strategies and

product strategies that highly match the market and implemented the annual business policy of "product

leadership marketing transformation efficiency breakthrough team activation". Facing the impact of the

epidemic the company’s business units took the initiative and turned crises into opportunities focusing on the

effective implementation of existing orders taking advantage of opportunities or policies to grab new orders and

ensured the safety of supply chain and the continuous improvement of capacity utilization. At the end of the

second quarter the market stopped slipping and net profit increased compared with the same period in 2019 and it

has entered the normal track of production and operation.In first half of 2020 the Company achieved operating income of6.796 billion yuan a decrease of 25.59% on a

year-on-year basis; net profit attributable to the parent company of -210.1306 million yuan a decrease of 486.74%

on a year-on-year basis. Including operating income of 2.282 billion yuan achieved in Q1 of 2020 the net profit

attributable to parent company amounted as -270.0081million yuan; the operating income for Q2 of 2020

amounted to 4.514 billion yuan and net profit attributable to parent company was 59.875 million yuan.

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

II. Main Business Analysis

(1) Overview

Shows no difference with the summary disclosed in Report of the Board of Director

□Yes √No

1. Introduction

From January to June of 2020 refrigerator and freezer business achieved revenue of 2.921 billion yuan with

23.53% down y-o-y; air-conditioning business achieved revenue of approximately 2.596 billion yuan with

34.95% down y-o-y.; washing machine business achieve revenue of approximately 180 million yuan with 12.34%

down y-o-y.; other business of small home appliance and kitchen & toilet products and cooling parts have revenue

approximately as 572 million yuan with 8.18% up y-o-y.

2. Progress of the Company's development strategy and business plan during the reporting period

During the reporting period in accordance with the development strategy and operating principles for first half of

2020 the Company has deployed the annual business plan arranged the production and management and carried

out the following activities:

(1) Product leading

In June 2020 the company and JD.com jointly released the world’s first very clean refrigerator 365WPUCA. The

original MNC+ long-lasting odor purification and sterilization technology is used to generate high reactive oxygen

species (ROS) through the catalysis of multiple metal oxides such as manganese copper iron and cerium and

then the odor molecules produced by a variety of foods in the refrigerator undergo a chemical reaction to become

carbon dioxide and water thereby restoring the fresh original flavor and overcoming the disadvantages of

traditional refrigerators such as slow odor purification poor effect and short life. After owning "Meiling Fresh"

and "Meiling Thin" the third "Meiling Clean" business card pushes the brand image of Meiling refrigerators to a

higher level showing Meiling's new blueprint for future refrigerators for consumers and the industry.In July 2020 Meiling's self-produced "very thin" front-loading washing machine made its debut. The "very thin"

front-loading washing machine is centered on larger/thinner/healthier and is committed to solving the

consumption pain points that the front-loading washing machine is difficult to embed. The "very thin"

front-loading washing machine uses taper expansion technology inclined tube stabilization technology and cloud

disk condensation technology to increase the diameter of the inner drum to 530mm and reduce the depth of the

inner drum to 487mm which is 10cm thinner than traditional washing machines and is the thinnest among

products of the same specification in the industry. The washing machine is perfectly embedded in the consumer's

home.

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

In April 2020 "Panda Lazy" new product of Changhong Air-conditioner was released online. The smart cleaning

function of this product can deep clean the evaporator ensure the output air is clean and hygienic and solved the

pain points that consumers can only simply clean the air conditioner filter. At the same time the product has

precise temperature control and small temperature fluctuations. The precise temperature control of 0.1°C creates a

comfortable and constant temperature environment which further meets the pain points of users.

(2) Marketing transformation

In the domestic market the company implemented the "one side two points" strategy carried out cycle

inspections based on "rationalized commercial inventory" strengthened weekly iterations improved the accuracy

of sales forecasts and improved the overall efficiency of the industry chain. At the same time it aimed at

benchmarking and carried out efficiency improvement and cost reduction work. AVC data showed that the average

online price of the company's refrigerator products from January to June fell by 4.7% and the share fell by 1.6%;

the average offline price increased by 3.8% and the share fell by 0.9%. Domestic air conditioners were greatly

affected by the epidemic and the company's air conditioner product sales fell on a year-on-year basis. In theoverseas market the company “expanded incremental markets externally and grasped operating efficiencyinternally” in the first half of the year overcame the impact of the epidemic and achieved an increase in the order

volume of refrigerators and air conditioners. The operating quality continued to improve the product structure

continued to improve and the proportion of mid-to-high-end products continued to increase. At the same time it

actively expanded overseas private brand sales.

(3) Efficiency promotion

Implement "one side and two points" fully benchmark against each other and improve efficiency. During the

reporting period the company continued to promote the special work of capital pressure control and the capital

operation efficiency was greatly improved on a year-on-year basis through pressure control of inventory

receivables and prepayments. On the development side achieved a nearly 10% increase in R&D efficiency

through the front-end input checks modular design and intelligent R&D platform applications. At the production

and manufacturing side through the coordination of sales production and research focused on promoting key

projects such as "five-izations and three easy" "fewer staff" and achieved a 10% increase in manufacturing

efficiency in the first half of the year.

(4) Team activation

In terms of talent development through the establishment of a normalized internal talent flow mechanism the

internal talent had a benign flow and improved the talent-post matching degree. At the same time the competition

for cadres and posts continued to be promoted to provide channels for employee promotion. In terms of personnel

structure the introduction of outstanding fresh graduates to join the company through school recruitment injected

fresh blood into the team improved the talent structure and activated the team atmosphere. In terms of staff

ability improvement built online platforms for professional learning through Meiling College such as Quality

College Technical College Manufacturing College and Management College so as to internalize outstanding

employees’ job experience and enrich their learning content. In terms of incentive mechanism through the full

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

coverage of incentive programs continued to implement value creation rewards for all employees encourage

employees to innovate and create independently and achieve employee self-driven.

At the same time following the outbreak of COVID-19 the Company made emergency arrangements and

formulated emergency prevention and control response plans in order to ensure the smooth resumption of works

and production reserve epidemic prevention materials and take various preparatory measures (popularization of

prevention & control knowledge disinfection transportation for staff out-of-town routine temperature detection

and so on) before resuming works. The Company and its subsidiaries resumed work and production on 10

February through careful plannings. Furthermore in order to improve the production capacity in time to meet the

customer demand after work & production resumption the Company has organized and contact the high-speed

rail special cars transport and other means to get back and recruit employees from all over the country who have

assisted Meiling to guarantee orders and stabilize the production to fully resume works and production and

laying the foundation for overall operation and gradual recovery and improvement of profitability from the second

quarter.

(2) Year-on-year changes of main financial data

In RMB

Current period

Same period of last

year

y-o-y

changes (+-)

Reasons for changes

Operation revenue 6795860736.99 9133162680.94 -25.59%

Impact of the COVID-19 epidemic resulting

in revenue reduced

Operation cost 5753849889.35 7490555537.25 -23.19% Same as “operation revenue”

Sales expenses 923983428.23 1244391756.87 -25.75% Same as “operation revenue”

Administrative

expenses

135469692.92 164393042.70 -17.59%

No major changes

Financial cost -12868114.05 17662677.78 -172.85%

Interest expenses declined from a year

earlier and interest income increased on a

y-o-y basis

Income tax expense -2863011.42 17701260.34 -116.17%

Decline of the taxable income resulting in

income tax expenses reduced

R&D investment 226678153.36 229049986.86 -1.04% -

Net cash flow arising

from operation

activities

-388104958.41 373484000.19 -203.91%

The cash received from good sales and

providing labor service decreased from a

year earlier

Net cash flow arising

from investment

activities

-705571689.24 4924554.81 -14427.62%

The cash received from investment return

declined in the period

Net cash flow arising

from financing

activities

501761856.98 -600631831.87 183.54%

The cash paid for debts in the period

declined

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Net increase of cash

and cash equivalent

-593339307.44 -218681424.93 -171.33%

Net cash flow arising from operation and

investment activities declined from a year

earlier

Taxes and surcharge 55304713.23 80639759.74 -31.42%

The operation revenue declined on a y-o-y

basis

R&D expenses 167889148.89 120048040.86 39.85%

Amortization of R&D assets in the period

and the R&D manufacture increased on a

y-o-y basis

Other income 54852125.20 35311208.60 55.34%

The government subsidy received in the

period increased on a y-o-y basis

Investment income 7151886.26 11663963.45 -38.68%

Income from financial product declined on a

y-o-y basis

Changing income of

fair value

-9724752.12 3364790.24 -389.02%

Change of the fair value in forward foreign

exchange contract in the period

Credit impairment

loss

-22270221.19 9545495.95 -333.31%

The impairment loss from note receivable

and account receivable increased on a y-o-y

basis

Assets impairment

loss

-26583248.58 -10615932.01 -150.41%

The impairment loss from inventory assets

increased on a y-o-y basis

Income from assets

disposal

-178704.98 -937771.74 80.94%

Loss from part of the assets disposed in the

period declined on a y-o-y basis

(3)Major changes on profit composition or profit resources in reporting period

□ Applicable √ Not applicable

No major changes on profit composition or profit resources occurred in reporting period

(4) Constitute of operation revenue

In RMB

Current period Same period of last year

Increase/decrease

y-o-y Amount

Ratio in operation

revenue

Amount

Ratio in operation

revenue

Total operation

revenue

6795860736.99 100.00% 9133162680.94 100.00% -25.59%

According to industries

Manufacture of

household

appliances

6268491126.30 92.24% 8543968799.83 93.55% -26.63%

Other business 527369610.69 7.76% 589193881.11 6.45% -10.49%

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

According to products

Refrigerator

freezer

2920923251.77 42.98% 3819493665.57 41.82% -23.53%

Air-conditioning 2595885454.11 38.20% 3990707709.01 43.69% -34.95%

Washing machine 179892246.84 2.65% 205216507.29 2.25% -12.34%

Small appliance

and kitchen &

toilet

512769500.40 7.54% 456750621.11 5.00% 12.26%

Other products 59020673.18 0.87% 71800296.85 0.79% -17.80%

Other business 527369610.69 7.76% 589193881.11 6.45% -10.49%

According to region

Domestic 4457906168.90 65.60% 7003023396.49 76.68% -36.34%

Foreign 2337954568.09 34.40% 2130139284.45 23.32% 9.76%

(5)About the industries products or regions accounting for over 10% of the company’s operating income

or operating profit

√ Applicable □ Not applicable

In RMB

Operating

revenue

Operating cost

Gross profit

ratio

Increase/decrea

se of operating

revenue y-o-y

Increase/decrea

se of operating

cost y-o-y

Increase/decrea

se of gross

profit ratio

y-o-y

According to industries

Manufacture of

household

appliances

6268491126.30 5248478697.42 16.27% -26.63% -24.40% -2.48%

According to products

Refrigerator

freezer

2920923251.77 2377765236.89 18.60% -23.53% -19.83% -3.75%

Air-conditionin

2595885454.11 2247295670.56 13.43% -34.95% -33.20% -2.27%

Small

appliance and

kitchen &

toilet

512769500.40 426489024.05 16.83% 12.26% 9.93% 1.77%

According to region

Domestic 3936852798.41 3251061917.12 17.42% -38.65% -35.99% -3.43%

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Foreign 2331638327.89 1997416780.30 14.33% 9.61% 7.20% 1.92%

Under circumstances of adjustment in reporting period for statistic scope of main business data adjusted main

business based on latest one year’s scope of period-end

□ Applicable √ Not applicable

Reasons for y-o-y relevant data with over 30% changes

√ Applicable □ Not applicable

The operating revenue and operating cost from air-conditioning products have declined on a y-o-y basis in

domestic area mainly because the COVID-19 epidemic resulting in sales reduced.III. Analysis of the non-main business

√ Applicable □Not applicable

In RMB

Amount

Ratio in total

profit

Note

Whether be

sustainable (Y/N)

Investment

income

7151886.26 -3.22%

The delivery earnings from

forward foreign exchange

contract in the period

Gains/losses

from change of

fair value

-9724752.12 4.38%

Loss from fair value changes of

the forward foreign exchange

contract

Asset

impairment

-26583248.58 11.97%

The accrual of inventory falling

price reserves increased in the

period

Non-operating

income

3445609.21 -1.55% N

Non-operating

expense

959554.13 -0.43% N

Credit

impairment loss

-22270221.19 10.03%

Credit impairment loss for

account receivable increased in

the period

Other income 54852125.20 -24.70%

Government subsidy received

in the period

IV. Analysis of assets and liability

(1) Major changes of assets composition

In RMB

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

End of current period Same period of last year

Ratio

changes

Notes of major changes

Amount

Ratio in

total

assets

Amount

Ratio in

total

assets

Monetary fund 4906733294.04 32.57% 4411009307.43 28.03% 4.54%

The entrust finance of the

Company declined on a y-o-y

basis

Account

receivable

2559946539.39 16.99% 2622242540.11 16.67% 0.32% No major changes

Inventory 1885850077.90 12.52% 2112649738.16 13.43% -0.91% No major changes

Investment real

estate

54827443.04 0.36% 45647730.74 0.29% 0.07% No major changes

Long-term

equity

investment

80574225.00 0.53% 57722108.43 0.37% 0.16% No major changes

Fix assets 2269407362.45 15.06% 1976351355.11 12.56% 2.50%

Due to the transfer-in from

construction in progress

Construction in

progress

191470652.98 1.27% 401818933.56 2.55% -1.28%

The construction in process are

transfer-in fixed assets

Short-term

loans

1510292009.60 10.03% 1809384200.27 11.50% -1.47%

Short-erm loans declined on a

y-o-y basis

Long-term

loans

292640000.00 1.94% 301280000.00 1.91% 0.03% No major changes

(2) Assets and liability measured by fair value

√ Applicable □ Not applicable

In RMB

Items

Amount at the

beginning

period

Changes of fair

value

gains/losses in

this period

Accumulative

changes of fair

value reckoned

into equity

Devaluatio

n of

withdrawi

ng in the

period

Amount of

purchase

in the

period

Amount of sale

in the period

Other

changes

Amount in the

end of period

Financial assets

1. Tradable

financial assets

(excluding

derivative

financial assets)

7730268.92 -4785270.15

2944998.77

Subtotal of financial 7730268.92 -4785270.15 2944998.77

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

assets

Above total 7730268.92 -4785270.15 2944998.77

Financial

liabilities

1081534.93 4939481.97 6578.57

6027595.47

Whether there have major changes on measurement attributes for main assets of the Company in report period or

not

□ Yes √No

(3) Assets right restricted ended as reporting period

Ended as the reporting period the Company has no major assets been closed down detain freeze or pledge and

guarantee. Other assets right restricted found more in the relevant content of 54. Assets with restricted ownership

or use rights in VI-Notes to the major items in the consolidated financial statements carried in Section XI.

Financial Report in the report.

V. Investment

1. Overall situation

√ Applicable □ Not applicable

Investment in the reporting (RMB)

Investment in the same period of last

year (RMB)

Changes

155280049.17 8504092.24 1725.95%

2. The major equity investment obtained in the reporting period

√ Applicable □ Not applicable

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

In RMB

Name of

invested

Principal business

Metho

d of

invest

ment

Amount of

investment

Shareholdi

Capita

source

Partne

Term

invest

ment

Type of

products

Status as of

the balance

sheet date

Expect

return

Current investment

profit and loss

Wheth

litigati

(Y/N)

Date of

disclosure (if

applicable

)

Index of disclosure

(if applicable

)

Anhui

Tuoxing

Science and

Technology

Co. Ltd.

Technology research and development

technical consulting technical services

processing sales design installation

maintenance of refrigeration equipment;

mechanical and electrical equipment

installation; warehousing services (except

dangerous goods); processing and sales of

metal products.Newly

establi

shed

10000000 63.2683%

Own

fund

N/A

Long-t

erm

Low

temperat

ure

refrigera

tion

equipme

research

and

develop

ment

producti

on and

sales

Contributed

5 million

yuan in the

reporting

period

Not

app

lica

ble

155955.68 N 2019-4-20

Juchao Website:

http://www.cninfo.c

om.cn (Notice No.:

2019-025)

Zhongshan

Changhong

Electric Co.

Ltd.Production: air conditioners refrigerators and

freezers heat pumps water heaters air

conditioning fans electric fans humidifiers

electric heaters clothes dryers dehumidifiers

air purifiers air water generators electric

fireplaces kitchen appliances and

kitchenware refrigeration units and spare

parts for the above products; engaged in the

import and export of self-produced products

Capita

increas

334000000 100%

Own

fund

Sichua

Chang

hong

Air-co

ndition

er Co.

Ltd.

20-yea

R&D

manuf

acturi

and

foreig

sales

Contributed

150 million

yuan in the

reporting

period

Not

app

lica

ble

-11722762.43 N 2020-3-28

Juchao Website:

http://www.cninfo.c

om.cn (Notice No.:

2020-018)

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

and raw and auxiliary materials equipment

and technology; engaged in software

development and consulting.of air

condit

ioner

Changhong

Meiling

Ridian

Technology

Co. Ltd.

Research and development production and

sales: household electric appliances

non-electric household appliances gas water

heaters gas boilers heat accumulating type

series electric heaters kitchen and toilet

furniture audio-visual equipment radio and

television equipment computers

communications and other electronic

equipment interior decoration materials

general equipment water purification

equipment smart bags personal hygiene

products; software and information

technology services; business management

consulting services; second and third types of

medical equipment operating companies;

goods and technology import and export.

Acquis

ition

83000000 99.0361%

Own

fund

Zhihen

Long-t

erm

R&D

manufac

turing

and

sales of

kitchen

&small

househol

applianc

es and

water

purifier

In reporting

period

acquired the

0.18%

equity of

Ridian

Technology

held by

individual

shareholder

Changyuan

with

280049.17

Yuan

Not

app

lica

ble

8761499.08 N 2020-4-18

Juchao Website:

http://www.cninfo.c

om.cn (Notice No.:

2020-022)

Total -- -- -- -- -- -- -- -- -- - -2805307.67 -- -- --

3.The material non-equity investment in the reporting period

√Applicable □ Not applicable

In RMB

Project Name

Invest

ment

Metho

Invested

with

fixed

Industry

involved

Investment Amount

in this Reporting

Period

Accrued Actual

Investment Amount

up to the End of

Capita

Source

Project Schedule

Anticipated

Income

Accrued

Realized Income

up to the End of

Reasons for not

Reaching the

Planned

Disclosed Date

(if any)

Disclosed Index (if any)

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

d assets

(Y/N)

Investm

ent

Projects

Reporting Period Reporting

Period

Schedule and

Anticipated

Income

Production base project

of annual output of 2

million washing

machines(Phase II)

Self-b

uilt

Manufac

ture of

househol

applianc

industry

16417053.76 50601516.68

fund-r

aising

The phase II

(roller production

line) has put into

production

successively at

end of the

reporting period

The

production

capacity of

one million

sets of

automatic

roller washing

machine shall

be formed

after this

project being

put into

operation

The project just

put into

production at

end of the

period without

income

temporary

Not applicable

2019-7-9、

2019-7-26

Juchao Website:

http://www.cninfo.com.cn (Notice No.:

2019-040. 2019-041

2019-042 2019-043

2019-047)

Total -- -- -- 16417053.76 50601516.68 -- -- - - -- -- --

Note 1: In order to further improve the efficiency of the company’s use of raised funds after careful study and demonstration the 24th session of the 9th board of

directors the 13th session of the 9th board of supervisors and the resolution of the second extraordinary general meeting of shareholders in 2019 approved and agreed

that the company shall change the unused raised funds of 120 million yuan from the sub-project Freezer Intelligent Construction Project of the "Intelligent

Manufacturing Construction Project" and put into the "Production base project of annual output of 2 million washing machines(Phase II) ". In May 2020 the second

phase of the project ( roller production line) has been put into operation.

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

4. Financial assets measured by fair value

□Applicable √ Not applicable

5. Financial assets investment

1. Securities investment

□Applicable √ Not applicable

The Company had no securities investment in the reporting period.

(2) Derivative investment

√Applicable □ Not applicable

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

In 10 thousand Yuan

Operator

Relate

relatio

nship

Whether

trade or

not(Y/N

)

Type Initial investment Start date End date

Investment

amount at

period-begin

Amount

purchased in the

reporting period

Amount sales in

the reporting

period

Amount of

reserve for

devaluation of

withdrawing (if

applicable)

Investment

amount at

period-end

Ratio of

investment

amount at

period-end in net

assets of the

Company at

period-end

Actual

gains/losses in

period

Financial

institution

N/A N

Forward

foreign

exchange

contract

118035.04

28 June 20

9 April 2021 73225.52 111209.03 85715.91 - 98178.43 20.71% 540.21

Total 118035.04 -- -- 73225.52 111209.03 85715.91 - 98178.43 20.71% 540.21

Capital source Own fund

Lawsuit involved (if applicable) Not applicable

Disclosure date for approval from the Board

for investment of derivatives (if applicable) 26 March 2020

Disclosure date for approval from board of

shareholders for investment of derivatives (if

applicable)

29 May 2020

Risk analysis and controlling measures for

derivatives holdings in the Period (including

but not limited to market risk liquidity risk

credit risks operation risk and law risks etc.)

1. Market risk: domestic and international economic situation changes may lead to exchange rate fluctuations forward foreign exchange transactions are under certain market risk.

Forward foreign exchange business is aiming to reducing impact on corporate profits by foreign exchange settlement and sale prices exchange rate fluctuations. The Company will

follow up the exchange fluctuation on the basis of target rate determined from the business relying on the research of the foreign currency exchange rates combined with

prediction of consignments and burdening ability to price variations due to exchange rate fluctuations then determine the plan of forward foreign exchange contracts and make

dynamic management to the business to ensure reasonable profit level.

2. Liquidity risk: all foreign exchange transactions are based on a reasonable estimate of the future import and export business to meet the requirements of the trade authenticity. In

addition forward foreign exchange transactions are processed with bank credit will not affect liquidity of company funds.

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

3. Bank default risk: if cooperative banks collapse within the contract time the Company will not be able to transact the original foreign exchange contracts with contract price

which leads the risk of income uncertainty. So the Company chose five state-owned banks the Chinese-funded banks in shareholding enterprise as Everbright Bank Industrial

Bank and the foreign-funded banks as UOB OCBC BEA etc. to conduct the trading of foreign exchange capital. These banks share a solid strength and management whose failure

and the risk of loss may bring to the Company is very low.

4. Operational risk: improper operation of the person in charge of forward foreign exchange transactions may cause related risk also. The Company has formulated related

management system which defines the operation process and responsibility to prevent and control risks.

5. The legal risks: unclear terms based in contract signed with banks for related transactions may lead legal risks when forward foreign exchange transactions are processing. The

Company will strengthen legal review and choose good bank to carry out this kind of business as to risk control.

Invested derivative products have changes in

market price or fair value in the Period as

for analysis of the fair value of derivatives

disclosed specific applied methods and

correlation assumption and parameter setting

The Company determines fair value in accordance with the Chapter VII “Determination of Fair Value” carried in the Accounting Standards for Business Enterprises No.22 -

Recognition and Measurement of Financial Instruments. Fair-value is basically obtained according to prices offered by bank and other pricing services. While fair-value of

derivatives is mainly obtained according to the balance between prices given by outstanding contracts and forward prices given by contracts signed during the reporting period with

bank. The differences are identified as Tradable financial assets and liabilities. During the reporting period forward foreign exchange contracts and losses of the Company is

5.4021 million.

Specific principle of the accounting policy

and calculation for derivatives in the Period

compared with last period in aspect of major

changes

Not applicable

Special opinion on derivative investment and

risk control by independent directors

Upon inspection the independent directors of the Company believes that: during the reporting period the Company carried out its foreign exchange forward deals in strict

compliance with the Standardized Operation Guidelines for Listed Company issued by Shenzhen Stock Exchange the Articles of Association Authorization Management of the

Company Management System in relating to Foreign Exchange Forward Deals of Hefei Meiling Co. Ltd. and these deals were conducted within the authorization scope under

general meeting and board meeting. The Company conducts no foreign exchange transactions on the purpose of getting profit only all of the forward foreign exchange transactions

are operates based on normal operating and production which is relying on specific business operations with purpose of avoiding the preventing the risks in exchange rate. The

forward foreign exchange transactions of the Company are beneficial to prevent the exchange risks exposed by import and export business and thus met its requirement for

operation development. There was no speculative operation no break of relevant rules and regulations and relevant business was conducted under corresponding decision-making

procedures. Interests of the Company and entire shareholders especially minority shareholders were not prejudiced.

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

VI. Sales of major assets and equity

1. Sales of major assets

□ Applicable √ Not applicable

The Company had no sales of major assets in the reporting period.

2. Sales of major equity

□ Applicable √ Not applicable

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

VII. Analysis of main holding company and stock-jointly companies

√ Applicable □ Not applicable

(1) Particular about main subsidiaries and stock-jointly companies net profit over 10%

In RMB

Company name Type Main business

capital

Total assets Net Assets Operating revenue Operating profit Net profit

Zhongke Meiling Cryogenic

Technology Co. Ltd.Subsidiary

Research and

development

manufacturing and

sales of ultra-low

temperature freezer

72548200 411451699.58 144487940.73 113979900.96 3454898.63 3187502.65

Jiangxi Meiling Electric

Appliance Co. Ltd.

Subsidiary

Manufacturing of

refrigeration and

freezer

50000000 379571809.26 114303857.69 313005689.38 10516968.21 10518968.21

Mianyang Meiling

Refrigeration Co. Ltd.Subsidiary

Manufacturing of

refrigeration and

freezer

100000000 193691297.91 127437445.04 180565762.80 8583783.63 7994004.91

Sichuan Changhong

Air-conditioner Co. Ltd.

Subsidiary

R&D manufacturing

and domestic sales

of air-conditioning

850000000 3331137971.44 1192086086.89 1564643806.21 -99152382.75 -97033960.14

Zhongshan Changhong

Electric Co. Ltd.

Subsidiary

R&D manufacturing

and domestic sales

of air-conditioning

334000000 1429659674.19 126257106.05 1297128150.99 -9729593.91 -11722762.43

Hefei Meiling Group Holdings Subsidiary Sales of white goods 80000000 1368364501.15 -189334548.79 1856149879.56 -100530781.75 -100510489.79

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Limited

Changhong Meiling Ridian

Technology Co. Ltd.Subsidiary

R&D manufacturing

and sales of kitchen

and toilet products

small home

appliances and water

purifier

83000000 423251448.98 102094372.70 388868705.58 11298097.18 8761499.08

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

(2) Subsidiary obtained and disposed in the period

√Applicable □ Not applicable

Company name

The method of obtaining and

disposing subsidiaries during the

report period

The influence to the whole production and

performance

Guangxi Huidian Household

Electrical Appliances Co. Ltd.

Clearing off

Minor effect on the overall production and

operation and performance of the company

Description of the holding company and stock-jointly companies: Nil

VIII. Structured entity controlled by the Company

□Applicable √ Not applicable

IX. Prediction of business performance from January – September 2020

Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss

probably or the warning of its material change compared with the corresponding period of the last year and

explanation on reason

□ Applicable √ Not applicable

X. Risks and countermeasures

(1) risks and countermeasures

In the second half of 2020 the home appliance industry as a whole is still facing severe and complex situations

and unprecedented profound changes. At the same time with the normalization of the impact of the epidemic

market demand for home appliances will be further released in the second half of the year. Faced with objective

factors such as more fierce competition in the home appliance market the environment for enterprises to survive

will be even worse. The company will face risks such as weak macroeconomic growth severe industry conditions

intensified competition rising costs the spread of the global novel coronavirus pneumonia epidemic the Sino-US

trade war new business models and the impact of the Internet era.In response to the above risks and combining with the industry situation in the second half of the year and the

insufficient in the first half of the year in the second half of 2020 the company will seize the chances turning

crisis into opportunity and carry out key tasks from the following aspects:

(2)Operation plan for second half of the year

Under the guidance of strategic planning the company takes "one side and two points" as its guiding ideology. In

the second half of 2020 we will continue to carry out operation and management work around "product leadership

marketing transformation efficiency breakthrough and team activation". Each product line must do the following

in terms of market strategy:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

1. Refrigerator and freezer industry

In the domestic market the company promotes product and technology leadership and cost and efficiency

improvement by focusing on "product leadership channel transformation organization optimization and

efficiency improvement" adhering to the strategy of quality goods and effective cost striving to create a "fresh

thin and clean" Meiling business card in the industry and taking products as the leader; through hard-core

technology research promotes product iteration innovation empowers products and brands and creates

high-profit products with its own traffic and omni-channel collaboration so as to form a comparative advantage in

mid-to-high-end products; enhances product competitiveness by relying on efficiency improvements and through

the establishment of local product focus and high-efficiency lines. Regarding overseas markets we continue to

optimize product structure and strengthen the adaptability of product R&D to different regions; sort out strategies

for core markets and core customers and strengthen the ability to respond to different markets; increase brand

team and product investment and continue to promote the private brand building in overseas.

2. Air-conditioning industry

In the domestic market we continue to promote the construction of base market form a competitive mechanism

to strive for the best and build a channel system based on our own channels; carry out model innovation in

non-base markets and sort out the value chain. In terms of overseas markets focus on key markets and important

customers and strive to become bigger and stronger; focus on developing countries and seek new business models;

complement blank market products and improve product definition and service capabilities.

3. Washing machine industry

In the second half of the year the washing machine industry will focus on effective channels to introduce new

self-produced rollers and focus on the popular high-capacity impeller to increase the volume. Take advantage of

the core advantages of the "one-button smart washing" "small volume and large capacity" of the impeller washing

machine and the "thin" + "smart" front-loading washing machine and make full use of the self-produced

front-loading washing machine press conference to upgrade the full category structure of Meiling washing

machine. At the same time relying on self-produced washing machines to deploy overseas business expand

ODM/OEM customers and achieve a rapid breakthrough in the scale of Meiling washing machines.

4. Kitchen bathroom and small household appliances industry

Focus on the product line of "water ecological home appliances" and expand the industry influence. In the second

half of the year we will focus on promoting dual-brand technology and supply-side synergy enhancing technical

advantages and bargaining power and enhancing market competitiveness. Promote new marketing and build live

broadcast rooms on the one hand improve the live broadcast capabilities and store building capabilities and on

the other hand use the platform's head star effect to promote cooperation achieve brand exposure and increase

sales.

5. Bio-pharmaceutical

Unswervingly implement the development strategy of “related diversification based on bio-pharmaceutical field”

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

focusing on the three business strategy layout of life sciences smart cold chain and family health continue to

promote the life science business channels and upgrade the quality of deep-cultivated products relying on the life

science channel system promote the smart cold chain business development and channel extension steadily;

meanwhile push forward the oxygen generator & other family health products to the market channel system

construction and promote the growth of the Company in scale.The above business plan and business objectives do not represent the listed company’s profit forecast of 2020

whether it can be achieved depends on the changes in market condition the efforts of management team and other

factors there are a lot of uncertainties investors should pay special attention to it.

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Section V. Important Events

I. AGM(Annual General Meeting) and extraordinary general meeting

1. AGM held in the period

Meeting Type

Participati

on ratio

for

investors

Holding date Disclosure date Index

First

Extraordinary

General Meeting

of 2020

Extraordinary

General

Meeting

31.79% 2020-1-10 2020-1-11

Juchao Website

(www.cninfo.com.cn)

Resolution Notice of First

Extraordinary General Meeting

of 2020 (Notice No.: 2020-002)

Second

Extraordinary

General Meeting

of 2020

Extraordinary

General

Meeting

32.32% 2020-2-11 2020-2-12

Juchao Website

(www.cninfo.com.cn)

Resolution Notice of First

Extraordinary General Meeting

of 2020 (Notice No.: 2020-009)

2019 AGM

Annual general

meeting

32.6543% 2020-5-29 2020-5-30

Juchao Website

(www.cninfo.com.cn)

Resolution Notice of AGM of

2019 (Notice No.: 2020-036)

2. Request for extraordinary general meeting by preferred stockholders with rights to vote

□ Applicable √ Not applicable

II. Profit distribution plan and capitalizing of common reserves in the period

□ Applicable √ Not applicable

There are no cash dividend bonus and capitalizing of common reserves carried out in the semi-annual

III. Commitments that the actual controller shareholders related parties acquirer and the

company have fulfilled during the reporting period and have not yet fulfilled by the end of

reporting period

□ Applicable √ Not applicable

There are no commitments that the actual controller shareholders related parties acquirer and the company have

fulfilled during the reporting period and have not yet fulfilled by the end of reporting period

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

IV. Appointment and non-reappointment (dismissal) of CPA

Whether the semi-annual financial report had been audited

□Yes √ No

The semi-annual report was not audited

V. Explanation on “Qualified Opinion” from CPA by the Board and Supervisory Committee

□ Applicable √ Not applicable

VI. Explanation from the Board for “Qualified Opinion” of last year’s

□ Applicable √ Not applicable

VII. Bankruptcy reorganization

□ Applicable √ Not applicable

No bankruptcy reorganization for the Company in reporting period

VIII. Lawsuit

(1) Significant lawsuits and arbitration

□ Applicable √ Not applicable

No significant lawsuits or arbitration occurred in the reporting period.

(2) Other lawsuits

√Applicable □ Not applicable

To maintain the independence and integrity of "Meiling" trademark and trade name the Company carried out

serials of lawsuits attribution and administration suits with “Meiling” trademark and corporate name concerned

please found more in 2014 first quarter report 2014 semi-annual report the 2014 annual report disclosed

respectively on April 19 2014 August 12 2014 and March 26 2014 for the relevant progress. Up to now the

company has stopped the infringement enterprises using “Meiling” trade name i.e. the infringement of company

name and unfair competition behavior through litigation and administrative complaints.

During the reporting period the Company won the lawsuit against Hefei Meiling Household Appliances Co.

Ltd.(hereinafter referred to as Meiling Household) for trademark rights infringement and unfair competition.Meiling Household has completed its registration change in enterprise name on 2 July 2020 in accordance with

the requirements of the effective judgment.

At present only the kitchen ventilator cooker water heater water purifiers and household electrical appliances

manufactured and sold by the Company and its wholly-owned subsidiary -Hefei Meiling Group Holding Co. Ltd.

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

and Guangdong Changhong Ridian Technology Co. Ltd. are the company's regular products any other small

household appliances using same or similar trademark as our company or using the trade name similar to the

Company’s name are the Company’s products. In view of the infringement to the Company’s trademark and trade

name false propaganda and unfair competition in the market the Company has carried out many ways including

administrative reports criminal investigation and civil litigation to fight against infringement and counterfeiting

behavior in the whole country.IX. Media questioning

□Applicable √Not applicable

During the reporting period the company had no media generally questioned matters.

X. Penalty and rectification

□ Applicable √ Not applicable

No penalty and rectification for the Company in reporting period.XI. Integrity of the company and its controlling shareholders and actual controllers

□ Applicable √ Not applicable

XII. Implementation of the company’s stock incentive plan employee stock ownership plan or

other employee incentives

√ Applicable □Not applicable

Implementation for annual performance incentive fund

On August 9 2012 and August 28 2012 the Company considers the adoption of "Hefei Meiling annual

performance incentive fund implementation plan" (hereinafter referred to as "" stimulus "") on the 16th meeting of

the 7th board of directors and the 2012-second provisional shareholders meeting. Details were disclosed on

information disclosure media appointed by the Company as "Securities Times" "Chinese Securities Daily"

"Hong Kong Commercial Daily" and the Juchao network (www.cninfo.com.cn) on August 10 2012 and August

29th in the form of announcement (No.: 2012-028 No.:2012-035).

1. Implementation about 2012 2013 2014 and 2016 performance incentive fund provision and distribution

plan

See details in "Implementation of the company's annual incentive fund" in "XV Implementation of the company's

stock incentive plan employee stock ownership plan or other employee incentive measures" in "Section V

Significant Events" of the company's "2019 Annual Report" disclosed on 28 March 2020.

All the shares that the incentive object has purchased are locked up as promised. Up to the end of this reporting

period the company's stock purchased by some 2012 annual performance incentive objects (non-directors

supervisors and senior management) 2013 annual performance incentive objects (non-directors supervisors and

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

senior management) the 2014 annual performance incentive objects (non-directors supervisors and senior

management) with their granted 2012 annual performance incentive funds and own funds and 2013 & 2014

annual performance incentive funds and own funds have been fully released for trading; the stock purchased by

2016 annual performance incentive objects (non-directors supervisors and senior management) with their granted

2016 annual performance incentive funds and own funds are expired for two years 50% of the stock shall be

released for trading details of the share reduction for the above mentioned objects see below. In the Period the

Company’s shares purchased by the current directors supervisors and senior executives among the performance

incentive targets due to the implementation of the 2012 2013 2014 and 2016 annual performance incentive plans

have not reduced the shareholdings.

2. Shareholding and reducing of performance incentive objects of the Company

Ended as 30 June 2020 shares hold by all incentive objects amounting to 11038467 shares a 1.0567 % in total

share capital of the Company including 9348574 A-share a 0.8949 % in total share capital and 1689893

B-share a 0.1618% in total share capital of the Company. Other grantees of the 2012 2013 2014 and 2016

incentive plan have reduced holding of 5475348 in aggregate accounting for about 0.5242 % of the total share

capital and 161750 shares are reduced in the reporting period.XIII. Major related transaction

(1) Related transaction with routine operation concerned

√ Applicable □Not applicable

1. Related transaction with routine operation concerned

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Seri

party Relationship

Type of

transact

ion

Content of

transaction

Pricing

principl

transaction

price (in 10

thousand

Yuan)

transaction

amount (in

10 thousand

Yuan)

Propor

tion in

similar

transa

ctions

(%)

Trading

limit

approved

(in 10

thousand

Yuan)

Whet

her

over

the

appro

ved

limite

d or

not

(Y/N)

Clearin

g form

for

transact

ion

Available

similar

market

price

Date of

disclosure

Index of disclosure

Sichuan

Changho

Electric

Co. Ltd.

Controlling

shareholder

and ultimate

controller

Commo

dity

purchas

Plastic

particles

integrated

circuits

transistors

plastic

parts

Youku

membership

cards etc.Marketi

ng price

18465.23 18465.23 3.15% 60000 N

Spot

exchang

e Bank

acceptan

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Electroni

Holding

Group

Co. Ltd.

Controlling

shareholder

and ultimate

controller

Commo

dity

purchas

Heat control

and cooling

products

Marketi

ng price

1.59 1.59 0.00% 8000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Changho

ng Huayi

Compress

or Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Commo

dity

purchas

Compressor

Marketi

ng price

17759.15 17759.15 3.03% 72000 N

Bank

acceptan

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

ng Mold

Plastic

Tech.

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Commo

dity

purchas

Plastic

products

etc.Marketi

ng price

28634.55 28634.55 4.89% 140000 N

Spot

exchang

e Bank

acceptan

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

ng Jijia

Fine Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Commo

dity

purchas

Bottom

plate

ventilation

hood

pressure

plate

bracket

sheet metal

parts etc.Marketi

ng price

13209.22 13209.22 2.26% 60000 N

Spot

exchang

e Bank

acceptan

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Package

Other

enterprise

control under

the same

Commo

dity

purchas

Packing

boxes

cartons

foam

Marketi

ng price

3616.69 3616.69 0.62% 22000 N

Bank

acceptan

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Printing

Co. Ltd.

controlling

shareholder

and ultimate

controller

labels

maintenanc

e spare

parts etc.

Sichuan

Changho

Precision

Electroni

cs Tech.

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Commo

dity

purchas

PCB

components

etc.Marketi

ng price

744.35 744.35 0.13% 10000 N

Bank

acceptan

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

ng New

Energy

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Commo

dity

purchas

Battery

Marketi

ng price

1.71 1.71 0.00% 8000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

081

Electroni

c Group

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Commo

dity

purchas

Power

Transforme

Marketi

ng price

10.08 10.08 0.00% 8000 N

Bank

acceptan

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Guangdo

Changho

Electroni

cs Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Commo

dity

purchas

Foam

epidemic

prevention

materials

etc.Marketi

ng price

196.21 196.21 0.03% 8000 N

Spot

exchang

e Bank

acceptan

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Intelligen

Manufact

uring

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Commo

dity

purchas

Circuit

board

Marketi

ng price

3.25 3.25 0.00% 8000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Hefei

Changho

Industrial

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Commo

dity

purchas

Control

board

power cord

frequency

conversion

integrated

board

Marketi

ng price

14.65 14.65 0.00% 8000 N

Bank

acceptan

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Zhiyijia

Network

Other

enterprise

control under

Commo

dity

purchas

Marketi

ng price

44.87 44.87 0.01% 8000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Technolo

gy Co.

Ltd.the same

controlling

shareholder

and ultimate

controller

ed 2019-080 No.: 2019-082 No.:

Changho

Internatio

nal

Holdings

(Hong

Kong)

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Commo

dity

purchas

Air

conditionin

Marketi

ng price

870.43 870.43 0.15% 8000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Electroni

Products

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Commo

dity

purchas

Electrical

components

Marketi

ng price

1209.94 1209.94 0.21% 6000 N

Bank

acceptan

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Property

Services

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Commo

dity

purchas

Exit ticket

Marketi

ng price

0.03 0.03 0.00% 8000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Sichuan

Ailian

Science

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Commo

dity

purchas

WiFi

module

hole cover

sealing

strip

temperature

and

humidity

sensor etc.Marketi

ng price

1641.27 1641.27 0.28% 8000 N

Bank

acceptan

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Aichuang

Science

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Commo

dity

purchas

Frequency

conversion

integrated

board

control

board

display

board

R-wifi

module

electric

heater etc.Marketi

ng price

4319.04 4319.04 0.74% 18000 N

Bank

acceptan

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Hunan

Grand-Pr

Intelligen

t Tech.

Company

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Commo

dity

purchas

smart

vacuum

cleaner

Marketi

ng price

766.89 766.89 0.13% 2500 N

Bank

acceptan

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Guangyu

Changho

Electroni

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Commo

dity

purchas

Drinking

fountain

Marketi

ng price

0.88 0.88 0.00% 8000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Service

Exp.

Applianc

e Service

Chain

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Commo

dity

purchas

Printed

board

Marketi

ng price

0.19 0.19 0.00% 8000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Electroni

Holding

Group

Co. Ltd.

Controlling

shareholder

and ultimate

controller

labor

Shuttle

transportati

on fee

Marketi

ng price

71.19 71.19 0.10% 8000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Electric

Controlling

shareholder

and ultimate

controller

labor

Software

usage fee

inspection

and

Marketi

ng price

1040.45 1040.45 1.52% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Co. Ltd. certification

fee

consulting

service fee

equipment

instrumenta

tion fee etc.

Sichuan

Changho

Minsheng

Logistics

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

labor

Transportati

on storage

loading and

unloading

Marketi

ng price

18330.03 18330.03 26.73% 60000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

ng Mold

Plastic

Tech.

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

labor

Change

mold fee

Marketi

ng price

50.96 50.96 0.07% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Service

Exp.

Applianc

e Service

Chain

Other

enterprise

control under

the same

controlling

shareholder

labor

Three

guarantees

fee service

support fee

installation

fee

Marketi

ng price

9182.26 9182.26 13.39% 35000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Co. Ltd. and ultimate

controller

Sichuan

Hongxin

Software

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

labor

Software

usage fee

brand

barcode

system fee

etc.Marketi

ng price

70.35 70.35 0.10% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Guangdo

Changho

Electroni

cs Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

labor

Conference

room usage

fee

information

consultation

fee etc.Marketi

ng price

14.25 14.25 0.02% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Jiahong

Industrial

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

labor

Greening

expenses

meal

expenses

business

activity

expenses

etc.Marketi

ng price

47.14 47.14 0.07% 8000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Sichuan

Changho

Internatio

nal Hotel

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

labor

Conference

fee

accommoda

tion fee

Marketi

ng price

1.08 1.08 0.00% 8000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Internatio

nal

Travel

Service

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

labor

Ticket fees

travel

service fees

Marketi

ng price

9.97 9.97 0.01% 8000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Property

Services

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

labor

Dormitory

facility

equipment

service fee

property

managemen

t fee

Marketi

ng price

162.70 162.70 0.24% 8000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Hongwei

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

labor

Testing fee

Marketi

ng price

410.87 410.87 0.60% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

shareholder

and ultimate

controller

Sichuan

Zhiyijia

Network

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

labor

Software

usage fee

Marketi

ng price

11.35 11.35 0.02% 600 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Intelligen

Manufact

uring

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

labor

Equipment

repair costs

Marketi

ng price

0.09 0.09 0.00% 8000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

ng Jijia

Fine Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

labor

Equipment

repair costs

Marketi

ng price

64.27 64.27 0.09% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Sichuan

Hongmof

ang

Network

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

labor

Market

support fee

Marketi

ng price

0.21 0.21 0.00% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Electric

Co. Ltd.

Controlling

shareholder

and ultimate

controller

Buy fuel

power

Water

electricity

gas etc.Marketi

ng price

826.11 826.11 0.14% 60000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Changho

ng Huayi

Compress

or Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Buy fuel

power

Steam

Marketi

ng price

18.87 18.87 0.00% 150 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Guangdo

Changho

Electroni

cs Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Buy fuel

power

Water

electricity

etc.Marketi

ng price

46.30 46.30 0.01% 8000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Hefei

Changho

ng New

Energy

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Buy fuel

power

Electricity

bill

Marketi

ng price

16.08 16.08 0.00% 8000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Property

Services

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Buy fuel

power

Electricity

bill

Marketi

ng price

0.67 0.67 0.00% 8000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Electric

Co. Ltd.

Controlling

shareholder

and ultimate

controller

Sales of

goods

Isocyanates

waste

materials

air

conditioners

refrigerators

water

dispensers

Marketi

ng price

409.94 409.94 0.07% 8000 N

Spot

exchang

e Bank

acceptan

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

ng Jijia

Fine Co.

Other

enterprise

control under

the same

Sales of

goods

Color plate

lower beam

bottom

plate

Marketi

ng price

2541.50 2541.50 0.41% 8000 N

Spot

exchang

e Bank

acceptan

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Ltd. controlling

shareholder

and ultimate

controller

bracket

water

purifier

ce 2019-087

Sichuan

Changho

ng Mold

Plastic

Tech.

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Sales of

goods

Plastic

particles

HIPS

particles

pattern

parts air

conditioners

etc.Marketi

ng price

8464.02 8464.02 1.35% 35000 N

Spot

exchang

e Bank

acceptan

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Lejiayi

Chain

Managem

ent Co.Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Sales of

goods

Refrigerator

s freezers

air

conditioners

small

appliances

Marketi

ng price

451.13 451.13 0.07% 7200 N

Spot

exchang

e Bank

acceptan

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Zhiyijia

Network

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Sales of

goods

Refrigerator

s freezers

air

conditioners

small

appliances

Marketi

ng price

179508.62 179508.62 28.64% 852000 N

Spot

exchang

e Bank

acceptan

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Sichuan

Changho

Minsheng

Logistics

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Sales of

goods

Refrigerator

s freezers

air

conditioners

small

appliances

Marketi

ng price

42.12 42.12 0.01% 12000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Service

Exp.

Applianc

e Service

Chain

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Sales of

goods

Dimensiona

l spare parts

and

accessories

Marketi

ng price

194.88 194.88 0.03% 12000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

ng Gerun

Environm

ental

Protectio

n Tech.

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Sales of

goods

Waste

Marketi

ng price

418.11 418.11 0.07% 3000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Hefei

Changho

Industrial

Co. Ltd.

Other

enterprise

control under

the same

controlling

Sales of

goods

air

conditionin

Marketi

ng price

0.24 0.24 0.00% 12000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

shareholder

and ultimate

controller

Sichuan

Huafeng

Enterpris

e Group

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Sales of

goods

air

conditionin

Marketi

ng price

20.28 20.28 0.00% 3000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Guangdo

Changho

Electroni

cs Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Sales of

goods

Air

conditioners

small

appliances

Marketi

ng price

7.79 7.79 0.00% 12000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

ng Power

Source

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Sales of

goods

air

conditionin

Marketi

ng price

1.81 1.81 0.00% 12000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Guangyu

Changho

Electroni

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Sales of

goods

air

conditionin

Marketi

ng price

0.35 0.35 0.00% 12000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

ng New

Energy

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Sales of

goods

air

conditionin

Marketi

ng price

31.18 31.18 0.00% 3000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

PT.CHA

NGHON

GELECT

RICIND

ONESIA

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Sales of

goods

refrigerator

Marketi

ng price

670.07 670.07 0.11% 12000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANG

HONG(H

K)TRAD

INGLIMI

Other

enterprise

control under

the same

Sales of

goods

air

conditionin

Marketi

ng price

37764.29 37764.29 6.02% 150000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

TED controlling

shareholder

and ultimate

controller

CHANG

HONG

ELECTR

IC(AUST

RALIA)

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Sales of

goods

refrigerator

Marketi

ng price

5137.25 5137.25 0.82% 12000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Orion.PD

P.Co.ltd

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Sales of

goods

refrigerator

Marketi

ng price

1049.00 1049.00 0.17% 4200 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Changho

Europe

Electrics.

r.o

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Sales of

goods

refrigerator

Marketi

ng price

1092.95 1092.95 0.17% 12000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

CHANG

HONG

ELECTR

MIDDLE

EASTFZ

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Sales of

goods

refrigerator

Marketi

ng price

446.95 446.95 0.07% 12000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Changho

Internatio

nal

Holdings

(Hong

Kong)

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Sales of

goods

Refrigerator

air

conditioner

Marketi

ng price

3122.61 3122.61 0.50% 35000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Aichuang

Science

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Sales of

goods

Optocouple

Marketi

ng price

24.33 24.33 0.00% 3000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

ng Mold

Plastic

Tech.Other

enterprise

control under

the same

controlling

Providin

services

Labor fee

Marketi

ng price

4.86 4.86 0.18% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Co. Ltd. shareholder

and ultimate

controller

Sichuan

Changho

ng Jijia

Fine Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Providin

services

Labor fee

Marketi

ng price

13.85 13.85 0.53% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Aichuang

Science

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Providin

services

Fees for

technical

services

Marketi

ng price

4.04 4.04 0.15% 3000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Huafeng

Enterpris

e Group

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Providin

services

Installation

fee

Marketi

ng price

17.43 17.43 0.66% 3000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Sichuan

Changho

Intelligen

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Providin

services

Labor fee

Marketi

ng price

54.72 54.72 2.08% 3000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Intelligen

Manufact

uring

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Providin

services

Labor fee

Marketi

ng price

49.45 49.45 1.88% 3000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Electric

Co. Ltd.

Controlling

shareholder

and ultimate

controller

Providin

services

Labor fee

Marketi

ng price

20.85 20.85 0.79% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Device

Technolo

gy Co.

Other

enterprise

control under

the same

controlling

shareholder

Providin

services

Labor fee

Marketi

ng price

10.56 10.56 0.40% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Ltd. and ultimate

controller

Sichuan

Changho

ng New

Energy

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Providin

services

Labor fee

Marketi

ng price

11.39 11.39 0.43% 3000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Guangdo

Changho

Electroni

cs Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Provide

fuel

power

Water and

electricity

bills

Marketi

ng price

1.27 1.27 0.00% 12000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Minsheng

Logistics

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Provide

fuel

power

Water and

electricity

bills

Marketi

ng price

3.41 3.41 0.00% 12000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Sichuan

Changho

ng Jijia

Fine Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Provide

fuel

power

Water

electricity

and gas

costs

Marketi

ng price

6.58 6.58 0.00% 12000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

ng Mold

Plastic

Tech.

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Provide

fuel

power

Water

electricity

and gas

costs

Marketi

ng price

296.57 296.57 0.05% 12000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Zhiyijia

Network

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Provide

fuel

power

Water and

electricity

bills

Marketi

ng price

1.65 1.65 0.00% 12000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Precision

Electroni

Other

enterprise

control under

the same

controlling

Provide

fuel

power

Water and

electricity

bills

Marketi

ng price

0.41 0.41 0.00% 12000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

cs Tech.

Co. Ltd.

shareholder

and ultimate

controller

Sichuan

Changho

Device

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Provide

fuel

power

Water and

electricity

bills

Marketi

ng price

36.11 36.11 0.01% 12000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

ng Jijia

Fine Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Rent to

the

party

Forklift

warehouse

apartment

factory

Marketi

ng price

450.98 450.98 6.55% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

ng Mold

Plastic

Tech.

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Rent to

the

party

Warehouse

apartment

workshop

second

living area

etc.Marketi

ng price

417.95 417.95 6.07% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Sichuan

Changho

Minsheng

Logistics

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Rent to

the

party

Partial lease

of office

building

warehouse

office

workshop

Marketi

ng price

140.29 140.29 2.04% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Service

Exp.

Applianc

e Service

Chain

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Rent to

the

party

Forklift

Marketi

ng price

0.48 0.48 0.01% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Hefei

Changho

Industrial

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Rent to

the

party

Apartment

Marketi

ng price

5.67 5.67 0.08% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Precision

Electroni

Other

enterprise

control under

the same

controlling

Rent to

the

party

Apartment

second

living area

etc.Marketi

ng price

3.53 3.53 0.05% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

cs Tech.

Co. Ltd.

shareholder

and ultimate

controller

Sichuan

Ailian

Science

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Rent to

the

party

warehouse

Marketi

ng price

0.13 0.13 0.00% 3000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Aichuang

Science

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Rent to

the

party

Warehouse

forklift

Marketi

ng price

1.88 1.88 0.03% 3000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Hongwei

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Rent to

the

party

Apartment

living area

workshop

Marketi

ng price

7.65 7.65 0.11% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Sichuan

Zhiyijia

Network

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Rent to

the

party

Apartment

Marketi

ng price

9.90 9.90 0.14% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Electric

Co. Ltd.

Controlling

shareholder

and ultimate

controller

Rent to

the

party

Apartments

meeting

rooms

factories

etc.Marketi

ng price

32.92 32.92 0.48% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Guangdo

Changho

Electroni

cs Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Rent to

the

party

Living area

Marketi

ng price

5.57 5.57 0.08% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Device

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Rent to

the

party

Plant

Marketi

ng price

77.55 77.55 1.13% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Sichuan

Changho

Electric

Co. Ltd.

Controlling

shareholder

and ultimate

controller

Rent

from the

party

Plant office

Marketi

ng price

296.44 296.44 4.30% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Chengdu

Changho

Electroni

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Rent

from the

party

office

Marketi

ng price

31.07 31.07 0.45% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Guangdo

Changho

Electroni

cs Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Rent

from the

party

Staff

dormitory

workshop

Marketi

ng price

48.10 48.10 0.70% 5000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Electroni

Holding

Group

Co. Ltd.

Controlling

shareholder

and ultimate

controller

Rent

from the

party

staff dorm

Marketi

ng price

2.51 2.51 0.04% 8000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Sichuan

Changho

Intelligen

Manufact

uring

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Purchas

e of

assets

Quality

improveme

nt and

transformati

on of

production

line

equipment

and baler

Marketi

ng price

76.95 76.95 0.44% 7000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Sichuan

Changho

Electric

Co. Ltd.

Controlling

shareholder

and ultimate

controller

Purchas

e of

assets

LRP system

Marketi

ng price

47.17 47.17 0.27% 15000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

100

Sichuan

Zhiyijia

Network

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Purchas

e of

assets

Projector

air

conditioner

Marketi

ng price

81.61 81.61 0.46% 15000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

101

Sichuan

Huanyu

Industrial

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

Purchas

e of

assets

Plant

construction

Marketi

ng price

216.48 216.48 1.23% 8000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

and ultimate

controller

102

Sichuan

Changho

ng Jineng

Sunshine

Technolo

gy Co.

Ltd.Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Purchas

e of

assets

Street lamp

Marketi

ng price

4.23 4.23 0.02% 15000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

103

Yuanxin

Financial

Lease

Co. Ltd.

Other

enterprise

control under

the same

controlling

shareholder

and ultimate

controller

Financia

leasing

commer

cial

factorin

g and

bill

financin

Financial

leasing

commercial

factoring

and billing

Marketi

ng price

1875.83 1875.83 -- 2000 N

Spot

exchang

2019-11-30

2019-12-18

Juchao Website

(www.cninfo.com.cn) No.:

2019-077 No.: 2019-078 No.:

2019-080 No.: 2019-082 No.:

Total -- -- 367652.88 -- -- -- -- -- -- --

Detail of sales return with major amount involved N/A

Report the actual implementation of the daily related

transactions which were projected about their total amount by

types during the reporting period (if applicable)

1. It is estimated that the related transaction amount resulted by purchasing goods (including door shell and plastic products etc.) and accepting fuel and

power from Sichuan Changhong and its subsidiary by the Company for year of 2020 was RMB 3060 million at most (tax-excluded) actually RMB

679057800 occurred in reporting period.

2. It is estimated that the related transaction amount resulted by purchasing goods (including compressor purchased smart vacuum cleaner etc.) from

Changhong Huayi and its subsidiary by the Company for year of 2020 was RMB 745 million at most (tax-excluded) actually RMB 185260400 occurred

in reporting period.

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

3. It is estimated that the related transaction amount resulted by purchasing or selling equipment software maintenance and spare parts and molds etc.

from Sichuan Changhong and its subsidiary by the Company for year of 2020 was RMB 150 million at most (tax-excluded) actually RMB 1330100

occurred in reporting period.

4. It is estimated that the related transaction amount resulted by selling goods and providing fuel and power to Sichuan Changhong and its subsidiary by

the Company for year of 2020 was RMB 11072 million at most (tax-excluded) actually RMB 2402025200 occurred in reporting period.

5. It is estimated that the related transaction amount resulted by accepting energy power and service from Huayi Compressor and its subsidiary by the

Company for year of 2020 was RMB 1.5 million at most (tax-excluded) actually RMB 188700 occurred in reporting period.

6. It is estimated that the related transaction amount resulted by leasing business to Sichuan Changhong and its subsidiary by the Company for year of

2020 was RMB 50 million at most (tax-excluded) actually RMB 15281000 occurred in reporting period.

7. It is estimated that the related transaction amount from domestic finished goods logistic business outsourcing to Sichuan Changhong Minsheng Logistic

Co. Ltd. by the Company for year of 2020 was RMB 600 million at most (tax-excluded) actually RMB 183300300 occurred in reporting period.

8. It is estimated that the related transaction amount from after sales service of domestic goods outsourcing to Sichuan Service Exp. Appliance Service

Chain Co. Ltd. by the Company for year of 2020 was RMB 350 million at most actually RMB 91822600 occurred in reporting period.

9. It is estimated that the related transaction amount resulted by accepting other service and labor service etc. or providing other service and labor service

etc. to Sichuan Changhong and its subsidiary by the Company for year of 2020 was RMB 56 million at most (tax-excluded) actually RMB 17128300

occurred in reporting period.

10. It is estimated that the related transaction amount resulted by selling goods and leasing business from Sichuan Changhong Electronics Group and its

subsidiary by the Company for year of 2020 was RMB 102 million at most (tax-excluded) actually RMB 16819400 occurred in reporting period.

11. It is estimated that the related transaction amount resulted by purchasing goods and receiving labor services fuel power leasing and purchasing

equipment etc. from Sichuan Changhong Electronics Group and its subsidiary by the Company for year of 2020 was RMB 330 million at most

(tax-excluded) actually RMB 65556700 occurred in reporting period.

12. It is estimated that the related transaction amount resulted by receiving finance lease commercial factoring and financial reconciliation business etc.

from Yuanxin Financial Lease Co. Ltd. for year of 2020 was RMB 20 million at most actually RMB 18758300 occurred in reporting period.Reasons for major differences between trading price and

market reference price

Not applicable

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

2. Related transactions with Changhong Finance Company

The resolution of the 34th session of 8th board of directors on August 9 2017 and the second extraordinary general

meeting of 2017 on September 12 2017 approved and agreed the company to continue carry out the financialservice cooperation with Sichuan Changhong Group Finance Co. Ltd. (hereinafter referred to as “Changhong

Finance Company”) and sign a triennial Financial Service Agreement It is agreed that the maximum deposit

balance (including accrued interest and handling fees) and the highest principal and interest of outstanding loan

the Company in any finance company within the three-year validity period from the effective date of the new

agreement shall be adjusted to not exceed RMB 3.8 billion per day. In accordance with the agreement Changhong

Finance Company shall provide a series of financial services such as deposit and loan in its business scope

according to the requirements of the Company and its subsidiaries. The related transactions between the company

and its subsidiaries and Changhong Finance Company from the beginning of the year to the end of the reporting

period are as follows:

Up to 30 June 2020 the Company and its subsidiaries have opened financial business as savings note drawing

and notes discounted with Changhong Finance Company. The Company and its subordinate company own

3496167552.53 yuan savings in Changhong Finance Company takes 25.99% of the deposit taking balance in

Changhong Finance Company without 30% occupied balance of notes drawing at period-end was

1001837533.96 yuan and balance of notes discounted outstanding as 459070557.54 yuan. More details are:

In RMB

Item

Balance at

year-begin

Increased in the

period

Decreased in the

period

Balance at

period-end

Interest and

commission

charge

received or

paid

I. Savings in

Changhong

Finance

Company

3702382630.38 18445347964.14 18651563041.99 3496167552.53 49682277.50

II. Borrowings

from Changhong

Finance

Company

1.Short-term

loans

- 125000000.00 125000000.00 - 60638.89

2.Long-term

loans

- - - - -

III. Other

financial business

1. Notes drawing 999585345.49 1029581691.15 1027329502.68 1001837533.96 515944.71

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

2. Discounted

bills

638333179.10 746207505.01 925470126.57 459070557.54 6090808.53

According to the regulation of Guidelines for Information Disclosure of Listed Companies No. 5- Transactions

and Related Transactions of the Shenzhen Stock Exchange the company issued the Risk Continuous Assessment

Report About Sichuan Changhong Group Finance Co. Ltd. for the deposit loan and other financial services that

the company carried out with Changhong Finance Company during the reporting period and disclosed at

www.cninfo.com.cn on 15 August 2020.

(2) Related transactions by assets acquisition and sold

□ Applicable √ Not applicable

There are no related transactions by assets acquisition and sold in the period

(3) Material related transaction of jointly foreign investment

√Applicable □ Not applicable

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Co-investor

Association

relationship

Invested

enterprise

Main business of the invested enterprise

Registered capital of the

invested enterprise

Total assets of

the invested

enterprise (10

thousand Yuan)

Net assets of

the invested

enterprise (10

thousand Yuan)

Net profit of the

invested

enterprise (10

thousand Yuan)

Sichuan

Changhong

Electronics

Holding Group

Co. Ltd.

Sichuan

Changhong

Electric Co.

Ltd. Changhong

Huayi

Compressor Co.

Ltd.

Controlling

shareholders

actual

controllers and

related parties

Sichuan

Changhon

g Group

Finance

Co. Ltd.

Handle financial affairs and financing

consulting credit verification and related

consulting and agency services for

member units; assist member units in the

collection and payment of transaction

funds; approved insurance agency

services; provide guarantees to member

units; handle entrusted loans among

member units; handle bill acceptance and

discount for member units; handle internal

transfer and settlement of accounts among

member units and the corresponding

settlement and clearing plan design;

absorb member units’ deposits; handle

loans and financial leases for member

units; engage in inter-bank lending; handle

entrusted investment among member units;

securities investment other than stock

investment; buyer's credit of member units'

products; consumer credit of member

units' products; spot foreign exchange

RMB 2693938365.84 1788569.0431 239152.7629 2181.3849

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

settlement and sale business; other

businesses approved by the China Banking

and Insurance Regulatory Commission.Progress of major projects under

construction of the invested

enterprise (if applicable)

N/A

The company’s 27th session of the 9th Board of Directors and the 3rd extraordinary general meeting of shareholders in 2019 held on September 9 and September 26

2019 reviewed and agreed that the company would use its own funds to cooperate with the related party Changhong Huayi to respectively increase capital of RMB

500 million to Changhong Finance Company for a total capital increase of RMB one billion. After the capital increase the company and Changhong Huayi

respectively hold 14.96% of the equity of Changhong Finance Company. Sichuan Changhong the controlling shareholder of the company and its controlling

shareholder Changhong Group respectively hold 35.04% of the equity of Changhong Finance Company. As of the disclosure date of this report the company has

completed the capital increase in Changhong Finance Company. Found more on announcement (Notice No.: 2019-060 2019-061 2019-063 2019-067 2020-051

and 2020-054) released on appointed media China Securities Journal Securities Times Hong Kong Commercial Daily and Juchao Website dated 10 Sept. 2019 27

Sept. 2019 28 July 2020 8 Aug. 2020 respectively.

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

(4) Connect of related liability and debt

√ Applicable □ Not applicable

Whether has non-operational contact of related liability and debts or not

□ Yes √No

No non-operational contact of related liability or debts in Period

(5) Other related transactions

□ Applicable √ Not applicable

No other related transactions in Period

XIV. Non-business capital occupying by controlling shareholders and its related parties

□ Applicable √ Not applicable

No non-business capital occupied by controlling shareholders and its related parties in Period.XV. Significant contract and implementations

(i) Entrust contract and leasing

1. Entrust

□ Applicable √ Not applicable

No entrust in Period.

2. Contract

□ Applicable √ Not applicable

No contract in Period.

3. Leasing

√ Applicable □ Not applicable

Explanation:

Operational leasing of the Company please found more details in “investment real estate” “fixed assets” “Leaseof related party” and “Rent of related party” in Note of Financial Statement.Gains or losses to the Company from projects that reached over 10% in total profit of the Company in reporting

period.

□ Applicable √Not applicable

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

No gains or losses to the Company from projects that reached over 10% in total profit of the Company in

reporting period.

(2) Material guarantee

√ Applicable □ Not applicable

During the reporting period we did not offering guarantee to any legal person or natural person except the

wholly-owned and controlling subsidiary the guarantees that the company provides for its wholly-owned and

holding subsidiaries are for the loans generated by supporting their production and operation the guaranty type is

assurance. During the reporting period the Company has granted credit to the guarantees of some wholly-owned

and holding subsidiaries in addition to Sichuan Changhong Air-conditioner Co. Ltd. and Hebei Hongmao Daily

Appliance Technology Co. Ltd. other subsidiaries have no actual guarantee. The external guarantees of the

Company and subsidiaries are as follows:

In 10 thousand Yuan

External guarantees of the company and its subsidiaries (excluding guarantees to subsidiaries)

Name of

the

Company

guarantee

Announcement

disclosure date

Guarantee limit

Actual

date of

happen

ing

Actual

guarantee

limit

Guara

ntee

type

Guara

ntee

term

Compl

ete

imple

mentati

on or

not

Guaran

tee for

party

- - - - - - - - -

Total approving external

guarantee in report period

(A1)

Total actual occurred external

guarantee in report period

(A2)

Total approved external

guarantee at the end of

report period (A3)

Total actual balance of

external guarantee at the end

of report period (A4)

Guarantee of the Company to the subsidiaries

Name of

the

Company

guarantee

Announcement

disclosure date

Guarante

e limit

Actual date of

happening (Date of

signing agreement)

Actual

guarantee

limit

Guarantee type

Guara

ntee

term

Compl

ete

imple

mentati

on or

not

Guaran

tee for

party

Zhongsha

Changho

Electric

Co. Ltd.

Notice No.

2018-005 No.

2018-009 No.

2018-029 released

on 30 Mar. 2018

and 11 May 2018

70000

2018-9-11 10000

Joint liability

guaranty

1-year Y N

2018-10-11 5000

Joint liability

guaranty 1-year Y N

Notice No.

2019-004 No.

130000 2019-1-22 10000

Joint liability

guaranty

1-year Y N

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

2019-006 No.

2019-012 released

on 30 Jan. 2019

and 23 Feb. 2019

2019-4-4 5500

Joint liability

guaranty

1-year Y N

2019-4-30 10000

Joint liability

guaranty

1-year Y N

2019-5-31 5000

Joint liability

guaranty

1-year Y N

2019-7-23 15000

Joint liability

guaranty

1-year N N

2019-8-21 2000

Joint liability

guaranty

1-year N N

2019-9-19 10000

Joint liability

guaranty

1-year N N

Notice No.

2019-090 No.

2020-002 released

on 26 Dec. 2019

and 11 Jan. 2020

150000

2020-3-5 5000

Joint liability

guaranty

1-year N N

2020-3-9 15000

Joint liability

guaranty

1-year N N

2020-327 5500

Joint liability

guaranty

1-year N N

2020-3-30 20000

Joint liability

guaranty

1-year N N

2020-4-14 17900

Joint liability

guaranty

1-year N N

2020-4-28 12000

Joint liability

guaranty

1-year N N

2020-6-10 20000

Joint liability

guaranty

1-year N N

Changho

Meiling

Ridian

Technolo

gy Co.

Ltd.Notice No.

2019-004 No.

2019-006 No.

2019-012 released

on 30 Jan. 2019

and 23 Feb. 2019

26000

2019-1-22 2500

Joint liability

guaranty

1-year N N

2019-4-30 4000

Joint liability

guaranty

1-year Y N

2019-9-4 6500

Joint liability

guaranty

1-year N N

Notice No.

2019-090 No.

2020-002 released

on 26 Dec. 2019

and 11 Jan. 2020

30000

2020-4-2 3000

Joint liability

guaranty

1-year N N

2020-4-2 4000

Joint liability

guaranty 1-year N N

Zhongke

Meiling

Notice No.

2019-004 No.

14000 2019-7-17 3000

Joint liability

guaranty

1-year N N

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Cryogeni

Technolo

gy Co.

Ltd.

2019-006 No.

2019-012 released

on 30 Jan. 2019

and 23 Feb. 2019

2019-8-23 2000

Joint liability

guaranty

1-year N N

2019-9-24 920

Joint liability

guaranty

1-year N N

2019-10-22 3000

Joint liability

guaranty

1-year N N

2019-12-30 2000

Joint liability

guaranty

11-mo

nth

N N

Notice No.

2019-090 No.

2020-002 No.

2020-012 No.

2020-019 No.

2020-036 released

on 26 Dec. 2019

11 Jan. 28 Mar.

and 30 May.2020

18000

2020-3-10 1000

Joint liability

guaranty

1-year N N

2020-6-1 1500

Joint liability

guaranty

9.5-mo

nth

N N

2020-6-18 500

Joint liability

guaranty 8.6-mo

nth

N N

Sichuan

Changho

Air-condi

tioner

Co. Ltd.

Notice No.

2019-004 No.

2019-006 No.

2019-012 released

on 30 Jan. 2019

and 23 Feb. 2019

100000 2019-7-30 20000

Joint liability

guaranty

8-mon

Y N

Notice No.

2019-090 No.

2020-002 released

on 26 Dec. 2019

and 11 Jan. 2020

100000 - - - - - -

Changho

ngRUBA

Trade

Company

Notice No.

2018-061 No.

2018-063 released

9 Nov. 2018

6264 2019-1-10 2062.41

Joint liability

guaranty

1-year Y N

Notice No.

2019-083 No.

2019-084 No.

2019-087 released

on 7 Dec. 2019

and 18 Dec. 2019

6345

2019-12-23 2103.51

Joint liability

guaranty

1-year N N

2020-1-14 1983.25

Joint liability

guaranty 11.4-m

onth

N N

Jiangxi

Meiling

Electric

Applianc

Notice No.

2019-004 No.

2019-006 No.

2019-012 released

25000

2019-1-10 5000

Joint liability

guaranty

1-year Y N

2019-3-21 10000

Joint liability

guaranty

1-year Y N

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

e Co.

Ltd.

on 30 Jan. 2019

and 23 Feb. 2019

Notice No.

2019-090 No.

2020-002 released

on 26 Dec. 2019

and 11 Jan. 2020

15000 2020-4-9 10000

Joint liability

guaranty

1-year N N

Hefei

Meiling

Nonferro

us Metal

Products

Co. Ltd.

Notice No.

2019-090 No.

2020-002 released

on 26 Dec. 2019

and 11 Jan. 2020

3000 2020-3-20 1000

Joint liability

guaranty

1-year N N

Hefei

Meiling

Group

Holdings

Limited

Notice No.

2019-090 No.

2020-002 released

on 26 Dec. 2019

and 11 Jan. 2020

50000 2020-3-26 6000

Joint liability

guaranty

1-year N N

Hebei

Hongmao

Daily

Applianc

Technolo

gy Co.

Ltd.Notice No.

2019-090 No.

2020-002 released

on 26 Dec. 2019

and 11 Jan. 2020

4000 - - - - - -

Total amount of approving

guarantee for subsidiaries in

report period (B1)

370000

Total amount of actual

occurred guarantee for

subsidiaries in report period

(B2)

259969.17

Total amount of approved

guarantee for subsidiaries at

the end of reporting period

(B3)

376345

Total balance of actual

guarantee for subsidiaries at

the end of reporting period

(B4)

183406.76

Guarantee of the subsidiaries for the subsidiaries

Name of

the

Company

guarantee

Announcement

disclosure date

Guarantee

limit

Actual date of

happening

Actual

guarantee

limit

Guarantee type Guarantee term

Com

plete

imple

ment

ation

not

Guara

ntee

for

party

- - - - - - - - -

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Total amount of approving

guarantee for subsidiaries in

report period (C1)

Total amount of actual

occurred guarantee for

subsidiaries in report period

(C2)

Total amount of approved

guarantee for subsidiaries at

the end of reporting period

(C3)

Total balance of actual

guarantee for subsidiaries at

the end of reporting period

(C4)

Total amount of guarantee of the Company (total of three abovementioned guarantee)

Total amount of approving

guarantee in report period

(A1+B1+C1)

370000

Total amount of actual

occurred guarantee in report

period (A2+B2+C2)

259969.17

Total amount of approved

guarantee at the end of report

period (A3+B3+C3)

376345

Total balance of actual

guarantee at the end of report

period (A4+B4+C4)

183406.76

Ratio of actual guarantee (A4+B4+C4) in net assets of the

Company

38.68%

Including:

Amount of guarantee for shareholders actual controller and its

related parties (D) 0

The debts guarantee amount provided for the guaranteed parties

whose assets-liability ratio exceed 70% directly or indirectly (E) 148486.76

Proportion of total amount of guarantee in net assets of the

Company exceed 50% (F) 0

Total amount of the aforesaid three guarantees (D+E+F) 148486.76

Explanations on possibly bearing joint and several liquidating

responsibilities for undue guarantees (if applicable)

N/A

Explanations on external guarantee against regulated procedures

(if applicable)

N/A

The above-mentioned guarantee objects are the wholly-owned and holding subsidiaries of the Company and these

wholly-owned and holding subsidiaries are in normal production and operation there are no overdue loans and

the guarantee risks are controllable. During the reporting period the highest level of security the Company

provided amounted to 3763450000 Yuan by the approval the actual amount of guarantee is 2599691700 Yuan.

At the end of the reporting period the practical guarantee balance amounted to 1834067600 Yuan accounting

for the Company’s latest net assets ratio of 38.68%.

Explanation on guarantee with composite way: Not applicable

2. Guarantee outside against the regulation

□Applicable √Not applicable

No guarantee outside against the regulation in Period.

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

(3) Trust financing

√Applicable □ Not applicable

In 10 thousand Yuan

Type Capital sources Amount for entrust Undue balance Overdue amount

Bank financing pro

ducts

Own fund 43500 40000 0

Bank financing pro

ducts

Idle raised funds 30000 15000 0

Total 73500 55000 0

Details of the single major amount or high-risk trust investment with low security poor fluidity and

non-guaranteed:

√Applicable □ Not applicable

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

In 10 thousand Yuan

Trustee

institution

(or name of

trustee)

Trust

type

Product

type

Amount

Source

of funds

Start

date

Expir

y date

Capital investment

purpose

Criter

ia for

fixing

rewar

Referen

annual

rate of

return

Antici

pated

incom

e (if

applic

able)

Actual

gains/lo

sses in

period

Actual

collecte

gains/lo

sses in

period

Amount

of reserve

for

devaluati

on of

withdraw

ing (if

applicabl

Whet

her

appro

ved

legal

proce

dure

(Y/N)

Whet

her

has

entrus

financ

e plan

in the

future

Summary

of the

items and

query

index (if

applicable

)

Chengdu Branch

of Bohai Bank

Co. Ltd

Bank

Principal-guar

anteed with

floating

income

10000.00

Idle raised

funds

2020-2-

2020-5-

The structured deposit

product the structural

derivatives tied with the

3-month interbank

lending rate in London

(Libor)

Annuali

zed

returns:

3.80%

3.80% 99.22 97.86 97.86 N/A Y

Not

applica

ble

Juchao

Website(ww

w.cninfo.co

m.cn)

(Notice No.:

2020-010)

Mianyang

Economic

Development

Zone branch of

Bank of China

Limited

Bank

Guaranteed

capital and

minimum

return

5000.00

Idle raised

funds

2020-3-

2020-6-

This product is a

structured deposit

product. The spot

exchange rate of US

dollar to Swiss franc is

taken from the quotes

U.S. dollar drawn by

EBS (Interbank

Electronic Trading

System) between 5 a.m.Sydney time every

Monday and 5 p.m. New

York time every Friday

against Swiss francs.

Annuali

zed

returns:

3.60%

3.60% 46 45.37 45.37 N/A Y

Not

applica

ble

Juchao

Website(ww

w.cninfo.co

m.cn)

(Notice No.:

2020-011)

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Hefei Branch of

China Guangfa

Bank

Principal-guar

anteed with

floating

income

5000.00

Idle own

funds

2020-4-

2020-7-

Investment of the central

bank bill in bank market

treasury bond corporate

bonds short-term

financing medium-term

bills inter-bank

borrowing inter-bank

deposits bills or bill

repurchase etc. and

interest rate-linked

option products

Annuali

zed

returns:

3.85%

3.85% 48.66 - - N/A Y

Not

applica

ble

Juchao

Website(ww

w.cninfo.co

m.cn)

(Notice No.:

2020-026)

Hefei Branch of

Bank of East

Asia (China)

Co. Ltd.

Bank

Principal-guar

anteed with

floating

income

5000.00

Idle own

funds

2020-4-

2020-7-

Deposits embedded in

financial derivatives

absorbed by the Bank

are linked to exchange

rate fluctuations so that

depositors can obtain

corresponding returns on

the basis of certain risks.

Annuali

zed

returns:

3.80%

3.80% 48.03 - - N/A Y

Not

applica

ble

Juchao

Website(ww

w.cninfo.co

m.cn)

(Notice No.:

2020-026)

Mianyang

Economic

Development

Zone branch of

Bank of China

Limited

Bank

Guaranteed

capital and

minimum

return

10000.00

Idle own

funds

2020-4-

2020-7-

Funds raised by this

product are operated

uniformly by the Bank

of China and business

management is carried

out in accordance with

the principle of

separating basic deposits

from derivative

transactions. The

principal part raised is

Annuali

zed

returns:

3.75%

3.75% 95.83 - - N/A Y

Not

applica

ble

Juchao

Website(ww

w.cninfo.co

m.cn)

(Notice No.:

2020-027)

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

included in the unified

operation and

management of the

internal funds of the

Bank of China and

included in the payment

scope of deposit

reserves and deposit

insurance premiums.Products embedded

derivatives are partly

invested in derivatives

markets such as

exchange rates interest

rates commodities and

indices and the final

product performance is

linked to derivatives.

During the investment

period Bank of China

uses the income method

to value the embedded

option price of this

structured deposit.Hefei Branch of

China Everbright

Bank Co. Ltd.

Bank

Principal-guar

anteed with

floating

income

5000.00

Idle own

funds

2020-5-

2020-8-

This product is a RMB

structured deposit

product with embedded

financial derivative

instruments. The bank

will invest the raised

structured deposit funds

Annuali

zed

returns:

3.30%

3.30% 42.17 - - N/A Y

Not

applica

ble

Juchao

Website(ww

w.cninfo.co

m.cn)

(Notice No.:

2020-033)

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

in bank time deposits

and at the same time

invest in financial

derivative transactions

(including but not

limited to options and

swaps and other

derivative transactions)

in domestic or

international financial

markets by limiting the

income of the time

deposits to the upper

limit the sum of the

investment gains and

losses of financial

derivative transactions

and the bank deposit

interest together

constitute the income of

structured deposit

products.Mianyang

Branch of Bank

Communications

Co. Ltd.

Bank

Principal-guar

anteed with

floating

income

5000.00

Idle own

funds

2020-5-

2020-8-

The funds collected by

the structured deposit

products are included in

the deposit management

category as the principal

Annuali

zed

returns:

3.30%

3.30% 42.63 - - N/A Y

Not

applica

ble

Juchao

Website(ww

w.cninfo.co

m.cn)

(Notice No.:

2020-034)

Chengdu Branch

of Bohai Bank

Co. Ltd

Bank

Principal-guar

anteed with

floating

income

10000.00

Idle raised

funds

2020-5-

2020-8-

The structured deposit

product the derivatives

tied with the 3-month

interbank lending rate in

London (Libor)

Annuali

zed

returns:

3.45%

3.45% 87.21 - - N/A Y

Not

applica

ble

Juchao

Website(ww

w.cninfo.co

m.cn)

(Notice No.:

2020-035)

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Mianyang

Branch of Bank

Communications

Co. Ltd.

Bank

Principal-guar

anteed with

floating

income

5000.00

Idle own

funds

2020-6-

2020-9-

The funds collected by

the structured deposit

products are included in

the deposit management

category as the principal

Annuali

zed

returns:

3.27%

3.27% 42.69 - - N/A Y

Not

applica

ble

Juchao

Website(ww

w.cninfo.co

m.cn)

(Notice No.:

2020-037)

Chengdu Branch

of China CITIC

Bank Co. Ltd.

Bank

Principal-guar

anteed with

floating

income

5000.00

Idle raised

funds

2020-6-

2020-9-

This product is a

structured deposit

product which refers to

deposits embedded in

financial derivative

products linking to the

fluctuation of interest

rates exchange rates

indexes and other

financial market objects

or to the credit status of

an entity so that

depositors can obtain

corresponding benefits

on the basis of bearing

certain risks.

Annuali

zed

returns:

3.30%

3.30% 41.71 - - N/A Y

Not

applica

ble

Juchao

Website(ww

w.cninfo.co

m.cn)

(Notice No.:

2020-040)

Hefei Branch of

Bank of East

Asia (China)

Limited

Bank

Principal-guar

anteed with

floating

income

5000.00

Idle own

funds

2020-6-

2020-9-

Deposits embedded in

financial derivatives

absorbed by the Bank

are linked to exchange

rate fluctuations so that

depositors can obtain

corresponding returns on

the basis of certain risks.

Annuali

zed

returns:

3.50%

3.50% 44.24 - - N/A Y

Not

applica

ble

Juchao

Website(ww

w.cninfo.co

m.cn)

(Notice No.:

2020-039)

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Mianyang

Economic

Development

Zone branch of

Bank of China

Limited

Bank

Guaranteed

capital and

minimum

return

3500.00

Idle own

funds

2020-4-

2020-5-

Funds raised by this

product are operated

uniformly by the Bank

of China and business

management is carried

out in accordance with

the principle of

separating basic deposits

from derivative

transactions. The

principal part raised is

included in the unified

operation and

management of the

internal funds of the

Bank of China and

included in the payment

scope of deposit

reserves and deposit

insurance premiums.Products embedded

derivatives are partly

invested in derivatives

markets such as

exchange rates interest

rates commodities and

indices and the final

product performance is

linked to derivatives.

During the investment

Annuali

zed

returns:

3.40%

3.40% 10.91 10.76 10.76 N/A Y

Not

applica

ble

Juchao

Website(ww

w.cninfo.co

m.cn)

(Notice No.:

2020-026)

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

period Bank of China

uses the income method

to value the embedded

option price of this

structured deposit.Total 73500.00 -- -- -- -- -- -- 649.3 153.99 153.99 -- -- -- --

Entrust financial expected to be unable to recover the principal or impairment might be occurred

□Applicable √ Not applicable

(4) Other material contracts

□Applicable √Not applicable

XVI. Social responsibility

(1) Material environmental protection

The listed Company and its subsidiary whether belong to the key sewage units released from environmental protection department: √ Yes □ No

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Company or

Subsidiary

Name

Names of

Main

Pollutants

and

Characteristi

c Pollutants

Emission

Method

Numbe

r of

Emissi

Outlets

Distribution of Emission

Outlets

Emission

Concentration

Implemented Pollutant Emission

Standards

Total

Emissions

Total Approved

Emissions

Excessive

Emissions

Sichuan

Changhong

Air-condition

er Co. Ltd.

VOC

(volatile

organic

compounds)

Organized

emissions

Two outlets at J05

workshop and one outlet at

J07 workshop No 128

Sanjiang Road Economic

Development Zone

Mianyang City

Less than 11.9

mg/m3

"Sichuan Province Fixed Pollution

Source Air Volatile Organic

Compound Emission Standard

DB51/2377-2017" Table 3 standard

requirements that is volatile organic

compounds <60mg/m3.

855.39kg

Sichuan Changhong

Air-conditioner Co. Ltd.

has completed the

pollutant discharge

registration on the

national pollutant

discharge permit

management information

platform and obtained the

registration receipt in

accordance with the

"Pollution Permit

Management Measures

Not

exceeded

Nitrogen

oxides

Organized

emissions

Two outlets at J05

workshop (it belongs to the

same output as J05VOC) No

128 Sanjiang Road

Economic Development

Zone Mianyang City

Not detected

"Comprehensive Emission Standard

of Air Pollutants GB16297-1996"

Table 2 secondary standard

requirements that is the

concentration of nitrogen oxides <240

mg/m3

Below

detection

limit

Not

exceeded

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Particulate

matter

Organized

emissions

Two outlets at J05 workshop

and one outlet at J07

workshop No 128 Sanjiang

Road Economic

Development Zone

Mianyang City

Concentration is

lower than the

detection limit i.e.

＜20 mg/m3

"Comprehensive Emission Standard

of Air Pollutants GB16297-1996"

Table 2 secondary standard

requirements that is the

concentration of particulate matter

<120 mg/m3

Below

detection

limit

(Trial)" the "Fixed

Pollution Source

Pollution Permit

Classification

Management Directory

(2019 Edition)" etc.

there is no requirement

for the company's total

emissions in the pollution

discharge registration

Not

exceeded

Note 1: In 2020 Bureau of Ecology and Environment of Mianyang issued the MHF [2020] No. 38 "Notice on Supplementing the List of Key Pollutant Discharge

Units in 2020" and included Changhong Air-conditioner in the list of key soil pollution supervision.Note 2: The company's wholly-owned subsidiary Zhongshan Changhong Electric Co. Ltd. (hereinafter referred to as "Zhongshan Changhong") is located in

Zhongshan City Guangdong Province. In 2019 Zhongshan Changhong was listed in the list of key pollutant emission units for the atmospheric environment in 2019

by the Bureau of Ecology and Environment of Zhongshan. However the company attached great importance to environmental protection in daily environmental

protection and pollution control work and actively fulfilled corporate social responsibility and undertook social obligations. In 2020 Zhongshan Changhong is no

longer included in the list of key pollutant discharge units in 2020 by the Bureau of Ecology and Environment of Zhongshan.

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

1. Construction and operation of pollution prevention facilities

The Company and its subsidiaries actively respond to the national ecological civilization construction plan and

actively participate in national environmental protection works in line with the purpose of actively fulfilling its

corporate social responsibility. In recent years The Company and its subsidiaries have actively explored the

introduction of advanced management concepts and methods and invested a large amount of money in the

purchase of pollution control equipment and facilities. And realized emission reduction by scientific technical

methods by the investment in installation of activated carbon adsorption treatment equipment welding dust

purifier facilities etc. At the same time in order to ensure the effective operation of the management equipment

and facilities the Company and its subsidiaries have adopted such management measures as setting up special

personnel to manage and maintain the operation of the equipment and facilities formulating proper rules for

operation and maintenance of the equipment and facilities emergency disposal regulations supervision and

assessment mechanism allocating special maintenance funds and so on so as to ensure the effective operation of

the governing facilities in a full round delivering its best to protect and improve the ecological environment

around the enterprise.

2. Environment impact assessment and other required environment protection administrative license for

construction projects

The Company and its subsidiaries earnestly implement the Environmental Protection Law the Environmental

Impact Assessment Law and the Regulations on Environmental Protection Management of Construction Projects

consciously abide by environmental protection laws and regulations industry requirements and government

regulations. For new renovated and expanded projects the Company and its subsidiaries adhere to the project

environmental impact assessment and "three simultaneous" system fully implement environmental protection

measures act well in environment protection management in respect of project planning design construction and

operation make full use of advanced crafts and technological means to reduce environmental pollution.

Environmental impact assessment is carried out synchronously while making the feasibility study for a

construction project. Third-party professional parties are engaged to analyze the industrial policy land use

planning environmental impact and the feasibility of environmental protection measures of the project.

Construction will be started only after approved by the competent environmental protection authorities. During

the construction environmental protection requirements are earnestly implemented environmental protection

facilities are built synchronously environmental protection acceptance of the project is arranged in time upon

completion of the project to ensure that the project meets the acceptance criteria and could be put into official

operation with all the environmental impact assessment requirements met. During the operation period the

Company conducts pollution prevention to ensure the normal operation of environmental protection facilities in

strict compliance with the relevant environmental impact assessment documents and the reply requirements of the

competent environmental protection authorities.

3. Emergency plan for environmental emergencies

The Company and its subsidiaries have set up related emergency plans for environmental emergencies. The

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Company and its subsidiaries have determined classified warning based on the different extent and severity of

environmental impacts that may be caused by the material environmental factors defined the responsibilities for

emergency response regulated emergency handling procedures established special team to handle emergencies

and organized regular rehearsal and appraisal of relevant emergency plans so as to ensure the effectiveness of

these plans improve their capability of emergency handling and take precautions against contingent emergencies.

4. Independent plan to monitor environment

The Company and its subsidiaries have established regular monitoring plan for environmental pollutants set up

special funds for pollutants monitoring and engaged third-party authoritative to regularly monitor the operation of

major pollution-production links and environmental protection treatment facilities in connection with the major

pollutants produced by the Company and its subsidiaries to make sure that the Company and its subsidiaries

could achieve emission standards in a full round.

5. Other environment information that should be disclosed

According to the Environmental Information Disclosure Measures of Enterprises and Institutions the Company

and its subsidiaries have realized the disclosure of information relating to environmental impact assessment

project acceptance pollutants production and discharge solid waste management important environmental

factors environmental objectives and performance of construction projects.

6. Other environment related information

In order to further realize the scientific and systematic environmental protection work of the Company and its

subsidiaries the Company and its subsidiaries have established an environmental management system in

accordance with ISO14001 standards set up an environmental protection organization acquired environmental

protection resources regularly identified updated and appraised environmental factors compliance obligations

environmental risks and opportunities and regularly determined environmental objectives and management

programs. Through the implementation of management programs and continuous normal improvement the

environmental performance of the Company and its subsidiaries has been continuously improved. Through regular

internal audit and management review as well as the verification and examination of the third parties the

environmental management system of the Company and its subsidiaries has been effectively controlled and fully

meets the system management standards and relevant regulations.

(2) Fulfill the precise social responsibility for poverty alleviation

The Company has no precise social responsibility for poverty alleviation in the period and has no follow-up plan

either

XVII. Explanation on other significant events

√ Applicable □ Not applicable

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

1. The resolution of the 34th session of the 9th board of directors of the company passed and agreed that the

company would withdraw in advance the remaining all investments under the "Dongwu-CMB-Donghui No. 135

Targeted Asset Management Plan" issued by Soochow Securities Co. Ltd. that is the remaining face value of 50

million yuan of principal and the investment income during the holding period corresponding to the principal of

about 2816300 yuan (preliminary calculation) are recovered in advance and use for the company's daily

operations. After this withdrawal in advance the entrusted asset principal of the No. 135 targeted asset

management plan subscribed by the company is 0 yuan and the company will subsequently liquidate the targeted

asset management plan. Found more on appointed media “Securities Times” “China Securities Journal” “HongKong Commercial Daily” and www.cninfo.com.cn that the Company disclosed in the form of announcement

(Announcement No. 2019-094) on 2 Jan. 2020.

2. The resolutions of the 36th session of the 9th Board of Directors the 19th session of the 9th Board of Supervisorsand the 2019 Annual General Meeting of Shareholders passed the “Plan for Profit Distribution of the Company in

2019” and the independent directors of the company made independent approval opinions taking into account the

interests of shareholders and the long-term development needs of the company agreed the company to use the

total share capital of 1044597881 shares on December 31 2019 as the base and distribute a cash dividend of 0.5

yuan (including tax) per every 10 shares to all shareholders who distributed cash dividends of 52229894.05 yuan

(including tax) in total. After this allocation the company's total share capital remains unchanged and the

remaining undistributed profit of the parent company is 893677967.36 yuan and the remaining undistributed

profits shall be distributed after being carried forward in the subsequent years.

On 11 June 2020 the Company released the profit distribution plan for year of 2019 and implemented the plan.

Found more on appointed media “Securities Times” “China Securities Journal” “Hong Kong Commercial Daily”

and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No. 2020-012

No.2020-013 No.2020-028 No.2020-036 and No.2020-038) on 28 March 2020 8 May 2020 30 May 2020 and

11 June 2020.

3. The 36th session of the 9th board of directors of the company and the 2019 annual general meeting of

shareholders passed and agreed that the company and its subsidiaries would conduct forward foreign exchange

fund transactions during the period from July 1 2020 to June 30 2021 the business transaction balance does not

exceed 650 million U.S. dollars (mainly including U.S. dollars Australian dollars Euros and all other foreign

exchanges are converted into U.S. dollars) and the longest delivery period of a single business does not exceed 1

year. Found more on appointed media “Securities Times” “China Securities Journal” “Hong Kong Commercial

Daily” and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No.

2020-012 No.2020-017 and No.2020-036) on 28 March 2020 and 30 May 2020.

5. The 36th session of the 9th board of directors of the company and the 2019 annual general meeting of

shareholders passed and agreed that the company should apply to China Construction Bank Co. Ltd. Hefei

Luyang Sub-branch for a special credit line of up to 700 million yuan in bill pools with a credit period of 2 years.The types of credits are mainly used for the special business in the bill pools by using the bill pledge method. The

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

37th session of the 9th board of directors of the company and the 2019 annual general meeting of shareholders

approved and agreed that the company could apply to Ping An Bank Co. Ltd. Hefei Branch for a special credit

line of up to 300 million yuan in bill pools with a a credit period of 1 year. The credit types are mainly used for

special business in the bill pools by adopting the bill pledge method. The 38th session of the 9th board of directors

of the company and the 2019 annual general meeting of shareholders approved and agreed that the company and

its subsidiaries could apply to the Hefei Branch of China Merchants Bank Co. Ltd. for a special credit line of up

to 300 million yuan in the bill pools with a credit period of 1 year. The credit types are mainly used for special

business in the bill pools by adopting the bill pledge method. Found more on appointed media “Securities Times”

“China Securities Journal” “Hong Kong Commercial Daily” and www.cninfo.com.cn that the Company disclosed

in the form of announcement (Announcement No. 2020-012 No.2020-020 No.2020-022 No.2020-025

No.2020-029 No.2020-030 and No.2020-036) on 28 March 2020 18 April 2020 8 May 2020 and 30 May 2020.

5. Being deliberated and approved by 39th session of 9th BOD the Company agreed to invested approximately

20.21 million yuan on the expansion technology improvement for production line of the export refrigerators with

purpose of improving the production capacity technical standards and product competitiveness. Found more on

appointed media “Securities Times” “China Securities Journal” “Hong Kong Commercial Daily” and

www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No.2020-041) on

30 June 2020.

6. The deliberations and approvals at the 33rd session of the 9th board of directors the 17th session of the 9th board

of supervisors and the first extraordinary general meeting of shareholders in 2020 agreed that the company would

close the "intelligent R&D project" and the project's surplus raised funds of 125084220.44 yuan as of November

30 2019 (including the income of wealth management and the interest income from deposits of 47970805.20

yuan) and the interest settled thereafter are used to permanently supplement the company's liquid funds. The

specific amount is subject to the actual amount after deducting the reserved contract balance and the warranty

money from the special account on the day the funds are transferred out. At the same time the total amount of

114368326.60 yuan in the balance of the contract to be paid and warranty money will continue to be kept in the

fund-raising account and paid according to the contract. Found more on appointed media “Securities Times”

“China Securities Journal” “Hong Kong Commercial Daily” and www.cninfo.com.cn that the Company disclosed

in the form of announcement (Announcement No. 2019-088 No.2019-089 No.2019-091 and No.2020-002) on 26

Dec. 2019 and 11 Jan. 2020.

7. In reporting period the Company and its subordinate controlling subsidiary have accumulated received various

kinds of government subsidies as 50907539.53 Yuan. Found more on appointed media “Securities Times”

“China Securities Journal” “Hong Kong Commercial Daily” and www.cninfo.com.cn that the Company disclosed

in the form of announcement (Announcement No.2020-043) on 2 July 2020.

8. On July 23 2020 the company issued the Reminder Announcement on Operating Conditions. Found more on

appointed media “Securities Times” “China Securities Journal” “Hong Kong Commercial Daily” and

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No.2020-046).XVIII. Major event of the subsidiary

√ Applicable □ Not applicable

1. The deliberations and approvals at the 36th session of the 9th board of directors of the company agreed that the

company and its wholly-owned subsidiary Sichuan Changhong Air-conditioner Co. Ltd. (hereinafter referred to

as "Changhong Air-conditioner") would jointly increase capital of 150 million yuan to Zhongshan Changhong

with their own funds according to the existing shareholding ratio of which the Company increased capital of

135 million yuan and Changhong Air conditioning increased capital of 15 million yuan. After the capital increase

was completed the registered capital of Zhongshan Changhong has increased to 334 million yuan and the

shareholding ratio of the company and Changhong Air-conditioner in Zhongshan Changhong remains unchanged

at 90% and 10%. Found more on appointed media “Securities Times” “China Securities Journal” “Hong Kong

Commercial Daily” and www.cninfo.com.cn that the Company disclosed in the form of announcement

(Announcement No.2020-012 and No.2020-018) on 28 Mar. 2020.

2. The deliberations and approvals at the 36th session of the 9th board of directors and the 19th session of the of the

9th board of supervisors of the company agreed that in 2020 the company would increase credit guarantee for

Zhongke Meiling with the amount not exceeding 30 million yuan. After the approval of the guarantee quota the

guarantee quota provided by the company to Zhongke Meiling in 2020 will accumulate to 180 million yuan.

Found more on appointed media “Securities Times” “China Securities Journal” “Hong Kong Commercial Daily”

and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No.2020-012

No.2020-013 and No.2020-036) on 28 Mar. 2020 and 30 May 2020.

3. The deliberations and approvals at the 37th session of the 9th board of directors of the company agreed that the

company would transfer the 0.18% equity of Ridian Technology held by Wu Changyuan with its own funds

(initial investment amount of 150000 yuan) and the equity transfer price was based on Ridian Technology’s

audited net assets of 155582873.62 yuan as of December 31 2019 the equity transfer price was determined to be

280049.17 yuan. After the equity transfer the company holds 99.036% of Ridian Technology's equity and natural

person shareholder Hu Zhiheng holds 0.964% of Ridian Technology's equity. Found more on appointed media

“Securities Times” “China Securities Journal” “Hong Kong Commercial Daily” and www.cninfo.com.cn that the

Company disclosed in the form of announcement (Announcement No.2020-022) on 18 April 2020.

4. The deliberations and approvals at the 37th session of the 9th board of directors of the company agreed that the

company would transfer 100% equity of 7 subsidiaries held by the company’s wholly-owned subsidiary Hefei

Meiling Electric Appliances Marketing Co. Ltd. including Chengdu Meiling Electric Appliances Marketing Co.Ltd. Fuzhou Meiling Electric Appliances Marketing Co. Ltd. and Nanjing Meiling Electric Appliances

Marketing Co. Ltd. Hangzhou Meiling Electric Appliances Marketing Co. Ltd. Shanghai Meiling Electric

Appliances Marketing Co. Ltd. Guangzhou Meiling Electric Appliances Marketing Co. Ltd. and Beijing

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Meiling Electric Appliances Marketing Co. Ltd. to Hefei Meiling Group Holdings Limited which is a

wholly-owned subsidiary of the company the equity transfer price is based on the audited net asset value of 7

marketing companies as of December 31 2019 and it’s determined that the total equity transfer cost is 7 yuan.

Found more on appointed media “Securities Times” “China Securities Journal” “Hong Kong Commercial Daily”

and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No.2020-022)

on 18 April 2020.

5. The deliberations and approvals at the 39th session of the 9th board of directors of the company agreed that

Changhong Air-conditioner would apply to the Agricultural Bank of China Co. Ltd. Mianyang Fucheng

Sub-branch for bank acceptance drafts not exceeding 100 million yuan with the pledge of time deposit certificates

the time limit was one year; and agreed that Changhong Air-conditioner could apply to Bohai Bank Co. Ltd.

Chengdu Branch for bank acceptance drafts not exceeding 100 million yuan with the pledge of time deposit

certificates the time limit was one year; and agreed that Changhong Air-conditioner could apply to Liangli

Sub-branch of Chengdu Rural Commercial Bank Co. Ltd. for bank acceptance drafts not exceeding 100 million

yuan with the pledge of time deposit certificates and the time limit was one year. Found more on appointed media

“Securities Times” “China Securities Journal” “Hong Kong Commercial Daily” and www.cninfo.com.cn that the

Company disclosed in the form of announcement (Announcement No.2020-041 and No.2020-042) on 30 June

2020.

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Section VI. Changes in shares and particular about shareholders

I. Changes in shares

(i) Changes in shares

In Share

Before the Change Increase/Decrease in the Change (+ -) After the Change

Amount Proportion

New

issue

Bonu

Capitalizatio

n of public

reserve

Others Subtotal Amount Proportion

I. Restricted shares 10553770 1.01% 0 0 0 -81094 -81094 10472676 1.00%

1. State-owned shares 0 0.00% 0 0 0 0 0 0 0.00%

2. State-owned legal

person’s shares

915987 0.09% 0 0 0 737748 737748 1653735 0.16%

3. Other domestic shares 8370363 0.80% 0 0 0 -818842 -818842 7551521 0.72%

Including: Domestic legal

person’s shares

4716077 0.45% 0 0 0 -737748 -737748 3978329 0.38%

Domestic

natural person’s shares

3654286 0.35% 0 0 0 -81094 -81094 3573192 0.34%

4. Foreign shares 1267420 0.12% 0 0 0 0 0 1267420 0.12%

Including: Foreign legal

person’s shares

0 0.00% 0 0 0 0 0 0 0.00%

Foreign

natural person’s shares

1267420 0.12% 0 0 0 0 0 1267420 0.12%

II. Unrestricted shares 1034044111 98.99% 0 0 0 81094 81094 1034125205 99.00%

1. RMB ordinary shares 872447531 83.52% 0 0 0 81094 81094 872528625 83.53%

2. Domestically listed

foreign shares

161596580 15.47% 0 0 0 0 0 161596580 15.47%

3. Overseas listed foreign

0 0.00% 0 0 0 0 0 0 0.00%

4. Others 0 0.00% 0 0 0 0 0 0 0.00%

III. Total shares 1044597881

100.00

0 0 0 0 0 1044597881

100.00

1. Reasons for share changed

√ Applicable □ Not applicable

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

(1) During the reporting period 737748 shares of the 1229580 shares with sales restrictions of the Company

held by the original shareholder the City Insurance Company were transferred to the People's Insurance Group of

China Co. Ltd. so the holder of the aforementioned shares was changed to a state-owned legal person.

(2) On August 22 2019 the director and vice president of the company Mr. Zhong Ming reduced his holding of

78725 shares of the company through centralized bidding. After this reduction of holding Mr. Zhong Ming holds

236175 shares of the company’s RMB ordinary shares. According to the relevant regulations of the

"Implementation Rules for Shareholding Reduction of Shareholders Directors Supervisors and Senior

Management of Listed Companies of the Shenzhen Stock Exchange" during the reporting period the sales

restrictions of 25% of the company’s shares held by Mr. Zhong Ming i.e. 59044 shares were lifted and the

remaining shares shall continue to be locked up.

(3) The original director of the company Mr. Teng Guangsheng (who no longer holds any position in the

company) the original term of office would expire on September 12 2020. According to the relevant regulations

of the "Implementation Rules for Shareholding Reduction of Shareholders Directors Supervisors and Senior

Management of Listed Companies of the Shenzhen Stock Exchange" during the reporting period the sales

restrictions of 25% of the company’s shares held by Mr. Teng Guangsheng namely 22050 shares were lifted and

the remaining shares shall continue to be locked up.

2. Approval of share changed

□ Applicable √ Not applicable

3. Ownership transfer of share changed

√ Applicable □ Not applicable

During the reporting period the changes in the ownership transfer of the company’s restricted shares are as

follows:

The 1229580 shares of the Company with sales restrictions held by the original shareholder City Insurance

Company were transferred to the People’s Insurance Group of China and China Life Insurance (Group) Company

respectively. Among them the People’s Insurance Group of China holds 737748 shares and China Life Insurance

(Group) Company holds 491832 shares. The equity transfer procedures of aforementioned shares were completed

on May 28 2020 at the Shenzhen branch of China Securities Depository and Clearing Corporation Limited.

4. Progress of shares buy-back

□ Applicable √ Not applicable

5.Implementation progress of the reduction of repurchases shares by centralized bidding

□ Applicable √ Not applicable

6. Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable

to common shareholders of Company in latest year and period

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

□ Applicable √ Not applicable

7.Other information necessary to disclose for the Company or need to disclosed under requirement from security

regulators

□ Applicable √ Not applicable

(2)Changes of restricted shares

√ Applicable □ Not applicable

In Share

Sharehol

ders

Opening

restricted

released

in Period

Restricted

Increased

the

Period

Ending

restricted

Restricted

reasons

Date for released

Zhong

Ming

236175 59044 0 177131

lockup in

senior

executives

At beginning of 2020 25% of the total

company’s shares held by Mr. Zhong

Ming namely the 59044 shares have

been released from restriction

Teng

Guangshe

88200 22050 0 66150

lockup in

senior

executives

At beginning of 2020 25% of the total

company’s shares held by Mr. Teng

Guangsheng namely the 22050 shares

have been released from restriction

Total 324375 81094 0 243281 -- --

II. Security offering and listing

□ Applicable √ Not applicable

III. Amount of shareholders of the Company and particulars about shares holding

In share

Total common shareholders in

reporting period-end

61594

Total preference

shareholders with voting

rights recovered at end of

reporting period (if

applicable) (note 8)

Particulars about shares held above 5% by common shareholders or top 10 common shares holding

Full name of Shareholders Nature of shareholder

Proport

ion of

held

Total common

shareholders

at the end of

report period

Changes in

report

period

Amount of

restricted

common

shares held

Amount of

un-restricted

common

shares held

Number of

pledged/frozen

State Amount

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Sichuan Changhong Electric

Co. Ltd.

State-owned

legal person

23.79% 248457724 0 0 248457724 - -

Hefei Industry Investment

Holding (Group) Co. Ltd.State-owned

legal person

4.58% 47823401 0 0 47823401 - -

CHANGHONG (HK)

TRADING LIMITED (note 1)

Foreign

legal person

2.59% 27077797 0 0 27077797 - -

CAO SHENGCHUN

Foreign

natural

person

1.41% 14766086 0 0 14766086 - -

Caitong Fund- Ningbo

Bank-Haitong Xingtai (Anhui)

Emerging Industry Investment

Fund (Limited Partnership)

Domestic

non

state-owned

corporate

1.03% 10733452 0 0 10733452 - -

Ma Guobin

Domestic

nature

person

0.92% 9633427 -239507 0 9633427 - -

Shanghai Fangda Investment

Management Co. Ltd.

Domestic

general

legal person

0.85% 8880000 4640000 0 8880000 - -

China Construction Bank -

Huaxia China Securities Sichuan

State-owned enterprise reform

exchange traded index securities

investment fund

Domestic

non

state-owned

corporate

0.65% 6781800 -347100 0 6781800 - -

Phillip Securities (Hong Kong)

Co. Ltd.

Foreign

legal person

0.60% 6296913 0 0 6296913 - -

China Securities Finance

Corporation Limited

Domestic

general

legal person

0.42% 4362500 0 0 4362500 - -

Strategy investors or general legal person

becomes top 10 shareholders due to rights

issued (if applicable)

Not applicable

Explanation on associated relationship or

consistent actors among the aforesaid

shareholders

Among the above shareholders CHANGHONG (HK) TRADING LIMITED

(hereinafter referred to as Hong Kong Changhong) is the wholly-owned

subsidiary of Sichuan Changhong Electric Co. Ltd.; except the shares of the

Company directly held by Hong Kong Changhong 6296913 shares of B-stock

are also held through Phillip Securities (Hong Kong) Co. Ltd. the foregoing

shareholders constitute persons of uniform action. There existed no associated

relationship or belong to the concerted actors as specified in the Measures for the

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Administration of Information Disclosure of Shareholder Equity Changes of

Listed Companies among Sichuan Changhong Hong Kong Changhong and othertop 7 shareholders; “Caitong Fund- Ningbo Bank-Haitong Xingtai (Anhui)

Emerging Industry Investment Fund (Limited Partnership) ” refers to the

products of Caitong Fund Management Company subscribe for privately

placement of 2016; The company neither knows whether there is any association

among other shareholders nor knows whether other shareholders belong to thepersons acting in concert that is stipulated in the “Administrative Measures onInformation Disclosure of Changes in Shareholding of Listed Companies”.Particular about top ten shareholders with un-restrict shares held

Shareholders’ name

Amount of unrestricted shares held at end of

Period

Type of shares

Type Amount

Sichuan Changhong Electric Co. Ltd. 248457724

RMB ordinary

248457724

Hefei Industry Investment Holding

(Group) Co. Ltd.

47823401

RMB ordinary

47823401

CHANGHONG (HK) TRADING

LIMITED (note 1)

27077797

Domestically listed

foreign shares

27077797

CAO SHENGCHUN 14766086

Domestically listed

foreign shares

14766086

Caitong Fund- Ningbo Bank-Haitong

Xingtai (Anhui) Emerging Industry

Investment Fund (Limited Partnership)

10733452

RMB ordinary

10733452

Ma Guobin 9633427

RMB ordinary

9633427

Shanghai Fangda Investment

Management Co. Ltd.

8880000

RMB ordinary

8880000

China Construction Bank - Huaxia China

Securities Sichuan State-owned

enterprise reform exchange traded index

securities investment fund

6781800

RMB ordinary

6781800

Phillip Securities (Hong Kong) Co. Ltd. 6296913

Domestically listed

foreign shares

6296913

China Securities Finance Corporation

Limited

4362500

RMB ordinary

4362500

Expiation on associated relationship or

consistent actors within the top 10

un-restrict shareholders and between top

10 un-restrict shareholders and top 10

shareholders

Found more in “Particulars about shares held above 5% by shareholders or top 10shares holding”

100

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Explanation on top ten common

shareholders involving margin business

(if applicable)

As of 30th June 2020 among the top 10 common shareholders Ma Guobin holds

9572801 shares of the Company through customer credit trading secured account of

Founder Securities Co. Ltd. and 60626 shares hold through common securities

account thus 9633427 shares of the Company are held in total. The

shareholder-Shanghai Fangda Investment Management Co. Ltd. customer credit

transaction guaranteed securities account of Guoyuan Securities Co. Ltd holds

8880000 shares of the Company.

Note 1: At end of the reporting period the person acting in concert with controlling shareholder Sichuan

Changhong-- CHANGHONG (HK) TRADING LIMITED holds B-stock of the Company as 33374710 shares

among which Changhong (Hong Kong) Trading Co. Ltd. 6296913 shares are held through Philip Securities

(H.K.) Co. Ltd.Note 2: In the above table "Particulars about shares held above 5% by common shareholders or top 10 common

shares holding" is subject to the data on stock transfer books provided by China Securities Depository and

Clearing Corporation Limited Shenzhen Branch

Whether the top ten ordinary shareholders of the company and the top 10 ordinary shareholders of unrestricted

conditions have made the repurchase transactions as agreed during the reporting period.□Yes √No

The top ten ordinary shareholders of the company and the top 10 ordinary shareholders of unrestricted conditions

have not made the repurchase transactions as agreed during the reporting period.IV. Changes of controlling shareholder or actual controller

Changes of controlling shareholder in reporting period

□ Applicable √ Not applicable

No change of controlling shareholder in reporting period.

Changes of actual controller in reporting period

□ Applicable √ Not applicable

No changes of actual controller in reporting period.

101

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Section VII. Preferred Stock

□ Applicable √ Not applicable

The Company had no preferred stock in the reporting period

102

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Section VIII. Convertible Bonds

□ Applicable √ Not applicable

The Company had no convertible bonds in the Period

103

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Section IX. Particular about Directors Supervisors and Senior Executives

I. Changes of shares held by directors supervisors and senior executive

□ Applicable √ Not applicable

Shares held by directors supervisors and senior executive of the Company had no changes more details can be

seen in Annual Report 2019.II. Changes of directors supervisors and senior executive

□ Applicable √ Not applicable

The directors supervisors and senior management of the company did not change during the reporting period

found more details in Annual Report 2019.

104

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Section X. Corporate Bonds

Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without

due on the date when semi-annual report approved for released or fail to cash in full on due: No

105

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Section XI. Financial Report

I. Audit reports

Whether the semi-annual report was audited or not

□ Yes √ No

The semi-annual report was not audited.II. Financial statements

Units in Notes of Financial Statements is RMB

1. Consolidated Balance Sheet

Prepared by CHANGHONG MEILING CO.LTD.

2020-6-30

In RMB

Item 2020-6-30 2019-12-31

Current assets:

Monetary funds 4906733294.04 5499601030.64

Settlement provisions

Capital lent

Tradable financial assets 2944998.77 7730268.92

Derivative financial assets

Note receivable 1153017551.33 1865165499.50

Account receivable 2559946539.39 1387961981.66

Receivable financing

Accounts paid in advance 50134976.60 25270406.37

Insurance receivable

Reinsurance receivables

Contract reserve of

reinsurance receivable

Other account receivable 103323652.86 97241894.80

Including: Interest

receivable

21556791.10 9510208.63

Dividend 661434.48

106

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

receivable

Buying back the sale of

financial assets

Inventories 1885850077.90 1460910189.06

Contractual assets

Assets held for sale

Non-current asset due within

one year

Other current assets 613160570.20 63604031.96

Total current assets 11275111661.09 10407485302.91

Non-current assets:

Loans and payments on

behalf

Debt investment

Other debt investment

Long-term account

receivable

Long-term equity investment 80574225.00 88556511.70

Investment in other equity

instrument

Other non-current financial

assets

45000000.00 45000000.00

Investment real estate 54827443.04 96343760.13

Fixed assets 2269407362.45 2180572946.87

Construction in progress 191470652.98 252494792.31

Productive biological asset

Oil and gas asset

Right-of-use assets

Intangible assets 951223966.82 933248463.84

Expense on Research and

Development

90129461.14 101078659.57

Goodwill

Long-term expenses to be

apportioned

Deferred income tax asset 107396151.15 97453178.14

Other non-current asset

107

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Total non-current asset 3790029262.58 3794748312.56

Total assets 15065140923.67 14202233615.47

Current liabilities:

Short-term loans 1510292009.60 1103991045.96

Loan from central bank

Capital borrowed

Trading financial liability 6027595.47 1081534.93

Derivative financial liability

Note payable 3159249003.31 3490271482.40

Account payable 3244631623.09 2343116374.58

Accounts received in

advance

425149194.97

Contractual liability 268622617.93

Selling financial asset of

repurchase

Absorbing deposit and

interbank deposit

Security trading of agency

Security sales of agency

Wage payable 183995065.62 196507174.68

Taxes payable 73123338.68 68558391.66

Other account payable 845775655.45 689477603.21

Including: Interest payable 7905522.29 12340385.61

Dividend

payable

4466628.25 3579491.94

Commission charge and

commission payable

Reinsurance payable

Liability held for sale

Non-current liabilities due

within one year

306677346.75 1708193.90

Other current liabilities

Total current liabilities 9598394255.90 8319860996.29

Non-current liabilities:

Insurance contract reserve

Long-term loans 292640000.00 401280000.00

108

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Bonds payable

Including: Preferred stock

Perpetual

capital securities

Lease liability

Long-term account payable 2291266.30 3016921.44

Long-term wages payable 11962977.24 13774110.61

Accrual liability 144526007.50 166099143.97

Deferred income 176601739.95 179970971.92

Deferred income tax

liabilities

4838162.61 6256759.14

Other non-current liabilities

Total non-current liabilities 632860153.60 770397907.08

Total liabilities 10231254409.50 9090258903.37

Owner’s equity:

Share capital 1044597881.00 1044597881.00

Other equity instrument

Including: Preferred stock

Perpetual

capital securities

Capital public reserve 2683806730.48 2684366619.10

Less: Inventory shares

Other comprehensive income -19561433.20 -18931430.36

Reasonable reserve

Surplus public reserve 410786860.20 410786860.20

Provision of general risk

Retained profit 621767268.44 884127743.42

Total owner’ s equity attributable

to parent company

4741397306.92 5004947673.36

Minority interests 92489207.25 107027038.74

Total owner’ s equity 4833886514.17 5111974712.10

Total liabilities and owner’ s

equity

15065140923.67 14202233615.47

Legal Representative: Wu Dinggang

109

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Person in charge of accounting works: Pang Haitao

Person in charge of accounting institute: Yang Jun

2. Balance Sheet of Parent Company

In RMB

Item 2020-6-30 2019-12-31

Current assets:

Monetary funds 3636944969.33 4040632437.18

Tradable financial assets 2815873.60 5967556.00

Derivative financial assets

Note receivable 940802777.23 1722707248.74

Account receivable 1693480573.86 1158563389.33

Receivable financing

Accounts paid in advance 64214047.76 34374932.07

Other account receivable 44773002.24 41964639.42

Including: Interest

receivable

20170010.71 7880186.85

Dividend

receivable

661434.48

Inventories 413527428.27 339728296.66

Contractual assets

Assets held for sale

Non-current assets maturing

within one year

Other current assets 560819507.73 11930690.86

Total current assets 7357378180.02 7355869190.26

Non-current assets:

Debt investment

Other debt investment

Long-term receivables

Long-term equity

investments

1827520360.88 1698744114.99

Investment in other equity

instrument

Other non-current financial 45000000.00 45000000.00

110

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

assets

Investment real estate 4066016.69 7314721.80

Fixed assets 1110878369.26 1138092635.67

Construction in progress 136072325.47 106575581.28

Productive biological assets

Oil and natural gas assets

Right-of-use assets

Intangible assets 485361193.07 483887751.05

Research and development

costs

53384939.68 56295271.74

Goodwill

Long-term deferred expenses

Deferred income tax assets 85567635.96 77849317.77

Other non-current assets

Total non-current assets 3747850841.01 3613759394.30

Total assets 11105229021.03 10969628584.56

Current liabilities

Short-term borrowings 1263629500.00 1009757944.82

Trading financial liability 5645175.50 1016052.00

Derivative financial liability

Notes payable 1692215768.61 1936867907.42

Account payable 1607267367.02 1497704307.48

Accounts received in

advance

147365864.56

Contractual liability 102466608.50

Wage payable 37642063.08 39633867.87

Taxes payable 16665081.43 20427731.13

Other accounts payable 414944985.73 520559494.30

Including: Interest payable 6656384.49 13175235.76

Dividend payable 3866628.25 3579491.94

Liability held for sale

Non-current liabilities due

within one year

305000000.00

Other current liabilities

Total current liabilities 5445476549.87 5173333169.58

111

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Non-current liabilities:

Long-term loans 292640000.00 401280000.00

Bonds payable

Including: preferred stock

Perpetual capital

securities

Lease liability

Long-term account payable

Long term employee

compensation payable

11962977.24 13774110.61

Accrued liabilities 137169182.74 158742319.21

Deferred income 68548120.84 67664815.53

Deferred income tax

liabilities

742725.60

Other non-current liabilities

Total non-current liabilities 510320280.82 642203970.95

Total liabilities 5955796830.69 5815537140.53

Owners’ equity:

Share capital 1044597881.00 1044597881.00

Other equity instrument

Including: preferred stock

Perpetual capital

securities

Capital public reserve 2753017007.10 2753017007.10

Less: Inventory shares

Other comprehensive income

Special reserve

Surplus reserve 410568694.52 410568694.52

Retained profit 941248607.72 945907861.41

Total owner’s equity 5149432190.34 5154091444.03

Total liabilities and owner’s

equity

11105229021.03 10969628584.56

Legal Representative: Wu Dinggang

Person in charge of accounting works: Pang Haitao

112

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Person in charge of accounting institute: Yang Jun

3. Consolidated Profit Statement

In RMB

Item 2020 semi-annual 2019 semi-annual

I. Total operating income 6795860736.99 9133162680.94

Including: Operating income 6795860736.99 9133162680.94

Interest income

Insurance gained

Commission charge

and commission income

II. Total operating cost 7023628758.57 9117690815.20

Including: Operating cost 5753849889.35 7490555537.25

Interest expense

Commission charge

and commission expense

Cash surrender value

Net amount of expense of

compensation

Net amount of withdrawal of

insurance contract reserve

Bonus expense of guarantee

slip

Reinsurance expense

Tax and extras 55304713.23 80639759.74

Sales expense 923983428.23 1244391756.87

Administrative

expense

135469692.92 164393042.70

R&D expense 167889148.89 120048040.86

Financial expense -12868114.05 17662677.78

Including: Interest

expenses

45498046.65 57892999.31

Interest

income

74784016.69 59401426.37

Add: other income 54852125.20 35311208.60

Investment income (Loss 7151886.26 11663963.45

113

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

is listed with “-”)

Including: Investment

income on affiliated company and

joint venture

209880.54 -8822000.32

The termination of

income recognition for financial

assets measured by amortized

cost(Loss is listed with “-”)

Exchange income (Loss

is listed with “-”)

Net exposure hedging

income (Loss is listed with “-”)

Income from change of

fair value (Loss is listed with “-”)

-9724752.12 3364790.24

Loss of credit impairment

(Loss is listed with “-”)

-22270221.19 9545495.95

Losses of devaluation of

asset (Loss is listed with “-”)

-26583248.58 -10615932.01

Income from assets

disposal (Loss is listed with “-”)

-178704.98 -937771.74

III. Operating profit (Loss is listed

with “-”)

-224520936.99 63803620.23

Add: Non-operating income 3445609.21 2476197.02

Less: Non-operating expense 959554.13 2362526.37

IV. Total profit (Loss is listed with

“-”)

-222034881.91 63917290.88

Less: Income tax expense -2863011.42 17701260.34

V. Net profit (Net loss is listed with

“-”)

-219171870.49 46216030.54

(i) Classify by business

continuity

1.continuous operating netprofit (net loss listed with ‘-”)

-219171870.49 46216030.54

2.termination of net profit (netloss listed with ‘-”)

(ii) Classify by ownership

1.Net profit attributable to

owner’s of parent company

-210130580.93 54334022.57

2.Minority shareholders’ gains -9041289.56 -8117992.03

114

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

and losses

VI. Net after-tax of other

comprehensive income

-1009706.23 -6957381.18

Net after-tax of other

comprehensive income attributable

to owners of parent company

-630002.84 -4411347.06

(I) Other comprehensive

income items which will not be

reclassified subsequently to profit

of loss

1.Changes of the

defined benefit plans that

re-measured

2.Other comprehensive

income under equity method that

cannot be transfer to gain/loss

3.Change of fair value

of investment in other equity

instrument

4.Fair value change of

enterprise's credit risk

5. Other

(ii) Other comprehensive

income items which will be

reclassified subsequently to profit

or loss

-630002.84 -4411347.06

1.Other comprehensive

income under equity method that

can transfer to gain/loss

2.Change of fair value

of other debt investment

3.Amount of financial

assets re-classify to other

comprehensive income

4.Credit impairment

provision for other debt investment

5.Cash flow hedging

reserve

6.Translation

differences arising on translation of

-630002.84 -4411347.06

115

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

foreign currency financial

statements

7.Other

Net after-tax of other

comprehensive income attributable

to minority shareholders

-379703.39 -2546034.12

VII. Total comprehensive income -220181576.72 39258649.36

Total comprehensive

income attributable to owners of

parent Company

-210760583.77 49922675.51

Total comprehensive income

attributable to minority

shareholders

-9420992.95 -10664026.15

VIII. Earnings per share:

(i) Basic earnings per share -0.2012 0.0520

(ii) Diluted earnings per share -0.2012 0.0520

As for the enterprise combined under the same control net profit of 0 Yuan achieved by the merged party before combination while 0

Yuan achieved last period

Legal Representative: Wu Dinggang

Person in charge of accounting works: Pang Haitao

Person in charge of accounting institute: Yang Jun

4. Profit Statement of Parent Company

In RMB

Item 2020 semi-annual 2019 semi-annual

I. Operating income 3213963833.18 4534756227.34

Less: Operating cost 3022119390.15 4032394105.20

Taxes and surcharge 30342788.85 37629052.43

Sales expenses 110175334.78 338606135.03

Administration expenses 56166016.62 68435172.51

R&D expenses 70182219.29 51474328.29

Financial expenses -15767670.19 8505383.95

Including: interest expenses 37724956.37 42484006.95

Interest income 62490589.12 40313424.26

116

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Add: other income 37653498.87 18499284.82

Investment income (Loss is listed with

“-”)

77837668.60 24118870.80

Including: Investment income on

affiliated Company and joint venture

2738300.44 -2832319.70

The termination of income

recognition for financial assets measured by

amortized cost (Loss is listed with “-”)

Net exposure hedging income (Loss is

listed with “-”)

Changing income of fair value (Loss is

listed with “-”)

-7780805.90 3434946.59

Loss of credit impairment (Loss is

listed with “-”)

-5196835.46 12788678.01

Losses of devaluation of asset (Loss is

listed with “-”)

-5212993.91 -2792854.97

Income on disposal of assets (Loss is

listed with “-”)

-319589.42 -791312.06

II. Operating profit (Loss is listed with “-”) 37726696.46 52969663.12

Add: Non-operating income 1382900.11 220590.00

Less: Non-operating expense

III. Total Profit (Loss is listed with “-”) 39109596.57 53190253.12

Less: Income tax -8461043.79 1057961.59

IV. Net profit (Net loss is listed with “-”) 47570640.36 52132291.53

(i)continuous operating net profit (net losslisted with ‘-”)

47570640.36 52132291.53

(ii) termination of net profit (net loss listedwith ‘-”)

V. Net after-tax of other comprehensive income

(I) Other comprehensive income items

which will not be reclassified subsequently to

profit of loss

1.Changes of the defined benefit

plans that re-measured

2.Other comprehensive income

under equity method that cannot be transfer to

gain/loss

3.Change of fair value of investment

in other equity instrument

117

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

4.Fair value change of enterprise's

credit risk

5. Other

(II) Other comprehensive income items

which will be reclassified subsequently to profit

or loss

1.Other comprehensive income

under equity method that can transfer to gain/loss

2.Change of fair value of other debt

investment

3.Amount of financial assets

re-classify to other comprehensive income

4.Credit impairment provision for

other debt investment

5.Cash flow hedging reserve

6.Translation differences arising on

translation of foreign currency financial

statements

7.Other

VI. Total comprehensive income 47570640.36 52132291.53

VII. Earnings per share:

(i) Basic earnings per share 0.0455 0.0499

(ii) Diluted earnings per share 0.0455 0.0499

Legal Representative: Wu Dinggang

Person in charge of accounting works: Pang Haitao

Person in charge of accounting institute: Yang Jun

5. Consolidated Cash Flow Statement

In RMB

Item 2020 semi-annual 2019 semi-annual

I. Cash flows arising from operating activities:

Cash received from selling commodities and

providing labor services

6157786632.53 8808462153.80

Net increase of customer deposit and

interbank deposit

118

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Net increase of loan from central bank

Net increase of capital borrowed from other

financial institution

Cash received from original insurance

contract fee

Net cash received from reinsurance business

Net increase of insured savings and

investment

Cash received from interest commission

charge and commission

Net increase of capital borrowed

Net increase of returned business capital

Net cash received by agents in sale and

purchase of securities

Write-back of tax received 251421150.31 190487049.58

Other cash received concerning operating

activities

74202707.99 77246943.31

Subtotal of cash inflow arising from operating

activities

6483410490.83 9076196146.69

Cash paid for purchasing commodities and

receiving labor service

5671705593.94 7057460101.03

Net increase of customer loans and advances

Net increase of deposits in central bank and

interbank

Cash paid for original insurance contract

compensation

Net increase of capital lent

Cash paid for interest commission charge

and commission

Cash paid for bonus of guarantee slip

Cash paid to/for staff and workers 671140486.91 823360788.76

Taxes paid 122903758.87 300839972.73

Other cash paid concerning operating

activities

405765609.52 521051283.98

Subtotal of cash outflow arising from operating

activities

6871515449.24 8702712146.50

Net cash flows arising from operating activities -388104958.41 373484000.19

119

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

II. Cash flows arising from investing activities:

Cash received from recovering investment 185000000.00 1384000000.00

Cash received from investment income 10469068.45 31627554.38

Net cash received from disposal of fixed

intangible and other long-term assets

210271.10 1677670.77

Net cash received from disposal of

subsidiaries and other units

Other cash received concerning investing

activities

68390962.53 54906734.15

Subtotal of cash inflow from investing activities 264070302.08 1472211959.30

Cash paid for purchasing fixed intangible

and other long-term assets

234361940.15 202145813.88

Cash paid for investment 735280051.17 1254000000.00

Net increase of mortgaged loans

Net cash received from subsidiaries and

other units obtained

Other cash paid concerning investing

activities

11141590.61

Subtotal of cash outflow from investing activities 969641991.32 1467287404.49

Net cash flows arising from investing activities -705571689.24 4924554.81

III. Cash flows arising from financing activities

Cash received from absorbing investment

Including: Cash received from absorbing

minority shareholders’ investment by subsidiaries

Cash received from loans 1460006749.33 1139670561.25

Other cash received concerning financing

activities

Subtotal of cash inflow from financing activities 1460006749.33 1139670561.25

Cash paid for settling debts 863778688.78 1614633080.08

Cash paid for dividend and profit

distributing or interest paying

93535991.73 100227663.84

Including: Dividend and profit of minority

shareholder paid by subsidiaries

4796676.00 2274030.00

Other cash paid concerning financing

activities

930211.84 25441649.20

Subtotal of cash outflow from financing activities 958244892.35 1740302393.12

Net cash flows arising from financing activities 501761856.98 -600631831.87

120

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

IV. Influence on cash and cash equivalents due to

fluctuation in exchange rate

-1424516.77 3541851.94

V. Net increase of cash and cash equivalents -593339307.44 -218681424.93

Add: Balance of cash and cash equivalents

at the period -begin

5385807475.51 4484643187.93

VI. Balance of cash and cash equivalents at the

period -end

4792468168.07 4265961763.00

Legal Representative: Wu Dinggang

Person in charge of accounting works: Pang Haitao

Person in charge of accounting institute: Yang Jun

6. Cash Flow Statement of Parent Company

In RMB

Item 2020 semi-annual 2019 semi-annual

I. Cash flows arising from operating activities:

Cash received from selling commodities and

providing labor services

3141710817.95 4398710855.09

Write-back of tax received 107087533.56 86062145.56

Other cash received concerning operating

activities

47856925.29 30523890.39

Subtotal of cash inflow arising from operating

activities

3296655276.80 4515296891.04

Cash paid for purchasing commodities and

receiving labor service

2941987065.27 3813992469.51

Cash paid to/for staff and workers 161430366.15 263503252.87

Taxes paid 33476947.97 64988153.11

Other cash paid concerning operating

activities

141140278.49 197408073.39

Subtotal of cash outflow arising from operating

activities

3278034657.88 4339891948.88

Net cash flows arising from operating activities 18620618.92 175404942.16

II. Cash flows arising from investing activities:

Cash received from recovering investment 150000000.00 1384000000.00

Cash received from investment income 78655551.41 36217554.38

121

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Net cash received from disposal of fixed

intangible and other long-term assets

193300.00 1320000.00

Net cash received from disposal of

subsidiaries and other units

Other cash received concerning investing

activities

54966416.09 278374247.03

Subtotal of cash inflow from investing activities 283815267.50 1699911801.41

Cash paid for purchasing fixed intangible

and other long-term assets

75044489.91 93641143.54

Cash paid for investment 835280049.17 1260000000.00

Net cash received from subsidiaries and

other units obtained

Other cash paid concerning investing

activities

59266363.88

Subtotal of cash outflow from investing activities 910324539.08 1412907507.42

Net cash flows arising from investing activities -626509271.58 287004293.99

III. Cash flows arising from financing activities

Cash received from absorbing investment

Cash received from loans 1058647533.33 909409999.44

Other cash received concerning financing

activities

9652301.36 55543648.47

Subtotal of cash inflow from financing activities 1068299834.69 964953647.91

Cash paid for settling debts 614397944.82 1373985025.00

Cash paid for dividend and profit

distributing or interest paying

83234428.66 90576186.82

Other cash paid concerning financing

activities

166648785.81 115345079.52

Subtotal of cash outflow from financing activities 864281159.29 1579906291.34

Net cash flows arising from financing activities 204018675.40 -614952643.43

IV. Influence on cash and cash equivalents due to

fluctuation in exchange rate

182509.41 1260766.69

V. Net increase of cash and cash equivalents -403687467.85 -151282640.59

Add: Balance of cash and cash equivalents

at the period -begin

4017400437.18 2894384811.05

VI. Balance of cash and cash equivalents at the

period -end

3613712969.33 2743102170.46

122

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Legal Representative: Wu Dinggang

Person in charge of accounting works: Pang Haitao

Person in charge of accounting institute: Yang Jun

123

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

7. Statement of Changes in Owners’ Equity (Consolidated)

This Period

In RMB

Item

2020 semi-annual

Owners’ equity attributable to the parent Company

Minority

interests

Total owners’

equity Share capital

Other

equity

instrument

Capital reserve

Less:

Invent

ory

Other

comprehensive

income

Reas

onab

reser

Surplus reserve

Provisi

on of

genera

l risk

Retained profit

Subtotal Pref

erred

stoc

Perp

etual

capit

secu

rities

Othe

I. Balance at the end

of the last year

1044597881.00 2684366619.10 -18931430.36 410786860.20 884127743.42 5004947673.36 107027038.74 5111974712.10

Add: Changes

of accounting policy

Error

correction of the last

period

Enterprise

combine under the

same control

Other

II. Balance at the

beginning of this

year

1044597881.00 2684366619.10 -18931430.36 410786860.20 884127743.42 5004947673.36 107027038.74 5111974712.10

III. Increase/

Decrease in this

year (Decrease is

listed with “-”)

-559888.62 -630002.84 -262360474.98 -263550366.44 -14537831.49 -278088197.93

124

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

(i) Total

comprehensive

income

-630002.84 -210130580.93 -210760583.77 -9420992.95 -220181576.72

(ii) Owners’

devoted and

decreased capital

-559888.62 -559888.62 279839.46 -280049.16

1.Common shares

invested by

shareholders

2. Capital invested

by holders of other

equity instruments

3. Amount reckoned

into owners equity

with share-based

payment

4. Other -559888.62 -559888.62 279839.46 -280049.16

(III) Profit

distribution

-52229894.05 -52229894.05 -5396678.00 -57626572.05

1. Withdrawal of

surplus reserves

2. Withdrawal of

general risk

provisions

3. Distribution for

owners (or

shareholders)

-52229894.05 -52229894.05 -4796678.00 -57026572.05

4. Other -600000.00 -600000.00

(IV) Carrying

forward internal

owners’ equity

1. Capital reserves

conversed to capital

(share capital)

125

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

2. Surplus reserves

conversed to capital

(share capital)

3. Remedying loss

with surplus reserve

4．Carry-over

retained earnings

from the defined

benefit plans

5．Carry-over

retained earnings

from other

comprehensive

income

6. Other

(V) Reasonable

reserve

1. Withdrawal in the

report period

2. Usage in the

report period

(VI)Others

IV. Balance at the

end of the report

period

1044597881.00 2683806730.48 -19561433.20 410786860.20 621767268.44 4741397306.92 92489207.25 4833886514.17

Last Period

In RMB

Item

2019 semi-annual

Owners’ equity attributable to the parent Company

Minority interests

Total owners’

equity Share capital

Other

equity

instrument Capital reserve

Less:

Invent

ory

Other

comprehensive

income

Reas

onab

Surplus reserve

Provisi

on of

genera

Retained profit

Subtotal

Pref Perp Othe

126

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

erred

stoc

etual

capit

secu

rities

r shares reser

l risk

I. Balance at the end

of the last year

1044597881.00 2684369598.46 -18143569.26 400673993.50 904232582.87 5015730486.57 119819558.59 5135550045.16

Add: Changes

of accounting policy

-1023250.12 -2734328.91 -3757579.03 -4385295.55 -8142874.58

Error

correction of the

last period

Enterprise

combine under the

same control

Other

II. Balance at the

beginning of this

year

1044597881.00 2684369598.46 -18143569.26 399650743.38 901498253.96 5011972907.54 115434263.04 5127407170.58

III. Increase/

Decrease in this

year (Decrease is

listed with “-”)

-2979.36 -787861.10 11136116.82 -17370510.54 -7025234.18 -8407224.30 -15432458.48

(i) Total

comprehensive

income

-787861.10 56441479.14 55653618.04 -14209434.27 41444183.77

(ii) Owners’

devoted and

decreased capital

-2979.36 -2979.36 8143349.03 8140369.67

1.Common shares

invested by

shareholders

8140369.67 8140369.67

2. Capital invested

by holders of other

equity instruments

127

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

3. Amount reckoned

into owners equity

with share-based

payment

4. Other -2979.36 -2979.36 2979.36

(III) Profit

distribution

11136116.82 -73811989.68 -62675872.86 -2341139.06 -65017011.92

1. Withdrawal of

surplus reserves

11136116.82 -11136116.82

2. Withdrawal of

general risk

provisions

3. Distribution for

owners (or

shareholders)

-62675872.86 -62675872.86 -2341139.06 -65017011.92

4. Other

(IV) Carrying

forward internal

owners’ equity

1. Capital reserves

conversed to capital

(share capital)

2. Surplus reserves

conversed to capital

(share capital)

3. Remedying loss

with surplus reserve

4．Carry-over

retained earnings

from the defined

benefit plans

5．Carry-over

retained earnings

from other

comprehensive

128

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

income

6. Other

(V) Reasonable

reserve

1. Withdrawal in the

report period

2. Usage in the

report period

(VI)Others

IV. Balance at the

end of the report

period

1044597881.00 2684366619.10 -18931430.36 410786860.20 884127743.42 5004947673.36 107027038.74 5111974712.10

Legal Representative: Wu Dinggang

Person in charge of accounting works: Pang Haitao

Person in charge of accounting institute: Yang Jun

8. Statement of Changes in Owners’ Equity (Parent Company)

This Period

In RMB

Item

2020 semi-annual

Share capital

Other equity instrument

Capital public

reserve

Less:

Inventory

Other

comprehensive

income

Reasonabl

e reserve

Surplus reserve Retained profit

Othe

Total owners’

equity

Preferre

d stock

Perpetua

l capital

securitie

Other

I. Balance at the end of the 1044597881.00 2753017007.10 410568694.52 945907861.41 5154091444.03

129

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

last year

Add: Changes of

accounting policy

Error correction

of the last period

Other

II. Balance at the

beginning of this year

1044597881.00 2753017007.10 410568694.52 945907861.41 5154091444.03

III. Increase/ Decrease in

this year (Decrease is

listed with “-”)

-4659253.69 -4659253.69

(i) Total comprehensive

income

47570640.36 47570640.36

(ii) Owners’ devoted and

decreased capital

1.Common shares invested

by shareholders

2. Capital invested by

holders of other equity

instruments

3. Amount reckoned into

owners equity with

share-based payment

4. Other

(III) Profit distribution -52229894.05 -52229894.05

1. Withdrawal of surplus

reserves

2. Distribution for owners

(or shareholders)

-52229894.05 -52229894.05

3. Other

(IV) Carrying forward

internal owners’ equity

1. Capital reserves

130

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

conversed to capital (share

capital)

2. Surplus reserves

conversed to capital (share

capital)

3. Remedying loss with

surplus reserve

4．Carry-over retained

earnings from the defined

benefit plans

5．Carry-over retained

earnings from other

comprehensive income

6. Other

(V) Reasonable reserve

1. Withdrawal in the report

period

2. Usage in the report

period

(VI)Others

IV. Balance at the end of

the report period

1044597881.00 2753017007.10 410568694.52 941248607.72 5149432190.34

Last period

In RMB

Item

2019 semi-annual

Share capital

Other equity instrument

Capital public

reserve

Less:

Inventory

Other

comprehensive

income

Reasonabl

e reserve

Surplus reserve Retained profit

Othe

Total owners’

equity

Preferre

d stock

Perpetua

l capital

securitie

Other

I. Balance at the end of 1044597881.00 2753017007.10 400455827.82 917567933.94 5115638649.86

131

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

the last year

Add: Changes of

accounting policy

-1023250.12 -9209251.03 -10232501.15

Error correction

of the last period

Other

II. Balance at the

beginning of this year

1044597881.00 2753017007.10 399432577.70 908358682.91 5105406148.71

III. Increase/ Decrease in

this year (Decrease is

listed with “-”)

11136116.82 37549178.50 48685295.32

(i) Total comprehensive

income

111361168.18 111361168.18

(ii) Owners’ devoted and

decreased capital

1.Common shares

invested by shareholders

2. Capital invested by

holders of other equity

instruments

3. Amount reckoned into

owners equity with

share-based payment

4. Other

(III) Profit distribution 11136116.82 -73811989.68 -62675872.86

1. Withdrawal of surplus

reserves

11136116.82 -11136116.82

2. Distribution for owners

(or shareholders)

-62675872.86 -62675872.86

3. Other

(IV) Carrying forward

internal owners’ equity

1. Capital reserves

132

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

conversed to capital (share

capital)

2. Surplus reserves

conversed to capital (share

capital)

3. Remedying loss with

surplus reserve

4．Carry-over retained

earnings from the defined

benefit plans

5．Carry-over retained

earnings from other

comprehensive income

6. Other

(V) Reasonable reserve

1. Withdrawal in the

report period

2. Usage in the report

period

(VI)Others

IV. Balance at the end of

the report period

1044597881.00 2753017007.10 410568694.52 945907861.41 5154091444.03

Legal Representative: Wu Dinggang

Person in charge of accounting works: Pang Haitao

Person in charge of accounting institute: Yang Jun

133

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

I. Company profile

Changhong Meiling Co. Ltd (hereinafter referred to as “the Company”) ，originally named as Hefei Meiling

Co. Ltd. is an incorporated Company established and reorganized by Hefei Meiling Refrigerator General

Factory and approved on June 12th 1992 through [WanTiGaiHanZi (1992) No.039] issued by original

Mechanism Reform Committee of Anhui Province. On August 30th 1993 through Anhui Provincial

Government [Wanzhenmin (1993) No.166] and re-examination of China Securities Regulatory Commission

the Company made first public issue for 30 million A shares and the Company was listed on Oct. 18th 1993

in Shenzhen Stock Exchange. On August 13th 1996 the Company was approved to issue 100 million B

shares to investors abroad through [ZhengWeiFa (1996) No.26] issued by China Securities Regulatory

Commission. The Company went public in Shenzhen Stock Exchange on August 28th 1996.

State-owned Assets Supervision & Administration Commission of the State Council approved such transfers

with Document Guozi Chanquan No.253 in 2007 Reply on Matters of Hefei Meiling Group Holdings

Company Limited Transferring Partial State-owned Ownership Hefei Meiling Group Holdings Limited

(hereinafter referred to as Meiling Group) transferred its holding 37852683 shares in 82852683

state-owned shares of the Company to Sichuan Changhong Electronic Group Co. Ltd (hereinafter referred to

as Changhong Group) other 45000000 shares to Sichuan Changhong Electric Co. Ltd (hereinafter referred

to as Sichuan Changhong). On Aug 15 2007 the above ownership was transferred and Cleaning Corporation

Limited.

On 27 August 2007 State-owned Assets Supervision & Administration Commission of Anhui ProvincialGovernment replied with Document [WGZCQH (2007) No.309] Reply on “Related Matters of Share MergerReform of Meiling Co. Ltd.” agreed the Company’s ownership split reform plan. The Company made

consideration that non-tradable share holders deliver 1.5 shares to A share holders per 10 shares and original

Meiling Group made prepayment 3360329 shares for some non-tradable share holders as consideration for

split reform plan.

On 29 May 2008 concerning 34359384 state-owned shares (including 3360329 shares paid for other

non-tradable shareholders by original Meiling Group in share reform) held by original Meiling Group the

“Notice of Freely Transfer of Meiling Electrics Equity held by Meiling Group”[HGZCQ(2008) No. 59]

issued from State-owned Assets Supervision & Administration Commission of Hefei Municipal agrees to

transfer the above said shares to Hefei Xingtai Holding Group Co. Ltd.(“Xingtai Holding Co.”) for free. On

7 August 2008 the “Reply of Transfer Freely of Part of the Shares of Hefei Meiling Co. Ltd. held byState-owned shareholders” [GZCQ (2007) No. 752] issued by SASAC agrees the above said transferring.On October 29 2008 Changhong Group Company signed Agreement on Equity Transfer of Hefei Meiling

Co. Ltd with Sichuan Changhong in which 32078846 tradable A-shares with conditional subscription of

the Company (accounting for 7.76% in total shares) held by Changhong Group Company. On 23 December

2008 “Reply of Transfer Freely of Part of the Shares of Hefei Meiling Co. Ltd. held by State-ownedshareholders” [GZCQ (2008) No. 1413] issued by SASAC agrees the above said share transferring.

134

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

On 24 December 2010 being deliberated and approved in 32nd Session of 6th BOD and 2nd Extraordinary

Shareholders’ General Meeting of 2010 as well as approval of document [ZJXP (2010) No. 1715] from

CSRC totally 116731500 RMB ordinary shares (A stock) were offering privately to target investors with

issue price of RMB 10.28/share. Capital collecting amounting to RMB 1199999820 after issuing expenses

RMB 22045500 deducted net capital collected amounting to RMB 1177954320 and paid-in capital

(share capital) increased RMB 116731500 with capital reserve (share premium) RMB 1061106088.5

increased. The increasing capital has been verified by Capital Verification Report No.:

［XYZH2010CDA6021］issued from Shinwing CPA Co. Ltd.

On 20 June 2011 the general meeting of the Company considered and approved the 2010 profit distribution

plan namely to distribute cash dividends of RMB0.5 (tax included) plus two shares for every ten shares held

by shareholders to all shareholders based on the total share capital of 530374449 shares as of 31 December

2010. The total share capital of the Company upon profit distribution increased to 636449338 shares. The

capital increase was verified by Anhui Huashen Zhengda Accounting Firm with the verification report

WHSZDKYZ (2011) No.141.

On 26 June 2012 the general meeting of the Company considered and approved the 2011 profit distribution

and capitalization of capital reserve plan namely to distribute cash dividends of RMB0.5 (tax included) plus

two shares for every ten shares to all shareholders capitalized from capital reserve based on the total share

capital of 636449338 shares as of 31 December 2011. The total share capital of the Company upon

implementation of capitalization of capital reserve increased to 763739205 shares from 636449338 shares

and was verified by Anhui Anlian Xinda Accounting Firm with the verification report WALXDYZ (2012)

No.093.

On November 18 2015 considered and approved by the 12th Session of the 8th BOD of the company and the

first extraordinary general meeting in 2016 and approved by the document of China Securities Regulatory

Commission [CSRC License No. (2016) 1396] “Reply to the approval of non-public offering of shares ofHefei Meiling Co. Ltd.” the company has actually raised funds of 1569999998.84 Yuan by non-public

offering of no more than 334042553 new shares at face value of 1 Yuan per share and with issue price no

less than RMB 4.70 per share after deducting the issue costs of 29267276.08 Yuan the net amount of

raised funds is 1540732722.76 Yuan the increased paid-in capital (share capital) of 280858676.00 Yuan

increased capital reserve (share premium) of 1259874046.76 Yuan. This capital increase has been verified

by No.［XYZH2016CDA40272］capital verification report of Shine Wing Certified Public Accountants

(LLP).

Ended as 30 June 2020 total share capital of the Company amounting to 1044597881shares with ordinary

shares in full. Among which 881733881 shares of A-share accounting 84.41% in total shares while B-share

with 162864000 shares accounting 15.59% in total shares. Detail share capital as:

135

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Type of stock Quantity Proportion

(1)Restricted shares 10472676 1.00%

1. State-owned shares

2. State-owned legal person’s shares 1653735 0.16%

3. Other domestic shares 7551521 0.72%

Including: Domestic legal person’s shares 3978329 0.38%

Domestic natural person’s shares 3573192 0.34%

4. Foreign shares 1267420 0.12%

Including: Overseas legal person’s shares

Overseas natural person’s shares 1267420 0.12%

(2)Unrestricted shares 1034125205 99.00%

1. RMB Ordinary shares 872528625 83.53%

2. Domestically listed foreign shares 161596580 15.47%

3. Overseas listed foreign shares

4. Others

Total shares 1044597881 100.00%

The Company belongs to the manufacture of light industry and engaged in the production and sale of

refrigerator freezer and air-conditioner. Unified social credit code of the Company: 9134000014918555XK;

Address: No.2163 Lianhua Road Economy and Technology Development Zone Hefei City; Legal

Representative: Wu Dinggang; register capital (paid-in capital): RMB 1044597881; type of company:

limited liability company(joint venture and listed of Taiwan Hong Kong and Macao) Business Scope: R&D

manufacture and sales of cooling apparatus air-conditioner washing machine water heater kitchenware

home decoration bathroom lamps & lanterns household & similar appliance injection plastic machine of

computer controlling plastic products metalwork packaging products and decorations as well as the

installation and technical consultant services. Business of self-produced products technology export and

import-export of the raw& auxiliary materials machinery equipment instrument and technology; department

sales and transportation (Excluding dangerous chemicals) computer network system integration intelligent

product system integration software development and technical information services development

production sales and service of automation equipment and electronic products sales services of cold chain

transport vehicles and refrigerator and freezer van development production sales and service of cold chain

insulation boxes research and development production sales and service of cold storage commercial

freezer chain display cabinets commercial cold chain products. (Projects that require approval in accordance

with the law can only be operated after approval by relevant departments)

II. Scope of consolidated financial statement

In the reporting period the consolidated financial statements of the Company cover 35 subsidiaries

including Sichuan Changhong Air-conditioner Co. Ltd Zhongshan Changhong Electric Co. Ltd. and

Zhongke Meiling Cryogenic Technology Co. Ltd. etc. Compared with the previous year during the reporting

136

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

period subsidiary-Guangxi Huidian Household Electrical Appliances Co. Ltd was out of the consolidate

scope due to liquidation cancellation. Found more in “VII. Changes in the scope of merger” and “VIII.

Equity in other entities” carry in the Note

III. Basis for preparation of financial statement

1. Basis for preparation

The financial statements of the Company were prepared in accordance with the actual transactions and

proceedings and relevant regulation of Accounting Standards for Enterprise released by the Ministry of

Finance and was on the basis of sustainable operation and the accounting policy and estimation stated in the

“IV. Significant Accounting Policy and Accounting Estimation”

2.Continuous operation

The Company recently has a history of profitability operation and has financial resources supporting and

prepared the financial statement on basis of going concern is reasonable.IV. Significant Accounting Policy and accounting Estimation

1. Statement on observation of accounting standards for enterprise

The financial statement prepared by the Company applies with the requirements of Accounting Standard for

Enterprise and reflects the financial condition operational achievements and cash flow of the Company

effectively and completely.

2. Accounting period

The accounting period of the Company is the calendar date from 1 January to 31 December.

3. Operation cycle

Operation cycle of the Company was 12 months and it is the standard of flow classification for assets and

liabilities.

4. Standard currency for accounting

The Company takes RMB as the standard currency for accounting.

5. Accountant arrangement method of business combination under common control and not under common

control

As acquirer the Company measures the assets and liabilities acquired through business combination under

common control at their carrying values as reflected in the consolidated financial statement of the ultimate

controller as of the combination date. Capital reserve shall be adjusted in respect of any difference between

carrying value of the net assets acquired and carrying value of the combination consideration paid. In case

137

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

that capital reserve is insufficient to offset the Company would adjust retained earnings.The acquiree’s net identifiable assets liabilities or contingent liabilities acquired through business

combination not under common control shall be measured at fair value as of the acquisition date. The cost of

combination represents the fair value of the cash or non-cash assets paid liabilities issued or committed and

equity securities issued by the Company as at the date of combination in consideration for acquiring the

controlling power in the acquiree together with the sum of any directly related expenses occurred during

business combination(in case of such business combination as gradually realized through various

transactions the combination cost refers to the sum of each cost of respective separate transaction). Where

the cost of the combination exceeds the acquirer’s interest in the fair value of the acquirer’s identifiable net

assets acquired the difference is recognized as goodwill; where the cost of combination is lower than the

acquirer’s interest in the fair value of the acquiree’s identifiable net assets the Company shall firstly make

further review on the fair values of the net identifiable assets liabilities or contingent liabilities acquired as

well as the fair value of the non-cash assets portion of combination consideration or the equity securities

issued by the Company. In case that the Company finds the cost of combination is still lower than the

acquirer’s interest in the fair value of the acquiree’s identifiable net assets after such further review the

difference is recognized in non-operating income for the current period when combination occurs.

6. Measures on Preparation of Consolidated Financial Statements

The Company shall put all the subsidiaries controlled and main body structured into consolidated financial

statements.

Any difference arising from the inconformity of accounting year or accounting policies between the

subsidiaries and the Company shall be adjusted in the consolidated financial statements.

All the material inter-company transactions non-extraordinary items and unrealized profit within the

combination scope are written-off when preparing consolidated financial statement. Owners’ equity of

subsidiary not attributable to parent company and current net gains and losses other comprehensive income

and total comprehensive income attributable to minority shareholders are recognized as non-controlling

interests minority interests other comprehensive income attributable to minority shareholders and total

comprehensive income attributable to minority shareholders in consolidated financial statement respectively.

As for subsidiary acquired through business combination under common control its operating results and

cash flow will be included in consolidated financial statement since the beginning of the period when

combination occurs. When preparing comparative consolidated financial statement the relevant items in

previous years financial statement shall be adjusted as if the reporting entity formed upon combination has

been existing since the ultimate controller commenced relevant control.

As for equity interests of the investee under common control acquired through various transactions which

138

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

eventually formed business combination the Company shall supplement disclosure of the accounting

treatment in consolidated financial statement in the reporting period when controlling power is obtained. For

example as for equity interests of the investee under common control acquired through various transactions

which eventually formed business combination adjustments shall be made as if the current status had been

existing when the ultimate controller commenced control in connection of preparing consolidated financial

statement; in connection with preparing comparative statement the Company shall consolidate the relevant

assets and liabilities of the acquiree into the Company’s comparative consolidated financial statement to the

extent not earlier than the timing when the Company and the acquiree are all under control of the ultimate

controller and the net assets increased due to combination shall be used to adjust relevant items under

owners’ equity in comparative statement. In order to prevent double computation of the value of the

acquiree’s net assets the relevant profits and losses other comprehensive income and change of other net

assets recognized during the period from the date when the Company acquires original equity interests and

the date when the Company and the acquiree are all under ultimate control of the same party (whichever is

later) to the date of combination in respect of the long-term equity investment held by the Company before

satisfaction of combination shall be utilized to offset the beginning retained earnings and current gains and

losses in the period as the comparative financial statement involves respectively.

As for subsidiary acquired through business combination not under common control its operating results and

cash flow will be included in consolidated financial statement since the Company obtains controlling power.When preparing consolidated financial statement the Company shall adjust the subsidiary’s financial

statement based on the fair value of the various identifiable assets liabilities or contingent liabilities

recognized as of the acquisition date.

As for equity interests of the investee not under common control acquired through various transactions which

eventually formed business combination the Company shall supplement disclosure of the accounting

treatment in consolidated financial statement in the reporting period when controlling power is obtained. For

example as for equity interests of the investee not under common control acquired through various

transactions which eventually formed business combination when preparing consolidated financial statement

the Company would re-measure the equity interests held in the acquiree before acquisition date at their fair

value as of the acquisition date and any difference between the fair value and carrying value is included in

current investment income. in case that the equity interests in acquiree held by the Company before the

relevant acquisition date involves other comprehensive income at equity method and change of other owners’

equity (other than net gains and losses other comprehensive income and profit distribution) then the equity

interests would transfer to investment gains and losses for the period which the acquisition date falls upon.The other comprehensive income arising from change of the net liabilities or net assets under established

benefit scheme as acquiree’s re-measured such scheme is excluded.The transaction with non-controlling interest to dispose long-term equity investment in a subsidiary without

losing control rights over the subsidiary the difference between the proceeds from disposal of interests and

139

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

the decrease of the shared net assets of the subsidiary is adjusted to capital premium (share premium). In case

capital reserve is not sufficient to offset the difference retained earnings will be adjusted.

As for disposal of part equity investment which leads to losing control over the investee the Company would

re-measure the remaining equity interests at their fair value as of the date when the Company loses control

over the investee when preparing consolidated financial statement. The sum of consideration received from

disposal of equity interest and fair value of the remaining equity interest less the net assets of the original

subsidiary attributable to the Company calculated based on the original shareholding proportion since the

acquisition date or the date then consolidation commences is included in investment gains and losses for the

period when control is lost meanwhile to offset goodwill. Other comprehensive income related to equity

interest investment in original subsidiaries is transferred into current investment gains and losses upon lost of

control.If the disposal of the equity investment of a subsidiary is realized through multiple transactions until loss of

control and is a package deal the accounting treatment of these transactions should be dealt with as one

transaction of disposal of the subsidiary until loss of control. However before the Company loses total

control of the subsidiary the differences between the actual disposal price and the share of the net assets of

the subsidiary disposed of in every transaction should be recognized as other comprehensive income in the

consolidated financial statements and transferred to profit or loss when losing control.

7. Accounting treatment for joint venture arrangement and joint controlled entity

The joint venture arrangement of the Company consists of joint controlled entity and joint venture. As for

jointly controlled entity the Company determines the assets held and liabilities assumed separately as a party

to the jointly controlled entity recognizes such assets and liabilities according to its proportion and

recognizes relevant income and expense separately under relevant agreement or according to its proportion.

As for asset transaction relating to purchase and sales with the jointly controlled entity which does not

constitute business activity part of the gains and losses arising from such transaction attributable to other

participators of the jointly controlled entity is only recognized.

8. Cash and cash equivalents

Cash in the cash flow statement comprises the Group’s cash on hand and deposits that can be readily

withdrawn on demand. Cash equivalents are short-term highly liquid investments held by the Group that

are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in

value including but not limited to the followings which meet the aforesaid conditions: debt investment

matured within three months upon the acquisition date bank time deposit which can be early withdrew by

serving a notice and transferrable deposit receipt etc. for time deposit which can not be used for payment at

any time it would be note recognized as cash; while if can be used for such purpose it would be recognized

as cash. Guarantee deposit over three months in other monetary capital shall not be recognized as cash

equivalents and those less than three months are recognized as cash equivalents.

140

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

9. Foreign currency business and foreign currency financial statement conversion

(1) Foreign currency business

As for the foreign currency business the Company converts the foreign currency amount into RMB amount

pursuant to the spot exchange rate as of the business day. As at the balance sheet date monetary items

expressed by foreign currency are converted into RMB pursuant to the spot exchange rate as of the balance

sheet date. The conversion difference occurred is recorded into prevailing gains and losses other than the

disclosure which is made according to capitalization rules for the exchange difference occurred from the

special foreign currency borrowings borrowed for constructing and producing the assets satisfying condition

of capitalization. As for the foreign currency non-monetary items measured by fair value the amount is then

converted into RMB according to the spot exchange rate as of the confirmation day for fair value. And the

conversion difference occurred during the procedure is recorded into prevailing gains and losses directly as

change of fair value. As for the foreign currency non-monetary items measured by historical cost conversion

is made with the spot exchange rate as of the business day with no change in RMB amount.

(2) Conversion of foreign currency financial statement

Spot exchange rate as of the balance sheet date is adopted for conversion of assets and liabilities in foreign

currency balance sheet; as for the items in statement of owners’ equity except for “Retained profit”

conversion is made pursuant to the spot exchange rate of business day; income and expense items in income

statement then are also converted pursuant to the spot exchange rate of transaction day. Difference arising

from the aforementioned conversions shall be listed separately in items of owners’ equity. Spot exchange rate

as of the occurrence date of cash flow is adopted for conversion of foreign currency cash flow. The amount

of cash affected by exchange rate movement shall be listed separately in cash flow statement.

10. Financial instrument

A financial asset or liability is recognized when the group becomes a party to a financial instrument contract.

The financial assets and financial liabilities are measured at fair value on initial recognition. For the financial

assets and liabilities measured by fair value and with variation reckoned into current gains/losses the related

transaction expenses are directly included in current gains or losses; for other types of financial assets and

liabilities the related transaction costs are included in the initial recognition amount.

(1) Method for determining the fair value of financial assets and financial liabilities

Fair value refers to the price that a market participant can get by selling an asset or has to pay for transferring

a liability in an orderly transaction that occurs on the measurement date. For a financial instrument having an

active market the Company uses the quoted prices in the active market to determine its fair value.Quotations in an active market refer to prices that are readily available from exchanges brokers industry

associations pricing services etc. and represent the prices of market transactions that actually occur in an

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

arm's length transaction. If there is no active market for a financial instrument the Company uses valuation

techniques to determine its fair value. Valuation techniques include reference to prices used in recent market

transactions by parties familiar with the situation and through voluntary trade and reference to current fair

values of other financial instruments that are substantially identical discounted cash flow methods and

option pricing models.

(2) Category and measurement on financial assets

The group divided the financial assets as the follow while initially recognized: the financial assets measured

at amortized cost; the financial assets measured at fair value and whose changes are included in other

comprehensive income; and the financial assets measured by fair value and with variation reckoned into

current gains/losses. The classification of financial assets depends on the business model that the Group's

enterprises manage the financial assets and the cash flow characteristics of the financial assets.

1) The financial assets measured at amortized cost

Financial assets are classified as financial assets measured at amortized cost when they also meet the

following conditions: The group's business model for managing the financial assets is to collect contractual

cash flows; the contractual terms of the financial assets stipulate that cash flow generated on a specific date is

only paid for the principal and interest based on the outstanding principal amount. For such financial assets

the effective interest method is used for subsequent measurement according to the amortized cost and the

gains or losses arising from amortization or impairment are included in current profits and losses. Such

financial assets mainly include monetary funds notes receivable accounts receivable other receivables debt

investment and long-term receivables and so on. The Group lists the debt investment and long-term

receivables due within one year (including one year) from the balance sheet date as non-current assets due

within one year and lists the debt investment with time limit within one year (including one year) when

acquired as other current assets.

2) Financial assets measured at fair value and whose changes are included in other comprehensive income

Financial assets are classified as financial assets measured at fair value and whose changes are included in

other comprehensive income when they also meet the following conditions: The Group's business model for

managing the financial assets is targeted at both the collection of contractual cash flows and the sale of

financial assets; the contractual terms of the financial asset stipulate that the cash flow generated on a

specific date is only the payment of the principal and the interest based on the outstanding principal amount.

For such financial assets fair value is used for subsequent measurement. The discount or premium is

amortized by using the effective interest method and is recognized as interest income or expenses. Except the

impairment losses and the exchange differences of foreign currency monetary financial assets are recognized

as the current profits and losses the changes in the fair value of such financial assets are recognized as other

comprehensive income until the financial assets are derecognized the accumulated gains or losses are

transferred to the current profits and losses. Interest income related to such financial assets is included in the

current profit and loss. Such financial assets are listed as other debt investments other debt investments due

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

within one year (including one year) from the balance sheet date are listed as non-current assets due within

one year; and other debt investments with time limit within one year (including one year) when acquired are

listed as other current assets.

3) Financial assets measured at fair value and whose changes are included in current gains/losses

Financial assets except for the above-mentioned financial assets measured at amortized cost and financial

assets measured at fair value and whose changes are included in other comprehensive income are classified

as financial assets measured at fair value and whose changes are included in current profits and losses which

adopt fair value for subsequent measurement and all changes in fair value are included in current profits and

losses. The Group classifies non-trading equity instruments as financial assets measured at fair value and

whose changes are included in current profits and losses. Such financial assets are presented as Tradable

financial assets and those expire after more than one year and are expected to be held for more than one year

are presented as other non-current financial assets.

(3) Devaluation of financial instrument

On the basis of expected credit losses the Group performs impairment treatment on financial assets

measured at amortized cost and financial assets measured at fair value and whose changes are included in

other comprehensive income and recognize the provisions for loss.

Credit loss refers to the difference between all contractual cash flows that the Company discounts at the

original actual interest rate and are receivable in accordance with contract and all cash flows expected to be

received that is the present value of all cash shortages. Among them for the purchase or source of financial

assets that have suffered credit impairment the Company discounts the financial assets at the actual interest

rate adjusted by credit.The Group considers all reasonable and evidenced information including forward-looking information

based on credit risk characteristics. When assessing the expected credit losses of receivables they are

classified according to the specific credit risk characteristics as follows:

1) For receivables and contractual assets and lease receivables (including significant financing components

and not including significant financing components) the Group measures the provisions for loss based on the

amount of expected credit losses equivalent to the entire duration.

①Evaluate expected credit losses based on individual items: credit notes receivable (including accepted

letters of credit) of financial institutions in notes receivable and accounts receivable and related party

payments (related parties under the same control and significant related parties); dividends receivable

interest receivable reserve funds investment loans cash deposits (including warranty) government grants

(including dismantling subsidies) in other receivables and receivables with significant financing components

(i.e. long-term receivables);

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

②Evaluate expected credit losses based on customer credit characteristics and ageing combinations: in

addition to evaluating expected credit losses based on individual items the Group evaluates the expected

credit losses of notes receivable and accounts receivable and other receivables financial instruments based on

customer credit characteristics and ageing combinations.The Group considers all reasonable and evidenced information including forward-looking information when

assessing expected credit losses. When there is objective evidence that its customer credit characteristics and

ageing combination cannot reasonably reflect its expected credit loss the current value of the expected future

cash flow is measured by a single item and the cash flow shortage is directly written down the book balance

of the financial asset.

2) Assess the expected credit losses on a case-by-case basis for other assets to which the financial

instruments are impaired such as the loan commitments and financial guarantee contracts that are not

measured at fair value through profit or loss financial assets measured at fair value and whose changes are

recognized in other comprehensive income; other financial assets measured at amortized cost (such as other

current assets other non-current financial assets etc.).

(4) Reorganization basis and measure method for transfer of financial assets

The financial assets meet one of following requirements will be terminated recognition: ① The contract

rights of collecting cash flow of the financial assets is terminated; ②The financial assets has already been

transferred and the Company has transferred almost all risks and remunerations of financial assets ownership

to the transferee; ③The financial assets has been transferred even though the Company has neither

transferred nor kept almost all risks and remunerations of financial assets ownership the Company has given

up controlling the financial assets.If the enterprise has neither transferred or kept almost all risks and remunerations of financial assets

ownership nor given up controlling the financial assets then confirm the relevant financial assets according

to how it continues to involve into the transferred financial assets and confirm the relevant liabilities

accordingly. The extent of continuing involvement in the transferred financial assets refers to the level of risk

arising from the changes in financial assets value faced by the enterprise.If the entire transfer of financial assets satisfies the demand for derecognition reckon the balance between

the book value of the transferred financial assets and the sum of consideration received from transfer and

fluctuation accumulated amount of fair value formerly reckoned in other consolidated income in the current

profits and losses.If part transfer of financial assets satisfies the demand for derecognition apportion the integral book value of

the transferred financial assets between the derecognized parts and the parts not yet derecognized according

to each relative fair value and reckon the balance between the sum of consideration received from transfer

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

and fluctuation accumulated amount of fair value formerly reckoned in other consolidated income that

should be apportioned to the derecognized parts and the apportioned aforementioned carrying amounts in the

current profits and losses.When the Group sells financial assets adopting the mode of recourse or endorses and transfers its financial

assets it is necessary to ensure whether almost all the risks and rewards of ownership of the financial assets

have been transferred. If almost all the risks and rewards of ownership of the financial assets have been

transferred to the transferee the financial assets shall be derecognized; if almost all the risks and rewards of

ownership of the financial assets are retained the financial assets shall not be derecognized; if almost all the

risks and rewards of ownership of the financial assets are neither transferred nor retained continue to judge

whether the company retains control over the assets and conduct accounting treatment according to the

principles described in the preceding paragraphs.

(5) Category and measurement of financial liability

Financial liability is classified into financial liability measured by fair value and with variation reckoned into

current gains/losses and other financial liability at initially measurement. Financial liability shall be initially

recognized and measured at fair value. As for the financial liability measured by fair value and with variation

reckoned into current gains/losses relevant trading costs are directly reckoned into current gains/losses while

other financial liability shall be reckoned into the initial amount recognized.① the financial liability measured by fair value and with variation reckoned into current gains/losses

The conditions to be classified as trading financial liabilities and as financial liabilities designated to be

measured at fair value and whose changes are included in current profit or loss at the initial recognition are

consistent with the conditions to be classified as Tradable financial assets and as financial assets designated

to be measured at fair value and whose changes are included in current profit or loss at the initial recognition.

Financial liabilities measured at fair value and whose changes are included in current profit or loss are

subsequently measured at fair value and the gain or loss arising from changes in fair value and the dividends

and interest expense related to these financial liabilities are included in current profit or loss.② Other financial liability

It must go through the delivery of the derivative financial liabilities settled by the equity instrument to link to

the equity instruments that are not quoted in an active market and whose fair value cannot be reliably

measured and the subsequent measurement is carried out in accordance with the cost. Other financial

liabilities are subsequently measured at amortized cost by using the effective interest method. The gain or

loss arising from derecognition or amortization is included in current profit or loss.

③Financial guarantee contract

The financial guarantee contract of a financial liability which is not designated to be measured at fair value

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

through profit or loss is initially recognized at fair value and its subsequent measurement is carried out by

the higher one between the amount confirmed in accordance with the Accounting Standards for Business

Enterprises No. 13 — Contingencies after initial recognition and the balance after deducting the accumulated

amortization amount determined in accordance with the principle of Accounting Standards for Business

Enterprises No. 14—Revenue from the initial recognition amount.

(6) Termination of recognition of financial liability

The financial liability or part of it can only be terminated for recognized when all or part of the current

obligation of the financial liability has been discharged. The Group (debtor) and the creditor sign an

agreement to replace the existing financial liabilities with new financial liabilities and if the contract terms

of the new financial liabilities are substantially different from the existing financial liabilities terminated for

recognized the existing financial liabilities and at the same time recognize the new financial liabilities. If the

financial liability is terminated for recognized in whole or in part the difference between the carrying

amount of the part that terminated for recognized and the consideration paid (including the transferred

non-cash assets or the assumed new financial liabilities) is included in current profits and losses.

(7) Balance-out between the financial assets and liabilities

As the Group has the legal right to balance out the financial liabilities by the net or liquidation of the

financial assets the balance-out sum between the financial assets and liabilities is listed in the balance sheet.In addition the financial assets and liabilities are listed in the balance sheet without being balanced out.

(8) Derivatives and embedded derivatives

Derivatives are initially measured at fair value on the signing date of the relevant contract and are

subsequently measured at fair value. Except for derivatives that are designated as hedging instruments and

are highly effective in hedging the gains or losses arising from changes in fair value will be determined

based on the nature of the hedging relationship in accordance with the requirements of the hedge accounting

and be included in the period of profit and loss other changes in fair value of derivatives are included in

current profits and losses. For a hybrid instrument that includes an embedded derivative if it is not

designated as a financial asset or financial liability measured at fair value and whose changes are included in

current profit or loss the embedded derivative does not have a close relationship with the main contract in

terms of economic characteristics and risks and as with embedded derivatives if the tools existing separately

conform to the definition of the derivatives the embedded derivatives are split from the hybrid instruments

and are treated as separate derivative financial instruments. If it is not possible to measure the embedded

derivative separately at the time of acquisition or subsequent balance sheet date the whole hybrid instrument

is designated as a financial asset or financial liability measured at fair value and whose changes are included

in current profits and losses.

(9) Equity instrument

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

The equity instrument is the contract to prove the holding of the surplus stock of the assets with the

deduction of all liabilities in the Group. The Company issues (including refinancing) repurchases sells or

cancels equity instruments as movement of equity. No fair value change of equity instrument would be

recognized by the Company. Transaction costs associated with equity transactions are deducted from equity.The Group's various distributions to equity instrument holders (excluding stock dividends) reduce

shareholders' equity.

11. Inventory

Inventories of the Company principally include raw materials stock goods; work in process self-made

semi-finished product materials consigned to precede low-value consumption goods goods in transit goods

in process mould and engineering construction etc.Perpetual inventory system is applicable to inventories. For daily calculation standard price is adopted for

raw materials low-value consumption goods and stock goods. Switch-back cost of the current month is

adjusted by distribution price difference at the end of the month the dispatched goods will share the cost

differences of inventory while in settlement the business income; and low-value consumption goods is

carried forward at once when being applied for use and the mould shall be amortized within one year after

receipt.Inventory at period-end is valued by the Lower-of-value between the cost and net realizable value. The

provision for inventory depreciation shall be drawn from the difference between the book cost of a single

inventory item and its net realizable value and the provision for inventory depreciation shall be recorded into

the current profit and loss.

12. Long-term equity investment

Long-term equity investment of the Company is mainly about investment in subsidiary investment in

associates and investment in joint-ventures.

For long-term equity investments acquired through business combination under common control the initial

investment cost shall be the acquirer’s share of the carrying amount of net assets of the acquiree as of the

combination date as reflected in the consolidated financial statement of the ultimate controller. If the carrying

amount of net assets of the acquiree as of the combination date is negative the investment cost of long-term

equity investment shall be zero. For long-term equity investment acquired through business combination not

under common control the initial investment cost shall be the combination cost.

Excluding the long-term equity investment acquired through business combination there is also a king of

long-term equity investment acquired through cash payment for which the actual payment for the purchase

shall be investment cost; If Long-term equity investments are acquired by issuing equity securities fair value

of issuing equity investment shall be investment cost; for Long-term equity investments which are invested

by investors the agreed price in investment contract or agreement shall be investment cost; and for long-term

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

equity investment which is acquired through debt reorganization and non-monetary assets exchange

regulations of relevant accounting standards shall be referred to for confirming investment cost.The Company adopts cost method for investment in subsidiaries makes calculation for investments in

joint-ventures and associates by equity method.When calculated by cost method long-term equity investment is priced according to its investment cost and

cost of the investment is adjusted when making additional investment or writing off investment; When

calculated by equity method current investment gains and losses represent the proportion of the net gains

and losses realized by the invested unit in current year attributable to or undertaken by the investor. When the

Company is believed to enjoy proportion of net gains and losses of invested unit gains and losses

attributable to the Company according to its shareholding ratio is to computer out according to the

accounting policy and accounting period of the Company on the basis of the fair value of various

recognizable assets of the invested unit as at the date of obtaining of the investment after offset of gains and

losses arising from internal transactions with associates and joint-ventures and finally to make confirmation

after adjustment of net profit of the invested unit. Confirmation on gains and losses from the long-term

equity investment in associates and joint-ventures held by the Company prior to the first execution day could

only stand up with the precedent condition that debit balance of equity investment straightly amortized

according to its original remaining term has already been deducted if the aforementioned balance relating to

the investment do exist.In case that investor loses joint control or significant influence over investee due to disposal of part equity

interest investment the remaining equity interest shall be calculated according to Accounting Standards for

Business Enterprise No.22-Recognition and Measurement of Financial Instrument. Difference between the

fair value of the remaining equity interest as of the date when loss of joint control or significant influence and

the carrying value is included in current gains and losses. Other comprehensive income recognized in respect

of the original equity interest investment under equity method should be treated according to the same basis

which the investee adopts to directly dispose the relevant assets or liabilities when ceasing adoption of equity

method calculation; and also switches to cost method for calculating the long-term equity investments which

entitles the Company to have conduct control over the invested units due to its additional investments; and

switches to equity method for calculating the long-term equity investments which entitles the Company to

conduct common control or significant influence while no control over the invested units due to its

additional investments or the long-term equity investments which entitles the Company with no control over

the invested units any longer while with common control or significant influence.When disposing long-term equity investment the balance between it carrying value and effective price for

obtaining shall be recorded into current investment income. When disposing long-term equity investment

which is calculated by equity method the proportion originally recorded in owners’ equity shall be

transferred to current investment income according to relevant ratio except for that other movements of

owners’ equity excluding net gains and losses of the invested units shall be recorded into owners’ equity.

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

13. Investment real estate

The investment real estate of the Company includes leased houses and buildings and is accounted value by

its cost. Cost of purchased-in investment real estate consists of payment for purchase relevant taxes and

other expenditure which is attributable to the assets directly; while cost of self-built investment real estate is

formed with all necessary expenditures occurred before construction completion of the assets arriving at the

estimated utilization state.

Consequent measurement of investment estate shall be measured by cost method. Depreciation is provided

with average service life method pursuant to the predicted service life and net rate of salvage value. The

predicted service life and net rate of salvage value and annual depreciation are listed as follows:

Category Depreciation term

Predicted rate of salvage

value

Depreciation rate per

annual

House and buildings 30-40 years 4%-5% 2.375%-3.20%

When investment real estate turns to be used by holders it shall switch to fixed assets or intangible assets

commencing from the date of such turning. And when self-used real estate turns to be leased out for rental or

additional capital the fixed assets or intangible assets shall switch to investment real estate commencing

from the date of such turning. In situation of switch the carrying value before the switch shall be deemed as

the credit value after the switch.When investment real estate is disposed or out of utilization forever and no economic benefit would be

predicted to obtain through the disposal the Company shall terminate recognition of such investment real

estate. The amount of income from disposal transfer discarding as scrap or damage of investment real estate

after deducting the asset’ s carrying value and relevant taxation shall be written into current gains and losses.

14. Fixed assets

Fixed assets of the Company represent the tangible assets and assets package: held by the Company for

purpose of producing commodities providing labor service leasing or operational management service life

exceeds one year and unit price exceeds RMB 2000. Including four categories of houses and buildings

machinery equipment transportation equipment and other equipment

Their credit value is determined on the basis of the cost taken for obtaining them. Of which cost of

purchased-in fixed assets include bidding price and import duty and relevant taxes and other expenditure

which occurs before the fixed assets arrive at the state of predicted utilization and which could be directly

attributable to the assets; while cost of self-built fixed asset is formed with all necessary expenditures

occurred before construction completion of the assets arriving at the estimated utilization state; credit value

of the fixed assets injected by investors is determined based on the agreed value of investment contracts or

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

agreements while as for the agreed value of investment contracts or agreements which is not fair it shall

take its fair value as credit value; and for fixed assets which are leased in through finance leasing credit

value is the lower of fair value of leased assets and present value of minimized leasing payment as at the

commencing date of leasing.

Consequent expenditure related to fixed assets consists of expenditures for repair and update reform. For

those meeting requirements for recognition of fixed assets they would be accounted as fixed asset cost; and

for the part which is replaced recognition of its carrying value shall cease; for those not meeting

requirements for recognition of fixed assets they shall be accounted in current gains and losses as long as

they occur. When fixed asset is disposed or no economic benefit would be predicted to obtain through

utilization or disposal of the asset the Company shall terminate recognition of such fixed asset. The amount

of income from disposal transfer discarding as scrap or damage of fixed asset after deducting the asset’ s

carrying value and relevant taxation shall be written into current gains and losses.The Company withdraws depreciation for all fixed assets except for those which have been fully depreciated

while continuing to use. It adopts average service life method for withdrawing depreciation which is treated

respectively as cost or current expense of relevant assets according to purpose of use. The depreciation term

predicted rate of salvage value and depreciation rate applied to fixed assets of the Company are as follows:

No. Category Depreciation term

Predicted rate of salvage

value

Depreciation rate per

year

1 House and buildings 30-40 years 4%-5% 2.375%-3.20%

2 Machinery equipment 10-14 years 4%-5% 6.786%-9.60%

3 Transport equipment 5-12 years 4%-5% 7.92%-19.20%

4 Other equipment 8-12 years 4%-5% 7.92%-12.00%

The Company makes re-examination on predicted service life predicted rate of salvage value and

depreciation method at each year-end. Any change will be treated as accounting estimation change.

15. Construction in progress

Construction in progress is measured with effective cost. Self-operated constructions projects are measured

with direct materials direct salaries and direct construction expense; construction projects undertaken by

external are measured with the engineering payment payable; and engineering cost (income abatement) of

equipment-installation projects is confirmed with consideration of value of the equipment installation fee

and expenditure arising from trial operation of the projects. Borrowing expense and exchange gains and

losses which should be capitalized are also included in cost of construction in progress.

16. Borrowing expense

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Borrowing expenses include interest expense amortization of discount or premium auxiliary expenses and

exchange difference due to borrowing in foreign currency. The borrowing expense which could be directly

attributable to purchase or production of assets satisfying capitalization condition starts capitalization when

capital expenditure and borrowing expense occur and when necessary purchase or production conducted for

promoting assets to reach the predicted available-for-use or available-for-sale state; and capitalization shall

cease when purchased or produced assets satisfying capitalization condition have reached the predicted

available-for-use or available-for-sale state. Other borrowing expense is recognized as expense during the

occurrence period.

Capitalization shall be exercised for interest expense actually occurred from special borrowings in current

period after deduction of the interest income arising from unutilized borrowing capital which is saved in

banks or deduction of investment income obtained from temporary investment; For recognization of

capitalized amount of common borrowing it equals to the weighted average of the assets whose accumulated

expense or capital disburse is more than common borrowing times capitalization rate of occupied common

borrowing. Capitalization rate is determined according to weighted average interest rate of common

borrowing.

Assets satisfying capitalization principle generally refer to fixed assets investment real estate and inventories

which can only arrive at predicted available-for-use and available-for-sale state after quite a long time

(generally over one year) in purchase or production activities.If abnormal interruption happens during purchase or production of assets satisfying capitalization principle

and the interruption lasts over 3 months the capitalization for the borrowing expense shall pause until the

purchase or production restarts.

17. Intangible assets

The Company holds intangible assets including land use right trademark patent technology and non-patent

technology. Intangible assets are measured according to the effective costs paid for obtaining the assets. For

those intangible assets purchased in by the Company their effective cost consist of actual payment and

relevant other expenditure; for the intangible assets input by investors effective cost is determined according

to the value agreed in investment contracts and agreements while if the agreed value is not fair then

effective value is confirmed according to fair value.Land use right is averagely amortized according to its transfer term commencing from the sate of transfer;

trademark use-rights averagely amortized by 10 years; patent technology non-patent technology and other

intangible assets is averagely amortized according to the shortest of their predicted service life beneficial

term concluded by contract and effective term regulated by laws. Amortization amount is recorded in assets

cost and current gains and losses relevant to beneficial objectives.

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Re-examination on predicted service life and amortization method of the intangible assets which have limited

service life shall be conducted at the end of each year. If changed it would be treated as change of

accounting estimation. Re-examination on predicted service life of intangible assets which have uncertain

service life shall be conducted. For any evidence proving that service life of intangible assets is limited then

the service life shall be estimated and the Company shall make amortization within the predicted service life

period.

18. Research and development

As for expenditure for research and development the Company classifies it into expenditure on research

phase and development phase based on nature of the expenditure and that whether the final intangible assets

formed by research & development is of great uncertainty. Expenditure arising during research should be

recorded in current gains and losses upon occurrence; expenditure arising during development is confirmed

as intangible assets when satisfying the following conditions:

(1) Completions of the intangible assets make it available for application or sell in technology;

(2) Equipped with plan to complete the intangible asset and apply or sell it;

(3) There is market for products produced with this intangible asset or the intangible asset itself;

(4) Have sufficient technology financial resource and other resources to support development of the

intangible assets and have ability to apply or sell the assets;

(5) Expenditure attributable to development of the intangible assets could be reliable measured.

Expenditure arising during development not satisfying the above conditions shall be recorded in current

gains and losses upon occurrence. Development expenditure which had been recorded in gains and losses in

previous period would not be recognized as assets in later period. Expenditure arising during development

phase which has been starting capitalization is listed in balance sheet as development expenditure and

transferred to intangible assets since the project reaches at predicted utilization state.

19. Impairment of non-financial long-term assets

As at each balance sheet date the Company has inspection on long-term equity investment fixed assets

construction in process and intangible assets with limited service life. When the following indications appear

assets may be impaired and the Company would have impairment test. As for goodwill and intangible assets

which have uncertain service life no matter there is impairment or not impairment test shall be conducted at

the end of every year. If it is hard to make test on recoverable amount of single asset test is expected to make

on the basis of the assets group or assets group portfolio where such asset belongs to.

After impairment test if the carrying value exceeds the recoverable amount of the asset the balance is

recognized as impairment loss. As long as impairment loss of the aforementioned assets is recognized it

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

couldn’t be switched back in later accounting periods. Recoverable amount of assets refers to the higher of

fair value of assets net disposal expense and present value of predicted cash flow of the asset.Indications for impairment are as follows:

(1) Market value of asset drops a lot in current period the drop scope is obviously greater than the predicted

drop due to move-on of times or normal utilization;

(2) Economy technology or law environment where enterprise operates or market where asset is located will

have significant change in current or recent periods which brings negative influence to enterprise;

(3) Market interest rate or returning rate of other market investments have risen in current period which

brings influence in calculating discount rate of present value of predicted future cash flow of assets which

leads to a great drop in recoverable amount of such assets;

(4) Evidence proving that asset is obsolete and out of time or its entity has been damaged;

(5) Asset has been or will be keep aside terminating utilization or disposed advance;

(6) Internal report of enterprise shows that economic performance of asset has been or will be lower than

prediction such as that net cash flow created by asset or operation profit (or loss) realized by asset is greatly

lower (or higher) than the predicted amount;

(7) Other indications showing possible impairment of assets

20. Goodwill

Goodwill represents balance between equity investment cost or business combination cost under no common

control exceeding the attributable part or fair value of recognizable net assets of party invested or purchased

(obtained through business combination) as of acquisition day or purchase day.Goodwill relating to subsidiaries is separately listed in consolidated financial statement. And goodwill

relating to associates and joint-ventures is included in carrying value of long-term equity investment.

21. Long-term deferred expenses

Long-term deferred expenses of the Company refer to the expense which has been paid out while should be

amortized from the current period and periods thereafter with amortization term over one year (excluding

one year). Such expense is averagely amortized during the beneficial period. If such long-term deferred

expense could not bring benefit to following accounting periods the unamortized value of the item shall be

fully transferred to current gains and losses.

22. Staff remuneration

Employee benefits mainly include all kinds of remuneration incurred in exchange for services rendered by

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

employees or compensation to the termination of employment relationship such as short-term wages

post-employment benefits compensation for the termination of employment relationship and other long-term

employee welfare.Short-term remuneration includes: staff salary bonus allowances and subsidies staff benefits social

insurances like medical insurance work-related injury insurance and maternity insurance housing fund

labor union funds and staff education funds short-term paid absence of duty short-term profit sharing

scheme and non-monetary benefits as well as other short-term remuneration. During the accounting period

when staff provides services the short-term remuneration actually occurred is recognized as liabilities and

shall be included in current gains and losses or related asset costs according to the beneficial items.Retirement benefits mainly consist of basic pension insurance unemployment insurance and early-retirement

benefits etc. retirement benefit scheme represents the agreement reached by the Company and its employees

in respect of retirement benefits or the rules or regulations established by the Company for providing

retirement benefits to employees. In particular defined contribution plan means a retirement benefit plan

pursuant to which the Company makes fixed contribution to independent fund upon which and it is not

obliged to make further payment. Defined benefit plan refers to retirement benefit scheme other than defined

contribution plan.The early retirement policy for staff and workers of the Company is the compensation for encouraging staff

and workers to accept the reduction voluntarily. The employees make applications voluntarily the two

parties sign the compensation agreement after approved by the Company and calculate the compensation

amount according to the compensation standard passed by the staff representative conference and the

Company confirms it as dismiss welfare and reckons it in current profits and losses. As the Company

promises to adjust the treatment for early retiring staff and workers with the increase of social basic cost of

living allowances the discount elements will not be considered for calculating the dismiss welfare.

23.Accrual liability

If the business in connection with such contingencies as a security involving a foreign party commercial

acceptance bill discount pending litigation or arbitration product quality assurance etc. meets all of the

following conditions the Company will confirm the aforesaid as liabilities: the obligation is an existing

obligation of the Company; performance of the obligation is likely to cause economic benefits to flow out of

the enterprise; the amount of the obligation is reliably measurable.

24. Principle of recognition of revenue and measurement method

Revenue is the total inflow of economic benefits formed in the Company's daily activities that increase

shareholders' equity and have nothing to do with the capital invested by shareholders. The Company has

fulfilled the performance obligations in the contract that is revenue is recognized when the customer

obtains control of the relevant goods or services.

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

If the contract contains two or more performance obligations the Company will allocate the transaction price

to each individual performance obligation according to the relative proportion of the stand-alone selling price

of the goods or services promised by each individual performance obligation on the date of the contract. The

revenue is measured according to the transaction price of each individual performance obligation.The transaction price is the amount of consideration that the Company expects to be entitled to receive due to

the transfer of goods or services to customers excluding payments on behalf of third parties. The transaction

price confirmed by the Company does not exceed the amount at which the cumulatively recognized revenue

will most likely not to undergo a significant switch back when the relevant uncertainty is eliminated. The

money expected to be returned to the customer will be regarded as a return liability and not included in the

transaction price.If there is a significant financing component in the contract the Company shall determine the transaction

price based on the amount payable on the assumption that the customer pays in cash when obtaining the

control of the goods or services. The difference between the transaction price and the contract consideration

shall be amortized by the effective interest method during the contract period. On the starting date of the

contract if the Company expects that the interval between the customer's acquisition of control of the goods

or services and the customer's payment of the price doesn’t exceed one year the significant financing

components in the contract shall be ruled out.When meeting one of the following conditions the Company is to perform its performance obligations

within a certain period of time otherwise it is to perform its performance obligations at a certain point in

time:

1) The customer obtains and consumes the economic benefits brought by the Company's performance at the

same time as the Company's performance;

2) Customers can control the products under construction during the performance of the Company;

3) The goods produced by the Company during the performance of the contract have irreplaceable uses and

the Company has the right to collect payment for the accumulated performance part of the contract during the

entire contract period.

For performance obligations performed within a certain period of time the Company recognizes revenue in

accordance with the performance progress during that period. When the performance progress cannot be

reasonably determined if the cost incurred by the Company is expected to be compensated the revenue shall

be recognized according to the amount of the cost incurred until the performance progress can be reasonably

determined.

For performance obligations performed at a certain point in time the Company recognizes revenue at the

point when the customer obtains control of the relevant goods or services. When judging whether a customer

has obtained control of goods or services the Company will consider the following signs:

1) The Company has the current right to collect payment for the goods or services;

2) The Company has transferred the goods in kind to the customer;

3) The Company has transferred the legal ownership of the product or the main risks and rewards of

ownership to the customer;

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

4) The customer has accepted the goods or services etc.

The Company’s right (and the right depends on other factors other than the passage of time) to collect

consideration arising from transferring goods or services to customers is listed as contract assets and

contract assets are devalued on the basis of expected credit losses. The Company's unconditional (only

depending on the passage of time) right to collect consideration from customers is listed as receivables. The

Company’s obligation to transfer goods or services to customers for consideration received or receivable

from customers is listed as contract liabilities.The specific accounting policies related to the Company's main activities are described as follows:

(1) Transfer of goods

The sales of goods between the Company and customers usually takes the point in time when the goods’

control rights are transferred to recognize revenue after considering the acquisition of current collection

right of the goods the transfer of the main risks and rewards of the ownership of the goods the transfer of

the legal ownership of the goods the transfer of the physical assets of the goods the customer’s acceptance

of the goods and other factors.

(2) Transfer of service

The transfer of service between the Company and its customers usually includes technical services labor

services etc.; the Company regards the transfer of service as a performance obligation performed within a

certain period of time and recognizes revenue according to the performance progress unless the

performance progress cannot be reasonably determined. The Company determines the performance progress

of the service delivery in accordance with the input method. When the performance progress cannot be

reasonably determined if the cost incurred by the Company is expected to be compensated the revenue shall

be recognized according to the amount of the cost incurred until the performance progress can be reasonably

determined.

(3) Transfer of the right to use assets

For the business of transferring asset use rights the Company confirms the realization of the income from the

transfer of asset use rights when the economic benefits related to the transaction are likely to flow into the

company and the amount of income can be reliably measured in accordance with the relevant contract or

agreement.

(4) Quality assurance obligations

According to the agreement of contract legal provisions etc. the Company provides quality assurance for

the goods sold. For guarantee-type quality assurance to assure customers that the goods sold meet the

established standards the Company conducts accounting treatment in accordance with estimated liabilities.

For the service-type quality assurance that provides a separate service in order to assure customers that the

goods sold meet the established standards the Company regards it as a single performance obligation

allocates part of the transaction priceto the service quality assurance based on the relative proportion of the

stand-alone selling price of the quality assurance of goods and services and recognizes the revenue during

the period of fulfilling the single performance obligation. When evaluating whether the quality assurance

provides a separate service in addition to ensuring that the goods sold meet the established standards the

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Company considers whether the quality assurance is a legal requirement or industry practice the quality

assurance period and the nature of the company's commitment to perform the tasks and other factors.

(5) Contractual rights not exercised by customer

When the Company receives payment for sales of goods or services from customers in advance the payment

is first recognized as a liability and then converted into revenue when the relevant performance obligations

are fulfilled. When the Company’s advance receipts do not need to be returned and the customer may give

up all or part of their contractual rights and the Company expects to be entitled to obtain the amount related

to the contractual rights waived by the customer the above amount is recognized as revenue in proportion

according to the mode of the client's exercise of contractual rights otherwise the Company only converts the

relevant balance of the above liabilities into revenue when the possibility of the customer requesting to fulfill

the remaining performance obligations is extremely low. Contract liabilities refer to the Company’s

obligation to transfer goods or services to customers for consideration received or receivable from customers.

25. Contract cost

Contract cost include incremental cost incurred to obtain contracts and contract performance costs.

The incremental cost incurred to obtain the contract refers to the cost (such as sales commission etc.) that

will not incur if the Company doesn’t obtain the contract. If the cost is expected to be taken back the

Company will regard it as a contract acquisition cost and recognize it as an asset. The Company's expenses

incurred to obtain the contract other than the incremental cost that is expected to be taken back are included

in the current profit and loss when incurred.If the cost incurred to fulfill the contract does not fall within the scope of other business accounting standards

such as inventory and meets the following conditions at the same time the Company will regards it as the

contract performance cost and recognize it as an asset:

1) The cost is directly related to a current or expected contract including direct labor direct materials

manufacturing expenses (or similar expenses) cost clearly borne by the customer and other costs incurred

only due to the contract;

2)The cost increases the Company's future resources for fulfilling contract performance obligations; and

3)The cost is expected to be recovered.

Assets recognized for contract acquisition costs and assets recognized for contract performance costs

(hereinafter referred to as "assets related to contract costs") are amortized on the same basis as the revenue

recognition of goods or services related to the asset and included in the current profit and loss. If the

amortization period does not exceed one year it shall be included in the current profit and loss when it

occurs.

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

If the book value of assets related to contract costs is higher than the difference between the following two

items the Company will make provisions for impairment for the excess part and recognize it as an asset

impairment loss:

1) The remaining consideration expected to be obtained due to the transfer of goods or services related to the

asset;

2) Costs estimated to incur for the transfer of the related goods or services.

26. Government subsidy

The government subsidy shall be recognized when the Company is able to meet the conditions attached and

is able to receive it. The Government subsidy other than fiscal subsidy received by the Company shall be

accounted on an aggregate basis. In particular the Government subsidies relating to ordinary activities would

be included in other income; the Government subsidies not relating to ordinary activities would be included

in non-operating income.When the Government subsidy is in the form of monetary assets it is measured at the actual amount received.The subsidy allocated according to fixed quota standards shall be measured by the amount receivable; When

the Government subsidy is in the form of non-monetary assets it is measured at fair value and measured at

the nominal value of RMB 1.00 in case of failure to obtain reliable fair value.

(1) Basis of determination and accounting of Government subsidy relating to assets

Government subsidy relating to assets refers to that obtained by the Company for the purpose of acquiring or

otherwise formation of long-term assets. Government subsidy relating to assets is deemed as that relating to

ordinary activities in principle and recognized as deferred income upon receipt. The Government subsidy

shall be allocated averagely over the life of use of relevant assets and accounted in other income.

(2) Basis of determination and accounting of Government subsidy relating to income

Government subsidy relating to income refers to the Government subsidy other than that relating to assets.Government subsidy relating to income shall be recognized as deferred income if the grant is used to

compensate the Company’s expenses or losses for subsequent periods and shall be accounted in profit or

loss for the period during the period in which the relevant expense is recognized. Those grants relating to our

ordinary activities are recorded in other income in the period in which the relevant expenses or losses are

recognized. Those grants not relating to our ordinary activities are recorded in non-operating income in the

period in which the relevant expenses or losses are recognized. Government subsidies used to compensate

the relevant costs or losses incurred by the Company and relating to our ordinary activities shall be accounted

in other income directly upon receipt of the grant and accounted in non-operating income directly upon

receipt if it is not related to our ordinary activities.

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

With respect to Government subsidy comprising both portions relating to assets and income it shall be

accounted separately based on different portions and it shall be aggregated as that relating to income if it is

difficult to distinguish the two portions.

(3) The policy-related preferential loan received by the Company shall be accounted separately in the

following two manners:

In case that government’s appropriation of interest subsidy is made to the lending bank the Company shall

account for the relevant loan based on the actual amount of loan received by it and calculate the borrowing

expense based on the principal of the borrowing and the policy-related preferential interest rate.In case that government’s appropriation of interest subsidy is made to the Company the Company applied

the relevant interest subsidy to offset borrowing expense.

27. Deferred Income Tax Assets and Deferred Income Tax Liabilities

A deferred tax asset and deferred tax liability shall be determined by a difference (temporary difference)

between the carrying amount of an asset or liability and its tax base. The deferred tax asset shall be

recognized for the carry forward of unused deductible losses that it is probable that future taxable profits will

be available against which the deductible losses can be utilized. For temporary difference arising from initial

recognition of goodwill no corresponding deferred income tax liabilities will be recognized. For temporary

difference arising from initial recognition of assets and liabilities occurred in the transaction related to

non-business combination which neither affect accounting profit nor taxable income (or deductible losses)

no corresponding deferred income tax assets and deferred income tax liabilities will be recognized. As of the

balance sheet date deferred income tax assets and deferred income tax liabilities are measured at the

effective tax rate applicable to the period when recovery of assets or settlement of liabilities occur.The Company recognizes deferred income tax assets to the extent of future taxable income tax which is

likely to be obtained to offset deductible temporary difference deductible losses and tax credits.

28. Lease

The Company categorizes the lease into the financial leasing and the operating leasing.The financial leasing is the lease in which all risks and returns related to the ownership of assets are

transferred in substance. The Company as a lease holder on the date of lease the financial lease is

recognized as the fixed asset at lower cost of fair value of the rental asset and the NPV of minimum payment

of leasing. The minimum payment of leasing is recognized as long-term payable and the difference is

accounted into unrecognized financing expense.The operating lease is the lease apart from the financial leasing. The Company as a lease holder accounts

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

the rents into current period by straight line method during the term of the lease. The Company as a leaser

accounts the rental income into current period by straight line method during the term of the lease.

29. Held-for-sale

(1)The Company classifies non-current assets or disposal groups that meet all of the following conditions as

held-for-sale: 1) according to the practice of selling this type of assets or disposal groups in a similar

transaction the non-current assets or disposal group can be sold immediately at its current condition; 2) The

sale is likely to occur that is the Company has made resolution on the selling plan and obtained definite

purchase commitment the selling is estimated to be completed within one year. Those assets whose disposal

is subject to approval from relevant authority or supervisory department under relevant requirements are

subject to that approval. Prior to the preliminary classification of non-current assets or disposal group as the

category of held-for-sale the Company measures the carrying value of the respective assets and liabilities

within the non-current assets or disposal group under relevant accounting standards. For non-current asset or

disposal group held for sale for which it is found that the carrying value is higher than its fair value less

disposal expense during the initial measurement or re-measurement on the balance sheet date the carrying

value shall be deducted to the net amount of fair value less disposal expense and the reduced amount shall

be recognized as impairment loss in profit or loss for the period and provision of impairment of assets held

for sale shall be provided for accordingly.

(2)The non-current assets or disposal group that the Company has acquired specially for resale are classifiedas held for sale on the acquisition date when they meet the condition that “the selling is estimated to becompleted within one year” on the acquisition date and are likely to satisfy other conditions of being

classified as the type of held for sale in a short-term (usually being 3 months). Non-current assets or disposal

group classified as held for sale are measured at the lower of their initial measurement amount and the net

amount after their fair value less the selling expenses based on the assumption that such non-current assets or

disposal group are not classified as held for sale at the time of initial measurement. Except for the

non-current assets or disposal group acquired in a business combination the difference arising from

considering the net amount of such non-current assets or disposal group after their fair value less the selling

expenses as the initial measurement amount is recorded in the current profit or loss.

(3)In case of loss of control over the subsidiaries due to the sales of investment in subsidiaries no matter

whether the Company retains part of the equity investment after selling investment in subsidiaries the

investment in subsidiaries shall be classified as held for sale on an aggregate basis in the separate financial

statements of the parent company when the investment in subsidiaries proposed to be sold satisfies the

conditions for being classified as held for sale; and all the assets and liabilities of the subsidiary shall be

classified as held for sale in the consolidated financial statements.

(4)If the net amount of fair value of non-current assets held for sale less sales expense on subsequent balance

sheet date increases the amount previously reduced for accounting shall be recovered and reverted from the

impairment loss recognized after the asset is classified under the category of held for sale with the amount

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

reverted recorded in profit or loss for the period. Impairment loss recognized before the asset is classified

under the category of held for sale shall not be reverted.

(5)For the amount of impairment loss on assets the carrying value of disposal group’s goodwill shall be

offset against first and then offset against the book value of non-current assets according to the proportion of

book value of non-current assets.If the net amount of fair value of the disposal group held for sale on the subsequent balance sheet date less

sales expenses increases the amount reduced for accounting in previous periods shall be restored and shall

be reverted in the impairment loss recognized in respect of the non-current assets which are applicable to

relevant measurement provisions after classification into the category of held for sale with the reverted

amount charged in profit or loss for the current period. The written-off carrying value of goodwill and

impairment loss of non-current assets which is recognized prior to classification into the category of held for

sale shall not be reverted.The subsequent reversed amount in respect of the impairment loss on assets recognized in the disposal group

held for sale will increase the book value in proportion of the book value of each non-current asset (other

than goodwill) in the disposal group.

(6) The non-current assets in the non-current assets or disposal group held for sale is not depreciated or

amortized and the debt interests and other fees in the disposal group held for sale continue to be recognized.

(7)If the non-current assets or disposal group are no longer classified as held for sale since they no longer

meet the condition of being classified as held for sale or the non-current assets are removed from the disposal

group held for sale they will be measured at the lower of the following: 1) the amount after their book value

before they are classified as held for sale is adjusted based on the depreciation amortization or impairment

that should have been recognized given they are not classified as held for sale; 2) the recoverable amount.

(8) The unrecognized profits or loss will be recorded in the current profits or loss when derecognizing the

non-current assets or disposal group held for sale.

30. Discontinued operation

A discontinued operation is a separately identified component of the Group that either has been disposed of

or is classified as held for sale and satisfies one of the following conditions: (1) represents a separate major

line of business or geographical area of operations; (2) is part of a single co-ordinate plan to dispose of a

separate major line of business or geographical area of operations; and (3) is a subsidiary acquired

exclusively with a view to resale.

31. Income tax accounting

The Company accounted the income tax in a method of debit in balance sheet. The income tax expenses

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

include income tax in the current year and deferred income tax. The income tax associated with the events

and transactions directly included in the owners’ equity shall be included in the owners’ equity; and the

deferred income tax derived from business combination shall be included in the carrying amount of goodwill

except for that above the income tax expense shall be included in the profit or loss in the current period.The income tax expense in the current year refers to the tax payable which is calculated according to the tax

laws on the events and transactions incurred in the current period. The deferred income tax refers to the

difference between the carrying amount and the deferred tax assets and deferred tax liabilities at Current

Year-end recognized in the method of debit in the balance sheet.

32. Segment information

Business segment was the major reporting form of the Company which divided into five parts:

air-conditioning refrigerator & freezer & washing machine marketing small home appliance and others.The transfer price among the segments will recognize based on the market price common costs will

allocated by income proportion between segments except for the parts that without reasonable allocation.

33. Explanation on significant accounting estimation

The management of the Company needs to apply estimation and assumption when preparing financial

statement which will affect the application of accounting policy and amounts of assets liabilities income and

expense. The actual condition may differ from the estimation. Constant evaluation is conducted by the

management in respect of the key assumption involved in the estimation and judgment of uncertainties.

Effect resulting from change of accounting estimation is recognized in the period the change occurs and

future periods.The following accounting estimation and key assumption may result in material adjustment to the book value

of assets and liabilities in future period.

(1) Inventory impairment provision

The Company provides impairment provision according to the type of finished products and goods delivered

under fixed proportion and estimates the realizable net value of inventories by reference to the projected

selling price of similar inventories less sales expenses and related taxes on a regular basis so as to evaluate

the rationality of the provision proportion. If the actual selling price or expense differs from the previous

estimation the management will make corresponding adjustment to the proportion. The estimation results

based on existing experiences may differ from the latter actual results which may result in adjustment to the

book value of inventories in the balance sheet and affect over the gains and losses of the period when the

estimation changes.

(2) Accounting estimation on long-term assets impairment provision

The Company makes impairment test on fixed assets such as buildings machine and equipment which have

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

impairment indication and long-term assets such as goodwill as at the balance sheet date. The recoverable

amount of relevant assets and assets group shall be the present value of the projected future cash flow which

shall be calculated with accounting estimation.If the management amends the gross profit margin and discount rate adopted in calculation of future cash

flow of assets and assets group and the amended gross profit margin is lower than the currently adopted one

or the amended discount rate is higher than the currently adopted one the Company needs to increase

provision of impairment provision. If the actual gross profit margin is higher (or the discount rate is lower)

than the estimation of management the Company can not transfer back the long term assets impairment

provision provided already.

(3) Accounting estimation on realization of deferred income tax assets

Estimation on deferred income tax assets needs estimation on the taxable income and applicable tax rate for

each future year. Realization of deferred income tax assets depends on whether a company is able to obtain

sufficient taxable income in future. Change of future tax rate and switch back of temporary difference could

affect the balance of income tax expense (gains) and deferred income tax. Change of the aforesaid estimation

may result in material adjustment to deferred income tax.

(4) Usable term and residual value rate of fixed assets and intangible assets

The Company at least at the end of each accounting year reviews the projected usable life and residual value

rate of fixed assets and intangible assets. The projected usable life and residual value rate are determined by

the management based on the historical experiences of similar assets by reference to the estimation generally

used by the same industry with consideration on projected technical upgrade. If material change occurs to

previous estimation the Company shall accordingly adjust the depreciation expenses and amortization

expenses for future period.

(5) Projected liabilities arising from product quality guarantee

The Company commits to repair the major spare parts of refrigerators sold through go-to-countryside

promotion activity for free for ten years. As to the maintenance expenses that may be increased arising from

such commitment the Company has provided projected liabilities.Taking into account the various uncertainties during the ten years the Company considers no discount factor

of such projected liabilities. Instead the Company reviews the parameters (probility proportion maintenance

expense per single set) based on the actual occurrence of maintenance expenses as of each balance sheet date.If obvious change is found the Company will adjust the projected liabilities according to the latest

parameters so as to reflect the best estimation.

34. Other comprehensive income

Other comprehensive income represents various gains and losses not recognized in current gains and losses

according to other accounting rules.

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Other comprehensive income items shall be reported in the following two classes under other relevant

accounting rules:

(1) Other comprehensive income items that can not be reclassified into gains and losses in future accounting

periods mainly including changes arising from re-measurement of net liabilities or net assets under defined

benefit plan and interest in investee’s other comprehensive income which are measured under equity method

and which can not be reclassified into gains and losses in future accounting periods;

(2) Other comprehensive income items that will be reclassified into gains and losses in future accounting

periods upon satisfaction of required conditions mainly includes the share of other comprehensive income

that is reclassified into profit and loss when the investee’s subsequent accounting periods are accounted for in

accordance with the equity method and meet the specified conditions the fair value changes occurred by the

debt investment that is measured at fair value and whose changes are included in other comprehensive

income the difference between the original book value included in other comprehensive income and the fair

value when a financial asset measured at amortized cost is reclassified as a financial asset measured at fair

value and its changes are included in other comprehensive income the loss provisions for financial assets

measured at fair value and whose changes are included in other comprehensive income the gains or losses

generated from cash flow hedging instruments are part of effective hedging and the differences in

conversion of foreign currency financial statements.

35. Change of significant accounting policies and accounting estimates

(1) Change of significant accounting policy

Content and reasons Approval procedure Note

On 5 July 2017 the Ministry of Finance revised and issued the

Accounting Standards for Business Enterprises No. 14 - Revenue

and the Company implemented since 1 Jan. 2020.

Approved by 41st session of 9th

BOD

Found below as

details

New Revenue standards are implemented by the Company and its subsidiaries for the first time in the period

and according to the regulation of Accounting Division of the Ministry of Finance CK[2019] No.6 impacts

on balance sheet at period-begin of the consolidate and parent company from change of the above mentioned

accounting policies are as:

Item

affected

Consolidated balance sheet Balance sheet of parent company

2019-12-31

(Before

adjustment)

Amount

adjusted

2020-1-1(Afte

r adjustment)

2019-12-31

(Before

adjustment)

Amount

adjusted

2020-1-1(After

adjustment)

Advance

payment 425149194.97 -425149194.97 147365864.56 -147365864.56

Contractua

l liabilities 425149194.97 425149194.97 147365864.56 147365864.56

(2) Change of significant accounting estimates

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

The Company had no change of significant accounting estimates in Current Period.V. Taxation

1. Major taxes (expenses) and tax rates

Tax(expenses) Tax base Tax rate

VAT Income from sales of goods and from processing 13%、9%、6%、5%

Urban maintenance and

construction tax Turnover tax 5% or 7%

Education surcharge Turnover tax 3%

Local education

surcharge Turnover tax 2%

Corporate income tax Taxable income 15% 、20%、25%

House Property Tax

Original Book value of house

property×(1-30%)or annual rent income

1.2% or 12%

Land use tax Actual land area used 1 Yuan/M

2 to 15 Yuan /M2

2. Preferential tax and approval documents

The Company and its subsidiary Zhongke Meiling Cryogenic Technology Co. Ltd. has passed the review for

high-tech enterprise certification on 20 July 2017 and continuous to enjoy 15% rate for the income tax for

State Hi-Tech Enterprise for three years term.The subsidiary Zhongshan Changhong Electric Co. Ltd. has passed the review for high-tech enterprise

certification on 9 November 2017 and continuous to enjoy 15% rate for the income tax for State Hi-Tech

Enterprise for three years term.

The subsidiary Sichuan Hongmei Intelligent Technology Co. Ltd. has passed the qualification of high-tech

enterprise certification on 3 December 2018 and enjoys 15% rate for the income tax for State Hi-Tech

Enterprise for three years term.

Subsidiary Mianyang Meiling Refrigeration Co. Ltd. pass the review of Reply [Chuan JX Industrial H(2014)

No.408] from Sichuan Commission of Information on 9 May 2014 and the enterprise belongs to the

encourage industry listed in Directories of Industrial Structure Adjustment (2011) Revised (State Law

Reform Committee No. 21 Order); which enjoys the preferential tax policy of income tax for the western

development enterprise. And file in tax bureau with 15% rate for enterprise income tax since 2014 with

seven years term.The subsidiary Guangdong Changhong Ridian Technology Co. Ltd. has passed the qualification of high-tech

enterprise certification on 2 December 2019 and enjoys 15% rate for the income tax for State Hi-Tech

Enterprise for three years term.

The subsidiary Hongyuan Ground Energy Heat Pump Tech. (Zhongshan) Co. Ltd. has passed the

qualification of high-tech enterprise certification on 2 December 2019 and enjoys 15% rate for the income

tax for State Hi-Tech Enterprise for three years term.

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

The subsidiary Hefei Meiling Nonferrous Metal Products Co. Ltd. has passed the qualification of high-tech

enterprise certification on 26 October 2018 and enjoys 15% rate for the income tax for State Hi-Tech

Enterprise for three years term.

The subsidiary Jiangxi Meiling Electric Appliance Co. Ltd. has passed the qualification of high-tech

enterprise certification on 16 September 2019 and enjoys 15% rate for the income tax for State Hi-Tech

Enterprise for three years term.

The subsidiary Sichuan Changhong Air-conditioner Co. Ltd. belongs to the encouraged industry in the

Industrial Structure Adjustment Guidance Catalog and enjoys the preferential taxation policy of corporate

income tax for the Western Development and the corporate income tax is levied at a reduced tax rate of 15%

valid until December 31 2030.The subsidiary Anhui Tuoxing Technology Co. Ltd. is in compliance with the relevant standards for small

and medium-sized enterprises with meager profits in the Notice on the Implementation of Inclusive Tax

Relief Policies for Small and Micro Enterprises (Caishui [2019] No. 13) of the Ministry of Finance and the

State Administration of Taxation and temporarily implements below policies: the part of annual taxable

income that does not exceed one million yuan is included in taxable income by 25% after a reduction and

corporate income tax is paid at a tax rate of 20%; while the part of annual taxable income exceeds one

million yuan but not exceeding three million yuan is included in taxable income by 50% after a reduction

and corporate income tax is paid at a tax rate of 20% which is valid until December 31 2021.VI. Notes to the major items in the consolidated financial statements

With respect to the financial statements figures disclosed below unless otherwise specified

“period-beginning” refers to Jan. 1 2020; “period-end” refers to Jun. 30 2020; “Current Period” refers to Jan.

1 to Jun. 30 2020; “the last period” refers to Jan. 1 to Jun. 30 2019; the currency is RMB.

1. Monetary fund

Item Ending balance Opening Balance

Cash 128714.24 44818.07

Bank deposit 4554664202.70 4771094609.77

Other Monetary fund 351940377.10 728461602.80

Total 4906733294.04 5499601030.64

Including: total amount deposited in overseas 8859504.98 25326137.49

Other monetary fund:

Item Ending balance

Cash deposit 350315615.71

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Ending balance

Account of foreign currency for verification 160225.03

Union Pay online 854615.47

Taobao account 609920.89

Total 351940377.10

Cash deposit which serves as non cash and cash equivalents refers to the banking acceptance draft deposit

with a term of over three months amounting to 86410721.99 yuan Guarantee deposit 1120000.00 the

amount restricted for used in managed account was 1501998.18 yuan balance of the loan guarantee for

loans from overseas subsidiary amounted as 23232000.00 yuan. Due to asset preservation restrictions

1800000.00 yuan China Union Pay Taobao account and Ten Pay are all third party payment platforms.

Except for the deposit of 200000.00 yuan utilization of other balance is not subject to any restriction.

Pars of the goods payment denominated in foreign currency should be transferred to reviewing accounts

which may not be used temporarily. Upon approval of such review those payments may be transferred to

general accounts. Due to the relatively short time for reviewing foreign exchange balance of the reviewing

accounts is not limited on utilization.

2. Tradable financial assets

Item Ending balance Opening Balance

Financial assets measured at fair value and whose changes are included

in current gains/losses 2944998.77 7730268.92

Including: Derivative financial assets 2944998.77 7730268.92

Tradable financial assets refers to the RMB forward exchange fund in Current Period

3. Note receivable

(1) Category of note receivable

Item Ending balance Opening Balance

Bank acceptance 1048215589.84 1676718999.50

Trade acceptance 107157224.53 190350000.00

Total 1155372814.37 1867068999.50

Less: bad debt provision 2355263.04 1903500.00

Book value 1153017551.33 1865165499.50

(2) By accrual of bad debt provision

Category

Ending balance

Book balance Bad debt provision Book value

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Amount Ratio Amount Ratio

With bad debt provision

accrual on single item 1048215589.84 90.73% 1048215589.84

Including: bank acceptance 1048215589.84 90.73% 1048215589.84

with bad debt provision

accrual on portfolio 107157224.53 9.27% 2355263.04 2.20% 104801961.49

Including: trade acceptance 107157224.53 9.27% 2355263.04 2.20% 104801961.49

Total 1155372814.37 100.00% 2355263.04 0.20% 1153017551.33

(Continued)

Category

Opening Balance

Book balance Bad debt provision

Book value

Amount Ratio Amount Ratio

With bad debt provision

accrual on single item 1676718999.50 89.80% 1676718999.50

Including: bank acceptance 1676718999.50 89.80% 1676718999.50

with bad debt provision

accrual on portfolio 190350000.00 10.20% 1903500.00 1.00% 188446500.00

Including: trade acceptance 190350000.00 10.20% 1903500.00 1.00% 188446500.00

Total 1867068999.50 100.00% 1903500.00 0.10% 1865165499.50

1) Note receivable withdrawal bad debt provision by combination

Account age

Ending balance

Note receivable Bad debt provision Provision ratio

Within 3 months (3 months

included) 92893993.57 928939.94 1.00%

Over 3 months and within 6

months (6 months included) 14263230.96 1426323.10 10.00%

Total 107157224.53 2355263.04 2.20%

(3) Provision and reversed in this period

The amount of provision for bad debts in the current period is RMB 451763.04 and no collection for

accounts charge off previous period

(4) Notes receivable already pledged at the end of the period

Item Amount pledge at period-end

Bank acceptance 331387334.54

Note: with purpose of improving the note utilization the Company draw up bank acceptance by pledge parts

of the outstanding notes receivable to the bank. For details of the pledge of bills receivable see Note VI. 54.

Assets with restricted ownership or use rights.

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

(5) Notes endorsement or discount and undue on balance sheet date

Item

Amount derecognition at

period-end

Amount without

derecognition at period-end

Bank acceptance 877063610.15

Trade acceptance 142893993.57

Total 1019957603.72

(6) Notes transfer to account receivable due for failure implementation by drawer at period-end

(7) No note receivable actually written off in this period.

4. Account receivable

(1) Category of account receivable

Category

Ending balance

Book balance Bad debt provision

Book value

Amount Ratio Amount Ratio

Account receivable that withdrawal

bad debt provision by single item 1316387441.66 49.82% 27170961.68 2.06% 1289216479.98

Including: current payment with related

party 1039175029.17 39.33% - 1039175029.17

Account receivable with letter of credit 202952368.32 7.68% - 202952368.32

Account receivable with single minor

amount but withdrawal single item bad

debt provision

74260044.17 2.81% 27170961.68 36.59% 47089082.49

Account receivable withdrawal bad

debt provision by portfolio 1326051663.74 50.18% 55321604.33 4.17% 1270730059.41

Including: account receivable of

engineering customers 229675170.03 8.69% 7257686.94 3.16% 222417483.09

Receivables other than engineering

customers 1096376493.71 41.49% 48063917.39 4.38% 1048312576.32

Total 2642439105.40 100.00% 82492566.01 3.12% 2559946539.39

(Continued)

Category

Opening Balance

Book balance Bad debt provision

Book value

Amount Ratio Amount Ratio

Account receivable that withdrawal

bad debt provision by single item 746199837.64 51.49% 26519983.66 3.55% 719679853.98

Including: current payment with related 614612878.93 42.41% 614612878.93

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Category

Opening Balance

Book balance Bad debt provision

Book value

Amount Ratio Amount Ratio

party

Account receivable with letter of credit 52306821.66 3.61% 52306821.66

Account receivable with single minor

amount but withdrawal single item bad

debt provision

79280137.05 5.47% 26519983.66 33.45% 52760153.39

Account receivable withdrawal bad

debt provision by portfolio 703054274.21 48.51% 34772146.53 4.95% 668282127.68

Including: account receivable of

engineering customers 141637042.88 9.77% 3940749.05 2.78% 137696293.83

Receivables other than engineering

customers 561417231.33 38.74% 30831397.48 5.49% 530585833.85

Total 1449254111.85 100.00% 61292130.19 4.23% 1387961981.66

1) Account receivable with single minor amount but withdrawal bad debt provision singly refers to the minor

single receivables and withdrawal bad debt provision by combination shows no risk characteristic of the

receivables 102 clients involved.

2) Account receivable withdrawal bad debt provision by portfolio

A. Account receivable of engineering customers

Account age

Ending balance

Account receivable Bad debt provision Provision ratio

Within 3 months (3 months included) 96246154.52 -

Over 3 months and within 6 months (6 months

included) 54513578.86 -

Over 6 months and within one year (One year

included) 42986980.97 -

Over one year - within 2 years (2 years

included) 35688469.68 7137693.94 20.00%

Over 2 years - within 3 years (3 years

included) 239986.00 119993.00 50.00%

Over 3 years - -

Total 229675170.03 7257686.94

B. Receivables other than engineering customers

Account age Ending balance

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Account receivable Bad debt provision Provision ratio

Within 3 months (3 months included) 934998070.63 9349980.71 1.00%

Over 3 months and within 6 months (6

months included) 81998231.31 8199823.13 10.00%

Over 6 months and within one year (One

year included) 42873768.12 8574753.62 20.00%

Over one year - within 2 years (2 years

included) 25549938.51 12774969.26 50.00%

Over 2 years - within 3 years (3 years

included) 8960472.36 7168377.89 80.00%

Over 3 years 1996012.78 1996012.78 100.00%

Total 1096376493.71 48063917.39

(2) By account age

Item Ending balance

Within 3 months (3 months included) 1997004581.20

Over 3 months and within 6 months (6 months included) 271432556.95

Over 6 months and within one year (One year included) 182933812.94

Over one year - within 2 years (2 years included) 150645903.29

Over 2 years - within 3 years (3 years included) 28438365.84

Over 3 years 11983885.18

Total 2642439105.40

(3) Bad debt reserves of account receivable

Bad debt provision has 23009930.60 Yuan accrual in Current period; bad debt provision of 1809494.78

Yuan is switch-back; no trade receivables written-off in previous year was recovered this period.

(4) Account receivable actually written-off in Current period: Nil

(5) Pledge of the account receivable at period-end can be found in 54. Assets with ownership or the right to

use restricted in VI.

(6) In Current period top five receivables collected by arrears party amounting to 1447563435.13 yuan in

total accounted for 54.78% of the receivables at balance of Current period-end the bad debt provision

accrual correspondingly amounting to 5382910.61 yuan at period-end balance.

(7) Account receivable terminated recognition due to the transfer of financial assets: nil

(8) No assets and liability transfer Account receivable and continues to involve at period-end.

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

5. Accounts paid in advance

(1) Age of account paid in advance

Item

Ending balance Opening Balance

Amount Ratio Amount Ratio

Within one year 49412683.49 98.56% 23665135.72 93.65%

1-2 years 401775.32 0.80% 945375.38 3.74%

2-3 years 22551.00 0.05% 331164.45 1.31%

Over 3 years 297966.79 0.59% 328730.82 1.30%

Total 50134976.60 100.00% 25270406.37 100.00%

(2) Top 5 of account paid in advance in balance at period-end amounting to 37245651.40 yuan accounted

for 74.29% of the account.

6. Other account receivable

Item Ending balance Opening Balance

Interest receivable 21556791.10 9510208.63

Dividend receivable 661434.48

Other account receivable 81766861.76 87070251.69

Total 103323652.86 97241894.80

6.1 Interest receivable

(1) Category of interest receivable

Item Ending balance Opening Balance

Interest receivable from time deposit 19159985.54 9510208.63

Income receivable from financial products 2396805.56

Total 21556791.10 9510208.63

(2) Major overdue interest: nil

6.2 Dividend receivable

(1) Category of dividend receivable

Item Ending balance Opening Balance

Huishang Bank Corporation Limited 661434.48

(2) Major dividends receivable with account age over 1 year: Nil

6.3 Other account receivable

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

(1) Category of other account receivable

Nature Ending balance Opening Balance

Export rebate 10556031.93 21650454.61

Cash deposit 47288215.13 49470316.18

Loans of employee’s pretty cash 26470536.53 16863753.28

Related party not in consolidation statement 1305071.74 1163963.53

Advance money temporary 90000.00 332896.32

Other 392725.13 2645856.29

Total 86102580.46 92127240.21

(2) Other account receivable bad debt reserves

Bad debt reserves

First stage Second stage Third stage

Total Expected credit

loss in next 12

months

Expected credit

loss for the whole

duration (no credit

impairment)

Expected credit

loss for the whole

duration (credit

impairment has

occurred)

Balance as at 1 Jan. 2020 5004988.52 52000.00 5056988.52

Book balance of Other account

receivable in Current Period as

at 1 Jan. 2020

--Transfer to the second stage

-- Transfer to the third stage

-- Reversal to the second stage

-- Reversal to the first stage

Provision in Current Period -749269.82 50000.00 -699269.82

Reversal in Current Period 22000.00 22000.00

Conversion in Current Period

Write off in Current Period

Other change

Balance as at 30 Jun. 2020 4255718.70 80000.00 4335718.70

(3) By account age

Account age Ending balance

Within 3 months (3 months included) 38155535.05

Over 3 months and within 6 months (6 months included) 9683233.74

Over 6 months and within one year (One year included) 14100213.69

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Account age Ending balance

over one year-within two years (2 years included) 17831652.89

Over 2 years - within 3 years (3 years included) 2576887.65

Over 3 years 3755057.44

Total 86102580.46

(4) No actual verification of other receivables in Current period

(5) Top 5 other receivables collected by arrears party at balance of period-end:

Name Nature Balance at

period-end

Account age

Proportion in

total other

receivables at

period-end

Balance at

period-end of

bad debt

provision

Development & Reform Bureau of

Qingyuan District Baoding City

Margin 14400000.00

Within 3

months &

over 2

years-within

3 years

16.72%

SAT of Hefei Economic &

Technological Development Zone

Tax rebate 10556031.93 Within 3 months 12.26%

Office of the lading group for

construction of new socialist

countryside in Shunyi District

Margin 8780849.40

Over 1 year

-within 2

years

10.20% 1756169.88

Municipal Public Utilities

Administration of Fengfeng Mining

Area Handan City

Margin 2386732.00

Over 2

years

–within 3

years

2.77% -

Bureau of agriculture and rural

affairs in Wuji County

Margin 2000000.00

Over 6

months-with

in 1 year

2.32%

Total 38123613.33 44.27% 1756169.88

(6) No other account receivable involved government subsidies at period-end.

(7) No other receivables terminated recognization due to the transfer of financial assets at period-end.

(8) No assets and liability transfer other receivables and continues to involve at period-end.

7. Inventories

(1) Classification of inventories

Item

Ending amount

Book balance Impairment provision Book value

Raw materials 178511791.77 11068250.22 167443541.55

Stock commodities 1357842767.16 79723683.43 1278119083.73

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item

Ending amount

Book balance Impairment provision Book value

Low value consumable articles 6058121.99 114037.76 5944084.23

Goods in transit 329259732.84 7500321.19 321759411.65

Goods-in-process 21189937.37 21189937.37

Engineering construction 68568957.74 68568957.74

Deferred expense for mould 22825061.63 22825061.63

Total 1984256370.50 98406292.60 1885850077.90

(Continued)

Item

Opening amount

Book balance Impairment provision Book value

Raw materials 151663007.21 8222896.79 143440110.42

Stock commodities 1067657584.34 85915212.96 981742371.38

Low value consumable articles 7450761.70 114037.76 7336723.94

Goods in transit 215898485.10 4872592.90 211025892.20

Goods-in-process 10181803.47 10181803.47

Engineering construction 70738030.16 70738030.16

Deferred expense for mould 36445257.49 36445257.49

Total 1560034929.47 99124740.41 1460910189.06

(2) Inventory falling price reserves

Item Opening amount

Increased in Current period Decreased in Current period

Ending amount

Provision Other

Switch-back or

conversion Other

Raw materials 8222896.79 5106744.70 2261391.27 11068250.22

Stock

commodities 85915212.96 14895908.31 21087437.84 79723683.43

Goods in

transit 4872592.90 6729137.05 4101408.76 7500321.19

Low value

consumable

articles

114037.76 - - 114037.76

Total 99124740.41 26731790.06 27450237.87 - 98406292.60

(3) Provision for inventories

Item Specific basis for determining of net realizable value

Reasons for the Switch-back

or conversion in Current

period

Raw materials Cost is higher than net realizable value (The processed products are decline)

Stock

commodities

Cost is higher than net realizable value (The market price at

period-end fell)

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Specific basis for determining of net realizable value

Reasons for the Switch-back

or conversion in Current

period

Goods in transit Cost is higher than net realizable value (The market price at period-end fell)

Low value

consumable

articles

Cost is higher than net realizable value

8. Other current assets

Item Ending balance Opening balance

Financial products 550000000.00

Value-added tax to be deducted 38178669.93 43809823.14

Advance payment of income tax 21749246.67 18010305.85

Pakistan local sales tax 3232653.60 1337337.27

Other unamortized expenses 446565.70

Total 613160570.20 63604031.96

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

9. Long-term equity investment

Invested enterprise Opening Balance

Changes in Current period

Ending

balance

Balance

period-en

d of

impairme

Additional

investment

Disin

vestm

ent

Investment

profit and loss

confirmed by

equity method

Other

comprehen

sive income

adjustment

Other

chang

es of

equity

Declaration of

cash dividends

or profits

Provisio

n for

impair

ment

Other

Associated companies

1.Changhong Ruba

Electric Company(Private)Ltd. note 1

-75548.73 75548.73

2.Hefei Xingmei Assets Management Co. Ltd. 8554613.73 -308937.28 8245676.45

3.Sichuan Zhiyijia Network Technology Co.

Ltd. note 2 45607507.85 182915.04 - - 6649787.97 - - 39140634.92

4.Hongyuan Ground Energy Heat Tech. Co.

Ltd. note 3 23374940.65 6130.29 23381070.94

5.Sichuan Tianyou Guigu Technology Co.

Ltd. note 4 2802223.55 -102761.71 2699461.84

6..Chengdu Guigu Environmental Tech. Co.

Ltd. note 5

8217225.92 -1109845.07 7107380.85

7. Hefei Meiling Solar Energy Technology

Co. Ltd. note 6

1617928.00 1617928.00 -

Total 88556511.70 209880.54 75548.73 - 8267715.97 80574225.00

Note 1: Zhongshan Changhong a subsidiary of the Company entered into a supplemental joint venture agreement with RUBA Comprehensive Trading Company in 2017 pursuant to which both parties

agreed to increase capital contribution of US$ 1130191.00 among which Zhongshan Changhong subscribed to contribute US$ 452076.00 (equivalent to 3001649.02 yuan on the actual contribution

date) according to the original shareholding proportion of 40% and RUBA Comprehensive Trading Company subscribed to contribute US$ 678115.00 according to the original shareholding proportion of

60%.

Note 2: on 16 December 2014 the Company executed a joint venture agreement with its controlling shareholder Sichuan Changhong Electric Co. LTD targeting to jointly establish Sichuan Zhiyijia

Network Technology Co. Ltd. On 5 January 2015 Sichuan Zhiyijia Network Technology Co. Ltd was officially incorporated with registered capital of 50 million yuan among which the Company made

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

contribution of 15 million yuan with shareholding proportion of 30% and Sichuan Changhong Electric Co. LTD made contribution of 35 million yuan with shareholding proportion of 70%. In 2019 the

Company increase capital of 29087040.00 yuan (of which: 20 million yuan reckoned in registered capital and 9087040 yuan reckoned in capital reserves) to Zhiyijia with shareholding ratio up to 50%.

Note 3: subsidiary Sichuan Changhong Air Conditioner Co. Ltd (“Changhong Air Conditioner”) and Hengyouyuan Technology Development Group Co. Ltd. (“Hengyouyuan”) cooperated to establish

Hongyuan Ground Energy Heat Technology Co. Ltd. on 28 October 2015. The registered capital of the company is 50 million yuan among which Changhong Air Conditioner contributed 24.5 million

yuan accounting for 49% of the registered capital and Hengyouyuan contributed 25.5 million yuan accounting for 51% of the registered capital.Note 4: Sichuan Tianyou Guigu Technology Co. Ltd. was incorporated on 31 March 2015 with registered capital of 100 million yuan. Our subsidiary Changhong Air Conditioner made capital contribution

of RMB 25 million in cash accounting for 25% of the registered capital. Chengdu Jiaodao Property Development Company made capital contribution of 20 million yuan accounting for 20% of the

registered capital. Chengdu Southwest Jiaotong University Industry (Group) Co. Ltd made capital contribution of 20 million yuan accounting for 20% of the registered capital. Mianyang Investment

Holding (Group) Co. Ltd made capital contribution of 5 million yuan accounting for 5% of the registered capital. Shanghai Zhongcheng Xindaya Financial Information Service Co. Ltd made capital

contribution of 5 million yuan accounting for 5% of the registered capital. Jiangsu Runye Investment Co. Ltd made capital contribution of 10 million yuan accounting for 10% of the registered capital.

Chengdu Dongyu Shangmao Co. Ltd made capital contribution of 15 million yuan accounting for 15% of the registered capital. In 2016 shareholders meeting of Sichuan Tianyou Guigu Technology Co.

Ltd. agreed to reduce the 50 million Yuan capital the shareholders are reducing the capital by ratio of share-holding. After capital reduction subsidiary Changhong Air conditioner contributed 12.5 million

Yuan representing 25% of the registered capital.Note 5: Chengdu Guigu Environmental Tech. Co. Ltd. was incorporated on 22 May 2013 with registered capital of 40 million yuan. Our subsidiary Changhong Air Conditioner made capital contribution

of 10 million yuan accounting for 25% of the registered capital. Chengdu Jiaodao Property Development Company made capital contribution of 8 million yuan accounting for 20% of the registered

capital. Chengdu Southwest Jiaotong University Industry (Group) Co. Ltd made capital contribution of 8 million yuan accounting for 20% of the registered capital. Mianyang Investment Holding (Group)

Co. Ltd made capital contribution of 2 million yuan accounting for 5% of the registered capital. Shanghai Zhongcheng Xindaya Financial Information Service Co. Ltd made capital contribution of 2

million yuan accounting for 5% of the registered capital. Sichuan Shuye Jiachen Property Development Company made capital contribution of 4 million yuan accounting for 10% of the registered capital.

Chengdu Dongyu Shangmao Co. Ltd made capital contribution of 6 million yuan accounting for 15% of the registered capital.

Note 6: Hefei Meiling Solar Energy Technology Co. Ltd. was incorporated on April 18 2002 with a registered capital of RMB 10 million. Subsidiary Hefei Meiling Group Holdings Limited invested

RMB 3.1114 million accounting for 31.114% of the registered capital; Hefei Huayi Investment Co. Ltd. invested RMB 4.972 million accounting for 49.72% of the registered capital; Hefei Xingtai Asset

Management Co. Ltd. invested RMB 1.9166 million accounting for 19.166% of the registered capital.

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

10. Other non-current financial assets

Item Ending balance Opening Balance

Huishang Bank Corporation Limited 5000000.00 5000000.00

Hongyun Fund 40000000.00 40000000.00

Total 45000000.00 45000000.00

11. Investment real estate

(1) Investment real estate measured at costs

Item House and buildings Land use right Total

I. Original book value

1. Opening Balance 107085322.69 3411848.00 110497170.69

2. Increased in Current period

3. Decreased in Current period 47572819.40 3411848.00 50984667.40

(1) Return fixed assets/intangible assets 47572819.40 3411848.00 50984667.40

4. Ending balance 59512503.29 - 59512503.29

II. Accumulated depreciation and

accumulated amortization

1. Opening Balance 13173242.66 980167.90 14153410.56

2. Increased in Current period 1529473.15 54092.71 1583565.86

(1) Provision or amortization 1529473.15 54092.71 1583565.86

3. Decreased in Current period 10017655.56 1034260.61 11051916.17

(1) Return fixed assets/intangible assets 10017655.56 1034260.61 11051916.17

4. Ending balance 4685060.25 - 4685060.25

III. Provision for impairment

IV. Book value

1. Ending book value 54827443.04 - 54827443.04

2. Opening book value 93912080.03 2431680.10 96343760.13

(2) No investment real estate measured by fair value at period-end.

(3) No particular about mortgage of investment property at period-end.

(4) Investment real estate without property certification held

Item The book value

Reasons for failing to complete

property rights certificate

J04 molding workshop 30081729.28 Related property rights in procedure

J03 Jijia workshop 18112365.56 Related property rights in procedure

J20 air compressor station workshop 1276136.28 Related property rights in procedure

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item The book value

Reasons for failing to complete

property rights certificate

J18 opening and closing office 590790.85 Related property rights in procedure

J04b Circulating pool 350202.40 Related property rights in procedure

J04a Circulating pool 350201.98 Related property rights in procedure

Total 50761426.35

12. Fixed assets

Item Ending balance Opening balance

Fixed assets 2193531845.34 2104697429.76

Disposal of fixed assets 75875517.11 75875517.11

Total 2269407362.45 2180572946.87

12.1 Fixed assets

(1) Fixed assets

Item House and buildings

Machinery

equipment

Transport

equipment

Other equipment Total

I. Original book value

1. Opening Balance 1523939695.75 1503518277.04 33309514.17 179439886.87 3240207373.83

2. Increased in

Current period 55915318.73 144275066.91 144345.62 11511241.90 211845973.16

(1) Purchase 1188711.38 4814533.66 35778.76 2081516.39 8120540.19

(2) Construction in progress

transfer-in 7153787.95 139460533.25 108566.86 9377442.73 156100330.79

(3) Inventory transfer-in - - - 52282.78 52282.78

(4) Return of

investment real estate 47572819.40 - - - 47572819.40

3. Decreased in

Current period 136440.41 22292131.46 129374.68 928124.35 23486070.90

(1) Dispose or retirement - 10658002.21 - 701247.54 11359249.75

(2) Construction in progress

transfer-in - 11634129.25 - - 11634129.25

(3) Decreased for

change of foreign rate - - 129374.68 226876.81 356251.49

(4) Other decrease 136440.41 - - - 136440.41

4. Ending Balance 1579718574.07 1625501212.49 33324485.11 190023004.42 3428567276.09

II. Accumulated

depreciation

1. Opening Balance 287729327.02 760142789.56 17507896.39 68398095.48 1133778108.45

2. Increased in

Current period 35000288.61 68312758.94 1481160.07 8234443.29 113028650.91

(1) Provision 24982633.05 68312758.94 1481160.07 8234443.29 103010995.35

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item House and buildings

Machinery

equipment

Transport

equipment

Other equipment Total

(2) Return of

investment real estate 10017655.56 - - - 10017655.56

3. Decreased in

Current period - 12623548.46 68300.98 674588.95 13366438.39

(1) Dispose or retirement - 9912423.32 - 589419.55 10501842.87

(2) Construction in progress

transfer-in - 2711125.14 - - 2711125.14

(3) Decreased for

change of foreign rate - - 68300.98 85169.40 153470.38

4. Ending Balance 322729615.63 815832000.04 18920755.48 75957949.82 1233440320.97

III. Provision for

impairment

1. Opening Balance - 1584226.14 - 147609.48 1731835.62

2. Increased in

Current period

3. Decreased in

Current period - 130239.68 - 6486.16 136725.84

(1) Dispose or retirement - 130239.68 - 6486.16 136725.84

(2) Construction in progress

transfer-in

4. Ending Balance - 1453986.46 - 141123.32 1595109.78

IV. Book value

1. Ending book value 1256988958.44 808215225.99 14403729.63 113923931.28 2193531845.34

2. Opening book value 1236210368.73 741791261.34 15801617.78 110894181.91 2104697429.76

The new fixed assets in this period mainly due to the 156100330.79 yuan transfer from construction in

process; decrease of the fixed assets in Current period mainly including renewal of the assets transfer to

construction in progress and assets dispose for retirement.

(2) No fixed assets temporary idle at period-end.

(3) Fixed assets for collateral at period-end

Item Original book value

Accumulated

depreciation Impairment loss Net book value

House and buildings 424584170.38 104265875.16 - 320318295.22

(4) Fixed assets leased through financing lease at period-end.

Item Original book value

Accumulated

depreciation

Impairment loss Net book value

Machinery equipment 2976714.26 937900.21 - 2038814.05

(5) Fixed assets leased through operating lease at period-end.

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Original book value

Accumulated

depreciation

Impairment loss Net book value

House and buildings 48724425.78 7493389.27 - 41231036.52

Machinery equipment 4497205.26 2862727.06 - 1634478.20

Other equipment 3006383.36 791602.93 - 2214780.43

Total 56228014.40 11147719.26 - 45080295.15

(6) Fixed assets without property certificate

Item The book value Reason of not complete the property certificate

Testing Center Building 40613387.28 Related property rights in procedure

Canteen in the second phase of the living area 21851483.17 Related property rights in procedure

No. 4 Transition Room (Transfer of Dormitory Building) 4808169.32 Related property rights in procedure

Freezer auxiliary station 3140998.53 Related property rights in procedure

Living area hot water room 2445250.20 Related property rights in procedure

Circulating water pump room\equipment room 842180.21 Related property rights in procedure

Freezer waste station 249867.44 Related property rights in procedure

Freezer No. 7 Factory Inspection Room 194265.19 Related property rights in procedure

Refrigerator packaging sorting storage and transportation center 51200397.56 Related property rights in procedure

Supporting plant 12577799.43 Related property rights in procedure

J07 Electric Control Plant 35430492.62 Related property rights in procedure

J02 plant 31812770.60 Related property rights in procedure

J01 plant 29486315.84 Related property rights in procedure

J05 two device workshop 23543469.05 Related property rights in procedure

J06 central air-conditioning plant 17918436.54 Related property rights in procedure

J50 finished product warehouse 16916180.43 Related property rights in procedure

J51 finished product warehouse 16372208.71 Related property rights in procedure

J53 finished product warehouse 12582320.06 Related property rights in procedure

J54 finished product warehouse 11701520.32 Related property rights in procedure

J55 finished product warehouse 10718654.43 Related property rights in procedure

J56 finished product warehouse 10718654.43 Related property rights in procedure

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item The book value Reason of not complete the property certificate

J52 finished product warehouse 9106360.85 Related property rights in procedure

J9 Raw Material Warehouse 6384445.10 Related property rights in procedure

J10 Raw Material Warehouse 4727552.22 Related property rights in procedure

J11 Raw Material Warehouse 4613648.49 Related property rights in procedure

J08 packaging material warehouse 4394648.32 Related property rights in procedure

J15 refrigerant forklift room 1347752.30 Related property rights in procedure

J17 Chemical Library 1323588.56 Related property rights in procedure

J16 Chemical Library 1210298.37 Related property rights in procedure

J19 main guard room 332691.77 Related property rights in procedure

J19A Guard Room 210121.63 Related property rights in procedure

J19C Guard Room 210121.12 Related property rights in procedure

J19B Guard Room 210120.87 Related property rights in procedure

J19D Guard Room 153634.05 Related property rights in procedure

J19E Guard Room 153634.05 Related property rights in procedure

Total 389503439.06

(7) No fixed assets held for sale at period-end

12.2 Disposal of fixed assets

Item Ending amount Opening amount Reasons for disposal transferred

Relevant assets disposal for reserved lands 75875517.11 75875517.11 Relocation for land reserve

Pursuant to the urban planning requirements of the People’s Government of Hefei city Hefei Land Reserve Center plans to

purchase and store the land use right of an integrated economic development zone of the Company located at Longgang of

Hefei with an area of 103978.9 sq.m. (Approximately 155.9684 mu Land Use Right Certificate No.: Dong Guo Yong (2004)

Zi No. 0200 the stated use of the land is for industrial purpose). The estimated consideration for purchasing and storage is

RMB74.48 million. The land is mainly used for the Company’s warehouse product finishing workshop and the factory of

Zhongke Meiling. Pursuant to the purchasing and storage requirements of land use right the land will be purchased and stored

with vacant possession. In April 2013 the Company completed the relocation of occupants of the premises and the net fixed

assets in relation to the land will transfer as disposal accounting treatment will be conduct in line with relevant rules upon

receiving of the relocation compensation.

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Pursuant to the urban planning requirements of Hefei Municipal Government and the Government of Feidong county the land

reserve center of Feidong county will purchase and store the land use right of an economic development zone located at

Feidong county Hefei city which is owned by the Company’s subordinate companies Equator Electric and Equator Home

Appliance respectively with an area of 19245.09 sq.m. (Approximately 28.87 mu Land Use Right Certificate No.: Dong

Guo Yong (2008) No. 0366 the stated use of the land is for industrial purpose) and an area of 46161.9 sq.m. (Approximately

69.24 mu Land Use Right Certificate No.: Dong Guo Yong (2008) No. 0367 the stated use of the land is for industrial

purpose). The total consideration for purchasing and storage is approximately 36 million yuan of which the consideration for

the land use right owned by Equator Electric and Equator Home Appliance is approximately 10.59 million yuan and 25.41

million yuan respectively. The Company has completed the relocation of occupants of the premises and the net fixed assets in

relation to the land will transfer as disposal accounting treatment will be conduct in line with relevant rules upon receiving of

the relocation compensation.No impairment of relevant assets disposal for reserved lands at period-end.

13. Construction in progress

Item Ending balance Opening balance

Construction in progress 191470652.98 252494792.31

(1) Details of construction in progress

Item

Ending amount Opening amount

Book balance

Imp

airm

ent

provi

sion

Book value Book balance

Imp

airm

ent

prov

ision

Book value

Construction of washing machine

plant 89921034.08 89921034.08 72019665.48 72019665.48

Other petty projects 36491875.74 36491875.74 19993376.23 19993376.23

Capacity enlargement and

technology improvement project

for Air-conditioner Company

28919755.30 28919755.30 6848640.93 6848640.93

Technical transformation project

of Zhongshan Changhong 10489874.88 10489874.88 2670888.52 2670888.52

Changhong Air Conditioner-

relocation of production base and

upgrading & expansion

9377462.68 9377462.68 115113691.81 115113691.81

Project of the application of MES

system during manufacturing 7264187.95 7264187.95 7259356.79 7259356.79

Construction of laboratory

(inspection center) 4965046.69 4965046.69 2283246.03 2283246.03

Low-voltage power distribution

room project 1753448.40 1753448.40 876724.20 876724.20

Production efficiency

improvement project of the Line

C for the overseas Refrigerator

Manufacture Company

1327155.18 1327155.18 1327155.18 1327155.18

Upgrade project for the 666500.00 666500.00 666500.00 666500.00

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item

Ending amount Opening amount

Book balance

Imp

airm

ent

provi

sion

Book value Book balance

Imp

airm

ent

prov

ision

Book value

production line of Mianyang

Meiling Intelligent Refrigerator

Jiangxi Meiling – construction of

the production line for producing

one million energy-saving smart

refrigeration annually

294312.08 294312.08 434062.08 434062.08

Construction of intelligent

manufacturing - - 4441461.82 4441461.82

Equipment to be installed - 16790792.47 16790792.47

Line modification for R290 - 1769230.77 1769230.77

Total 191470652.98 - 191470652.98 252494792.31 - 252494792.31

(2) Changes in significant construction in progress

Item

Book balance

at period-begin

Increase

during the

period

Transfer to

fixed assets in

the period

Other

decreas

Book balance

at period-end

Source of funds

Construction of washing

machine plant 72019665.48 21955552.42 4054183.82 89921034.08

Self-raised/

Raise

Changhong Air

Conditioner- relocation of

production base and

upgrading & expansion

115113691.81 13510910.22 119247139.35 9377462.68 Self-raised

Construction of laboratory

(inspection center) 2283246.03 2864959.36 183158.70 4965046.69 Raise

Construction of intelligent

manufacturing 4441461.82 1580690.73 6022152.55 - Raise

(Continued)

Projects

Budget

(in 10

thousand

Yuan)

Proportion of

project

investment in

budget

Progres

Accumulated

amount of

interest

capitalization

including:

interest

capitalized

amount of the

period

Interest

capitaliza

tion rate

of the

period

Construction of washing

machine plant 37121.00 83.45% 85%

Changhong Air Conditioner-

relocation of production base

and upgrading & expansion

84791.01 86.44% 96% 2570143.02

Construction of laboratory

(inspection center) 10748.00 81.98% 95%

Construction of intelligent

manufacturing 26128.00 97.03% 100%

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

(2) No impairment occurred for construction in progress at period-end

14. Intangible assets

(1) According to intangible assets item:

Item Land use right Trademark special right

Non-patent

technology Patent right Other Total

I. Original

book value

1.Opening

balance 866310249.56 283292439.34 417638699.74 7592305.59 7106572.74 1581940266.97

2.Current

increased 3414048.01 - 60145668.45 21448794.43 66037.74 85074548.63

(1)

Purchase 2200.01 - - - - 2200.01

(2)

Internal

research

- - 60145668.45 21448794.43 66037.74 81660500.62

(3) Return

investment

real estate

3411848.00 - - - 3411848.00

4.Ending

balance 869724297.57 283292439.34 477784368.19 29041100.02 7172610.48 1667014815.60

II.

Accumulat

amortizati

1.Opening

balance 160546271.68 282607964.69 194299345.34 282904.72 2140264.95 639876751.38

2.Current

increased 10255884.33 684474.65 54251681.10 1785046.33 121959.24 67099045.65

(1) Accrual 9221623.72 684474.65 54251681.10 1785046.33 121959.24 66064785.04

(2) Return

investment

real estate

1034260.61 - - - 1034260.61

4.Ending

balance 170802156.01 283292439.34 248551026.44 2067951.05 2262224.19 706975797.03

III.Impairmen

t loss

4306556.42 4508495.33 8815051.75

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Land use right Trademark special right

Non-patent

technology Patent right Other Total

IV. Book

value

1.Ending

book value 698922141.56 - 224926785.33 26973148.97 401890.96 951223966.82

2.Opening

book value 705763977.88 684474.65 219032797.98 7309400.87 457812.46 933248463.84

The intangible assets resulted from internal research takes 4.90% of the balance of intangible assets at

period-end

(2) No land use right without property certification done at prtiof-end

(3) Up to end of current period mortgage of intangible assets is as follows:

Name Property certificate serials Area(M2) Net book value Note

Land use right HGYJCZi No.: 0121 27120.22 17989983.82

Land use right

Wan (2019)Property right of Hefei No.:

1148244/1148249/1148243/1148240/1148248/1148246/1

148241/1148238/1149101/1148242/1148245/1148239/11

48237/1148250/1148247/1149102

477550.03 243236699.81

Land use right Wan (2019) Property right of Feixi County No.:

0061435/0061445 33383.10 13701469.91

Land use right

Wan (2019) Property right of Feixi County No.:

0061456/0061447/0061438/0061440/0061452/0061450/0

061430/0061657

82850.51 18858305.69

Total 620903.86 293786459.23

15. Development expense

Item

Opening

balance

Current increased Current decreased

Ending

balance

Internal

development

expenditure

Othe

Included in

current profits

and losses

Confirmed as

intangible assets

Othe

Technology

development for

Air-conditioner

39987914.98 41817700.09 92339.11 51315358.31 30397917.65

Technology

development for

refrigerator

61090744.59 28985941.21 30345142.31 59731543.49

Total 101078659.57 70803641.30 - 92339.11 81660500.62 - 90129461.14

16. Goodwill

(1) Original value of goodwill

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Invested enterprise

Opening

balance

Current increased Current decreased

Ending

balance

Formation

from

enterprise

merger

Other

Formation

from

enterprise

merger

Other

Hefei Meiling Group Holdings

Limited 3553367.77 3553367.77

Total 3553367.77 3553367.77

(2) Impairment loss of goodwill

Invested enterprise

Opening

balance

Current increased Current decreased Ending

balance Accrual Other Accrual Other

Hefei Meiling Group Holdings

Limited 3553367.77 3553367.77

Total 3553367.77 3553367.77

Note: The Company’s goodwill has been fully accrued for impairment reserves at period-end.

17. Deferred income tax assets

(1) Deferred income tax assets without the offset

Item

Ending balance Opening balance

Deductible

temporary

difference

Deferred

income tax

assets

Deductible

temporary

difference

Deferred

income tax

assets

Deferred income tax assets recognized from

assets impairment 85113683.09 12767052.45 65074900.25 9761235.04

Deferred income tax assets recognized from

accrual liability 137169182.74 20575377.41 158742319.21 23811347.88

Deferred income tax assets recognized from

Dismission welfare 14952250.56 2242837.58 16996022.45 2549403.37

Deferred income tax assets recognized from

deferred income 101680318.95 15252047.85 109766307.31 16464946.10

Deferred income tax assets recognized from

ir-reparable losses 369713431.79 55457014.77 295681201.10 44352180.17

Deferred income tax assets recognized from

changes in the fair value 2829301.90 424395.29

Accrued income tax assets 4516172.03 677425.80 3427103.89 514065.58

Total 715974341.06 107396151.15 649687854.21 97453178.14

The Company’s long-term equity investment impairment provisions are the investments in its subsidiaries Changmei

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Technology Co. Ltd. and Meiling Candy Washing Machine Co. Ltd. these two subsidiaries are expected to be cancelled in

2020 and the Company also confirmed deferred income tax assets while confirming the impairment provisions. The

subsidiaries have unrecovered losses at the consolidation level the deferred income tax assets recognized in the Company’s

long-term equity investment impairment provisions are adjusted to be the deferred income tax assets generated from the

recoverable losses.

(2) Deferred income tax liabilities without the offset

Item

Ending balance Opening balance

Taxable

temporary

differences

Deferred

income tax

liability

Taxable

temporary

differences

Deferred

income tax

liability

Recognized by fixed assets depreciation 32254417.40 4838162.61 36760223.60 5514033.54

Recognized by changes in fair value 4951504.00 742725.60

Total 32254417.40 4838162.61 41711727.60 6256759.14

(3) Details of unrecognized deferred income tax assets

Item Ending balance Opening balance

Deductible temporary difference 126832329.93 148160001.57

Deductible loss 863189499.12 721832411.79

Total 990021829.05 869992413.36

18. Short-term loans

(1) Category

Category Ending balance Opening balance

Loan in pledge 306192500.00 147438160.00

Guaranteed loan 75470009.60 46794941.14

Loan in credit 1128629500.00 909757944.82

Total 1510292009.60 1103991045.96

Short-term loans at Current period-end:

1) The Company entered into a Forfaiting Business Contract with Jiujiang Bank Co. Ltd. and term of

borrowing from 16 April 2019 to 16 April 2021. Fixed interest rate of 2.825% the loan amount is

5000000.00 Yuan.

2) The Company entered into a Contract for Loans in RMB with Huaining Road Branch of Hefei Science

&Technology Rural Commercial Bank contract agreed to has 12 months in terms and term of borrowing

from 19 August 2019 to 19 August 2020. Fixed interest rate of 4.5675% the loan amount is 5000000.00

Yuan.

3) The Company entered into a Contract for Loans of Working Capital with Anhui Branch of Bank of

Communication contract agreed to has 12 months in terms and interest counted from the date of loan entry

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

duration of credit is from 24 Sept. 2019 to 24 Sept. 2020; Fixed interest rate of 4.00 % the loan amount is

100000000.00 Yuan.

4) The Company entered into a Contract for Loans of Working Capital with Anhui Development Zone

Branch of Bank of China contract agreed to has 12 months in terms and counted from the actual withdrawal

date. The Company withdrawal on 26 September 2019. Term of borrowing from 26 September 2019 to 25

September 2020. every 12 months is a floating period based on floating rate method the loan amount is

50000000.00 Yuan.

5) The Company entered into a Contract for Opening the Domestic L/C with Bank of Jiujiang the forfaiting

cost is 3.3% opening charge is 0.15% and comprehensive cost is 3.45%. Term of borrowing from 23 October

2019 to 22 October 2020. Fixed interest rate of 3.3% the loan amount is 50000000.00 Yuan.

6) The Company entered into a Contract for Loans of Working Capital with Anhui Branch of Bank of

Communication contract agreed to has 12 months at most in terms and counted from the actual lending day.

The Company withdrawal on 26 November 2019. Term of borrowing from 26 November 2019 to 25

September 2020. Fixed interest rate of 4.00% the loan amount is 100000000.00 Yuan.

7) The Company entered into a Forfaiting Business Contract with Anhui Branch of Bank of Communication

applying a short-term loans of 100000000.00 yuan with bill pledge method. Term of borrowing from 27

December 2019 to 24 December 2020. Fixed interest rate of 3.25%.

8) The Company entered into a Contract for Loans of Working Capital with Anhui Development Zone

Branch of Bank of China contract agreed to has 12 months in terms and counted from the actual withdrawal

date. The Company withdrawal on 6 Jan. 2020. Term of borrowing from 6 Jan. 2020 to 6 Jan. 2021. every 12

months is a floating period based on floating rate method the loan amount is 30000000.00 Yuan.

9) The Company entered into a Forfaiting Business Contract with Anhui Branch of Bank of Communication

applying a short-term loans of 100000000.00 yuan with bill pledge method. Term of borrowing from 6

March 2020 to 1 March 2021. Fixed interest rate of 3.00%.

10) The company and China Construction Bank Co. Ltd. Hefei Luyang Branch signed the Cross-border

Financing Loan Business Contract contract agreed to has 12 months in terms Term of borrowing from

March 10 2020 to March 10 2021. Fixed interest rate of 3.08%. the loan amount is 30000000.00 Yuan.

11) The company signed the Cross-border Direct Loan Financing Contract" with China Guangfa Bank Co.

Ltd. Macau Branch contract agreed to has 12 months in terms Term of borrowing from March 19 2020 to

March 19 2021. Fixed interest rate of 2.95%. the loan amount is 50000000.00 Yuan.

12) The company and the Agricultural Bank of China Co. Ltd. Hefei Baohe District Branch signed the

Agricultural Bank of China Co. Ltd. International Trade Financing Contract Term of borrowing from March

20 2020 to August 28 2020. Fixed interest rate of 3.45%. the loan amount is 92000000.00 Yuan.

13) The company signed the Rongyida Business Contract" with Bank of China Co. Ltd. Hefei Branch Term

of borrowing from March 26 2020 to September 22 2020. Fixed interest rate of 3.13%. the loan amount is

33000000.00 Yuan.

14) The company and United Overseas Bank (China) Co. Ltd. Chengdu Branch signed the Simplified Export

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Invoice Financing (and Domestic Sales Financing) Application Term of borrowing from April 13 2020 to

October 10 2020. Fixed interest rate of 4.00%. the loan amount is 50000000.00 Yuan.

15) The company signed the Loan Contract with China Merchants Bank Co. Ltd. The loan period is from

April 21 2020 to April 9 2021 the loan interest rate is 0.65% and the loan amount is EUR 9500000.00.

16) The company and China Postal Savings Bank Co. Ltd. Hefei Branch signed the Working Capital Loan

Contract. The contract has an agreed period of 12 months. The loan period is from April 23 2020 to April 22

2021. The borrowing rate is 3.915 % the loan amount is 28000000.00 Yuan.

17) The company and China Everbright Bank Co. Ltd. Hefei Branch signed the Contract on the

Non-Recourse Transfer of Seller’s Bonds under Domestic Letter of Credit (Domestic Forfaiting Business)

and the loan period is from June 12 2020 to June 4 2021 the loan interest rate was 2.50% and the loan

amount was 50000000.00 Yuan.

18) Subsidiary Zhongshan Changhong and China Construction Bank Co. Ltd. Zhongshan Branch signed the

Export Account Receivable Risk Participation Cooperation Agreement. Subsidiary Zhongshan Changhong

applied Account receivable to Zhongshan Branch of China Construction Bank Apply for a short-term loan of

US$10000000.00 the loan period is from January 16 2020 to July 13 2020 and the borrowing rate is

2.60%.

19) Subsidiary Zhongshan Changhong and Bank of Communications Co. Ltd. Zhongshan Branch signed the

Comprehensive Credit Contract. Subsidiary Zhongshan Changhong applied for a short-term loan of

US$ 5000000.00 from Bank of Communications Co. Ltd. Zhongshan Branch by way of export invoice

financing. The loan period was 6 months. The loan period is from March 6 2020 to September 2 2020 and

the borrowing rate is 2.60%.

20) Subsidiary Changhong Ruba Trading Company (Private) Limited signed a loan agreement with Bank of

China Karachi Branch through CHANGHONG MEILING guarantee applied for a short-term loan of

439290000.00 rupees in December 2019 the loan period is from December 23 2019 to December 23 2020

the borrowing rate was 14.04%

21) Subsidiary Changhong Ruba Trading Company (Private) Limited and ICBC Lahore branch applied for a

short-term loan of 380000000.00 rupees. The loan period is from January 20 2020 to November 20 2020

and the principal is repaid in installments until the reporting period. The principal has been paid back

195000000.00 rupees and the remaining unpaid principal is 185000000.00 rupees. The borrowing rate is

based on the lending rate issued by the Central Bank of Pakistan plus 0.9% and the borrowing rate is

14.44%.

22) According to the RMB Short-term Loans Contract entered into by subsidiary Sichuan Changhong

Air-conditioner Co. Ltd. and Mianyang Branch of Bank of China Sichuan Changhong Air-conditioner Co.

Ltd. applying for a short-term loan of RMB 80000000.00 by credit. The loan period is from February 7

2020 to February 7 2021. The loan interest rate is 4.35%. On May 21 2020 the loan interest rate is reduced

to 4.29%. On June 3 2020 the early repayment is 50000000.00 Yuan until 2020. The balance of the loan

on June 30 2010 is 30000000.00 Yuan.

23) The "Working Capital Loan Contract" signed by the subsidiary Zhongke Meiling and Bank of China Co.

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Ltd. Hefei Branch stipulates that the subsidiary Zhongke Meiling shall apply for a short-term loan of RMB

9200000.00 from Bank of China Co. Ltd. Hefei Branch by way of guarantee the guarantor is Changhong

Meiling Co. Ltd.; the loan period is from September 24 2019 to September 24 2020 adopting the floating

interest rate method with a floating period of every 12 months.

24) The "Working Capital Loan Contract" signed by the subsidiary Zhongke Meiling and Bank of

Communications Co. Ltd. Anhui Branch stipulates that the subsidiary Zhongke Meiling shall apply for a

short-term loan of RMB 20000000.00 from Bank of Communications Co. Ltd. Anhui Branch by way of

credit guarantee; the loan period is from February 28 2020 to February 28 2021 adopting the fixed interest

rate method and the borrowing rate is 1.65 percentage points lower than the one-year LPR interest rate

quoted on the loan market on the entry day.

25) The "Working Capital Loan Contract" signed by the subsidiary Zhongke Meiling and Industrial Bank Co.

Ltd. Hefei Branch stipulates that subsidiary Zhongke Meiling shall apply for a short-term loan of RMB

9900000.00 from Industrial Bank Co. Ltd. Hefei Branch by way of guarantee the guarantor is Changhong

Meiling Co. Ltd.; the loan period is from March 17 2020 to March 16 2021 and the fixed interest rate

method is adopted. The borrowing rate is the benchmark interest rate (1-year LPR) on the borrowing date

minus 1%.

26) The "Working Capital Loan Contract" signed by the subsidiary Zhongke Meiling and Industrial and

Commercial Bank of China Co. Ltd. Hefei Changjiang East Road Branch stipulates that subsidiary Zhongke

Meiling shall apply for a short-term loan of RMB 5000000.00 from ICBC Hefei Changjiang East Road

Branch by way of guarantee the guarantor is Changhong Meiling Co. Ltd.; the loan period is from March 18

2020 to March 15 2021 and the borrowing interest rate is 12 months for one period which shall be adjusted

for each period. The interest rate is determined by the pricing basis plus the number of floating points where

the pricing basis is the 1-year LRP of the previous working day before the effective date of the loan contract

and the number of floating points is minus 100 basis points (one basis point is 0.01%).

27) The "Working Capital Loan Contract" signed by the subsidiary Zhongke Meiling and the Feixi Branch of

China Construction Bank Co. Ltd. stipulates that the subsidiary Zhongke Meiling shall apply for a

short-term loan of RMB 30000000.00 from the Feixi Branch of China Construction Bank Co. Ltd. by way

of guarantee of which RMB 15000000.00 is guaranteed by Changhong Meiling Co. Ltd. and RMB

15000000.00 is guaranteed by the credit of the subsidiary Zhongke Meiling; the loan period is from March

13 2020 to March 12 2021 using a fixed interest rate method with the interest rate being 1-year LPR

minus 200 basis points.

28) The subsidiary Non-Ferrous Metals signed the "Current Loan Contract" with Industrial and Commercial

Bank of China Co. Ltd. Hefei Changjiang East Road Sub-branch. The contract has an agreed period of 12

months starting from the actual loan issuance date and the company's actual withdrawal is on March 27

2020 the loan period is from 27 March 2020 to 5 March 2021 with fixed interest rate of 4.05% loans

amounted to 10000000.00 Yuan.

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

(2) No overdue short-term loans outstanding at period-end.

19. Tradable financial liability

Item Ending balance Opening balance

Tradable financial liability 6027595.47 1081534.93

Including: Derivative financial liability 6027595.47 1081534.93

20. Note payable

Category Ending balance Opening balance

Bank acceptance 3003662903.31 3298019669.51

Trade acceptance 155586100.00 192251812.89

Total 3159249003.31 3490271482.40

Note: No notes expired at period-end without paid

21. Account payable

(1) Account age

Item Ending balance Opening balance

Total 3244631623.09 2343116374.58

Including: over one year 88000714.47 76194618.91

(2) No major account payable with over one year book age at period-end.

22. Contract liabilities

Item Ending balance Opening balance

Advance payment for goods 268622617.93 425149194.97

Total 268622617.93 425149194.97

23. Wages payable

(1) Category

Item Opening balance Current increased Current decreased Ending balance

Short-term compensation 177402906.03 631531240.97 641672431.59 167261715.41

After-service welfare- defined

contribution plans 7453793.72 46642779.54 40911175.61 13185397.65

Dismiss welfare 11650474.93 1952027.68 10054550.05 3547952.56

Total 196507174.68 680126048.19 692638157.25 183995065.62

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

(2) Short-term compensation

Item Opening balance Current increased Current decreased Ending balance

Wages bonuses allowances and subsidies 170288735.22 554031789.40 580568531.22 143751993.40

Welfare for workers and staff 639308.36 17986118.79 18282576.65 342850.50

Social insurance 1770245.68 25856692.50 22154475.34 5472462.84

Including: Medical insurance 1617788.73 23966530.25 20477729.12 5106589.86

Work injury insurance 63191.51 824037.10 630365.32 256863.29

Maternity insurance 89265.44 1066125.15 1046380.90 109009.69

Housing accumulation fund 3586116.49 32724865.84 19358492.59 16952489.74

Labor union expenditure and

personnel education expense 1118500.28 931774.44 1308355.79 741918.93

Total 177402906.03 631531240.97 641672431.59 167261715.41

(3) Defined contribution plans

Item Opening balance Current increased

Current

decreased

Ending balance

Basic endowment insurance 5213876.36 44567454.27 38969962.83 10811367.80

Unemployment insurance 2239917.36 2075325.27 1941212.78 2374029.85

Total 7453793.72 46642779.54 40911175.61 13185397.65

24. Tax payable

Item Ending balance Opening balance

Value-added tax 31535409.67 31073647.86

Enterprise income tax 8004887.52 2100004.27

Individual income tax 1850199.12 3080366.29

Urban maintenance and construction tax 1362792.32 3279877.94

Real estate tax 6199771.92 6023111.75

Land use tax 2729230.57 2757210.52

Educational surtax 1043618.58 2389535.13

Stamp tax 2074945.31 3033620.58

Construction fund of Water Conservancy Projects 634948.45 759372.01

Treatment fund for abandon electrics & electronics 15651773.00 12489459.00

Other 2035762.22 1572186.31

Total 73123338.68 68558391.66

25. Other account payable

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Ending balance Opening balance

Interest payable 7905522.29 12340385.61

Dividend payable 4466628.25 3579491.94

Other account payable 833403504.91 673557725.66

Total 845775655.45 689477603.21

25.1 Interest payable

(1) Category

Item Ending balance Opening balance

Interest on long-term borrowings for repayment of principal of

installment maturity 663803.89 466340.02

Interest of short-term loans 7241718.40 11874045.59

Total 7905522.29 12340385.61

(2) No significant overdue and unpaid interest at period-end.

25.2 Dividends payable

Item Ending balance Opening balance

China Life Insurance (Group) Company 263813.22 239221.62

People's Insurance Group of China Co. Ltd. 395719.83 358832.43

BOC- Fullgoal Tianyi Securities Investment Fund 153697.50 153697.50

Hefei Branch of BOC 329766.50 299027.00

Hefei collective industry association 329765.99 299026.54

Entrust Investment Wuhu of Provincial ABC 263813.22 239221.62

Other units 2730051.99 1990465.23

Total 4466628.25 3579491.94

Note: Balance at period-end refers to the common dividends that not receiving by shareholders.

25.3 Other account payable

(1) Other account payable by nature

Nature Ending balance Opening balance

1.Accrued expenses (expenses occurred without reimbursed) 563477651.39 487992668.34

2. Receivables received temporary and deducted temporary 14935393.23 14950208.02

3.Deposit margin 145704728.00 114946522.03

4.Not the come-and-go with related parties in statement scope 40584681.61 14101588.30

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Nature Ending balance Opening balance

5. Other 68701050.68 41566738.97

Total 833403504.91 673557725.66

(2) At end of the period the major other account payable with account age over one year mainly refers to the

margin.

26. Non-current liability due within one year

(1) Classification of non-current liability due within one year

Item Ending balance Opening balance

Long term borrowings due within one year 305000000.00

Long term account payable due within one year 1677346.75 1708193.90

Total 306677346.75 1708193.90

27. Long term borrowings

(1) Category of long term borrowings

Category Ending amount Opening amount

Loan in mortgage 192640000.00 101280000.00

Loan in credit 100000000.00 300000000.00

Total 292640000.00 401280000.00

(2) Long-term borrowings at period-end

Loan from

Borrowing

day

Returning

day

Foreign

currency

Interest

rate

Ending amount

(RMB)

Opening

amount (RMB)

Ministry of Finance of Hefei

Note 1 2006/11/9 2021/11/8 RMB 1.80% 640000.00 1280000.00

EIBC (Export-Import Bank of

China) Anhui Province

Branch Note 2

2019/12/23 2026/12/23 RMB 4.605% 94000000.00 100000000.00

EIBC (Export-Import Bank of

China) Anhui Province

Branch Note 3

2020/3/26 2026/12/25 RMB 4.555% 98000000.00

Anhui Branch of Bank of

Communications Co. Ltd Note

2020/6/15 2021/7/15 RMB 3.75% 100000000.00

EIBC (Export-Import Bank of

China) Anhui Province

Branch

2019/5/30 2021/5/30 RMB 3.685% 300000000.00

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Total 292640000.00 401280000.00

Note 1: In August of 2006 the Company signed Asset Mortgage Agreement with Ministry of Finance of

Hefei. It takes five industry crusher chambers which cover an area of 2322.98 square meters as mortgage for

the Company to get the lending of treasury bond fund which has 15-year term and worthy of RMB 7040000

from the Ministry of Finance of Hefei. The capital on-lending began to bear interest from the appropriate

date (November 9 2006) which would be paid by stages in the loan period to Ministry of Finance of Hefei

by the Company. The first four years were grace period during which the annual interest rate was subject to

floating interest rate (the annual interest rate was the annual interest rate of one year fixed deposit plus 0.3%).

On 1 March 2013 according to the Letter Relating to Ceasing Process of Other Securities in respect of the

Properties in Feidong Longgang Industrial Park of Hefei Meiling Co. Ltd. (HCJ (2006) No.85) issued by the

finance office of Hefei Meiling commenced the national purchase of its land parcels in Longgang in

compliance with the land planning of Hefei municipal government which required its properties in

Longgang land parcel to be unrestricted. The real estate for mortgage lifted in 2006 of the Company with

registration No. HGYJCZ No.0121 which was used as the security for treasury bonds lending capital (details

were set out in Note).Note 2: The Company and the Anhui Branch of the Export-Import Bank signed the "Loan Contract

(Promoting Domestic Opening-up Loans-Fixed Assets)" which pledged the Company's fixed assets and

intangible assets as long-term loans of 100 million yuan. The contract agreed period is 84 months and the

loan term is from December 23 2019 to December 23 2026. The loan interest rate is determined by the

quoted interest rate of loan market with a term of more than 5 years minus 0.195% which fluctuates annually.The loan amount is 100000000.00 yuan according to the repayment schedule agreed with the bank

1000000.00 yuan has been repaid and the planned repayment of 5000000.00 yuan before June 30 2021

has been reclassified to non-current liabilities due within one year. The ending balance is 94000000.00

yuan.Note 3: the company signed the loan contract (promoting domestic opening up loans - fixed assets) with

Anhui Branch of export import bank which mortgaged the fixed assets and intangible assets of the

company for 98000000.00 yuan of long-term loan. The loan term is from March 26 2020 to December

25 2026. The loan interest rate is determined by reducing 0.195% of the market quotation interest rate

of loans with a term of more than 5 years. The loan amount is 98000000.00 Yuan.Note 4: the company signed the working capital loan contract with Anhui Branch of Bank of

Communications Co. Ltd. the contract period is 13 months with the interest from the date of loan entry

the loan period is from June 15 2020 to July 15 2021 the loan interest rate is 3.75% and the loan

amount is 100000000.00 yuan.

28. Long-term account payable

Item Balance at year-end Opening balance

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Balance at year-end Opening balance

Long-term account payable 761266.30 1486921.44

Special payable 1530000.00 1530000.00

Total 2291266.30 3016921.44

28.1 Classify by nature

Nature Ending balance Opening balance

Financing lease 761266.30 1486921.44

28.2 Special payable

Item

Opening

balance

Current

increased

Current

decreased

Ending

balance

Reason

Zhongshan Special funds

for Technical renovation 1530000.00 1530000.00

Technology plan project

in Zhongshan City

29. Long-term wage payable

Item Ending balance Opening balance

Dismissal welfare 11962977.24 13774110.61

According to the internal early retirement policy the long-term payable dismissal welfare bears by the Company up to end of

the period amounting to 11962977.24 yuan.

30. Accrual liability

Item Ending balance Opening balance Reason

Product quality guarantee 15427220.80 15427220.80 Guarantee of product

Guarantee fund for quality service 129098786.70 150671923.17 Guarantee of product

Total 144526007.50 166099143.97

Product quality guarantee is the maintenance expense provided by the Company under the national policy while quality service

special guarantee capital is the warranty costs provided for product quality in addition to such policy. Parts of the commitments

on product quality assurance beyond the national three guarantees policy are expired in period the accrual liability that have

not been anticipated has written-off in Current period actually 21198636.00 Yuan written-off.

31. Deferred income

(1) Classification of deferred income

Item Ending amount Opening amount

Government subsidies---subsidies of development project 134147854.46 135392959.96

Government subsidies---subsidies of Relocation 42453885.49 44578011.96

Total 176601739.95 179970971.92

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

(2) Government subsidy

Government subsidy Opening amount

New subsidy in

the period Amount

reckoned into

other income

Oth

cha

nge

Ending amount

Assets

related/Income

Demolition compensation

of Changhong Meiling 40613394.80 1234182.17 39379212.63

Assets

Technical transformation of

the Athena project 4877812.50 2143125.00 2734687.50

Assets

Freezer project of

Changhong Meiling 734062.42 367031.26 367031.16

Assets

Promoting the new industry

( annual output of 0.6

million medium& large

volume environmental

protection and energy

saving freezer)

1065443.73 152206.26 913237.47

Assets

Research and application of

the MCU chip for inverter

control

2300000.00 2300000.00

Assets

Subsidies for intelligent

transformation & upgrading

of enterprises from the new

industrialization policy in

economic development

zone

3886414.58 302837.50 3583577.08

Assets

Subsidy for industrial

development policy from

Hefei for first half of 2018

8750000.00 625000.00 8125000.00

Assets

Policy funds for

manufacturing a strong

province subsidy for

equipment for the

technological

transformation of industrial

strong base

4375000.00 312500.00 4062500.00

Assets

Subsidy for purchase of R

& D instruments and

equipment

1062687.50 280900.00 73500.00 1270087.50

Assets

Hefei City Industrial

Development Policy

Subsidy Funds in the

Second Half of 2019

7154200.00 1341412.50 5812787.50

Assets

New plant construction

government subsidy-low

temperature refrigeration

equipment industrialization

project

3791666.67 250000.00 3541666.67

Assets

Subsidy for equipment

purchasing of the technical

renovation from Hefei for

year of 2017

1358630.00 89580.00 1269050.00

Assets

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Government subsidy Opening amount

New subsidy in

the period Amount

reckoned into

other income

Oth

cha

nge

Ending amount

Assets

related/Income

Equipment subsidy for the

industrial base technical

renovation from Economic

and Information

Commission

1782083.33 117500.00 1664583.33

Assets

Subsidy for characteristic

innovation and

entrepreneurship carrier

project from Hefei

economic & development

zone

2000000.00 2000000.00

Assets

Upgrade project for the

production line of

Mianyang Meiling

Intelligent Refrigerator

1514166.68 98749.98 1415416.70

Assets

Demolition compensation

of Jiangxi Meiling 3964617.16 889944.30 3074672.86

Assets

Subsidy for the

development on production

line technical reform for

green-friendly high-quality

metal pipe

129493.23 20446.32 109046.91

Assets

Refrigerator evaporator

workshop 186295.31 14516.50 171778.81

Assets

Technical transformation of

refrigerator evaporator

workshop

454687.50 30312.50 424375.00

Assets

Special fund government

subsidy CZ059001 4200000.00 4200000.00

Assets

Centre for external

cooperation of the

environmental protection

2538300.00 2538300.00

Assets

Government subsidy

CZ028001 technical

improvement topic

478116.29 47825.00 430291.29

Assets

Government subsidy

CZ028001- subsidy in

equipment renewal

286596.77 30601.92 255994.85

Assets

Subsidy from Zhongshan

Finance Bureau (CZ028001

provincial special project

2019)

1703353.19 152823.24 1550529.95

Assets

Research and application of

the VISA (variable

frequency volume

integrated intelligent

air-conditioner)

5872093.04 704651.16 5167441.88

Assets

Promotion of the

energy-saving room air

conditioner

1069072.21 105154.62 963917.59

Assets

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Government subsidy Opening amount

New subsidy in

the period Amount

reckoned into

other income

Oth

cha

nge

Ending amount

Assets

related/Income

Adaptability improvement

on new coolants production 11824908.42 1182490.86 10642417.56

Assets

Industrialization of

intelligent white household

appliances software

platform and typical

application research and

development

3030303.05 363636.36 2666666.69

Assets

Special funds for strategic

emerging industry and

high-end growth industry

2000000.00 2000000.00

Assets

Key chip and module for

transducer used and

detection capacity building

6840000.00 6840000.00

Assets

Changhong Air

Conditioner- relocation of

production base and

upgrading & expansion

6880000.00 6880000.00

Assets

Demonstration factory

construction for the

intelligent manufacturing of

intelligent air-conditioner

49500000.00 49500000.00

Assets

2018 Zhongshan Special

fund for industrial

development - Special topic

of technical transformation

730232.55 132861.90 597370.65

Assets

Special fund for technical

improvement 171540.99 21442.62 150098.37

Assets

Total 179970971.92 7435100.00 10804331.97 - 176601739.95

32. Share capital

Item Opening balance

Change during the period (+、-)

Ending balance

New shares issued

Bonus

Shares transferred

from capital

reserve

Other Subtotal

Total shares 1044597881.00 1044597881.00

33. Capital reserve

Item Opening amount Current increased Current decreased Ending amount

Share premium 2636193356.40 559888.62 2635633467.78

Other capital reserve 48173262.70 48173262.70

Total 2684366619.10 559888.62 2683806730.48

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Note: Changes in equity premium for this period are: Due to the acquisition of some minority shareholders’ shares of Shanghai

Meiling Chengdu Meiling and Ridian Technology the difference between the newly acquired long-term equity investment and

the share of the subsidiary’s net assets calculated on the basis of the newly-added shareholding ratio was caused by the

continuous calculation of the net assets from the date of purchase.

34. Other comprehensive income

Item

Opening

balance

Current amount

Ending balance Account before

income tax in the

period

Less:

written

in other

compreh

ensive

income

period

and

carried

forward

to gains

and

losses in

current

period

Less:

Income

tax

expense

Belong to

parent

company after

tax

Belong to

minority

shareholders after

tax

Other comprehensive income that will re-classified to gains/losses later

Including: Translation

differences arising on

translation of foreign

currency financial

statements

-18931430.36 -1009706.23 -630002.84 -379703.39 -19561433.20

35. Surplus reserves

Item Opening amount Current increased Current decreased Ending amount

Statutory surplus reserve 295179158.04 295179158.04

Discretionary surplus reserve 115607702.16 115607702.16

Total 410786860.20 410786860.20

36. Retained profit

Item Current period Last period

Amount at the end of last year 884127743.42 904232582.87

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Current period Last period

Add: Adjustment from undistributed profit at period-begin -2734328.91

Including: retroactive adjustment by Accounting Standards for

Business Enterprise

Change of accounting policy -2734328.91

Correction of former material error

Change of combination scope under common control

Current opening balance 884127743.42 901498253.96

Add: net profit attributable to shareholders of parent company for this

period -210130580.93 56441479.14

Less: withdraw of statutory surplus reserve 11136116.82

Withdraw of discretionary surplus reserve

Withdraw of general risk provision

Dividend payable for ordinary shares 52229894.05 62675872.86

Dividend of ordinary shares transferred to share capital

Current ending balance 621767268.44 884127743.42

37. Operation income and operation cost

(1) Operation income and operation cost

Item Current period Last period

Main business income 6268491126.30 8543968799.83

Other business income 527369610.69 589193881.11

Total 6795860736.99 9133162680.94

Main business cost 5248478697.42 6942346945.06

Other business cost 505371191.93 548208592.19

Total 5753849889.35 7490555537.25

(2) Main business classified according to product

Category

Current period Last period

Operation income Operation cost Operation income Operation cost

Refrigerator

freezer 2920923251.77 2377765236.89 3819493665.57 2965821052.02

Air-conditioner 2595885454.11 2247295670.56 3990707709.01 3364231232.05

Washing

machine 179892246.84 148034172.04 205216507.29 161545734.09

Small 512769500.40 426489024.05 456750621.11 387949800.00

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Category

Current period Last period

Operation income Operation cost Operation income Operation cost

household

appliances and

kitchen and

bathroom

Other 59020673.18 48894593.88 71800296.85 62799126.90

Total 6268491126.30 5248478697.42 8543968799.83 6942346945.06

(3) Main business classified according to sales region

Region

Current period Last period

Operation income Operation cost Operation income Operation cost

Domestic 3936852798.41 3251061917.12 6416709241.89 5079123427.39

Overseas 2331638327.89 1997416780.30 2127259557.94 1863223517.67

Total 6268491126.30 5248478697.42 8543968799.83 6942346945.06

Top five clients have income in sales of RMB 3003456419.67 in total a 44.20% in total operation income.

38. Business tax and extra charges

Item Current period Last period

Treatment fund for abandon electrics & electronics 23183817.00 31474957.00

Real estate tax 8958027.86 7655849.19

City construction tax 5891358.89 17260016.63

Stamp duty 5581068.92 4952161.86

Extra charge for education and local education surcharge 4600301.45 12444121.82

Land use tax 3429180.26 3523971.33

Water fund 3328943.43 3408253.81

Other 332015.42 -79571.90

Total 55304713.23 80639759.74

39. Sales expense

Item Current period Last period

Salary and extra charge 255283621.81 313475070.08

Transport expenses 211841082.72 286457370.36

Market support fee 135417268.91 194977090.49

Air conditioner installation fee 114700395.35 181806817.80

National three guarantees expense 90184296.10 102855535.34

Storage rental fee 47400139.04 63667118.95

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Current period Last period

Travel expenses 12373271.22 24070080.12

Depreciation expenses 3944399.06 3629916.41

Operation activities expenses 2617936.49 12174172.67

Vehicle consumption 2050607.05 2398835.38

Communication expenses 788152.95 3134174.08

House-lease expenses 781344.62 9326474.23

Advertising fee 352891.37 14704579.10

Other 46248021.54 31714521.86

Total 923983428.23 1244391756.87

40. Administration expense

Item Current period Last period

Salary and social insurance etc. 79407413.87 88854543.67

Intangible assets amortization 10046746.48 12746300.56

Depreciation 9232289.11 9675666.50

Water and electricity fee 1773141.17 8528459.15

Property insurance fee 1425753.98 2142321.97

Domestic travelling fee 1315916.59 3968094.14

Business activities fee 1195638.78 2604837.36

Office fee 803009.47 1499270.12

Inspection and authentication fee 412574.00 1732091.97

Other 29857209.47 32641457.26

Total 135469692.92 164393042.70

41. R&D expenses

Item Current period Last period

Amortized intangible assets 53871905.01 40270721.67

Salary and social insurance etc. 50278576.62 45300688.74

Trial fee of R&D 31728340.10 17704764.73

Depreciation 7707855.52 4107066.78

water and electricity 5126916.81 -

Inspection and authentication fee 4446068.74 3314163.26

Cost of mould 2727245.15 3381991.85

Software royalty 2690872.94 1868153.84

Domestic travel expenses 588805.86 1069553.39

Other 8722562.14 3030936.60

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Current period Last period

Total 167889148.89 120048040.86

42. Financial expenses

Item Current period Last period

Interest expenditure 45498046.65 57892999.31

Less: Interest income 74784016.69 59401426.37

Add: Exchange loss 9367991.95 10608433.65

Commission charges 10335558.03 13172852.69

Discount expenditure -3285693.99 -4610181.50

Total -12868114.05 17662677.78

43. Other income

Item Current period Last period

Corporate policy funds 28310000.00

Subsidy for employment stable 4457036.59

R290 air conditioning production IOC subsidy 2403000.00

Special funds for technical transformation of the Athena project 2143125.00 2143125.00

Immediate refund of VAT for software products 2071200.78 2649557.46

Special funds for export credit insurance 1475997.00

Hefei City Industrial Development Policy Subsidy Funds in the Second

Half of 2019 1341412.50

Demolition compensation of CHANGHONG MEILING 1234182.17 1097927.30

Adaptability improvement on new coolants production 1182490.86 1182490.86

Demolition compensation of Jiangxi Meiling 889944.30 898940.16

Research and application of the VISA (variable frequency volume

integrated intelligent air-conditioner) 704651.16 704651.16

Technology Innovation and Enterprise Development Fund 640240.37 671307.09

2025 Industrial Development Fund 630000.00

Subsidy for industrial development policy from Hefei for first half of

2018 625000.00 625000.00

Feidong County's policy awards for promoting high-quality economic

development 500000.00

Special subsidy funds for epidemic prevention and control 500000.00

Freezer project of Changhong Meiling 367031.26 367031.26

Industrialization of intelligent white household appliances software

platform and typical application research and development 363636.36 363636.36

Policy funds for manufacturing a strong province subsidy for

equipment for the technological transformation of industrial strong

base

312500.00

Subsidies for intelligent transformation & upgrading of enterprises 302837.50 302837.50

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Current period Last period

from the new industrialization policy in economic development zone

Government subsidy for new plant construction - industrialization of

cryogenic refrigeration equipment 250000.00 250000.00

Subsidy from Zhongshan Finance Bureau (CZ028001 provincial

special project 2019) 152823.24

Promoting the new industry ( annual output of 0.6 million medium&

large volume environmental protection and energy saving freezer) 152206.26 152206.26

Special fund for technical improvement 132861.90 132861.90

Equipment subsidy for the industrial base technical renovation from

Economic and Information Commission 117500.00 117500.00

Energy-saving smart air conditioner industrialization Item 105154.62 105154.62

Upgrade and transformation of smart refrigerator production line Item 98749.98

Subsidy for equipment purchasing for Hefei Tech. Improvement

project in 2017 89580.00 89580.00

Subsidy for purchase of R & D instruments and equipment 73500.00 39812.50

Government subsidy CZ028001 technical improvement topic 47825.00 48363.50

Technical transformation of refrigerator evaporator workshop 44829.00 14516.52

Government subsidy CZ028001- subsidy in equipment renewal 30601.92 30601.92

Special fund for technical improvement 21442.62 21442.62

Subsidy for the development on production line technical reform for

green-friendly high-quality metal pipe 20446.32 20446.30

Other sporadic items 3060318.49 4173842.17

Supplementary fund for characteristic dual creative carriers of

borrowing and transferring 4000000.00

Economic and Trade Development Bureau corporate policy subsidy

funds 3000000.00

Special funds for provincial-level innovation-driven development 2950000.00

Enterprise home appliance logistics subsidy 1753000.00

Special funds for steady growth of foreign trade in Zhongshan for 2017 1532797.00

Research and Industrial Application of Key Energy-saving

Comfortable Control Technology of Inverter Air Conditioner 1440000.00

Special subsidy for Nanjing Port 1234485.00

Special funds for foreign economic & trade development and port

construction for 2018 1057163.36

Subsidy for E-business sales 1000000.00

Subsidy for home appliance standards customization project from

China Household Appliances Research Institute 574000.00

Technical Transformation of Industrial Enterprises in Jingdezhen

High-tech Zone Item 500000.00

Innovation development project for the E-Business 38037.66

Government subsidy for the project of ministry of finance of science

and education entrepreneurship park in Mianyang Technology Town 28893.12

Total 54852125.20 35311208.60

44. Investment income

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Current period Last period

Long-term equity investment income by equity method 209880.54 -8822000.32

Investment income obtained from disposal of tradable financial

assets 5402087.72 -11141590.61

Income from financial products 1539918.00 31627554.38

Total 7151886.26 11663963.45

45. Changes in fair value gains

Item Current period Last period

Tradable financial assets -4785270.15 -6550413.41

Including: Income of fair value changes from derivative financial

instruments -4785270.15 -6550413.41

Tradable financial liability -4939481.97 9915203.65

Including: Income of fair value changes from derivative financial

instruments -4939481.97 9915203.65

Total -9724752.12 3364790.24

46. Credit impairment loss

Item Current period Last period

Note receivable bad debt loss -451763.04 17262634.10

Account receivable bad debt loss -22539727.97 -7933111.89

Other account receivable bad debt loss 721269.82 215973.74

Total -22270221.19 9545495.95

47. Assets impairment loss

Item Current period Last period

Loss on inventory valuation -26583248.58 -10615932.01

Total -26583248.58 -10615932.01

48. Income from assets disposal

Item Current period Last period

Amount reckoned

into

non-recurring

gains/losses in the

period

Income from non-current assets disposal -178704.98 -937771.74 -178704.98

Including: income classify to assets ready for sale

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Current period Last period

Amount reckoned

into

non-recurring

gains/losses in the

period

income not classify as to assets ready for sale

Including: Income from fixed assets disposal -178704.98 -937771.74 -178704.98

Income from intangible assets disposal

Total -178704.98 -937771.74 -178704.98

49. Non-operation income

(1) Non-operation income

Item Current period Last period

Amount reckoned

into non-recurring

gains/losses in the

period

Government subsidy 110000.00

Income of penalty 366979.53 379815.74 366979.53

Other 3078629.68 1986381.28 3078629.68

Total 3445609.21 2476197.02 3445609.21

(2) Government subsidy

Item

Current

period

Last period Resource and basis Assets/income related

Nantou Town Zhongshan City 2018

Outstanding Industrial Development

Enterprise Award

20000.00 Income related

Municipal industrial development

project award for 2018 90000.00

Chuan CJ (2019) No.: 20 Income related

Total 110000.00

50. Non-operating expenditure

Item Current period Last period

Amount reckoned

into non-recurring

gains/losses in the

period

Penalties and late fees 77.03 11517.95 77.03

Relocation expenses 2131394.09

Other 959477.10 219614.33 959477.10

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Current period Last period

Amount reckoned

into non-recurring

gains/losses in the

period

Total 959554.13 2362526.37 959554.13

51. Income tax expenses

Item Current period Last period

Current income tax expenses 8498558.12 11572518.08

Deferred income tax expenses -11361569.54 6128742.26

Total -2863011.42 17701260.34

52. Other comprehensive income

Found more in 34. Other comprehensive income in VI

53. Items of cash flow statement

(1) Cash received (paid) from (for) other activities relating to operation/investment/financing

1) Cash received from other activities relating to operation

Item Current period Last period

Government subsidy 49374979.95 36458594.62

Cash deposit deposit 11794014.82 3265073.83

Collection of restriction fund 4801740.89 26400639.34

Rental income 2537602.16 4026499.54

Compensations 1589695.33 1368694.98

Other 4104674.84 5727441.00

Total 74202707.99 77246943.31

2) Cash paid for other activities relating to operation

Item Current period Last period

Market support fee 103452106.47 128402307.99

Rental fees 56501840.38 94079187.33

Reserve funds margin 33991028.48 49884342.29

Service support fee 27112533.75 590374.72

Convert to restricted funds 23523106.48 35263814.30

Travel expenses 15537025.21 30084107.15

Handling fee 9596183.72 11238128.64

Inspection and certification fee 8194323.28 8876393.23

Business activity fee 7486994.76 15643474.01

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Current period Last period

advertising fee 4535316.89 22969354.76

Shuttle transportation fee 4280786.69 4142833.60

Office expenses 3977096.29 4614465.23

Vehicle cost 2647658.04 3044978.86

Conference organization fee 417753.18 8454207.14

Fines and late fees 77.03 12959457.95

other fee 104511778.87 90803856.78

Total 405765609.52 521051283.98

3) Cash received from other activities relating to investment

Item Current period Last period

Interest income from bank deposits 62758263.18 52972498.64

Forward foreign exchange delivery income 5402087.72

Other 230611.63 1934235.51

Total 68390962.53 54906734.15

4) Cash paid for other activities relating to investment

Item Current period Last period

Loses of forward exchange settlement 11141590.61

Total 11141590.61

5) Cash paid for other activities relating to financing

Item Current period Last period

Handling charge of dividend 36893.14 44620.40

Loan deposit 24750000.00

Financing lease 893318.70 647028.80

Total 930211.84 25441649.20

(2) Supplementary of the consolidated cash flow statement

Item Current period Last period

1. Net profit is adjusted to cash flow of operation activities:

Net profit -219171870.49 46216030.54

Add: Ending balance of assets impairment 48853469.77 1070436.06

Depreciation of fixed assets consumption of oil gas assets and

depreciation of productive biological assets 104594561.21 89438431.78

Amortization of intangible assets 66064785.04 54522230.54

Amortization of long-term retained expense

Loss from disposal of fixed assets intangible assets and other 178704.98 937771.74

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Current period Last period

long term assets (gain is listed with “-”)

Loss from discarding fixed assets as useless (gain is listed with

“-”)

Loss from change of fair value(gain is listed with “-”) 9724752.12 -3364790.24

Financial expense (gain is listed with “-”) -19917978.09 -2486261.85

Investment loss (gain is listed with “-”) -7151886.26 -11663963.45

Decrease of deferred income tax assets (increase is listed with

“-”) -9942973.01 6666548.00

Increase of deferred income tax liabilities (decrease is listed

with “-”) -1418596.53 -251195.56

Decrease of inventories (increase is listed with “-”) -424221441.03 79201887.77

Decrease of operational accounts receivable (increase is listed

with “-”) -478954328.10 -365235586.93

Increase of operational accounts payable (decrease is listed with

“-”) 543257841.98 478432461.79

Other

Net cash flow arising from operation activities -388104958.41 373484000.19

2. Major investment and financing activities that do not involve

cash receipts:

Conversion of debt into capital

Convertible bonds due within one year

Financing lease of fixed assets

3. Net change in cash and cash equivalents:

Ending balance of cash 4792468168.07 4265961763.00

Less: Opening balance of cash 5385807475.51 4484643187.93

Add: Ending balance of cash equivalents

Less: Balance of cash equivalents at period-begin

Net increase in cash and cash equivalents -593339307.44 -218681424.93

(3) No net cash paid for subsidiary obtained in the period

(4) No net cash received from subsidiary disposal in the period

(5) Cash and cash equivalent

Item Ending balance Opening balance

Cash 4792468168.07 5385807475.51

Including: cash in stock 128714.24 44818.07

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Ending balance Opening balance

Bank deposits available for payment at any time 4552864202.70 4771094609.77

Other monetary fund available for payment at any time 239475251.13 614668047.67

Cash equivalents

Including: bond investment due within 3 months

Balance of cash and cash equivalents at period-end 4792468168.07 5385807475.51

Including: using the restricted cash and cash equivalents of the

parent company or subsidiary of the group

54. Assets with ownership or the right to use restricted

Item Ending book value Reasons

Monetary fund 114265125.97 Margin

Note receivable note 1 331387334.54 Pledged

Account receivable note 2 136802022.65 Pledged

Fixed assets note 3 320318295.22 Pledged

Intangible assets note 3 293786459.23 Pledged

Total 1196559237.61

Note 1: The note receivable was pledged for: short-term financing from the bank; with purpose of improving the note

utilization the Company draw up bank acceptance by pledge parts of the outstanding notes receivable to the bank

Note 2: Pledge of the account receivable refers to the account pledge for export bill financing.Note 3: The mortgage of fixed assets and intangible assets is the mortgage of houses and buildings and land use rights. For

details see Note VI. 28. Long-term loans.

55. Foreign currency

(1) Foreign currency

Item

Ending foreign currency

balance

Exchange rate

Ending RMB converted

balance

Monetary fund

Including: USD 27712637.84 7.0795 196191619.60

Euro 2496834.25 7.9610 19877297.44

AUD 1707640.61 4.8657 8308866.91

Pakistan Rupi 49438968.09 0.04224 2088302.01

IDR 5875467340.00 0.000497 2920107.27

HKD 3297.10 0.9134 3011.57

Account receivable

Including: USD 91014446.30 7.0795 644336772.58

Euro 1902952.39 7.9610 15149403.98

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item

Ending foreign currency

balance

Exchange rate

Ending RMB converted

balance

AUD 9604143.04 4.8657 46730878.79

Pakistan Rupi 1792503789.55 0.04224 75715360.07

IDR 31735370142.00 0.000497 15772478.96

Other account receivable

Including: USD 6734.77 7.0795 47678.80

Pakistan Rupi 19543654.00 0.04224 825523.94

IDR 1018687980.00 0.000497 506287.93

Account payable

Including: USD 466757.91 7.0795 3304412.62

Euro 92339.42 7.9610 735114.12

Pakistan Rupi 656271820.94 0.04224 27720921.72

IDR 15293339741.00 0.000497 7600789.85

Other account payable

Including: USD 21827.00 7.0795 154524.25

Pakistan Rupi 269784676.00 0.04224 11395704.71

IDR 8989490554.00 0.000497 4467776.81

Short-term loans

Including: USD 15000000.00 7.0795 106192500.00

Euro 9500000.00 7.9610 75629500.00

Pakistan Rupi 624290000.00 0.04224 26370009.60

(2) Foreign operational entity

The foreign operational entity of the Company was Changhong Ruba Trading Company (Private) Limited mainly operates in

Lahore Pakistan; Recording currency is Pakistan Rupi. CHANGHONG MEILING ELECTRIC INDONESIA PT mainly

operates in Jakarta; Recording currency is IDR.

57. Government subsidy

(1) Government subsidy

Category Amount Item

Amount reckoned

into current

gain/loss

Corporate policy funds 28310000.00 Other income 28310000.00

Hefei City Industrial Development Policy Subsidy Funds in

the Second Half of 2019 7154200.00 Deferred income 1341412.50

Subsidy for employment stable 4457036.59 Other income 4457036.59

R290 air conditioning production IOC subsidy 2403000.00 Other income 2403000.00

Immediate refund of VAT for software products 2071200.78 Other income 2071200.78

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Category Amount Item

Amount reckoned

into current

gain/loss

Special funds for export credit insurance 1475997.00 Other income 1475997.00

Technology Innovation and Enterprise Development Fund 640240.37 Other income 640240.37

2025 Industrial Development Fund 630000.00 Other income 630000.00

Feidong County's policy awards for promoting high-quality

economic development 500000.00 Other income 500000.00

Special subsidy funds for epidemic prevention and control 500000.00 Other income 500000.00

Purchase of R&D equipment subsidies 280900.00 Deferred income 73500.00

Other sporadic projects 2984964.79 Other income 2984964.79

Total 51407539.53 45387352.03

(2) Refund of government subsidy: nil

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

VII. Changes of consolidation rage

1. Enterprise combined under the different control: Nil

2. Enterprise combined under the same control: Nil

3. Reversed takeover: Nil

4. Disposal of subsidiary: Nil

5. Subsidiary liquidated

Subsidiary

Price of

the equity

disposed

Ratio of the equity

disposed

Way of the equity

disposed

Time point of control right

lose

Determination basis for the time

point of control right lose

Difference between the disposal price and

proportion of the subsidiary’s net assets enjoy

in aspect of the consolidated financial

statement which is respond to the disposal

investment

Other comprehensive income

transferred into investment

income which related with

the equity investment of

original subsidiary

Guangxi Huidian Household

Appliances Co. Ltd. 100.00%

Liquidation

cancellation 2020.03

Liquidation completed

6. Subsidiary newly established: Nil

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

VIII. Equity in other entity

1. Equity in subsidiary

(1) Composition of the enterprise group

Subsidiary

Main office

place

Registration

place

Business

nature

Shareholding ratio (%)

Acquire by

Directly

Indirectl

Zhongke Meiling Cryogenic

Technology Co. Ltd.1)

Hefei Hefei

Manufacturing

and sales 63.2683 Investment

Sichuan Hongmei Intelligent

Technology Co. Ltd.2)

Mianyang Mianyang

Software

development 100 Investment

Mianyang Meiling Refrigeration Co.Ltd.3)

Mianyang Mianyang

Manufacturing

and sales 95 5 Investment

Jiangxi Meiling Electric Appliance Co.Ltd. 4)

Jingdezhen Jingdezhen

Manufacturing

and sales 98.75 1.25 Investment

Hefei Meiling Wulian Technology Co.Ltd. 5)

Hefei Hefei

Software

development 100 Investment

Hefei Meiling Electric Marketing Co.Ltd.6)

Hefei Hefei Sales 99.82 0.18 Investment

Jinan Xiangyou Electric Marketing Co.Ltd.7) Jinan Jinan

Sales 93.4 Investment

Wuhan Meizirong Electric Marketing

Co. Ltd.8)

Wuhan Wuhan Sales 91 Investment

Zhengzhou Meiling Electric

Marketing Co. Ltd.9)

Zhengzhou Zhengzhou Sales 100 Investment

Chengdu Meiling Electric Marketing

Co. Ltd.10)

Chengdu Chengdu Sales 100 Investment

Fuzhou Meiling Electric Marketing

Co. Ltd.11)

Fuzhou Fuzhou Sales 100 Investment

Nanjing Meiling Electric Marketing

Co. Ltd.12)

Nanjing Nanjing Sales 100 Investment

Taiyuan Meiling Electric Marketing

Co. Ltd.13)

Taiyuan Taiyuan Sales 100 Investment

Hangzhou Meiling Electric Marketing

Co. Ltd.14)

Hangzhou Hangzhou Sales 100 Investment

Shanghai Meiling Electric Marketing

Co. Ltd.15)

Shanghai Shanghai Sales 100 Investment

Guangzhou Meiling Electric

Marketing Co. Ltd.16)

Guangzhou Guangzhou Sales 98 Investment

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Subsidiary

Main office

place

Registration

place

Business

nature

Shareholding ratio (%)

Acquire by

Directly

Indirectl

Tianjin Meiling Electric Marketing

Co. Ltd.17)

Tianjin Tianjin Sales 100 Investment

Beijing Meiling Electric Marketing

Co. Ltd.18)

Beijing Beijing Sales 100 Investment

Hefei Meiling Nonferrous Metal

Products Co. Ltd.19)

Hefei Hefei

Manufacturing

and sales 100

Enterprise combined under the

different control

Changhong Meiling Ridian Technology

Co. Ltd.20）

Zhongshan Zhongshan

Manufacturing

and sales 99.0361

Enterprise combined under the

same control

Changmei Technology Co. Ltd. 21) Mianyang Mianyang Sales 96.256 Investment

CHANGHONGMEILINGELECTRICI

NDONESIAPT22）

Jakapta Jakapta Sales 100 Investment

ChanghongRubaTradingCompany（Private）Limited23)

Pakistan Pakistan Sales 60 Investment

Sichuan Changhong Air-conditioner

Co. Ltd. 24)

Mianyang Mianyang

Manufacturing

and sales 100

Enterprise combined under the

same control

Zhongshan Changhong Electric Co.Ltd.25)

Zhongshan Zhongshan

Manufacturing

and sales 90 10

Enterprise combined under the

same control

Hefei Meiling Group Holdings

Limited26)

Hefei Hefei

Manufacturing

and sales 100

Enterprise combined under the

different control

Meiling Equator Household

Appliance (Hefei) Co. Ltd27)

Hefei Hefei

Manufacturing

and sales 100

Enterprise combined under the

different control

Hefei Equator Appliance Co. Ltd.28) Hefei Hefei

Manufacturing

and sales 100

Enterprise combined under the

different control

Hongyuan Ground Energy Heat Pump

Tech. Co. Ltd.29)

Mianyang Mianyang

Manufacturing

and sales 51 Investment

Hongyuan Ground Energy Heat Pump

Tech. (Zhongshan) Co. Ltd.30)

Zhongshan Zhongshan

Manufacturing

and sales 51 Investment

Meiling CANDY Washing Machine

Co. Ltd. 31)

Hefei Hefei

Manufacturing

and sales 60 Investment

Guangzhou Changhong Trading Co.Ltd.32)

Guangzhou Guangzhou Sales 100 Investment

Hebei Hongmao Household ApplianceTechnology Co. Ltd33）

Handan Handan

Manufacturing

and sales 100 Investment

Anhui Tuoxing Technology Co.Ltd.34）

Hefei Hefei Technology

R&Dt 100 Investment

Note:

1) Zhongke Meiling Cryogenic Technology Co. Ltd. (hereinafter referred to as Zhongke Meiling) the

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

predecessor of which was Zhongke Meiling Cryogenic Technology Limited Liability Company was

established on 29 October 2002 by joint contribution from the Company and Technical Institute of Physics

and Chemistry CAS (“TIPC”) with registered capital of RMB60 million upon the establishment among

which the Company made capital contribution of RMB42 million (including the assets in specie at the

consideration of RMB35573719.70 as evaluated by Beijing Zhongzheng Appraisal Co. Ltd. with issuance

of the Appraisal Report (ZZPBZ(2002)No.029) and cash contribution of RMB6426280.30) accounting for

70% of the aforesaid registered capital and TIPC made capital contribution of RMB18 million with

intangible assets of such value (namely the single compressor mixture industrial low temperature

refrigeration technology) as evaluated by Jingzhongzi Assets Appraisal Co. Ltd. with issuance of the

Appraisal Report (ZZPBZ(2002)No.225) accounting for 30% of the aforesaid registered capital. The paid-in

of the above registered capital has been verified by Huazheng Accounting Firm by issuance of the Assets

Verification Report (HZYZ (2002) No. B157) dated 16 October 2002.In October 2014 according to the relevant provision under the Management Rules on Application of State

Owned Assets by Central Business Organs TIPC transferred the 30% equity interests held by it in Zhongke

Meiling Cryogenic Technology Company Limited to its wholly-owned subsidiary Zhongke Xianxing

(Beijing) Assets Management Co. Ltd (hereinafter referred to as Zhongke Xianxing) which would perform

management over the operating assets of TIPC. Upon consideration and approval at the 37th session of the 7th

Board of Directors of Hefei Meiling Co. Ltd it is agreed to waive the pre-emptive right.

On 10 August 2015 all the founders signed the Founder Agreement of Zhongke Meiling Cryogenic

Technology Company Limited pursuant to which they decided to change the firm type of Zhongke Meiling

Cryogenic Technology Company Limited to a joint stock company. Based on the net assets of RMB96

431978.25 as audited by Xinyong Zhonghe CPA as of 30 June 2015 an aggregate of 65000000 shares have

been converted at the proportion of 1:0.67 which are to be held by the original shareholders according to

their respective entitlement. In case that the net assets exceed registered capital the balance shall be recorded

in capital reserve. On 28 August 2015 Xinyong Zhonghe CPA reviewed the registered capital and paid-in

thereof in respect of the stock reform and issued Assets Verification Report (XYZH/2015CDA40161). The

Company registered industrial and commercial information on 11 September 2015.

On November 25 2016 the first Extraordinary Shareholders' General Meeting of Zhongke Meiling

Cryogenic Technology Co. Ltd. in 2016 considered and approved the Proposal on the Issuance Plan of the

Company; Zhongke Meiling Company issued 3150000 shares to specific investors by the non-public

offering of shares at 1.63 Yuan per share. The current capital increase was verified by the No.［XYZH/2016CDA40294］capital verification report issued by ShineWing CPA (special general partnership).

After the completion of the issuance the share capital of Zhongke Meiling Company increased to 68150000

shares and the Company's shareholding ratio was 66.76%.

On 15 September 2017 the Proposal of the First Stock Placement of Zhongke Meiling Cryogenic

Technology Co. Ltd for year of 2017 was deliberated and approved by 4th session extraordinary of

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

shareholders general meeting of 2017. Zhongke Meiling offering 490300 shares to specific investors by way

of privately placement which has 1.72 Yuan per share in amount. The capital increasement has been verified

by the No. ［XYZH/2017CDA40324］capital verification report issued by ShineWing CPA (special general

partnership). After the completion of shares placement stock of the Company increased to 68640300 shares

and 66.87% held by the Company.On September 9 2019 the 10th Meeting of the Second Board of Directors and the Fourth Extraordinary

Shareholders’ Meeting reviewed and approved the Proposal on the First Stock Issuance Plan of Zhongke

Meiling Cryogenic Technology Co. Ltd. in 2019 (Revised Version) the number of shares to be issued this

time does not exceed 3907900 shares (including 3907900 shares) the issue price is not less than 2.16 yuan

per share and the raised funds are expected to not exceed 8441064.00 yuan (including 8441064.00 yuan).

After the completion of the additional issue the company’s share capital increased to 72548200 shares

which was verified by [No. XYZH/2020CDA30002] “Capital Verification Report” issued by Shine Wing

Certified Public Accountants (LLP) and the Company’s shareholding ratio was 63.2683%.

2) Sichuan Hongmei Intelligent Technology Co. Ltd. (hereinafter referred to as Hongmei Intelligent) was

established on Jan. 24 2014. It is a limited company jointly invested by the Company and Mianyang Meiling

Refrigeration Co. Ltd. being approved by the Industrial and Commerce Bureau of Peicheng District

Mianyang City. The company owes registered capital of RMB 5 million including RMB 4.95 million

contributed by Changhong Meiling Company in cash accounted for 99% of the registered capital; Mianyang

Meiling Refrigeration Co. Ltd. contributed RMB 50000 in cash with 1% of the register capital occupied. The

above mentioned register capital have been verified by verification report of Chuanjinlai Yanzi No. [2014]

B039 issued by Sichuan Jinlai Accounting Firm Co. Ltd. In July 2016 the shares of Hongmei Intelligent

held by the Company has transferred to Sichuan Changhong AC Co. Ltd. after transferred Changhong AC

has 99% equity of Hongmei Intelligent the Company has no shares of Hongmei Intelligent directly.

3) Mianyang Meiling Refrigeration Co. Ltd. (hereinafter referred to as Mianyang Meiling) a limited liability

company jointly set up by the Company and China-tech Meiling Company was founded on Mar. 6 2009. Its

registered capital and paid-in capital were RMB 50 million upon establishment of which the Company

invested RMB 45 million accounting for 90% of the registered capital; Zhongke Meiling Company invested

RMB 5 million accounting for 10% of the registered capital. The capital receipt was verified by the

verification report [CXKY (2009) No. 008] of Sichuan Xingrui Certified Public Accountants. On 19 January

2011 the Company increase RMB 50 million in capital of Mianyang Meiling of which RMB 95 million

invested by the Company a 95% of total register capital while RMB 5 million invested by Zhongke Meiling

a 5% of total capital occupied. The paid-in capital has been verified by Capital Verification Report

［XYZH/2010CDA6040］from Chengdu Branch of Shinewing CPA CO. Ltd. In 2011 Zhongke Meiling

entered into “Equity Transfer Agreement” with Jiangxi Meiling Refrigeration Co. Ltd. 5 percent equity of

Mianyang Meiling held by Zhongke Meiling was transferred to Jiangxi Meiling Refrigerator. In September

2013 Jiangxi Meiling Refrigeration was combined by Jiangxi Meiling Electric Appliance Co. Ld than 5

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

percent equity was transfer to Jiangxi Meiling Electric Appliance.

4) Jiangxi Meiling Electric Appliance Co. Ltd. (hereinafter referred to as Jiangxi Meiling Electric Appliance)

was a limited liability company jointly established by the Company and Mianyang Meiling on 23 May 2011.Register capital of the company totally as RMB 50 million RMB 49.375 million invested by the Company

98.75% in total register capital while RMB 0.625 million invested by Mianyang Meiling a 1.25% in total

RMB 10 million from the Company and RMB 0.5 million from Mianyang Meiling. Rest of the capital shall

be invested fully within 2 years after the joint ventures established according to capital requirement. The

initial investment capital were verified by the Capital Verification Report [JXKYZi (2011) No. 090] issued

from Jingdezhen Xingci CPA Co. Ltd. Second capital RMB 39.5 million was fully funded on 28 July 2011

the Company contributed RMB 39.375 million while Mianyang Meiling Company invested RMB 125000

the contributions have been verified by the capital verification report [Jing Xing Kuai Yan Zi (2011) No.: 134]

issued from JDZ Xingci CPA Co. Ltd.

5) Hefei Meiling Wulian Technology Co. Ltd. (hereinafter referred to as Wulian Technology) was

established dated 21 January 2019 with registered capital of RMB 10 million and it is the subsidiary of the

Company with fully-owned establishment. As of June 30 2020 paid in capital is 6 million yuan

6) Hefei Meiling Electric Marketing Co. Ltd. (hereinafter referred to as Meiling Marketing) is the limited

company jointly invested by the Company and Mianyang Meiling Company on 21 Oct. 2009. Registered

capital and paid-up capital were RMB 10 million including RMB 9.9 million invested by the Company a

99% of the registered capital; Mianyang Meiling Company contributed RMB 0.1 million a 1% of the

registered capital. The above mentioned paid-up register capital have been verified by verification report of

[Wan An Lian Xin Da Yan Zi (2009) No. 074] issued by Anhui An Lian Xin Da Accounting Firm Co. Ltd.

On 25 Nov. 2010 the Company increased capital RMB 45 million registered capital amounting to RMB 55

million including RMB 54.9 million contributed by the Company a 99.82% of the registered capital while

Mianyang Meiling invested RMB 0.1 million a 0.18% of the registered capital. The increased capital has

been verified by verification report of [Wan Hua Shen Zheng Da Kuai Yan Zi (2010) No. 1514] issued by

Anhui Hua Shen Zhengda CPA Co. Ltd.

7) Jinan Xiangyou Electric Marketing Co. Ltd. (hereinafter referred to as Jinan Xiangyou) was established

dated 3 June 2011 with registered capital of RMB 3 million; Meiling Marketing invested RMB 1.08 million

accounted for 36% of the registered capital; after Meiling Marketing acquired 55.4% equity interests from

the minority shareholders in 2015 Meiling Marketing totally holds 91.4% equity of the Jinan Xiangyou In

2019 minority shareholders step out shares of Jinan Meiling hold by Meiling Marketing changed to 93.4%.

8) Wuhan Meizirong Electric Marketing Co. Ltd. (hereinafter referred to as Wuhan Meizirong) was

established dated 10 January 2011 with registered capital of RMB 5 million; Meiling Marketing invested RMB

4.55 million accounted for 91% of the registered capital.

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

9) Zhengzhou Meiling Electric Marketing Co. Ltd. (hereinafter referred to as Zhengzhou Meiling) was

established dated 17 January 2011 with registered capital of RMB 3 million; Meiling Marketing invested RMB

1.08 million accounted for 36% of the registered capital. In 2013 Meiling Marketing purchased 10% equity

from minority; Meiling Marketing signed equity transfer agreement with the minority shareholders in April

2015 to acquire as the transferee the 39% equity interests of Zhengzhou Meiling held by minority

shareholders Meiling Marketing acquired 10% equity interests from the minority shareholders in February

2016; and after acquiring 5% equity from minority in 2017 Meiling Marketing totally holds 100% equity of

Zhengzhou Meiling.

10) Chengdu Meiling Electric Marketing Co. Ltd. (hereinafter referred to as Chengdu Meiling) was

established dated 26 January 2011 with registered capital of RMB 5 million; Meiling Marketing invested RMB

4.17 million accounted for 83.4% of the registered capital; After Meiling Marketing purchased 9% equity

from minority in 2015 purchased 0.8% equity from minority in 2016 and purchased 1.2% equity from

minority in 2018 Meiling Marketing totally holds 96% equity of Chengdu Meiling. After Meiling Marketing

acquired 4% of minority shareholders in 2020 Meiling Marketing held 100% of Chengdu Meiling's total

equity.

11) Fuzhou Meiling Electric Marketing Co. Ltd. (hereinafter referred to as Fuzhou Meiling) was established

dated 25 January 2011 with registered capital of RMB 3 million; Meiling Marketing invested RMB 2.97 million

accounted for 99% of the registered capital; in 2017 after acquiring 1% equity from the minority Meiling

Marketing holds 100% equity of Fuzhou Meiling in total.

12) Nanjing Meiling Electric Marketing Co. Ltd. (hereinafter referred to as Nanjing Meiling) was

established dated 14 Feb. 2011 with registered capital of RMB 3 million; Meiling Marketing invested RMB

2.97 million accounted for 99% of the registered capital; in 2017 after acquiring 1% equity from the

minority Meiling Marketing holds 100% equity of Nanjing Meiling in total.

13) Taiyuan Meiling Electric Marketing Co. Ltd. (hereinafter referred to as Taiyuan Meiling) was

established dated 18 January 2011 with registered capital of RMB 4 million; Meiling Marketing invested RMB

1.59 million accounted for 39.75% of the registered capital; after Meiling Marketing purchased 45.5%

equity from minority in 2013 after purchased 14.75% equity from minority in 2016 Meiling Marketing

totally holds 100% equity of the Taiyuan Meiling.

14) Hangzhou Meiling Electric Marketing Co. Ltd. (hereinafter referred to as Hangzhou Meiling) was

established dated 17 Feb. 2011 with registered capital of RMB 3 million; Meiling Marketing invested RMB

2.655 million accounted for 88.5% of the registered capital; Meiling Marketing signed equity transfer

agreement with the minority shareholders in 2015 to acquire as the transfer the 6.5% equity interests of

Hangzhou Meiling held by minority shareholders. Upon completion of such equity transfer in February 2015

Meiling Marketing held in aggregate the 95% equity interests of Hangzhou Meiling; in 2017 after acquiring

5% equity from the minority Meiling Marketing holds 100% equity of Hangzhou Meiling in total.

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

15) Shanghai Meiling Electric Marketing Co. Ltd. (hereinafter referred to as Shanghai Meiling) was

established dated 9 March 2011 with registered capital of RMB 3 million; Meiling Marketing invested RMB

2.97 million accounted for 99% of the registered capital. After Meiling Marketing acquired 1% of minority

shareholders in 2020 Meiling Marketing will hold 100% of Shanghai Meiling's equity in total.

16) Guangzhou Meiling Electric Marketing Co. Ltd. (hereinafter referred to as Guangzhou Meiling) was

established dated 13 May 2011 with registered capital of 5 million Yuan; Meiling Marketing invested 4.3

million Yuan accounted for 86% of the registered capital; after Meiling Marketing acquired 12% equity

interests from the minority shareholders in 2014 Meiling Marketing totally held the 98% equity interests of

Guangzhou Meiling.

17) Tianjin Meiling Electric Marketing Co. Ltd. (hereinafter referred to as Tianjin Meiling) was established

dated 2 March 2011 with registered capital of 3 million Yuan; Meiling Marketing invested 2.565 million Yuan

accounted for 85.5% of the registered capital; In 2015 Meiling Marketing and Jiangxi Meiling Appliances

entered into equity transfer agreements with minority shareholders respectively to acquire as the transfers the

14.1% and 0.4% equity interests of Tianjin Meiling held by minority shareholders. Upon completion of

equity transfer in December 2015 Meiling Marketing totally held the entire equity interests of Tianjin

Meiling.

18) Beijing Meiling Electric Marketing Co. Ltd. (hereinafter referred to as Beijing Meiling) was established

dated 28 March 2011 with registered capital of 3 million Yuan; Meiling Marketing invested 2.97 million Yuan

accounted for 99% of the registered capital; in 2017 after acquiring 1% equity from the minority

shareholders Meiling Marketing holds 100% equity of the Beijing Meiling in total.

19) Hefei Meiling Nonferrous Metal Products Co. Ltd. (hereinafter referred to as Nonferrous Metal) was the

Sino-foreign joint venture jointly set up by original Meiling Group Hefei Meiling Copper Co. Ltd. And Singapore Kim

Shin Development Co. Ltd. which have been originally approved by the [WJMWFZZ (1996) No.349] of

Foreign Trade and Economic Committee of Anhui Province. Its registered capital was US$ 2.92 million upon

establishment of which original Meiling Group invested US$ 1.46 million (monetary capital) accounting

50% of the registered capital Hefei Meiling Copper Co. Ltd invested US$ 0.584 million (monetary capital of RMB

0.18 million and real assets of US$ 0.404 million) accounting 20% of registered capital while Singapore Kim Shin

Development Co. Ltd invested US$ 0.876 million (monetary capital) accounting 30% of the registered capital.

The above mentioned investment verified by the verification report of [HSWZ (1995) No. 0737] [HSWZ

(1996) No. 328] and [HSWZ (1998) No. 088] from Anhui CPAs Co. Ltd. In July 2008 approved by [HWS

(2008) No.53] from Foreign Trade Economic Cooperation Bureau of Hefei City 30% equity and 20% equity

held by Singapore Kim Shin Development Co. Ltd and Hefei Meiling Copper Co. Ltd respectively transferred to

original Meiling Group Totally. The Company’s register capital came into RMB 24286808.00 after

transference and was not the joint-venture any more.

20) Changhong Meiling Ridian Technology Co. Ltd. (hereinafter referred to as Ridian Technology) is a

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

limited liability company invested and established by Sichuan Changhong Electric Co. Ltd. (hereinafter

referred to as Sichuan Changhong) and Sichuan Changhong Motor Transport Co. Ltd. (hereinafter referred

to as Changhong Motor Transport Company) on May 25 2016. The registered capital and paid-in capital are

RMB 40 million Yuan of which Sichuan Changhong has invested 32 million Yuan by monetary capital

accounting for 80% of the registered capital; Changhong Motor Transport Company has invested 8 million

Yuan accounting for 20% of the registered capital. The official receipts of registered capital have been

verified by original Sichuan Junhe Accounting Firm [No. JHYZ (2006) 3027]. Ridian Technology increased

registered capital of 43 million Yuan on January 4 2007 changing from 40 million Yuan to 83 million

Yuan for the newly increased 43 million Yuan Sichuan Changhong invested 1.8 million Yuan Guangdong

Xiongfeng Electric Co. Ltd. invested 40 million Yuan and Kou Huameng and other 9 natural person

shareholders invested 1.2 million Yuan at the same time the shareholders' meeting considered and agreed to

transfer the investment of 8 million Yuan of Changhong Motor Transport Company to Sichuan Changhong

Venture Investment Co. Ltd the structure of the registered capital after changes was that Sichuan

Changhong invested 33.8 million Yuan accounting for 40.72%；Guangdong Xiongfeng Electric Co. Ltd.

invested 40 million Yuan accounting for 48.19%; Sichuan Changhong Venture Investment Co. Ltd Invested

8 million Yuan accounting for 9.64%; Kou Huameng and other 9 natural person shareholders invested 1.2

million Yuan accounting for 1.45%. The change of registered capital was verified by Zhongshan Promise

Accounting Firm [No. ZCHZ (2007)501010].

On February 18 2009 seven natural person shareholders transferred total 0.76% stock rights to Hu Zhiheng

after the transfer the registered capital of Ridian Technology was still 83 million Yuan the structure of

registered capital after changes was that Sichuan Changhong invested 33.8 million Yuan accounting for

40.72%; Guangdong Xiongfeng Electric Co. Ltd. invested 40 million Yuan accounting for 48.19%; Sichuan

Changhong Venture Investment Co. Ltd invested 8 million Yuan accounting for 9.64%; Hu Zhiheng and

other two natural person shareholders invested 1.2 million Yuan accounting for 1.45%.On October 9 2014 Ridian Technology held the shareholders meeting which considered and agreed Kou

Huameng to transfer its stock rights of total 250000 Yuan which accounts for 0.301% of the Ridian

Technology’s registered capital to Sichuan Changhong Venture Investment Co. Ltd at the cost of 317802

Yuan. The other shareholders of the Ridian Technology waived the right of pre-emption. On December 11

2014 Ridian Technology held the shareholders meeting which considered and agreed Guangdong Xiongfeng

Electric Co. Ltd. to transfer its stock rights of total 40 million Yuan which accounts for 48.19 % of the

company's registered capital to Sichuan Changhong Electric Co. Ltd. at the cost of 43977300 Yuan. The

other shareholders of the Ridian Technology waived the right of pre-emption. The structure of registered

capital after changes was that Sichuan Changhong invested 73.8 million Yuan accounting for 88.92%;

Sichuan Changhong Venture Investment Co. Ltd Invested 8.25 million Yuan accounting for 9.94%; Hu

Zhiheng and another natural person shareholder invested 950000 Yuan accounting for 1.14%.

On 4 January 2016 Sichuan Changhong and Sichuan Changhong Venture Investment Co. Ltd. transferred

total 98.855% equity of the Ridian Technology to the Company. After the transfer the Company directly

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

holds 98.855% stock rights of Ridian Technology.

On April 7 2020 resolution of the shareholders’ meeting of Ridian Technology agrees the Wu Changyuan to

transfer shares of Ridian Technology (representing 0.18% of the registered capital of Ridian Technology) to

the Company the Company holds 99.0361% equity of the Ridian Technology directly after transferred.

21) Changmei Technology Co. Ltd. (hereinafter referred to as Changmei Technology) was invested and set

up on May 12 2016 in order to promote intelligent transformation and implement the company’s intelligent

life project according to the company's strategic planning and business development needs. In accordance

with the Article of Association registered capital of Changmei Technology was 50 million Yuan including

48.128 million Yuan contributed by the Company in cash a 96.256% in the contribution capital the

management team contribute 1.872 million Yuan in cash a 3.744% in contribution capital.

22) CHANGHONG MEILING ELECTRIC INDONESIA PT.(hereinafter referred to as Indonesia

Changhong) is a subsidiary established in Indonesia and jointly invested by Zhongshan Changhong and

Sichuan Changhong in 2016 the company’s registered capital is 6 million US dollars of which Zhongshan

Changhong subscribed and paid 5.88 million US dollars in cash accounting for 98% of the registered capital

Changhong Air Conditioning subscribed and paid 120000 US dollars in cash accounting for 2% of the

registered capital. On 4 July 2017 rests of the 2.94 million US dollars are subscribed by Zhongshan

Changhong in line with the agreement.

23) Changhong Ruba Trading Company (Private) Limited (hereinafter referred to as Changhong Ruba) was a

joint venture established by Zhongshan Changhong Appliances Company Limited and RUBA GENERAL

TRADING FZE Company (“RUBA”) on 5 August 2011 with the approval from Guangdong Development

and Reform Commission by issuance of the Approval Relating to Joint Construction of a Manufacturing and

Selling Platform Project in Pakistan by Zhongshan Changhong Appliances Company Limited

(YFGWZ(2011)958). The resolution of the second extraordinary shareholders' meeting of Zhongshan

Changhong in 2016 passed the "Proposal on the Company's Capital Increase to Changhong Ruba Trading

Company (Private) Limited" and agreed that the company and UAE RUBA Company jointly increase capital

to Changhong Ruba Trading Company(Private) Limited which was invested by both sides in Pakistan at an

earlier stage Zhongshan Changhong invested 3.84 million US dollars in this capital increase and UAE

RUBA Company invested 2.56 million US dollars the shares held by both sides remained unchanged. After

the capital increase the company’s registered capital became 12.4 million US dollars of which Zhongshan

Changhong Home Appliances Company Limited invested 7.44 million US dollars in cash shareholding ratio

was 60% UAE RUBA Company invested 4.96 million US dollars in cash and shareholding ratio was 40%.

24) Sichuan Changhong Air Conditioner Co. Ltd.(hereinafter referred to as Changhong Air Conditioner) a

limited liability company jointly set up by Sichuan Changhong and Changhong Chuangtou was founded on

November 28 2008. Its registered capital was RMB 200 million upon establishment of which Sichuan

Changhong invested RMB 298 million (RMB 210088900 invested by monetary capital while RMB

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

87911100 invested by real material) equivalent to RMB 198 million shares accounting for 99% of the

registered capital; and Changhong Chuangtou invested RMB 3 million accounting for 1% of the registered

capital with equivalent of RMB 2 million shares. The registered capital receipt was verified by the

verification report [CGYYZ (2008) No. 177] of Sichuan Guangyuan Certified Public Accountants Co. Ltd.and [HLTHYZ (2008) No. 12-006] of Sichuan Henglitai Certified Public Accountants Co. Ltd. In December

2009 the Company obtained 100% equity of Changhong Air-conditioner by consolidated under the same

control. In 2017 the Company increased capital of 650 million Yuan to Changhong Air Conditioner after

capital increased registered capital of Changhong Air Conditioner comes to 850 million Yuan from 200

million Yuan shareholding still counted as 100%.

25) Zhongshan Changhong Electric Co. LTD (hereinafter referred to as Zhongshan Changhong) was the

original Guangdong Changhong Electric Co. Ltd. and is a limited liability company jointly set up by

Sichuan Changhong and China Minmetals on May 22 2001. Its registered capital was RMB 80 million upon

establishment of which Sichuan Changhong invested RMB 72 million including RMB 69.3 million biding

for the estate/ non-estate from original Zhongshan Sanrong Air-conditioner Co. Ltd. And its patent use-right

of RMB2.7 million accounting for 90% of the registered capital; Chine Minmetals invested RMB 8 million

in monetary capital accounting 10% of the registered capital. The Company changed its name originally from

Guangdong Changhong Electric Co. Ltd in July 2003. In December 2009 the Company obtained 90%

equity of Zhongshan Changhong by consolidated under same control. 10% equity held by China Minmetals

has been transferred by Changhong Air-conditioner on April 11 2010. On 25 May 2014 the Company

increased RMB 36 million to Zhongshan Changhong and Changhong AC increased RMB 4 million. In 2016

according to the overseas development strategy of the Company and the development and operation needs of

the subsidiaries the Company and the wholly-owned subsidiary Changhong Air Conditioning have increased

capital of RMB 64 million Yuan to Zhongshan Changhong according to the existing shareholding ratio

among which the capital increase of the Company was RMB 57.6 million Yuan and the capital increase of

Changhong Air Conditioning was RMB 6.4 million Yuan. After the completion of this capital increase the

registered capital Zhongshan Changhong shall increase to RMB 184 million Yuan the shareholding ratio of

the company and Changhong Air Conditioning remained unchanged and was still 90% and 10% of which

the Company invested 165.6 million Yuan accounting for 90% of the registered capital Changhong Air

Conditioning invested 18.4 million Yuan accounting for 10% of the registered capital. In March 2020 in

accordance with the Company’s overseas development strategy and the operation and development needs of

its subsidiaries the Company and its wholly-owned subsidiary Changhong Air Conditioning increased

capital of RMB 150 million to Zhongshan Changhong according to the existing shareholding ratios of which

the Company increased capital of RMB 135 million Changhong Air-Conditioning increased capital of RMB

15 million. After the completion of capital increase the registered capital of Zhongshan Changhong has

increased to RMB 334 million. The Company’s and Changhong’s shareholding ratios in Zhongshan

Changhong remain unchanged at 90% and 10% of which the Company funded RMB 300.6 million

accounting for 90% of the registered capital while Changhong Air Conditioning funded RMB 33.4 million

accounting for 10% of the registered capital.

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

26) Hefei Meiling Group Holdings Limited (hereinafter referred to as Meiling Group) was the state-owned

company originally approved by People’s Government of Hefei Province and established authorized by SASAC of

Hefei City. On July 14 2008 100% state-owned equity of Meiling Group has freely transferred to Xingtai

Holding by Hefei SASAC. Agreement by the approval of < State-owned property agreement transfer from

Meiling Group> [ HGZCQ (2010) No.34] of Hefei SASAC on April 9 2010 100% state-owned property of

Meiling Group after partial assets and liabilities separated transferred to the Company from Xingtai Holding

as amount of RMB 113.2 million. The re-registration of industrial and commercial procedure for Meiling

Group after separated partial assets liability has finished on July 28 2010. The new Meiling Group has

Auding CPAs Co. Ltd.

27) Meiling Equator Household Appliance (Hefei) Co. Ltd.( hereinafter referred to as Equator Household

Appliance) was the Sino-foreign joint venture jointly set up by original Meiling Group and EQUATOR

INVESTMENTS (USA) INC.( EQUATOR for short) which have been approved by the [SWZWFZZ(2004)

No.0103] of Approval Certificate of Foreign Enterprise from People’s Government of Anhui Province. Its

registered capital was US$ 3 million upon establishment of which Sino company invested US$ 2.25 million

in machinery equipment accounting 75% of the registered capital while foreign company invested US$ 0.5

million in monetary capital and US$ 0.25 million in intangible assets amounting to US$0.75 million

accounting 25% of the registered capital. The above mentioned investment verified by the verification report

of [WYAYZ (2004) No. 135] from Anhui Yongan CPAs Co. Ltd. In July 2007 approved by [HWJ (2007)

No.136] from Foreign Trade Economic Cooperation Bureau of Hefei City 25% equity held by EQUATOR

transferred to Anhui Meiling Electric Co. Ltd. Totally. The Company’s register capital came into RMB

24793200 after transference and was not the joint-venture any more. 25% equity owned by Anhui Meiling

Electric Co. Ltd has been transferred totally to original Meiling Group in July 2009.

28) Hefei Equator Appliance Co. Ltd.(hereinafter referred to as Equator Appliance) was jointly set up by original

Meiling Group and Yingkaite Appliance on September 26 2007. Its register capital was RMB 12 million among

which original Meiling Group invested 8670600 Yuan in monetary capital accounting 72.255% in

registered capital; Equator Appliance invested 3329400 Yuan in the assessment value of intangible assets

(land-use right) accounting 27.745% of total registered capital. The investment being verified by [WYAZ

(2004) No. 135] from Anhui Yongan CPAs Co. Ltd.

29) Hongyuan Ground Energy Heat Pump Technology Co. Ltd. (hereinafter referred to as Hongyuan Ground

Energy) was established on 28 August 2015 it is a limited liability company authorized by Administration

for Industry and Commerce of Peicheng District Mianyang Sichuan contributed by Sichuan Changhong Air

Conditioner Co. Ltd (hereinafter referred to as Changhong Air Conditioner) and Hengyouyuan Technology

Development Group Co. Ltd. together. Registered capital amounted as 50 million Yuan including 25.5

million Yuan contributed by Changhong Air Conditioner in cash a 51% in total registered capital;

Hengyouyuan Technology Development Group Co. Ltd. invested 24.5 million Yuan in cash a 49% in

registered capital.

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

30) Hongyuan Ground Energy Heat Pump Tech. (Zhongshan) Co. Ltd.(hereinafter referred to as Hongyuan

Zhongshan) was established and invested on 18 July 2017 with registered capital of 15 million Yuan The

Hongyuan Ground Energy Heat Pump Tech. Co. Ltd contributed 1.5 million Yuan with own funds and takes

100% in the registered capital.In 2018 the shareholdes of the Hongyuan Zhongshan decided to increase

capital of 30 million Yuan and contributed by the shareholder Hongyuan Ground Energy; thus registered

capital of Hongyuan Zhongshan up to 45 million Yuan

31) Meiling Candy Washing Machine Co. Ltd. (hereinafter referred to as Meiling Candy) was established

and registered on 27 April 2017 which was contributed by the Company and Candy Hoover Group S.r.l.together. Registered capital counted as 150 million Yuan including 90 million Yuan invested by the

Company a 60% in registered capital.

32) Guangzhou Changhong Trading Co. Ltd. (hereinafter referred to as Changhong Trading) was established

on 6 Jan. 2017 the wholly-owned subsidiary of Zhongshan Changhong Electric Co. LTD (hereinafter

referred to as Zhongshan Changhong) with registered capital of one million Yuan

33) Hebei Hongmao Household Appliance Technology Co. Ltd (hereinafter referred to as Hebei Hongmao)

was established on 21 July 2017 with registered capital of 5 million Yuan. Guangdong Changhong Ridian

Technology Co. Ltd. invested 5 million Yuan by own fund and takes 100% in registered capital.

34) Anhui Tuoxing Technology Co. Ltd. (hereinafter referred to as Tuoxing Technology) was established on

20 May 2019 with registered capital of 10 million Yuan and it is the subsidiary of Zhongke Meiling with

fully-owned establishment. As of December 31 2019 no capital contributes.

(2) Major non-wholly-owned subsidiary

Subsidiary

Shareholding ratio

of minority

Gains/losses

attributable to

minority in the year

Dividend distributed

to minority

announced in the

year

Balance of

minority’s interest at

period-end

Meiling CANDY 40.00% -1728214.38 21549861.33

Changmei

Technology 3.74% 10286.06 113.58

Zhongke Meiling 36.73% 1170282.45 4796676.00 53072902.46

Hongyuan Ground

Energy 49.00% -4779592.77 14946477.30

Changhong Ridian 0.96% 93628.03 600000.00 984042.15

(3) Financial information for major non-wholly-owned subsidiary

Subsidiary Ending balance

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Subsidiary Ending balance

Current assets Non-current assets Total assets Current liability

Non-current

liability

Total liabilities

Meiling

CANDY 101990370.21 513718.57 102504088.78 41191270.76 7356824.76 48548095.52

Changmei

Technology 3033.84 3033.84

Zhongke Meiling 276074904.34 135376795.24 411451699.58 258478867.50 8484891.35 266963758.85

Hongyuan Ground

Energy 96273988.29 29170335.57 125444323.86 93582672.02 1358636.95 94941308.97

Changhong

Ridian 370253734.21 52997714.77 423251448.98 321006977.91 150098.37 321157076.28

(Continued)

Subsidiary

Opening balance

Current assets Non-current assets Total assets Current liability

Non-current

liability

Total liabilities

Meiling

CANDY 107483599.72 560471.69 108044071.41 42492057.38 7356824.76 49848882.14

Changmei

Technology 813640.04 69816.35 883456.39 1155157.08 1155157.08

Zhongke Meiling 173698258.09 135802000.42 309500258.51 146202370.20 8938774.23 155141144.43

Hongyuan Ground

Energy 72495161.24 29851452.34 102346613.58 59872173.74 2217153.99 62089327.73

Changhong

Ridian 469012870.35 55302405.39 524315275.74 368560861.13 171540.99 368732402.12

(Continued)

Subsidiary

Current amount

Operation income Net profit

Total comprehensive

income

Cash flow from

operation activity

Meiling

CANDY 1627127.27 -4320535.96 -4320535.96 530341.33

Changmei

Technology 274734.53 274734.53 -36018.69

Zhongke Meiling 113979900.96 3187502.65 3187502.65 -1593316.20

Hongyuan Ground

Energy 89983710.53 -9754270.96 -9754270.96 6460975.38

Changhong 388868705.58 8761499.08 8761499.08 -79204317.51

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Subsidiary Current amount

Ridian

(Continued)

Subsidiary

Last period

Operation income Net profit

Total comprehensive

income

Cash flow from

operation activity

Meiling

CANDY 202748512.94 -12044830.55 -12044830.55 -19338158.67

Changmei

Technology 8371432.27 -3245434.46 -3245434.46 -3850631.51

Zhongke Meiling 104654118.52 6108281.21 6108281.21 14717867.84

Hongyuan Ground

Energy 161373764.24 -12666951.69 -12666951.69 -13509130.08

Changhong

Ridian 284981563.96 8263471.00 8263471.00 17513052.52

(4) Major limitation on using enterprise group’s assets and liquidate debts of enterprise group: Nil

(5) Offering financial supporting or other supports for structured entity that included in consolidation

statement scope: Nil

2. Changes of owner’ equity shares in subsidiary and its impacts

Item Chengdu Meiling Shanghai Meiling Ridian Technology Total

Original ratio of

shares held 96.00% 99.00% 98.855%

Equity purchased

from minority 4.00% 1.00% 0.1811%

Share issuance

Ratio of shares held at

period-end 100.00% 100.00% 99.0361%

Cost of purchasing

minority equity 1.00 1.00 280049.17 280051.17

Less: Ratio of the net

assets measured by

equity ratio while

acquiring the

subsidiary

-450354.49 -119870.42 290387.46 -279837.45

Equity dilution for

shares issuance

Balance 450355.49 119871.42 -10338.29 559888.62

Including: Capital

public reserve

adjusted

450355.49 119871.42 -10338.29 559888.62

In 2020 due to the acquisition of minority shareholder’s shares under the name of Chengdu Meiling

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Electrical Marketing Co. Ltd by the subsidiary and the difference between the newly acquired long-term

equity investment and the share of net assets that should be continuously calculated by the subsidiary from

the purchase date in accordance with the newly increased shareholding ratio was 450355.49 yuan which

was included in capital reserve.

In 2020 due to the acquisition of minority shareholder’s shares under the name of Shanghai Meiling

Electrical Marketing Co. Ltd. and the difference between the newly acquired long-term equity investment

and the share of net assets that should be continuously calculated by the subsidiary from the purchase date in

accordance with the newly increased shareholding ratio was 119871.42 yuan which was included in capital

reserve.

In 2020 the company acquired the minority shareholders of Changhong Meiling Ridian Technology Co.

Ltd. and the difference between the newly acquired long-term equity investment and the share of net assets

that should be continuously calculated by the subsidiary from the purchase date in accordance with the newly

increased shareholding ratio was -10338.29 yuan which was included in capital reserve.

3. Equity in joint venture or associate enterprise

(1) Major joint venture or associate enterprise

Joint venture or associate enterprise

Main office

place

Registr

ation

place

Business

nature

Shareholding

ratio (%)

Accounting

treatment for

investment of

joint venture or

associate

enterprise

Direct

Indire

ctly

Associate enterprise:

1.Changhong Ruba Electric Company

(Private)Ltd.Lahore

Pakistan

Lahore

R&D and

manufacturin

40.00 Equity

2.Hefei Xingmei Assets Management Co.

Ltd.Hefei Hefei

Rental

agency

48.28 Equity

3.Sichuan Zhiyijia Network Technology

Co. Ltd.

Mianyang Mianyang Sales 30.00 Equity

4.Hongyuan Ground Energy Heat Tech.

Co. Ltd.

Mianyang Mianyang

R & D sales

after-sales

49.00 Equity

5.Sichuan Tianyou Guigu Technology Co.

Ltd

Mianyang Mianyang

R&D and

manufacturin

25.00 Equity

6.Chengdu Guigu Environmental Tech. Co. Chengdu Chengdu

R&D

manufacturin

25.00 Equity

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Joint venture or associate enterprise

Main office

place

Registr

ation

place

Business

nature

Shareholding

ratio (%)

Accounting

treatment for

investment of

joint venture or

associate

enterprise

Direct

Indire

ctly

Associate enterprise:

Ltd. g and sales

(2) Financial information for major Joint venture: Nil

(3) Financial information for associate enterprise

Item

Ending balance / Current amount

Changhong Ruba

Electric Company

(Private)Ltd.Hefei Xingmei

Assets

Management

Co. Ltd.

Sichuan Zhiyijia

Network

Technology Co.Ltd.Hongyuan

Ground

Energy Heat

Tech. Co. Ltd.Sichuan Tianyou

Guigu

Technology Co.Ltd

Chengdu Guigu

Environmental

Tech. Co. Ltd.

Current assets 109286574.13 1711821.12 2583553136.17 47027702.79 21304228.40 16565458.88

Including: cash and cash

equivalent 5436016.48 226717.86 1337829306.09 172640.47 9068753.09 2298848.41

Non-current assets 49872737.22 16606486.00 1318342.50 12013422.17 53332.84 14169694.77

Total assets 159159311.35 18318307.12 2584871478.67 59041124.96 21357561.24 30735153.65

Current liability 166551417.69 1239441.24 2497722644.92 11394761.62 10106355.41 16789184.49

Non-current liability - 334740.00

Total liabilities 166551417.69 1239441.24 2498057384.92 11394761.62 10106355.41 16789184.49

Minority's interest 943994.83

Equity attributable to

shareholder of parent

company

-7392106.34 17078865.88 86814093.75 47646363.34 11251205.83 13001974.33

Share of net assets measured

by shareholding ratio -2956842.55 8245676.45 43407046.88 23346718.04 2812801.46 3250493.58

Adjustment

--Goodwill 821877.28 3887027.34

Unrealized profit of the

internal downstream

transactions

442772.94 5088289.24 74539.10 4447.62 30140.07

Unrealized profit of the

internal upstream

transactions

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Other 3399615.49

Book value of the equity

investment for associate

enterprise

- 8245676.45 39140634.92 23272178.94 2808353.84 7107380.85

Fair value of equity

investment for the associate

with consideration publicly

Operation income 45300541.58 - 3605343938.12 23259797.54 10087.61 1501031.58

Financial expenses 10265459.27 -1117.38 -22628943.85 1359.95 -134260.28 124588.98

Income tax expenses - 1037833.62

Net profit -11109497.99 -639886.66 5881057.16 -128904.93 23543.66 -4433824.06

Net profit of discontinuing

operation

Other comprehensive

income 188871.84

Total comprehensive

income -10920626.15 -639886.66 5881057.16 -128904.93 23543.66 -4433824.06

Dividend received from

associate enterprise in the

period

6649787.97

(Continued)

Item

Opening balance /Same period last year

Changhong Ruba

Electric Company

(Private)Ltd.Hefei Xingmei

Assets

Management

Co. Ltd.

Sichuan Zhiyijia

Network

Technology Co. Ltd.Hongyuan

Ground

Energy Heat

Tech. Co. Ltd.Sichuan Tianyou

Guigu

Technology Co.Ltd

Chengdu Guigu

Environmental

Tech. Co. Ltd.

Current assets 104632500.22 1833902.21 3365539682.22 46101621.41 21254869.83 18277711.92

Including: cash and cash

equivalent 5030479.12 1726698.95 2349815225.85 925625.77 11975680.17 3026977.11

Non-current assets 52830981.68 17138280.87 1252898.22 12965065.72 39777.34 14593410.88

Total assets 157463481.90 18972183.08 3366792580.44 59066687.13 21294647.17 32871122.80

Current liability 153934962.09 1253430.54 3272121806.17 11291418.86 10066985.00 14376055.61

Non-current liability 651580.00

Total liabilities 153934962.09 1253430.54 3272773386.17 11291418.86 10066985.00 14376055.61

Minority's interest 1059268.80

Equity attributable to

shareholder of parent company 3528519.81 17718752.54 94019194.27 47775268.27 11227662.17 17435798.39

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Share of net assets measured by

shareholding ratio 1411407.92 8554613.73 47009597.14 23409881.45 2806915.54 4358949.60

Adjustment

--Goodwill 821877.28 3887027.34

Unrealized profit of the internal

downstream transactions 393075.11 2223966.56 34940.80 4691.99 28751.02

Unrealized profit of the internal

upstream transactions

Other -1018332.81

Book value of the equity

investment for associate

enterprise

- 8554613.73 45607507.85 23374940.65 2802223.55 8217225.92

Fair value of equity investment

for the associate with

consideration publicly

Operation income 162916496.00 2430211379.62 16939634.90 -290705.70 22927852.35

Financial expenses 24206842.56 -3153.87 5617886.35 -788.08 -163651.65 89217.31

Income tax expenses

Net profit -18627283.09 -969500.31 -9710951.08 115981.57 -2769666.72 403485.31

Net profit of discontinuing

operation

Other comprehensive income -4412343.03

Total comprehensive income -23039626.12 -969500.31 -9710951.08 115981.57 -2769666.72 403485.31

Dividend received from

associate enterprise in the period

(4) Financial summary for non-important Joint venture and associate enterprise

Item

Ending balance / Current

amount

Opening balance / Last period

Associate enterprise:

Total book value of investment

Total amount measured by shareholding

ratio

--Net profit -129133.66 -144198.04

--Other comprehensive income

--Total comprehensive income -129133.66 -144198.04

(5) Major limitation on capital transfer ability to the Company from joint venture or affiliates: Nil

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

(6) Excess loss occurred in joint venture or affiliates: Nil

(7) Unconfirmed commitment with joint venture investment concerned: Nil

(8) Intangible liability with joint venture or affiliates investment concerned: Nil

4. Major conduct joint operation: Nil

5. Structured body excluding in consolidate financial statement: Nil

IX. Relevant risks related with financial instrument

The major financial instruments of the Company include borrowings account receivables account payable

tradable financial assets tradable financial liability the details of which are set out in Note VI. Risks related

to these financial instruments include exchange risks and interest rate risks. The management of the

Company controls and monitors the risk exposures to ensure the above risks are under control.

In connection with exchange risks in order to prevent from exchange risks arising from foreign currency

transaction amount foreign currency dominated loans and interest expenditure the Company entered into

several forward exchange contracts with banks. Fair value of the forward exchange contract which has been

recognized as derivative financial instrument has been included in profits and losses. As export business is

increasing if risks that are out of control of the Company occur such as appreciation of RMB the Company

will mitigate the relevant risks by adjusting its sales policy.The Company’s interest rate risk arises from bank borrowings and interest-bearing debt. Financial liabilities

at floating rate expose the Company to cash flow interest rate risk and financial liabilities at fixed rate

expose the Company to fair value interest rate risk. The Company will determine the respective proportion of

contracts at fixed and floating rates based on the prevailing market conditions. As of 30 June 2020 the

interest-bearing debts mainly referred to borrowing contracts at floating rate denominated in RMB with total

amount of 1322740000.00 Yuan the floating rate loan contract measured by RMB amounted as

577000000.00 Yuan in total; borrowing contracts at fixed rate denominated in USD with total amount of

106192500.00 Yuan; borrowing contracts at fixed rate denominated in IDR with total amount of

26370009.60 Yuan; borrowing contracts at fixed rate denominated in Euro with total amount of

75629500.00 Yuan. Risks relating to change of fair value of financial instruments arising from movement

of interest rate mainly related to bank borrowings at fixed rate. As for borrowings at fixed rate the Company

aims to keep its floating rate. Risks relating to change of cash flow of financial instruments arising from

movement of interest rate mainly related to bank borrowings at floating rate. The Company establishes its

policy to keep floating rate for these borrowings so as to eliminate fair value risk arising from movement of

interest rate.

X. Fair value disclosure

1. Asset and liability measured by fair value at end of the period and fair value measurement level

Item

Fair value at period-end

1st level 2nd level 3rd level Total

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item

Fair value at period-end

1st level 2nd level 3rd level Total

Financial assets measured by fair value and with variation reckoned into current gains/losses

1. Tradable financial assets

(1) Derivative financial assets 2944998.77 2944998.77

Financial liability measured by fair value and with variation reckoned into current gains/losses

1. Tradable financial liability

(1) Derivative financial liability 6027595.47 6027595.47

The derivative contract is measured by fair value on 2nd level which is the real-time quote on foreign exchange market on

balance sheet date

XI. Related parties and related transaction

(i) Relationship of related parties

1. Controlling shareholder and ultimate controller

(1) Controlling shareholder and ultimate controller

Controlling shareholder and

ultimate controller

Registr

ation

place

Business

nature

Registered

capital

Share-holdin

g ratio in the

Company

Voting rights

ratio in the

Company

Sichuan Changhong Electric Co.Ltd.Mianya

Manufactur

e and sales 4616244222.00 26.98% 26.98%

Sichuan Changhong Electronics Holding Group Co. Ltd. is the controlling shareholder of Sichuan Changhong Electric Co.Ltd and the SASAC Mianyang office holds 100.00% equity interests of Sichuan Changhong Electronic Holding Group which

means that SASAC Mianyang office is the ultimate controller of the Company.

(2) Register capital and change thereof of controlling shareholder

Controlling shareholder Opening balance

Current

increased

Current

decreased

Ending balance

Sichuan Changhong Electric Co. Ltd. 4616244222.00 4616244222.00

(3) Shares held by the controlling shareholder and its changes on equity

Controlling shareholder

Amount of shares held Shareholding ratio

Ending balance Opening balance

Ratio at

period-end

Ratio at

period-begin

Sichuan Changhong Electric Co. Ltd. 281832434.00 281832434.00 26.98% 26.98%

2. Subsidiary

Found more in Note “VIII. 1 (1) Enterprise group composition”

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

3. Joint venture and associated enterpriseMajor Joint venture and associated enterprise of the Company found more in Note “VIII. 3 (1) major joint venture andassociated enterprise”. Other Joint venture and associated enterprise that have related transactions occurred with the Company

in the period or occurred in last period and with balance results:

Joint venture and associated enterprise Relationship with the company

Hefei Meiling Solar Energy Technology Co. Ltd. Associated enterprise of subsidiary Meiling Group

Changhong Ruba Electric Company (Private)Ltd. Associated enterprise of subsidiary Zhongshan Changhong

Hefei Xingmei Assets Management Co. Ltd. Associated enterprise of the Company

Sichuan Zhiyijia Network Technology Co. Ltd.

Associated enterprise of the Company has the same

controlling shareholder and actual control of the Company

Hongyuan Ground Energy Heat Tech. Co. Ltd.

Associated enterprise of subsidiary Changhong

Air-conditioner

Sichuan Tianyou Guigu Technology Co. Ltd

Associated enterprise of subsidiary Changhong

Air-conditioner

Chengdu Guigu Environmental Tech. Co. Ltd.

Associated enterprise of subsidiary Changhong

Air-conditioner

4. Other related party

Other related party Relationship with the company

Changhong Huayi Compressor Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Changhong Mold Plastic Tech. Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Changhong Jijia Fine Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Changhong Package Printing Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Changhong Precision Electronics Tech. Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Changhong New Energy Technology Co. Ltd. Control by same controlling shareholder and ultimate controller

081 Electronic Group Control by same controlling shareholder and ultimate controller

Guangdong Changhong Electronics Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Changhong Intelligent Manufacturing Technology

Co. Ltd.

Control by same controlling shareholder and ultimate

controller

Sichuan Hongwei Technology Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Changhong Power Source Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Changhong Electronic Products Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Changhong Property Services Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Ailian Science & Technology Co. Ltd. Control by same controlling shareholder and ultimate controller

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Other related party Relationship with the company

Hunan Grand-Pro Intelligent Tech. Company Control by same controlling shareholder and ultimate controller

Sichuan Aichuang Science & Technology Co. Ltd. Control by same controlling shareholder and ultimate controller

Guangyuan Changhong Electronic Technology Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Service Exp. Appliance Service Chain Co. Ltd. Control by same controlling shareholder and ultimate controller

Hefei Changhong Industrial Co. Ltd. Control by same controlling shareholder and ultimate controller

Changhong International Holdings (Hong Kong) Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Changhong Minsheng Logistics Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Hongxin Software Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Jiahong Industrial Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Changhong International Hotel Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Changhong International Travel Service Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Changhong Network Technology Co. Ltd. Control by same controlling shareholder and ultimate controller

Hefei Changhong New Energy Technology Co. Ltd. Control by same controlling shareholder and ultimate controller

Lejiayi Chain Management Co. Ltd. Control by same controlling shareholder and ultimate controller

PT.CHANGHONG ELECTRIC INDONESIA Control by same controlling shareholder and ultimate controller

CHANGHONG (HK) TRADING LIMITED Control by same controlling shareholder and ultimate controller

CHANGHONG ELECTRIC (AUSTRALIA) Control by same controlling shareholder and ultimate controller

Sichuan Changhong Device Technology Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Changhong Gerun Environmental Protection Tech.

Co. Ltd.

Control by same controlling shareholder and ultimate

controller

Sichuan Huafeng Enterprise Group Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Changhong Property Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Changhong Smart Health Technology Co. Ltd. Control by same controlling shareholder and ultimate controller

BVCH Optronics (Sichuan) Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Changhong Group Finance Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Changhong Education Technology Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Changhong Electronic System Co. Ltd. Control by same controlling shareholder and ultimate controller

Orion.PDP.Co.ltd Control by same controlling shareholder and ultimate controller

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Other related party Relationship with the company

Changhong Europe Electric s.r.o Control by same controlling shareholder and ultimate controller

Yibin Red-Star Electronics Co. Ltd. Control by same controlling shareholder and ultimate controller

CHANGHONG ELECTRIC MIDDLE EASTFZCO Control by same controlling shareholder and ultimate controller

Mianyang Huafeng Interconnection Tech. Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Changhong Intelligent Technology Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Hongcheng Real Estate Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Huanyu Industrial Co. Ltd. Control by same controlling shareholder and ultimate controller

Mianyang Science & Technology City Big Data Tech. Co.Ltd.

Control by same controlling shareholder and ultimate

controller

Sichuan Changhong Jineng Sunshine Technology Co. Ltd. Control by same controlling shareholder and ultimate controller

Changhong Shundatong Tech. Development Co. Ltd. Control by same controlling shareholder and ultimate controller

Chengdu Changhong Electronic Technology Co. Ltd. Control by same controlling shareholder and ultimate controller

Yuanxin Financial Lease Co. Ltd. Control by same controlling shareholder and ultimate controller

Sichuan Hongmofang Network Technology Co. Ltd. Other enterprise that have the same controlling shareholder

Sichuan Hongyu Metal Manufacturing Co. Ltd. Associated enterprise of other enterprise that have the same controlling shareholder

Sichuan Yunyou Internet Technology Co. Ltd. Associated enterprise of other enterprise that have the same controlling shareholder

Sichuan Changxin Refrigeration Parts Co. Ltd. Associated enterprise of controlling shareholder

Mianyang Highly Electric Co. Ltd. Associated enterprise of controlling shareholder

Sichuan Hongran Green Energy Co. Ltd. Associated enterprise of controlling shareholder

Beijing Changhong Tech. Co. Ltd Subsidiary of the controlling shareholder's associate

(ii) Related transactions

1. Purchasing commodity

Related party Content

Current amount

(in 10 thousand

Yuan)

Last period

(in 10 thousand

Yuan)

Sichuan Changhong Electric Co. Ltd. Purchasing commodity 18465.23 18083.03

Sichuan Changhong Electronics Holding Group Co. Ltd. Purchasing commodity 1.59

Changhong Huayi Compressor Co. Ltd. Purchasing commodity 17759.15 20599.19

Sichuan Changhong Mold Plastic Tech. Co. Ltd. Purchasing commodity 28634.55 38909.02

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Related party Content

Current amount

(in 10 thousand

Yuan)

Last period

(in 10 thousand

Yuan)

Sichuan Changhong Jijia Fine Co. Ltd. Purchasing commodity 13209.22 17967.00

Sichuan Changhong Package Printing Co. Ltd. Purchasing commodity 3616.69 6539.21

Sichuan Changhong Precision Electronics Tech. Co. Ltd. Purchasing commodity 744.35 1030.50

Sichuan Changhong New Energy Technology Co. Ltd. Purchasing commodity 1.71 0.59

081 Electronic Group Purchasing commodity 10.08 95.04

Guangdong Changhong Electronics Co. Ltd. Purchasing commodity 196.21 120.45

Sichuan Changhong Intelligent Manufacturing Technology

Co. Ltd.

Purchasing

commodity 3.25 16.10

Sichuan Hongwei Technology Co. Ltd. Purchasing commodity 168.36

Sichuan Zhiyijia Network Technology Co. Ltd. Purchasing commodity 44.87 23.61

Sichuan Changhong Power Source Co. Ltd. Purchasing commodity 0.30

Sichuan Changhong Electronic Products Co. Ltd. Purchasing commodity 1209.94 2014.78

Sichuan Changhong Property Services Co. Ltd. Purchasing commodity 0.03

Sichuan Ailian Science & Technology Co. Ltd. Purchasing commodity 1641.27 1175.20

Hunan Grand-Pro Intelligent Tech. Company Purchasing commodity 766.89 221.15

Sichuan Aichuang Science & Technology Co. Ltd. Purchasing commodity 4319.04 4175.90

Sichuan Changxin Refrigeration Parts Co. Ltd. Purchasing commodity 13415.61 25519.21

Guangyuan Changhong Electronic Technology Co. Ltd. Purchasing commodity 0.88

Sichuan Service Exp. Appliance Service Chain Co. Ltd. Purchasing commodity 0.19

Mianyang Highly Electric Co. Ltd. Purchasing commodity 7870.76 15545.66

Changhong Ruba Electric Company (Private) Ltd. Purchasing commodity 4630.78 12020.14

Hongyuan Ground Energy Heat Tech. Co. Ltd. Purchasing commodity 374.67

Sichuan Tianyou Guigu Technology Co. Ltd. Purchasing commodity -29.26

Chengdu Guigu Environmental Tech. Co. Ltd. Purchasing commodity 6.46

Hefei Changhong Industrial Co. Ltd. Purchasing commodity 14.65

Changhong International Holdings (Hong Kong) Co. Ltd. Purchasing commodity 870.43

Total 117802.04 164201.64

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

2. Accept the labor services

Related party Content Current amount Last period

Sichuan Changhong Electronics Holding Group Co. Ltd.

Accept the labor

services 711931.57 355937.03

Sichuan Changhong Electric Co. Ltd.

Accept the labor

services 10404495.04 5194850.47

Sichuan Changhong Minsheng Logistics Co. Ltd.

Accept the labor

services 183300319.49 234971186.87

Sichuan Changhong Mold Plastic Tech. Co. Ltd.

Accept the labor

services 509633.16 82518.41

Sichuan Service Exp. Appliance Service Chain Co. Ltd.

Accept the labor

services 91822618.54 60542230.02

Sichuan Hongxin Software Co. Ltd.

Accept the labor

services 703487.72 560220.75

Guangdong Changhong Electronics Co. Ltd.

Accept the labor

services 142467.10 269770.19

Sichuan Jiahong Industrial Co. Ltd.

Accept the labor

services 471372.03 59318.00

Sichuan Changhong International Hotel Co. Ltd.

Accept the labor

services 10827.32 88864.48

Sichuan Changhong International Travel Service Co. Ltd.

Accept the labor

services 99699.89 226778.81

Sichuan Changhong Property Services Co. Ltd.

Accept the labor

services 1627043.79 1835408.94

Sichuan Hongwei Technology Co. Ltd.

Accept the labor

services 4108738.76 106473.57

Sichuan Zhiyijia Network Technology Co. Ltd.

Accept the labor

services 113548.74 9004733.41

Sichuan Changhong Network Technology Co. Ltd.

Accept the labor

services 24474.11

Sichuan Changhong Intelligent Manufacturing Technology

Co. Ltd.

Accept the labor

services 884.96 900754.83

Sichuan Changhong Jijia Fine Co. Ltd.

Accept the labor

services 642657.00 25195.83

Sichuan Changhong Electronic Products Co. Ltd.

Accept the labor

services 450488.09

Sichuan Hongmofang Network Technology Co. Ltd.

Accept the labor

services 2122.64

Total 294671847.75 314699203.81

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

3. Purchase fuel and power

Related party Content Current amount Last period

Sichuan Changhong Electric Co. Ltd.

Fuel and power

accepted 8261144.64 10300048.70

Changhong Huayi Compressor Co. Ltd.

Fuel and power

accepted 188715.05 383150.11

Guangdong Changhong Electronics Co. Ltd.

Fuel and power

accepted 463030.92 501569.74

Hefei Changhong New Energy Technology Co. Ltd.

Fuel and power

accepted 160813.32 147179.16

Sichuan Changhong Property Services Co. Ltd.

Fuel and power

accepted 6680.80 9849.75

Sichuan Hongran Green Energy Co. Ltd.

Fuel and power

accepted 189240.25 708567.36

Total 9269624.98 12050364.82

4. Sales of goods/provide labor service

Related party Content

Current amount

(in 10 thousand

Yuan)

Last period

(in 10 thousand

Yuan)

Sichuan Changhong Electric Co. Ltd.Sales of goods/provide

labor service 430.79 623.87

Sichuan Changhong Electronics Holding Group Co. Ltd. Sales of goods 31.91

Sichuan Changhong Jijia Fine Co. Ltd. Sales of goods 2555.35 2698.81

Sichuan Changhong Mold Plastic Tech. Co. Ltd.Sales of goods/provide

labor service 8468.88 10882.50

Lejiayi Chain Management Co. Ltd. Sales of goods 451.13 3428.75

PT.CHANGHONGELECTRICINDONESIA Sales of goods 670.07 381.52

CHANGHONG(HK)TRADINGLIMITED Sales of goods 37764.29 19688.72

CHANGHONGELECTRIC(AUSTRALIA) Sales of goods 5137.25 1712.51

Sichuan Hongwei Technology Co. Ltd. Sales of goods 0.76

Sichuan Changhong Device Technology Co. Ltd.Sales of goods/provide

labor service 10.56 49.93

Sichuan Changhong Minsheng Logistics Co. Ltd. Sales of goods 42.12 88.66

Sichuan Service Exp. Appliance Service Chain Co. Ltd. Sales of goods 194.88 330.81

Sichuan Changhong Gerun Environmental Protection

Tech. Co. Ltd.Sales of goods 418.11 444.60

Hefei Changhong Industrial Co. Ltd. Sales of goods 0.24 111.05

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Related party Content

Current amount

(in 10 thousand

Yuan)

Last period

(in 10 thousand

Yuan)

Sichuan Huafeng Enterprise Group Co. Ltd.Sales of goods/provide

labor service 37.71

Sichuan Zhiyijia Network Technology Co. Ltd. Sales of goods 179508.62 105495.05

Sichuan Changhong Property Co. Ltd.Sales of goods/provide

labor service 157.86

Sichuan Changhong Network Technology Co. Ltd. Sales of goods 0.10

Sichuan Changhong Smart Health Technology Co. Ltd. Sales of goods 0.44

Sichuan Changhong Property Services Co. Ltd. Sales of goods 4.60

Guangdong Changhong Electronics Co. Ltd. Sales of goods 7.79 1.72

BVCH Optronics (Sichuan) Co. Ltd. Sales of goods 0.68

Sichuan Changhong Electronic Products Co. Ltd. Sales of goods 8.22

Sichuan Changhong Group Finance Co. Ltd. Sales of goods 1.84

Changhong Huayi Compressor Co. Ltd.

Sales of goods/provide

labor service 37.85

Sichuan Changhong Package Printing Co. Ltd. Sales of goods 0.35

Sichuan Changhong Power Source Co. Ltd. Sales of goods 1.81 4.41

Sichuan Changhong Education Technology Co. Ltd. Sales of goods 70.86

081 Electronic Group Sales of goods 1.72

Guangyuan Changhong Electronic Technology Co. Ltd. Sales of goods 0.35 63.28

Sichuan Ailian Science & Technology Co. Ltd. Sales of goods 2.09

Sichuan Jiahong Industrial Co. Ltd. Sales of goods 13.87

Sichuan Changhong New Energy Technology Co. Ltd. Sales of goods 42.57 3.06

Sichuan Changhong International Hotel Co. Ltd. Sales of goods 3.62

Sichuan Changhong Precision Electronics Tech. Co. Ltd. Sales of goods 0.09

Orion.PDP.Co.ltd Sales of goods 1049.00 1936.82

Changhong International Holdings (Hong Kong) Co.

Ltd.Sales of goods 3122.61

Changhong Europe Electric s.r.o Sales of goods 1092.95

CHANGHONG ELECTRIC MIDDLE EAST FZCO Sales of goods 446.95 717.43

Sichuan Aichuang Science & Technology Co. Ltd.Sales of goods/provide

labor service 28.37 26.54

Sichuan Changxin Refrigeration Parts Co. Ltd. Sales of goods 5105.82 8074.51

Mianyang Huafeng Interconnection Tech. Co. Ltd. Sales of goods 324.56

Hongyuan Ground Energy Heat Tech. Co. Ltd. Sales of goods 2365.22 1504.84

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Related party Content

Current amount

(in 10 thousand

Yuan)

Last period

(in 10 thousand

Yuan)

Chengdu Guigu Environmental Tech. Co. Ltd. Sales of goods 62.47 893.80

Changhong Ruba Electric Company (Private) Ltd. Sales of goods 258.73 7299.85

Sichuan Changhong Intelligent Manufacturing

Technology Co. Ltd. Provide labor service 49.45

Sichuan Changhong Intelligent Technology Co. Ltd. Provide labor service 54.72

Total 249378.81 167124.46

Businesses between the Company and its connected persons are generally conducted under market operation rules as if they

were the same as other business counter parties. For price of sale or purchase and provision of other labor service between the

Company and its related parties the state pricing is applicable if the pricing do exists; in case of absence of such state pricing

price is determined under market price; in case of absence of such market price price is determined by both parties at actual

cost plus reasonable expenses; for some special services the price of which cannot be determined under the rule of cost plus

expense the price shall be determined by both parties by negotiation.

5. Provide fuels

Related party Content Current amount Last period

Guangdong Changhong Electronics Co. Ltd. Provide fuels 12670.97 591379.86

Sichuan Changhong Minsheng Logistics Co. Ltd. Provide fuels 34091.79 46424.66

Sichuan Changhong Jijia Fine Co. Ltd. Provide fuels 65789.86 63436.46

Sichuan Changhong Mold Plastic Tech. Co. Ltd. Provide fuels 2965740.57 3686814.01

Sichuan Zhiyijia Network Technology Co. Ltd. Provide fuels 16480.49

Sichuan Changhong Precision Electronics Tech. Co. Ltd. Provide fuels 4085.08 693.51

Sichuan Changhong Device Technology Co. Ltd. Provide fuels 361054.22 402243.20

Sichuan Service Exp. Appliance Service Chain Co. Ltd. Provide fuels 4860.07

Total 3459912.98 4795851.77

6. Related rental

(1) Rent out

Lessor Lessee Type of assets

Leasing

income in this

period

Leasing income

last period

CHANGHON

G MEILING Sichuan Changhong Jijia Fine Co. Ltd.

Forklift 12713.38 8142.41

CHANGHON

G MEILING Sichuan Changhong Jijia Fine Co. Ltd.

Warehouse 66900.76 66640.08

CHANGHON

G MEILING Sichuan Changhong Jijia Fine Co. Ltd.

Apartment 3417.92 3417.92

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Lessor Lessee Type of assets

Leasing

income in this

period

Leasing income

last period

CHANGHON

G MEILING Sichuan Changhong Jijia Fine Co. Ltd.

Workshop 134544.22 271283.23

CHANGHON

G MEILING Sichuan Changhong Jijia Fine Co. Ltd.

Appliance 300.00

CHANGHON

G MEILING Sichuan Changhong Mold Plastic Tech. Co. Ltd.

Warehouse 173480.38 239218.86

CHANGHON

G MEILING Sichuan Changhong Mold Plastic Tech. Co. Ltd.

Workshop 357577.84 711904.98

CHANGHON

G MEILING Sichuan Changhong Mold Plastic Tech. Co. Ltd.

Apartment 249003.66 295066.43

CHANGHON

G MEILING Sichuan Changhong Minsheng Logistics Co. Ltd.

Apartment 69201.18

CHANGHON

G MEILING

Sichuan Service Exp. Appliance Service Chain Co.Ltd.office 132641.68

CHANGHON

G MEILING

Sichuan Service Exp. Appliance Service Chain Co.Ltd.Workshop 43241.00

CHANGHON

G MEILING

Sichuan Service Exp. Appliance Service Chain Co.Ltd.

Forklift 4800.00 4800.00

CHANGHON

G MEILING Hefei Changhong Industrial Co. Ltd.

Apartment 56700.43 96003.82

CHANGHON

G MEILING Sichuan Changhong Electric Co. Ltd.

Apartment 20314.50

CHANGHON

G MEILING

Sichuan Changhong Precision Electronics Tech. Co.Ltd.

Apartment 9864.00 15657.14

CHANGHON

G MEILING Sichuan Ailian Science & Technology Co. Ltd.

Warehouse 1343.10 1343.10

CHANGHON

G MEILING Sichuan Aichuang Science & Technology Co. Ltd.

Warehouse 16227.34 18759.84

CHANGHON

G MEILING Sichuan Aichuang Science & Technology Co. Ltd. 叉车 2532.50 1713.68

CHANGHON

G MEILING Sichuan Hongwei Technology Co. Ltd.

Apartment 31200.00

CHANGHON

G MEILING Sichuan Zhiyijia Network Technology Co. Ltd.

Apartment 98968.06

Zhongke

Meiling Sichuan Changhong Minsheng Logistics Co. Ltd.Workshop 1310400.00 1411295.19

Changhong

Air-conditione

Chengdu Guigu Environmental Tech. Co. Ltd. Workshop 28403.67

Changhong

Air-conditione

Sichuan Changhong Mold Plastic Tech. Co. Ltd. Workshop 2962527.42

Changhong

Air-conditione

Sichuan Changhong Jijia Fine Co. Ltd. Workshop 4292185.61

Changhong

Air-conditione

Sichuan Changhong Electric Co. Ltd. Workshop 327319.42

Changhong

Air-conditione

Sichuan Changhong Electric Co. Ltd. meeting room 1834.86

Zhongshan Guangdong Changhong Electronics Co. Ltd. Second living 55721.47 17477.59

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Lessor Lessee Type of assets

Leasing

income in this

period

Leasing income

last period

Changhong area

Zhongshan

Changhong Sichuan Changhong Minsheng Logistics Co. Ltd.

Partial lease of

office building 16422.70 18637.42

Zhongshan

Changhong Sichuan Changhong Mold Plastic Tech. Co. Ltd.

Second living

area 27080.00 6770.00

Zhongshan

Changhong Sichuan Changhong Device Technology Co. Ltd.

Second living

area 10861.40

Zhongshan

Changhong

Sichuan Changhong Precision Electronics Tech. Co.Ltd.Second living

area 25400.00 4050.00

Jiangxi

Meiling Sichuan Changhong Mold Plastic Tech. Co. Ltd.Workshop 409855.80 390338.86

Jiangxi

Meiling Sichuan Changhong Minsheng Logistics Co. Ltd. warehouse office 6857.14

Ridian

Technology Sichuan Changhong Device Technology Co. Ltd.Workshop 764656.24 711493.90

Ridian

Technology Sichuan Hongwei Technology Co. Ltd.Workshop 45257.14 45257.14

Total 11573257.64 4535768.77

(2) Lessee of related parties

Lessor Lessee Type of assets

Leasing expense in

this period

Leasing expense

last period

Sichuan Changhong Electric Co. Ltd. Changhong Air-conditioner

Workshop office 264244.07

Chengdu Changhong Electronic Technology

Co. Ltd.

Hongmei Intelligent office 310722.13 240812.32

Guangdong Changhong Electronics Co.Ltd.Ground energy heat

pump

Staff dormitory 42425.47 12970.19

Sichuan Changhong Electric Co. Ltd.Mianyang

Refrigeration

Workshop leasing 1766436.48 1620516.65

Sichuan Changhong Electronics Holding

Group Co. Ltd.Mianyang

Refrigeration

Staff dormitory 25087.32 14000.23

Guangdong Changhong Electronics Co.Ltd. Ridian Technology

Staff dormitory 32765.89

Sichuan Changhong Electric Co. Ltd. Ridian Technology Staff dormitory 48257.03

Beijing Changhong Tech. Co. Ltd Meiling Group office 78932.59

Sichuan Changhong Electric Co. Ltd. Meiling Group office 885487.38 194009.55

Guangdong Changhong Electronics Co.Ltd.Zhongshan

Changhong

Staff dormitory 67231.64

Guangdong Changhong Electronics Co.Ltd.Zhongshan

Changhong

Workshop leasing 338551.56

Total 3781208.97 2161241.53

7. Related guarantee

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Secured party Sponsored party

Maximum guarantee

amount (in 10 thousand

Yuan)

Start Date due

Completed

(Y/N)

CHANGHONG

MEILING Jiangxi Meiling 5000.00 2019.03.12 2020.03.11 Y

CHANGHONG

MEILING Jiangxi Meiling 10000.00 2019.03.14 2020.03.14 Y

CHANGHONG

MEILING Jiangxi Meiling 10000.00 2020.04.09 2021.04.09 N

CHANGHONG

MEILING Meiling Group 6000.00 2020.03.26 2021.03.26 N

CHANGHONG

MEILING Non-ferrous metals 1000.00 2020.03.20 2021.03.05 N

CHANGHONG

MEILING

Changhong

Air-conditioner 20000.00 2019.07.30 2020.03.25 Y

CHANGHONG

MEILING ChanghongRuba 2062.41 2019.01.28 2020.02.15 Y

CHANGHONG

MEILING ChanghongRuba 2103.51 2019.12.23 2021.01.05 N

CHANGHONG

MEILING ChanghongRuba 1983.25 2020.01.17 2020.12.24 N

CHANGHONG

MEILING Ridian Technology 4000.00 2019.03.31 2020.03.30 Y

CHANGHONG

MEILING Ridian Technology 6500.00 2019.08.22 2020.08.22 N

CHANGHONG

MEILING Ridian Technology 2500.00 2020.01.28 2020.07.27 N

CHANGHONG

MEILING Ridian Technology 3000.00 2020.03.14 2021.03.13 N

CHANGHONG

MEILING Ridian Technology 4000.00 2020.03.30 2021.03.31 N

CHANGHONG

MEILING Zhongke Meiling 3000.00 2019.07.18 2020.07.17 N

CHANGHONG

MEILING Zhongke Meiling 2000.00 2019.12.30 2020.11.22 N

CHANGHONG

MEILING Zhongke Meiling 3000.00 2019.08.20 2020.08.19 N

CHANGHONG

MEILING Zhongke Meiling 2000.00 2019.08.23 2020.08.23 N

CHANGHONG

MEILING Zhongke Meiling 920.00 2019.09.24 2020.09.24 N

CHANGHONG

MEILING Zhongke Meiling 1000.00 2020.03.10 2021.03.10 N

CHANGHONG

MEILING Zhongke Meiling 1500.00 2020.06.01 2021.03.12 N

CHANGHONG

MEILING Zhongke Meiling 500.00 2020.06.30 2021.03.15 N

CHANGHONG

MEILING

Zhongshan

Changhong 10000.00 2018.08.09 2019.08.09 Y

CHANGHONG

MEILING

Zhongshan

Changhong 5000.00 2018.10.23 2019.10.23 Y

CHANGHONG

MEILING

Zhongshan

Changhong 10000.00 2019.01.25 2020.01.24 Y

CHANGHONG Zhongshan 5500.00 2019.03.15 2020.03.15 Y

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Secured party Sponsored party

Maximum guarantee

amount (in 10 thousand

Yuan)

Start Date due

Completed

(Y/N)

MEILING Changhong

CHANGHONG

MEILING

Zhongshan

Changhong 10000.00 2019.03.31 2020.03.30 Y

CHANGHONG

MEILING

Zhongshan

Changhong 5000.00 2019.06.20 2020.06.20 Y

CHANGHONG

MEILING

Zhongshan

Changhong 15000.00 2019.06.28 2020.06.27 N

CHANGHONG

MEILING

Zhongshan

Changhong 2000.00 2019.08.21 2020.08.20 N

CHANGHONG

MEILING

Zhongshan

Changhong 10000.00 2019.08.31 2020.08.31 N

CHANGHONG

MEILING

Zhongshan

Changhong 20000.00 2020.06.12 2021.03.10 N

CHANGHONG

MEILING

Zhongshan

Changhong 5000.00 2020.03.09 2021.03.09 N

CHANGHONG

MEILING

Zhongshan

Changhong 15000.00 2020.01.10 2021.01.10 N

CHANGHONG

MEILING

Zhongshan

Changhong 5500.00 2020.03.15 2021.03.15 N

CHANGHONG

MEILING

Zhongshan

Changhong 17900.00 2020.04.14 2021.04.13 N

CHANGHONG

MEILING

Zhongshan

Changhong 20000.00 2020.03.30 2021.03.30 N

CHANGHONG

MEILING

Zhongshan

Changhong 12000.00 2020.04.28 2021.04.28 N

Counter guarantee:

Jiangxi Meiling CHANGHONG MEILING 5000.00 2019.03.12 2020.03.11 Y

Jiangxi Meiling CHANGHONG MEILING 10000.00 2019.03.14 2020.03.14 Y

Jiangxi Meiling CHANGHONG MEILING 10000.00 2020.04.09 2021.04.09 N

Meiling Group CHANGHONG MEILING 6000.00 2020.03.26 2021.03.26 N

Non-ferrous metals CHANGHONG MEILING 1000.00 2020.03.20 2021.03.05 N

Changhong

Air-conditioner

CHANGHONG

MEILING 20000.00 2019.07.30 2020.03.25 Y

ChanghongRuba CHANGHONG MEILING 2062.41 2019.01.28 2020.02.15 Y

ChanghongRuba CHANGHONG MEILING 2103.51 2019.12.23 2021.01.05 N

ChanghongRuba CHANGHONG MEILING 1983.25 2020.01.17 2020.12.24 N

Ridian Technology CHANGHONG MEILING 4000.00 2019.03.31 2020.03.30 Y

Ridian Technology CHANGHONG MEILING 6500.00 2019.08.22 2020.08.22 N

Ridian Technology CHANGHONG MEILING 2500.00 2020.01.28 2020.07.27 N

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Secured party Sponsored party

Maximum guarantee

amount (in 10 thousand

Yuan)

Start Date due

Completed

(Y/N)

Ridian Technology CHANGHONG MEILING 3000.00 2020.03.14 2021.03.13 N

Ridian Technology CHANGHONG MEILING 4000.00 2020.03.30 2021.03.31 N

Zhongke Meiling CHANGHONG MEILING 3000.00 2019.07.18 2020.07.17 N

Zhongke Meiling CHANGHONG MEILING 2000.00 2019.12.30 2020.11.22 N

Zhongke Meiling CHANGHONG MEILING 3000.00 2019.08.20 2020.08.19 N

Zhongke Meiling CHANGHONG MEILING 2000.00 2019.08.23 2020.08.23 N

Zhongke Meiling CHANGHONG MEILING 920.00 2019.09.24 2020.09.24 N

Zhongke Meiling CHANGHONG MEILING 1000.00 2020.03.10 2021.03.10 N

Zhongke Meiling CHANGHONG MEILING 1500.00 2020.06.01 2021.03.12 N

Zhongke Meiling CHANGHONG MEILING 500.00 2020.06.30 2021.03.15 N

Zhongshan

Changhong

CHANGHONG

MEILING 10000.00 2018.08.09 2019.08.09 Y

Zhongshan

Changhong

CHANGHONG

MEILING 5000.00 2018.10.23 2019.10.23 Y

Zhongshan

Changhong

CHANGHONG

MEILING 10000.00 2019.01.25 2020.01.24 Y

Zhongshan

Changhong

CHANGHONG

MEILING 5500.00 2019.03.15 2020.03.15 Y

Zhongshan

Changhong

CHANGHONG

MEILING 10000.00 2019.03.31 2020.03.30 Y

Zhongshan

Changhong

CHANGHONG

MEILING 5000.00 2019.06.20 2020.06.20 Y

Zhongshan

Changhong

CHANGHONG

MEILING 15000.00 2019.06.28 2020.06.27 N

Zhongshan

Changhong

CHANGHONG

MEILING 2000.00 2019.08.21 2020.08.20 N

Zhongshan

Changhong

CHANGHONG

MEILING 10000.00 2019.08.31 2020.08.31 N

Zhongshan

Changhong

CHANGHONG

MEILING 20000.00 2020.06.12 2021.03.10 N

Zhongshan

Changhong

CHANGHONG

MEILING 5000.00 2020.03.09 2021.03.09 N

Zhongshan

Changhong

CHANGHONG

MEILING 15000.00 2020.01.10 2021.01.10 N

Zhongshan

Changhong

CHANGHONG

MEILING 5500.00 2020.03.15 2021.03.15 N

Zhongshan

Changhong

CHANGHONG

MEILING 17900.00 2020.04.14 2021.04.13 N

Zhongshan

Changhong

CHANGHONG

MEILING 20000.00 2020.03.30 2021.03.30 N

Zhongshan CHANGHONG 12000.00 2020.04.28 2021.04.28 N

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Secured party Sponsored party

Maximum guarantee

amount (in 10 thousand

Yuan)

Start Date due

Completed

(Y/N)

Changhong MEILING

8. Assets transfer debt restructuring of related parties

Related party Type Current amount Last period

Sichuan Changhong Intelligent Manufacturing

Technology Co. Ltd.Purchase & build fixed

assets 769469.03 27193066.98

Sichuan Hongcheng Real Estate Co. Ltd. Purchase & build fixed assets 56603.77

Sichuan Changhong Electric Co. Ltd. Purchase intangible assets 471698.11 241379.31

Sichuan Changhong Electric Co. Ltd. Purchase & build fixed assets 32509712.14

Sichuan Hongxin Software Co. Ltd. Purchase & build fixed assets 1490566.05

Sichuan Changhong Network Technology Co. Ltd. Purchase & build fixed assets 820476.33

Sichuan Changhong Electronic System Co. Ltd. Purchase & build fixed assets 142500.00

Sichuan Zhiyijia Network Technology Co. Ltd. Purchasing fixed assets 816132.79

Sichuan Huanyu Industrial Co. Ltd. Purchase & build fixed assets 2164755.99 17007856.54

Sichuan Jiahong Industrial Co. Ltd. Purchase & build fixed assets 1347541.41

Mianyang Science & Technology City Big Data Tech.

Co. Ltd.

Purchase & build fixed

assets 1112815.42

Sichuan Changhong Jineng Sunshine Technology Co.Ltd.Purchasing fixed assets 42348.02

Sichuan Changhong Gerun Environmental Protection

Tech. Co. Ltd.Sales of fixed assets 8149.87

Sichuan Changhong Electronics Holding Group Co.Ltd.Sales of fixed assets 13993.08

Sichuan Jiahong Industrial Co. Ltd. Sales of fixed assets 4813.70

Changhong Shundatong Tech. Development Co. Ltd. Sales of fixed assets 128199.13

Total 4264403.94 82077673.73

9. Other

Name of company Content

Current amount (in 10

thousand Yuan)

Last period(in 10

thousand Yuan)

Yuanxin Financial Lease

Co. Ltd.

Enterprise payment business

financial leasing 1875.83 184.31

10. Related transaction with Changhong Finance Company

(1) Saving balance

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Name of company Ending balance Opening balance

Interest income from

bank saving

CHANGHONG MEILING CO.LTD. 2689352840.31 3081631716.95 40888177.59

Hebei Hongmao Household Appliance

Technology Co. Ltd 223926.31 1799703.59 18385.72

Sichuan Changhong Air-conditioner Co. Ltd. 248629961.93 424969027.90 6273340.11

Zhongshan Changhong Electric Co. Ltd. 319207885.32 13782922.16 206129.08

Hefei Meiling Group Holdings Limited 3734.23 798.43 3735.08

Mianyang Meiling Refrigeration Co. Ltd. 5933.88 925.37 8.51

Zhongke Meiling Cryogenic Technology Co.Ltd. 139961092.75 90904816.77 1680261.47

Jiangxi Meiling Electric Appliance Co. Ltd. 9524.64 9504.34 20.30

Changhong Meiling Ridian Technology Co.

Ltd. 61856693.95 76106470.22 367411.73

Hongyuan Ground Energy Heat Pump Tech.

Co. Ltd. 284240.78 100690.19 2152.06

Hongyuan Ground Energy Heat Pump Tech.(Zhongshan) Co. Ltd 26631718.43 13076054.46 242655.85

Anhui Tuoxing Technology Co. Ltd. 10000000.00

Total 3496167552.53 3702382630.38 49682277.50

(2) Notes discounted

Name of company

Commercial bill

book discounted

amount

Commercial bill

discounted amount

Expenses of discounted

CHANGHONG MEILING CO.LTD. 517662866.10 513666723.14 3996142.96

Sichuan Changhong Air-conditioner Co. Ltd. 221122027.51 219109026.04 2013001.47

Hongyuan Ground Energy Heat Pump Tech.(Zhongshan) Co. Ltd 7422611.40 7340947.30 81664.10

Total 746207505.01 740116696.48 6090808.53

(3) Notes issued

Name of company Issuing from Note amount Type

CHANGHONG MEILING CO.LTD. Sichuan Changhong Group Finance Co. Ltd. 367378133.83

Bank acceptance

Hebei Hongmao Household Appliance

Technology Co. Ltd

Sichuan Changhong Group Finance

Co. Ltd. 2105534.66

Bank acceptance

Sichuan Changhong Air-conditioner Co.Ltd.Sichuan Changhong Group Finance

Co. Ltd. 543181338.48

Bank acceptance

Zhongke Meiling Cryogenic Technology

Co. Ltd.

Sichuan Changhong Group Finance

Co. Ltd. 12343642.11

Bank acceptance

Changhong Meiling Ridian Technology

Co. Ltd.

Sichuan Changhong Group Finance

Co. Ltd. 36795517.40

Bank acceptance

Zhongshan Changhong Electric Co. Ltd. Sichuan Changhong Group Finance Co. Ltd. 59603694.39

Bank acceptance

Hongyuan Ground Energy Heat Pump

Tech. (Zhongshan) Co. Ltd

Sichuan Changhong Group Finance

Co. Ltd. 8173830.28

Bank acceptance

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Name of company Issuing from Note amount Type

Total 1029581691.15

(4) Borrowing: Nil

(5) Accounts receivable factoring: Nil

(III) Come and go balance with related parties

1. Receivable items

Item Related party

Ending balance Opening balance

Book balance

Bad

debt

provisio

Book balance

Bad debt

provision

Account

receivable Sichuan Changhong Electric Co. Ltd. 506659.27

Account

receivable Orion.PDP.Co.ltd 6012889.26 8267321.25

Account

receivable Sichuan Changhong Mold Plastic Tech. Co. Ltd. 437516.22 162163.72

Account

receivable Changhong Europe Electric s.r.o 10896766.89 1664405.17

Account

receivable CHANGHONGELECTRIC(AUSTRALIA) 46730878.99 37804702.10

Account

receivable Sichuan Changhong Minsheng Logistics Co. Ltd. 49961.37 41163.13

Account

receivable

Sichuan Service Exp. Appliance Service Chain

Co. Ltd. 121083.95 211621.68

Account

receivable PT.CHANGHONGELECTRICINDONESIA 3996700.13 3844393.51

Account

receivable CHANGHONG(HK)TRADINGLIMITED 174327884.40 75242050.75

Account

receivable Sichuan Changhong Device Technology Co. Ltd. 327.80

Account

receivable Lejiayi Chain Management Co. Ltd. 3744484.31 12461940.42

Account

receivable Sichuan Zhiyijia Network Technology Co. Ltd. 698675608.77 375948123.63

Account

receivable Sichuan Changhong Property Co. Ltd. 159690.33 159690.33

Account

receivable

Sichuan Changhong New Energy Technology

Co. Ltd. 347045.60

Account

receivable Hefei Changhong Industrial Co. Ltd. 50000.00 50000.00

Account

receivable

Changhong International Holdings (Hong Kong)

Co. Ltd. 10190492.45

Account

receivable Guangdong Changhong Electronics Co. Ltd. 224817.29

Account

receivable

CHANGHONG ELECTRIC MIDDLE EAST

FZCO 2510737.61 1552183.58

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Related party

Ending balance Opening balance

Book balance

Bad

debt

provisio

Book balance

Bad debt

provision

Account

receivable

Sichuan Aichuang Science & Technology Co.Ltd. 9210.63 43297.65

Account

receivable Sichuan Huafeng Enterprise Group Co. Ltd. 419133.90

Account

receivable Hongyuan Ground Energy Heat Tech. Co. Ltd. 174921.11 10720675.24

Account

receivable Changhong Ruba Electric Company (Private) Ltd. 79813363.98 86214001.68

Account paid

in advance Sichuan Zhiyijia Network Technology Co. Ltd. 1622.40

Account paid

in advance Sichuan Changhong Minsheng Logistics Co. Ltd. 15295.00

Account paid

in advance Sichuan Hongran Green Energy Co. Ltd. 30988.36

Account paid

in advance Sichuan Changhong Mold Plastic Tech. Co. Ltd. 4138.06 16.80

Other account

receivable

Sichuan Service Exp. Appliance Service Chain

Co. Ltd. 586370.70 500000.00

Other account

receivable Sichuan Changhong Mold Plastic Tech. Co. Ltd.Other account

receivable Sichuan Changhong Property Co. Ltd. 309410.65 309410.65

Other account

receivable Sichuan Changhong Minsheng Logistics Co. Ltd. 9600.00

Other account

receivable Sichuan Changhong International Hotel Co. Ltd. 27589.45 27589.45

Other account

receivable 081 Electronic Group 204504.86 204567.35

Other account

receivable Changhong Huayi Compressor Co. Ltd. 45200.00

Other account

receivable Hefei Changhong Industrial Co. Ltd. 122396.08 122396.08

Total 1040484238.97 615824765.02

2. Payable items

Item Related party Ending balance Opening balance

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Related party Ending balance Opening balance

Account payable Sichuan Changhong Electric Co. Ltd. 47403684.66 153791187.83

Account payable Sichuan Changhong Mold Plastic Tech. Co. Ltd. 163711166.53 75808653.32

Account payable Changhong Huayi Compressor Co. Ltd. 107819208.51 59533997.08

Account payable Sichuan Changhong Jijia Fine Co. Ltd. 97517019.30 12883071.50

Account payable Sichuan Changhong Minsheng Logistics Co. Ltd. 7351784.21 210699.13

Account payable Sichuan Changhong Package Printing Co. Ltd. 36799481.64 3080005.38

Account payable Sichuan Changhong Jineng Sunshine Technology Co. Ltd. 52743.33 20076.99

Account payable Sichuan Changhong Precision Electronics Tech. Co. Ltd. 6505997.90 1443759.01

Account payable 081 Electronic Group 231435.73 86951.38

Account payable Sichuan Changhong New Energy Technology Co. Ltd. 2950.00

Account payable Guangdong Changhong Electronics Co. Ltd. 957434.40 113504.45

Account payable Sichuan Changhong Power Source Co. Ltd. 1870.82 1870.82

Account payable Sichuan Hongyu Metal Manufacturing Co. Ltd. 14662.40 14662.40

Account payable Sichuan Service Exp. Appliance Service Chain Co. Ltd. 148664.39 127050.71

Account payable Sichuan Hongwei Technology Co. Ltd. 3225.71

Account payable Sichuan Hongxin Software Co. Ltd. 537698.11 340000.00

Account payable Sichuan Changhong Intelligent Manufacturing Technology

Co. Ltd. 6441303.46 15962820.73

Account payable Sichuan Changhong International Travel Service Co. Ltd. 48090.00 167858.10

Account payable Sichuan Changhong Electronic System Co. Ltd. 5432.53 5432.53

Account payable Sichuan Jiahong Industrial Co. Ltd. 14764.05 14764.05

Account payable Sichuan Changhong Network Technology Co. Ltd. 7229.72 7229.72

Account payable Sichuan Changhong Electronic Products Co. Ltd. 10459363.34 2097100.40

Account payable CHANGHONG(HK)TRADINGLIMITED 3052516.27 3052516.27

Account payable Sichuan Ailian Science & Technology Co. Ltd. 11283843.25 5500914.00

Account payable Sichuan Aichuang Science & Technology Co. Ltd. 39950187.50 24466981.06

Account payable Hunan Grand-Pro Intelligent Tech. Company 165453.10 9095322.04

Account payable Lejiayi Chain Management Co. Ltd. 16856.00

Account payable Guangyuan Changhong Electronic Technology Co. Ltd. 434414.70

Account payable Hefei Changhong Industrial Co. Ltd. 176773.35 1729.50

Account payable Mianyang Science & Technology City Big Data Tech. Co.

Ltd. 7540.79 7540.79

Account payable Sichuan Changxin Refrigeration Parts Co. Ltd. 48386359.56 692843.70

Account payable Mianyang Highly Electric Co. Ltd. 21066624.27 9379903.10

Account payable Changhong Ruba Electric Company (Private) Ltd. 27720921.72 20520728.81

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Related party Ending balance Opening balance

Account payable Changhong International Holdings (Hong Kong) Co. Ltd. 8392016.50 394743.12

Contractual

liabilities Sichuan Changhong Electric Co. Ltd. 908774.50 997132.81

Contractual

liabilities Sichuan Changhong Electronics Holding Group Co. Ltd. 5080.00

Contractual

liabilities Lejiayi Chain Management Co. Ltd. 406331.40 2227.97

Contractual

liabilities CHANGHONG(HK)TRADINGLIMITED 1026.32 1011.34

Contractual

liabilities CHANGHONG ELECTRIC MIDDLE EAST FZCO 627.86

Contractual

liabilities Changhong Huayi Compressor Co. Ltd. 66037.73 66037.73

Contractual

liabilities 081 Electronic Group 25.55 25.55

Contractual

liabilities

Sichuan Changhong Gerun Environmental Protection Tech.

Co. Ltd. 985795.36 659496.67

Contractual

liabilities Sichuan Service Exp. Appliance Service Chain Co. Ltd. 80390.47 15364.13

Contractual

liabilities Hefei Changhong Industrial Co. Ltd. 4022.06 6681.11

Contractual

liabilities Sichuan Zhiyijia Network Technology Co. Ltd. 3985095.87 3816946.86

Contractual

liabilities Hongyuan Ground Energy Heat Tech. Co. Ltd. 108490.57

Contractual

liabilities Sichuan Aichuang Science & Technology Co. Ltd. 2000000.00

Contractual

liabilities Guangdong Changhong Electronics Co. Ltd. 542700.00

Contractual

liabilities Orion.PDP.Co.ltd 16471.68

Contractual

liabilities Sichuan Changhong International Hotel Co. Ltd. 237300.00

Other account

payable Sichuan Changhong Electric Co. Ltd. 10980589.69 5861224.39

Other account

payable Sichuan Changhong Mold Plastic Tech. Co. Ltd. 1700295.88 1700295.88

Other account Sichuan Changhong Jijia Fine Co. Ltd. 400500.00 400500.00

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Related party Ending balance Opening balance

payable

Other account

payable

Sichuan Changhong Gerun Environmental Protection Tech.

Co. Ltd. 10000.00 10000.00

Other account

payable Changhong Huayi Compressor Co. Ltd. 1598900.00 1598900.00

Other account

payable Sichuan Changhong Package Printing Co. Ltd. 51256.56 50000.00

Other account

payable Sichuan Changhong Precision Electronics Tech. Co. Ltd. 192717.54 192717.54

Other account

payable Sichuan Changhong Minsheng Logistics Co. Ltd. 550500.00 520500.00

Other account

payable CHANGHONG(HK)TRADINGLIMITED 3926563.12 82671.18

Other account

payable Sichuan Jiahong Industrial Co. Ltd. 22054.24 20002.24

Other account

payable

Sichuan Changhong Intelligent Manufacturing Technology

Co. Ltd. 2066743.98 1282495.95

Other account

payable Hunan Grand-Pro Intelligent Tech. Company 250000.00 250000.00

Other account

payable Yuanxin Financial Lease Co. Ltd. 18130775.34 1315045.86

Other account

payable

Mianyang Science & Technology City Big Data Tech. Co.Ltd. 113450.00

Other account

payable Sichuan Changhong Jineng Sunshine Technology Co. Ltd. 553165.00 553165.00

Other account

payable Sichuan Changxin Refrigeration Parts Co. Ltd. 46702.03 46702.03

Other account

payable Sichuan Hongxin Software Co. Ltd. 61978.23 61978.23

Other account

payable Sichuan Zhiyijia Network Technology Co. Ltd. 41940.00 41940.00

Total 696161640.17 418950358.95

(IV) Commitments from related parties: Nil

XII. Share-based payment: Nil

XIII. Contingency

1. Pending action or possible liabilities formed from arbitration: Nil

2. Contingency from external guarantee: Nil

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

3. Other contingency: Nil

XIV. Commitments: nil

XV. Events occurring after the balance sheet date

1. Important non-adjustment items: Nil

2. Profit distribution: Nil

3. Major sales re turn: Nil

4. Other than the above mentioned events the Company have no other events occurred after balance sheet

date.XVI. Other significant matters

1. Correct ion of previous periods and influence: Nil

2. Debt restructuring: Nil

3. Assets replacement: Nil

4. Pension plan: Nil

5. Discontinuing operat ion: Nil

6 . Bran ch in format ion

In 10 thousand Yuan

Item

Refrigerator

freezer

Washing

machine

AC Marketing

Small home

appliances

Other Sales in branch Total

Operation income 347191.32 281781.49 1274.25 51107.08 13862.62 15630.69 679586.07

Including: Income from

trading outside 341292.39 281781.49 1272.78 50714.65 4524.76 679586.07

Income from trading in

branch 5898.92 - 1.47 392.43 9337.87 15630.69

Operation expenses 362465.73 293377.86 1770.92 50329.95 12303.79 15556.64 704691.61

Operation profit -15274.41 -11596.37 -496.67 777.13 1558.83 74.05 -25105.54

Total assets 1160375.01 474036.48 5396.98 42325.14 23409.03 199028.55 1506514.09

Total liability 664269.73 348373.90 19121.31 32115.71 12668.70 53423.91 1023125.44

Supplementary information - - -

Depreciation and

amortization expenses 10066.58 6380.35 6.80 251.61 317.63 -42.96 17065.93

Capital expenditure 13343.65 7819.10 - 21.88 155.91 21340.54

Non-cash expenses except for

depreciation and amortization 43426.51 29058.20 -535.66 4218.99 2513.10 -531.61 79212.75

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

7. Other major transactions and events shows impact on investor’s decision-making: Nil

XVII. Notes to main items of financial statement of parent company

1. Account receivable

(1) Category of account receivable

Category

Ending balance

Book balance Bad debt provision

Book value

Amount Ratio Amount Ratio

Account receivable that withdrawal

bad debt provision by single item 1475977585.83 86.41% 4893949.76 0.33% 1471083636.07

Including: current payment with

related party 1427811428.96 83.59% 1427811428.96

Account receivable with letter of

credit 43272207.11 2.53% 43272207.11

Account receivable with single minor

amount but withdrawal single item

bad debt provision

4893949.76 0.29% 4893949.76 100.00%

Account receivable withdrawal bad

debt provision by portfolio 232067230.27 13.59% 9670292.48 4.17% 222396937.79

Including: account receivable of

engineering customers -

Receivables other than engineering

customers 232067230.27 13.59% 9670292.48 4.17% 222396937.79

Total 1708044816.10 100.00% 14564242.24 0.85% 1693480573.86

(Continued)

Category

Opening Balance

Book balance Bad debt provision

Book value

Amount Ratio Amount Ratio

Account receivable that withdrawal bad

debt provision by single item 1006525937.93 86.22% 3514443.05 0.35% 1003011494.88

Including: current payment with related

party 965981524.72 82.75% 965981524.72

Account receivable with letter of credit 37029970.16 3.17% 37029970.16

Account receivable with single minor

amount but withdrawal single item bad

debt provision

3514443.05 0.30% 3514443.05 100.00%

Account receivable withdrawal bad debt 160872283.13 13.78% 5320388.68 3.31% 155551894.45

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Category

Opening Balance

Book balance Bad debt provision

Book value

Amount Ratio Amount Ratio

provision by portfolio

Including: account receivable of

engineering customers 390215.80 0.03% 390215.80

Receivables other than engineering

customers 160482067.33 13.75% 5320388.68 3.32% 155161678.65

Total 1167398221.06 100.00% 8834831.73 0.76% 1158563389.33

1) Account receivable with single minor amount but withdrawal bad debt provision singly refers to the minor

single receivables and withdrawal bad debt provision by combination shows no risk characteristic of the

receivables 3 clients involved.

2) Account receivable withdrawal bad debt provision by portfolio

Account receivable of engineering customers

Account age

Ending balance

Account receivable Bad debt provision Provision ratio

Within 3 months (3 months included) 207597423.65 2075974.24 1.00%

Over 3 months and within 6 months (6

months included) 9066989.54 906698.95 10.00%

Over 6 months and within one year (One year

included) 8276911.56 1655382.31 20.00%

Over one year - within 2 years (2 years

included) 2595427.63 1297713.82 50.00%

Over 2 years - within 3 years (3 years

included) 3979773.65 3183818.92 80.00%

Over 3 years 550704.24 550704.24 100.00%

Total 232067230.27 9670292.48

(2) By account age

Item Ending balance

Within 3 months (3 months included) 1372341297.29

Over 3 months and within 6 months (6 months included) 144086705.46

Over 6 months and within one year (One year included) 120338041.49

Over one year - within 2 years (2 years included) 51754344.55

Over 2 years - within 3 years (3 years included) 17808451.40

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Ending balance

Over 3 years 1715975.91

Total 1708044816.10

(3) Account receivable bad debt reserves

Bad debt provision has 5935724.65 Yuan accrual in Current period; bad debt provision of 206314.14 Yuan

is switch-back; no trade receivables written-off in previous year was recovered this period.

(4) Account receivable actually written-off in Current period: Nil

(5) In Current period top five receivables collected by arrears party amounting to 1322689386.40 yuan in

total accounted for 77.44% of the receivables at balance of Current period-end the bad debt provision

accrual correspondingly amounting to 0.00 yuan at period-end balance.

(6) Account receivable terminated recognition due to the transfer of financial assets: nil

(7) No assets and liability transfer Account receivable and continues to involve at period-end.

2. Other account receivable

Item Ending balance Opening Balance

Interest receivable 20170010.71 7880186.85

Dividend receivable 661434.48

Other account receivable 24602991.53 33423018.09

Total 44773002.24 41964639.42

2.1 Interest receivable

(1) Category of interest receivable

Item Ending balance Opening Balance

Interest receivable from time deposit 17773205.15 7880186.85

Income receivable from financial products 2396805.56

Total 20170010.71 7880186.85

(2) Major overdue interest: nil

2.2 Dividend receivable

(1) Category of dividend receivable

Item Ending balance Opening Balance

Huishang Bank Corporation Limited 661434.48

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

(2) Major dividends receivable with account age over 1 year: Nil

2.3 Other account receivable

(1) Category of other account receivable

Nature Ending book balance Opening book Balance

Related party in consolidation statement 2252798.84 4126498.15

Related party not in consolidation statement 500000.00 500000.00

Loans of employee’s pretty cash 9638796.77 6014409.39

Cash deposit 1705375.14 1010000.00

Export rebate 10556031.93 21650454.61

Other 133182.08

Total 24653002.68 33434544.23

(2) Other account receivable bad debt reserves

Bad debt reserves

First stage Second stage Third stage

Total Expected credit loss

in next 12 months

Expected credit loss

for the whole

duration (no credit

impairment)

Expected credit loss

for the whole

duration (credit

impairment has

occurred)

Balance as at 1 Jan. 2020 11526.14 11526.14

Book balance of Other

account receivable in Current

Period as at 1 Jan. 2020

— — —

--Transfer to the second stage

-- Transfer to the third stage

-- Reversal to the second

stage

-- Reversal to the first stage

Provision in Current Period -11514.99 50000.00 38485.01

Reversal in Current Period

Conversion in Current Period

Write off in Current Period

Other change

Balance as at 30 Jun. 2020 11.15 50000.00 50011.15

(3) By account age

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Ending balance

Within 3 months (3 months included) 14251567.39

Over 3 months and within 6 months (6 months included) 1057392.58

Over 6 months and within one year (One year included) 2080878.95

over one year-within two years (2 years included) 3755544.21

Over 2 years - within 3 years (3 years included) 676260.00

Over 3 years 2831359.55

Total 24653002.68

(4) No actual verification of other receivables in Current period

(5) The top five in the ending amount of other receivables totaled RMB 14177277.18 accounting for

57.51% of the total amount of other receivables and the aggregate amount of the ending balance of the

corresponding provision for bad debts was RMB 0.00.

(6) No other account receivable involved government subsidies at period-end.

(7) No other receivables terminated recognization due to the transfer of financial assets at period-end.

(8) No assets and liability transfer other receivables and continues to involve at period-end.长虹美菱股份有限公司财务报表附注

2020 年 1 月 1 日至 2020 年 6 月 30 日（本财务报表附注除特别注明外，均以人民币元列示）

3. Long-term equity investments

(1) Classification of long-term equity investments

Item

Ending balance Opening balance

Book balance Impairment Book value Book balance Impairment Book value

Investment in subsidiaries:

Zhongke Meiling Cryogenic Technology Co. Ltd. 42652000.00 - 42652000.00 42652000.00 42652000.00

Mianyang Meiling Refrigeration Co. Ltd. 95000000.00 - 95000000.00 95000000.00 95000000.00

Hefei Meiling Electric Marketing Co.Ltd. 54900000.00 - 54900000.00 54900000.00 54900000.00

Zhongshan Changhong Electric Co. Ltd. 304856419.37 - 304856419.37 169856419.37 169856419.37

Sichuan Changhong Air-conditioner Co.Ltd. 955600437.79 - 955600437.79 955600437.79 955600437.79

Hefei Meiling Group Holdings Limited 113630000.00 - 113630000.00 113630000.00 113630000.00

Jiangxi Meiling Electric Appliance Co.Ltd. 79000000.00 - 79000000.00 79000000.00 79000000.00

Changhong Meiling Ridian Technology

Co. Ltd. 91082111.12 - 91082111.12 90802061.95 90802061.95

Changmei Technology Co. Ltd. 48128000.00 48128000.00 - 48128000.00 48128000.00

Meiling CANDY Washing Machine Co.Ltd. 60000000.00 27675208.01 32324791.99 60000000.00 25082892.26 34917107.74

Hefei Meiling Wulian Technology Co.Ltd. 6000000.00 - 6000000.00 6000000.00 6000000.00

Investment in associates:

Hefei Xingmei Assets Management Co.Ltd. 8245676.45 - 8245676.45 8554613.73 8554613.73

Sichuan Zhiyijia Network Technology 44228924.16 - 44228924.16 47831474.41 47831474.41长虹美菱股份有限公司财务报表附注

2020 年 1 月 1 日至 2020 年 6 月 30 日（本财务报表附注除特别注明外，均以人民币元列示）Item

Ending balance Opening balance

Book balance Impairment Book value Book balance Impairment Book value

Co. Ltd.

Total 1903323568.89 75803208.01 1827520360.88 1771955007.25 73210892.26 1698744114.99

(2) Investment in subsidiaries

Invested enterprise Opening balance Current increased Current decreased Ending balance

Provision for impairment

loss in the period

Ending balance of

impairment

Zhongke Meiling Cryogenic Technology

Co. Ltd. 42652000.00 42652000.00

Mianyang Meiling Refrigeration Co. Ltd. 95000000.00 95000000.00

Hefei Meiling Electric Marketing Co.Ltd. 54900000.00 54900000.00

Zhongshan Changhong Electric Co. Ltd. 169856419.37 135000000.00 304856419.37

Sichuan Changhong Air-conditioner Co.Ltd. 955600437.79 955600437.79

Hefei Meiling Group Holdings Limited 113630000.00 113630000.00

Jiangxi Meiling Electric Appliance Co.Ltd. 79000000.00 79000000.00

Changhong Meiling Ridian Technology

Co. Ltd. 90802061.95 280049.17 91082111.12

Changmei Technology Co. Ltd. 48128000.00 48128000.00 48128000.00

Meiling CANDY Washing Machine Co.Ltd. 60000000.00 60000000.00 27675208.01

Hefei Meiling Wulian Technology Co.Ltd. 6000000.00 6000000.00

Total 1715568919.11 135280049.17 1850848968.28 75803208.01长虹美菱股份有限公司财务报表附注

2020 年 1 月 1 日至 2020 年 6 月 30 日（本财务报表附注除特别注明外，均以人民币元列示）

(3) Investment in associates

Invested enterprise

Opening

balance

Changes in the period

Ending balance

Ending

balance of

impairment

Additional

Investment

reduction

Investment income

recognized under

equity

Adjustment

for other

comprehensive

income

Other

equity

change

Cash dividend or

profit announced

to issued

Provision for

impairment loss

Other

Hefei Xingmei Assets Management Co.Ltd. 8554613.73 -308937.28 8245676.45

Sichuan Zhiyijia Network Technology Co.Ltd. 47831474.41 3047237.72 6649787.97 44228924.16

Total 56386088.14 2738300.44 6649787.97 52474600.61

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

4. Operation income and operation cost

Item

Current period Last period

Income Cost Income Cost

Main business 2453463713.88 2260946436.99 3595970830.12 3108565034.11

Other business 760500119.30 761172953.16 938785397.22 923829071.09

Total 3213963833.18 3022119390.15 4534756227.34 4032394105.20

(1) Main business -Classified according to product

Product

Current period Last period

Operation income Operation cost Operation income Operation cost

Refrigerator

freezer 2201687822.75 2028605037.68 3359059870.90 2898999289.84

Washing machine 102710982.12 103454823.52 60295707.79 54562704.69

Small household

appliances and

kitchen and

bathroom

146212337.07 126125131.02 175588336.18 154221270.69

Other 2852571.94 2761444.77 1026915.25 781768.89

Total 2453463713.88 2260946436.99 3595970830.12 3108565034.11

(2) ) Main business -Classified according to region

Regions

Current period Last period

Operation income Operation cost Operation income Operation cost

Domestic 1322226066.74 1332014226.07 2564886628.36 2199492611.91

Overseas 1131237647.14 928932210.92 1031084201.76 909072422.20

Total 2453463713.88 2260946436.99 3595970830.12 3108565034.11

Top five clients in sales income amounted as RMB 1158120716.61 a 36.03% in total operation income.

5. Investment income

Item Current period Last period

Long-term equity investment income by equity method 2738300.44 -2832319.70

Investment income arising from disposal of Tradable financial

assets 3755039.20 -9266363.88

Income from financial products 1432328.96 31627554.38

Long-term equity investment income by cost method 69912000.00 4590000.00

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Current period Last period

Total 77837668.60 24118870.80

XVIII. Approval of financial statement

The financial statement has already been approved from the board of directors of the Company for

reporting dated 14 August 2020.

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Supplementary information for financial statement

1. Non-recurring gains and losses for this year

(1) Non-recurring gains and losses regulated by Explanation Announcement of Information Disclosure on Stock

Issuance Enterprise No.1—Non-recurring gains/losses (2008) from CSRC:

Item Current period Note

Gains and losses from disposal of non-current assets -178704.98

Tax refund or mitigate due to examination-and-approval beyond power or without official

approval document or accident

Governmental subsidy reckoned into current gains/losses 52704872.66

Capital occupancy expense collected from non-financial enterprises and recorded in current gains

and losses

Income from the exceeding part between investment cost of the Company paid for obtaining

subsidiaries associates and joint-ventures and recognizable net assets fair value attributable to the

Company when acquiring the investment

Gains and losses from exchange of non-monetary assets

Gains and losses from assets under trusted investment or management

Various provision for impairment of assets withdrew due to act of God such as natural disaster

Gains and losses from debt restructuring

Enterprise reorganization expense

Gains and losses of the part arising from transaction in which price is not fair and exceeding fair

value

Current net gains and losses occurred from period-begin to combination day by subsidiaries

resulting from business combination under common control

Gains and losses arising from contingent proceedings irrelevant to normal operation of the

Company

Except for effective hedge business relevant to normal operation of the Company gains and losses

arising from fair value change of tradable financial assets and tradable financial liabilities and

investment income from disposal of tradable financial assets tradable financial liabilities and

financial assets available for sale

-2782746.40

Switch-back of provision of impairment of account receivable which are treated with separate

depreciation test 1809494.78

Gains and losses obtained from external trusted loans

Gains and losses arising from change of fair value of investment real estate whose follow-up

measurement are conducted according to fair value pattern

Affect on current gains and losses after an one-time adjustment according to requirements of laws

Annotations of Financial Statements of ChangHong Meiling Co. Ltd.

From 1 January 2020 to 30 June 2020

(Unless other wise specified RMB for record in the Statement)

Item Current period Note

and regulations regarding to taxation and accounting

Trust fee obtained from trust operation

Other non-operating income and expenditure except for the aforementioned ones 2486055.08

Other gains and losses items complying with definition for non-recurring gains and losses

Subtotal

Impact on income tax 6716413.17

Impact on minority equity(after taxation) 318475.54

Total 47004082.43

2. Return on equity and earnings per share

In accordance with requirement of the No. 9 Rule of Information Disclosure Compiling of Public Listed Companies: Calculation and

Disclosure of Return on Equity and Earnings per Share (revised in 2010) the weighted average return on equity basic earnings per

share and diluted earnings per share of the Company in the period are as follow:

Profit during the report period

Weighted average

return on equity

Earnings per share/EPS (RMB/Share)

Basic EPS Diluted EPS

Net profit attributable to shareholders of parent company -4.29% -0.2012 -0.2012

Net profit attributable to shareholders of parent company after

deduction of non-recurring gains and losses

-5.25% -0.2462 -0.2462

3. Accounting difference under the accounting rules in and out of China: Nil

4. Supplementary information for accounting policy changed: Nil

CHANGHONG MEILING CO. LTD SEMI-ANNUAL REPORT 2020

Section XII. Documents available for Reference

I. Text of the Semi-Annual Report carrying the signature of the Chairman;

II. Financial statement carrying the signatures and seals of the Chairman principal of the accounting works and

person in charge of accounting organ(chief accountants);

III. Original documents of the Company and manuscripts of public notices that disclosed in the website designated

by CSRC in the report period;

The aforesaid documents are all available at headquarter of the Company. The Company would provide them

timely when CSRC and Shenzhen Stock Exchange require or the shareholders need consultation according to the

regulations and Articles of Association.

Chairman: Wu Dinggang

Changhong Meiling Co. Ltd.

15 August 2020

行情