虹美菱B定期财报：虹美菱B：2019年年度报告（英文版）

长虹美菱股份有限公司2019年年度报告长虹美菱股份有限公司CHANGHONGMEILINGCO.,LTD.二〇一九年年度报告AnnualReport2019CHANGHONGMEILINGCO.,LTD.AnnualReport20191SectionI.ImportantNotice,ContentsandInterpretationBoardofDirectors,SupervisoryCommittee,alldirectors,supervisorsandseniorexecutivesofChanghongMeilingCo.,Ltd.(hereinafterreferredtoastheCompany)herebyconfirmthattherearenoanyfictitiousstatements,misleadingstatements,orimportantomissionscarriedinthisreport,andshalltakeallresponsibilities,individualand/orjoint,forthereality,accuracyandcompletionofthewholecontents.Mr.WuDinggang,ChairmanoftheCompany,Mr.PangHaitao,personinchargeofaccountingworkandMr.YangJun,personinchargeofaccountingorgan(accountantincharge)herebyconfirmthattheFinancialReportof2019AnnualReportisauthentic,accurateandcomplete.TheCompanydidnothavedirectors,supervisorsandseniorexecutivesoftheCompanycouldnotguaranteethereality,accuracyandcompletionofthewholecontentsorhaveobjections.AllthedirectorsattendedtheboardmeetingondeliberatingtheReportonsiteandbycommunication.Modifiedauditopinionsnotes□Applicable√NotapplicableShineWingCertifiedPublicAccountantsCo.,Ltd.(LLP)issuedstandardunqualifiedAuditors‘ReportfortheCompany‘sFinancialReportof2019.Majordefectsininternalcontrol□Applicable√NotapplicableTheCompanyhadnomajordefectsininternalcontrolinthereportingperiod.Riskwarningofconcerningtheforward-lookingstatementswithfutureplanninginvolvedinannualreport√Applicable□NotapplicableConcerningtheforward-lookingstatementswithfutureplanninginvolvedintheReport,theydonotconstituteasubstantialcommitmentforinvestors,investorsandthepersonconcernedshouldmaintainadequateriskawareness,furthermore,differencesbetweentheplans,forecastandcommitmentsshouldbecomprehended.Investorsareadvisedtoexercisecautionofinvestmentrisks.Investorsareadvisedtoreadthefulltextofannualreport,andpayparticularattentiontothefollowingriskfactors:MoredetailsaboutthepossiblerisksandcountermeasuresintheoperationoftheCompanyaredescribedinthereport―IX.Prospectsforthefuturedevelopmentofthecompany‖of―SectionIV.Analysisanddiscussionoftheoperation‖,investorsareadvisedtoreadtherelevantcontent.CHANGHONGMEILINGCO.,LTD.AnnualReport20192SecuritiesTimes,ChinaSecuritiesJournal,HongKongCommercialDailyandJuchaoWebsite()arethemediaforinformationdisclosureforyearof2020thatappointedbytheCompany.AllpublicinformationunderthenameoftheCompanydisclosedontheabovesaidmediaandwebsiteshallprevail,andinvestorsareadvisedtoexercisecaution.DoestheCompanyneedtocomplywithdisclosurerequirementsofthespecialindustry:noProfitdistributionpre-planorcapitalizingofcommonreservespre-plandeliberatedbytheBoardinthereportingperiod√Applicable□NotapplicableWhetherhascapitalizingofcommonreservescarriedout□Yes√NoTheprofitdistributionplanforyearof2019,thatdeliberatedandapprovedby36thsessionofthe9thBODwas:taketotalsharesof1,044,597,881sharesasbasedated31December2019,distributed0.50Yuan(taxincluded)bonusincashforevery10-shareholdbyallshareholders,nosharebonusissuedandnocapitalizingofcommonreservescarriedout.Directors,supervisorsandseniorexecutivesoftheCompanyrespectivelysignedWrittenConfirmationOpinionsfor2019AnnualReport.SupervisoryCommitteeoftheCompanyformedWrittenExaminationOpinionsfor2019AnnualReport.CHANGHONGMEILINGCO.,LTD.AnnualReport20193ContentsSectionI.ImportantNotice,ContentsandInterpretation.............................................................1SectionIICompanyProfileandMainFinancialIndexes..............................................................5SectionIII.SummaryofCompanyBusiness.................................................................................11SectionIV.DiscussionandAnalysisoftheOperation..................................................................19SectionV.ImportantEvents............................................................................................................60SectionVI.Changesinsharesandparticularaboutshareholders............................................141SectionVII.PreferredStock.........................................................................................................149SectionVIII.ConvertibleBonds...................................................................................................150SectionIX.ParticularaboutDirectors,Supervisors,SeniorExecutivesandEmployees.......151SectionX.CorporateGovernance................................................................................................165SectionXI.CorporateBond..........................................................................................................181SectionXII.FinancialReport.......................................................................................................182SectionXIII.DocumentsavailableforReference.......................................................................350CHANGHONGMEILINGCO.,LTD.AnnualReport20194InterpretationItemsReferstoContentsCompany,TheCompany,ChanghongMeilingorMeilingElectricReferstoCHANGHONGMEILINGCO.,LTD.SichuanChanghongorcontrollingshareholderReferstoSichuanChanghongElectricCo.,Ltd.ChanghongGroupReferstoSichuanChanghongElectronicsHoldingGroupCo.,Ltd.HongKongChanghongReferstoCHANGHONG(HK)TRADINGLIMITEDMeilingGroupReferstoHefeiMeilingGroupHoldingsLimitedIndustryInvestmentGroupReferstoHefeiIndustryInvestmentHolding(Group)Co.,Ltd.ShineWingReferstoShineWingCertifiedPublicAccountants(LLP)ChanghongAir-conditionerReferstoSichuanChanghongAir-conditionerCo.,Ltd.ZhongkeMeilingReferstoZhongkeMeilingCryogenicTechnologyCo.,Ltd.JiangxiMeilingReferstoJiangxiMeilingElectricApplianceCo.,Ltd.ChanghongRidianReferstoGuangdongChanghongRidianTechnologyCo.,Ltd.ZhongshanChanghongReferstoZhongshanChanghongElectricCo.,Ltd.ChangmeiTechnologyReferstoChangmeiTechnologyCo.,Ltd.ChanghongHuayiReferstoChanghongHuayiCompressorCo.,Ltd.MeilingCANDYReferstoMeilingCANDYWashingMachineCo.,Ltd.ZhiyijiaCompanyReferstoSichuanZhiyijiaNetworkTechnologyCo.,Ltd.CSRCReferstoChinaSecuritiesRegulatoryCommissionAnhuiSecuritiesBureauReferstoChinaSecuritiesRegulatoryCommission,AnhuiProvinceSecuritiesRegulatoryBureauSSEReferstoShenzhenStockExchangeCHANGHONGMEILINGCO.,LTD.AnnualReport20195SectionIICompanyProfileandMainFinancialIndexesI.CompanyprofileShortformofthestockChanghongMeiling,HongmeilingBStockcode000521,200521ShortformoftheStockafterchanged(ifapplicable)N/AStockexchangeforlistingShenzhenStockExchangeNameoftheCompany(inChinese)长虹美菱股份有限公司ShortformoftheCompany(inChinese)长虹美菱ForeignnameoftheCompany(ifapplicable)CHANGHONGMEILINGCO.,LTD.Abbr.ofEnglishnameoftheCompany(ifapplicable)CHMLLegalrepresentativeWuDinggangRegistrationsadd.No.2163,LianhuaRoad,EconomicandTechnologyDevelopmentZone,HefeiCodeforregistrationsadd230601Officesadd.No.2163,LianhuaRoad,EconomicandTechnologyDevelopmentZone,HefeiCodesforofficeadd.230601WebsiteE-mailinfo@meiling.comII.Person/WaytocontactSecretaryoftheBoardRep.ofsecurityaffairsNameLiXiaZhuWenjieContactadd.No.2163,LianhuaRoad,EconomicandTechnologyDevelopmentZone,HefeiNo.2163,LianhuaRoad,EconomicandTechnologyDevelopmentZone,HefeiTel.0551-622190210551-62219021Fax.0551-622190210551-62219021e-maillixia@meiling.comwenjie.zhu@meiling.comIII.InformationdisclosureandpreparationplaceNewspaperappointedforinformationdisclosureSecuritiesTimes,ChinaSecuritiesJournal,HongKongCommercialDailyCHANGHONGMEILINGCO.,LTD.AnnualReport20196WebsiteforannualreportpublishappointedbyCSRCJuchaowebsite:PreparationplaceforannualreportRoomofsecretaryoftheBoard,2/F,administrativecenter,OfficebuildingoftheCompanyIV.RegistrationchangesoftheCompanyOrganizationcodeUniformsocialcreditcode:9134000014918555XKChangesofmainbusinesssincelisting(ifapplicable)NochangesPreviouschangesforcontrollingshareholders(ifapplicable)1.InOctober1993,afterinitiallisting,controllingshareholderoftheCompany--HefeiMeilingIndustrialCorp.(renamedasHefeiMeilingGroupCo.,dated23May1994),executingcontrollingrightsoftheCompanyandmanagementrightofthestate-ownedassetsonbehalfofHefeiState-ownedAssetsManagementOffice,namedatthattime;2.FromNovember1997toMay2003,controllingshareholderoftheCompanywasHefeiMeilingGroupHoldingCo.,Ltd.(establishedbaseonformerMeilingGroupCo.,,―MeilingGroup‖forshort),anenterprisesolelyownedbytheState;mainlyoperatingthestate-ownedcapitalinauthorizedfromState-ownedAssetsManagementCommissionofHefeiCity,ensuringthemaintenanceandappreciationofstate-ownedassets;3.On29May2003,MeilingGroupenteredinto―EquityTransferAgreement‖withShundeGreenKelEnterpriseDevelopmentCo.,ltd.(―GreenKel‖),the82,852,683state-ownedsharesheldbytheCompanywastransfertoGreenKel.Aftertransferring,GreenKelcomestothefirstlargestshareholderoftheCompany.4.Accordingtothespiritof―BulletinofTreatmentOpinionsonGreenKelCompanypurchasingState-ownedAssetsSharesofListedCompany‖(GZFCQ[2006]No.:44)jointlyissuedfromSASACandMinistryofFinanceinApril2006,MeilingGrouptookbacktheMeilingElectric82,852,683sharesfromGreenKelbyprocedures,whichhasbeentransferred.InSeptember2006,relevantequitytransferagreementsignedbetweentheMeilingGroupandGreenKelisinvalid,whichwasconfirmedbythe―Award‖((2006)HZZNo.:104)issuedfromarbitrationcommissionofHefei;thestate-ownedlegalperson‘s82,852,683shares,heldbyGreenKel,shouldreturntoMeilingElectric,andrelevantequityconsiderationwillpaytoGreenKelbyMeilingGroup.On29December2006,the82,852,683sharesofMeilingElectricweretransfertoMeilingGroupbyGreenKel,andMeilingGroupbecomesthecontrollingshareholderofMeilingElectricagain.5.On18May2006and11January2007,MeilingGroupenteredinto―EquityTransferAgreementofMeilingElectric‖and―SupplementaryAgreementofEquityTransferofMeilingElectric‖respectivelywithSichuanChanghongandChanghongGroup,amongthe123,396,375sharesheldbyMeilingGroup,82,852,683sharesweretransferredrespectivelytoSichuanChanghongandChanghongGroupaccordingtothetransferwayregulatedinagreement;ofthistransferring,45,000,000shares(10.88%oftotalsharecapitaloftheCompany)weretransferredtoSichuanChanghong,thefirstlargestshareholderoftheCompanywhile37,852,683shares(9.15%oftotalsharecapitaloftheCompany)weretransferredtoChanghongGroup,thethirdlargestshareholderoftheCompany.6.On29October2008,ChanghongGroupandSichuanChanghongenteredinto―EquityTransferAgreementofHefeiMeilingCo.,Ltd.‖,the32,078,846restrictedcirculationsAsharesofMeilingElectricheldbyChanghongGroupweretransferredbyagreementtoSichuanChanghong.On23CHANGHONGMEILINGCO.,LTD.AnnualReport20197December2008,theaforesaidequitytransferwasapprovedby―ReplyonMattersofEquityheldbyState-ownedShareholdersofHefeiMeilingCo.,Ltd.‖(GZCQ(2008)No.:1413)fromSASAC;on21January2009,theaforesaidtransferwasregisteredforownershiptransferinShenzhenBranchofChinaSecuritiesDepositoryandClearingCorporationLimited.Withthis,thefirstmajorityshareholderoftheCompanycomestoSichuanChanghong.7.From12November2018to25February2019,SichuanChanghonganditsconcertedactionHongKongChanghongtotallybuys16,231,024sharesoftheCompanythroughthesecondarymarketbybidding(includingA-stockof13,751,756sharesandB-stockof2,479,268shares),a1.55%intotalsharecapitaloftheCompany.Afterstakeenlarge,SichuanChanghonganditsconcertedactionHongKongChanghongholds281,832,434sharesoftheCompanyintotal,a26.98%ofthetotalsharecapitaloftheCompany;ofwhich,SichuanChanghongdirectlyholds248,457,724A-shareoftheCompany,a23.79%intotalsharecapitaloftheCompanywhileHongKongChanghongholdscirculationB-shareoftheCompanyamountingas33,374,710shares,a3.19%intotalsharecapitaloftheCompany.8.Endedas31December2019,SichuanChanghonganditsconcertedactionHongKongChanghongtotallyholds281,832,434sharesoftheCompany,a26.98%intotalsharecapitaloftheCompany;SichuanChanghongdirectlyholds248,457,724A-shareoftheCompany,a23.79%intotalsharecapitaloftheCompanywhileHongKongChanghongholdscirculationB-shareoftheCompanyamountingas33,374,710shares,a3.19%intotalsharecapitaloftheCompany.V.Otherrelevantinformation(I)CPAengagedbytheCompanyNameofCPAShineWingCertifiedPublicAccountants(LLP)Officesadd.forCPA8/F,BlockA,FuHuaMansionNo.8ChaoYangMenBeidajie,DongChengDistrict,Beijing,P.R.CSigningAccountantsLiXifu,XiaCuiqiong(II)SponsorengagedbytheCompanyforperformingcontinuoussupervisiondutiesinreportingperiod□Applicable√Notapplicable(III)FinancialconsultantengagedbytheCompanyforperformingcontinuoussupervisiondutiesinreportingperiod□Applicable√NotapplicableVI.MainaccountingdataandfinancialindexesWhetherithasretroactiveadjustmentorre-statementonpreviousaccountingdata□Yes√No20192018Changesoverlastyear2017Operatingincome(RMB)16,553,252,894.9317,490,174,950.01-5.36%16,797,436,757.36CHANGHONGMEILINGCO.,LTD.AnnualReport20198Netprofitattributabletoshareholdersofthelistedcompany(RMB)56,441,479.1438,658,256.9746.00%32,473,204.92Netprofitattributabletoshareholdersofthelistedcompanyafterdeductingnon-recurringgainsandlosses(RMB)-50,454,661.39-3,142,791.01-1505.41%-97,705,959.02Netcashflowarisingfromoperatingactivities(RMB)1,285,003,985.04-220,560,615.36682.61%-551,501,994.74Basicearningspershare(RMB/Share)0.05400.037045.95%0.0311Dilutedearningspershare(RMB/Share)0.05400.037045.95%0.0311WeightedaverageROE1.13%0.77%0.36percentagepointsup0.64%Yearendof2019Yearendof2018ChangesoverendoflastyearYearendof2017Totalassets(RMB)14,202,233,615.4715,561,810,184.54-8.74%15,961,511,966.81Netassetsattributabletoshareholderoflistedcompany(RMB)5,004,947,673.365,015,730,486.57-0.21%5,051,066,095.31Thecauseoftheaccountingpolicychangeandaccountingerrorcorrection□Applicable√NotapplicableWhetherhavecorporatebondsornot□Yes√NoVII.Accountingdatadifferenceunderdomesticandforeignaccountingstandards(I)Differenceofthenetprofitandnetassetsdisclosedinfinancialreport,underbothIAS(InternationalAccountingStandards)andChineseGAAP(GenerallyAcceptedAccountingPrinciples)□Applicable√NotapplicableTheCompanyhasnodifferenceofthenetprofitandnetassetsdisclosedinfinancialreport,underbothIAS(InternationalAccountingStandards)andChineseGAAP(GenerallyAcceptedAccountingPrinciples)inreportingperiod.(II)Differenceofthenetprofitandnetassetsdisclosedinfinancialreport,underbothforeignaccountingrulesandChineseGAAP(GenerallyAcceptedAccountingPrinciples)√Applicable□NotapplicableCHANGHONGMEILINGCO.,LTD.AnnualReport20199InRMBNetprofitattributabletoshareholdersoflistedcompanyNetassetsattributabletoshareholdersoflistedcompanyAmountinthisperiodAmountinlastperiodAmountatperiod-endAmountatperiod-beginChineseGAAP56,441,479.1438,658,256.975,004,947,673.365,011,972,907.54ItemsandamountadjustedbyforeignaccountingrulesForeignaccountingrules56,441,479.1438,658,256.975,004,947,673.365,011,972,907.54TheCompanyhadnodifferenceofthenetprofitornetassetsdisclosedinfinancialreport,undereitherforeignaccountingrulesorChineseGAAP(GenerallyAcceptedAccountingPrinciples)intheperiod.(III)ReasonsforthedifferencesofaccountingdataunderaccountingrulesinandoutofChina√Applicable□NotapplicableThe―NoticeofRelevantIssuesofAuditforCompanywithDomesticallyForeignSharesOffering‖wasissuedfromCSRCdated12September2007,sincethedayissuing,canceltheprevious―dualaudit‖requirementforcompanieswhoofferingdomesticallylistedforeignshares(B-shareenterprise)whileengagingsecuritiespracticequalificationCPAforauditing.TheCompanydidnotcompilefinancialreportunderforeignaccountingrulessince2007,thefinancialreportoftheCompanyiscomplyingonthe―AccountingStandardforBusinessEnterprise‖inChina,andtherefore,therearenodifferencesofaccountingdataunderaccountingrulesinandoutofChinaatperiod-end.VIII.QuarterlymainfinancialindexInRMBQ1Q2Q3Q4Operatingincome4,222,693,607.414,910,469,073.533,907,875,881.653,512,214,332.34Netprofitattributabletoshareholdersofthelistedcompany60,526,575.53-6,192,552.9626,417,996.84-24,310,540.27Netprofitattributabletoshareholdersofthelistedcompanyafterdeductingnon-recurringgainsandlosses36,385,461.05-31,910,064.208,955,796.33-63,885,854.57Netcashflowarisingfromoperatingactivities-921,543,887.111,295,027,887.30-172,257,908.291,083,777,893.14Whethertherearesignificantdifferencesbetweentheabove-mentionedfinancialindexoritstotalnumberandtherelevantfinancialindexdisclosedinthecompany‘squarterlyreportandsemi-annualreport□Yes√NoIX.Itemsandamountsofnon-recurringprofit(gains)/losses√Applicable□NotapplicableCHANGHONGMEILINGCO.,LTD.AnnualReport201910InRMBItem201920182017NoteGains/lossesfromthedisposalofnon-currentasset(includingthewrite-offthataccruedforimpairmentofassets)-9,537,945.52787,721.32-8,203,782.90Foundmorein―Incomefromassetsdisposal‖Governmentalsubsidyreckonedintocurrentgains/losses(notincludingthesubsidyenjoyedinquotaorrationaccordingtonationalstandards,whicharecloselyrelevanttoenterprise‘sbusiness)103,813,820.0290,401,997.6368,403,702.36‖Foundmorein―Otherincome‖,―Non-operationincome‖GainsandlossesarisingfromcontingentproceedingsirrelevanttonormaloperationoftheCompany-13,050,649.33‖Foundmorein―Non-operationexpenditure‖Losses/gainsfromchangesoffairvaluesoccurredinholdingtradingfinancialassets,derivativefinancialassets,tradingfinancialliabilitiesandderivativefinancialliabilities,andinvestmentincomeobtainingfromthedisposaloftradingfinancialassets,derivativefinancialassets,tradingfinancialliability,derivativefinancialliabilityandotherdebtinvestment,excludedeffectivehedgingbusinessrelevantwithnormaloperationsoftheCompany27,685,917.00-18,928,688.8792,846,391.02Foundmorein―Incomeoffairvaluechanges‖,―Investmentincome‖Reversaloftheaccountreceivableandcontractassetsdepreciationreservessubjecttoseparateimpairmenttest1,936,952.672,543,553.45Foundmorein―Accountreceivable/otheraccountreceivable‖Othernon-operatingincomeandexpenditureexceptfortheaforementionedones1,070,165.28-2,614,761.682,680,908.22Foundmorein―Non-operationincome&expenditure‖Less:impactonincometax15,170,286.7716,236,806.6624,087,520.95--Impactonminorityshareholders‘equity(post-tax)2,902,482.151,101,317.881,460,533.81--Total106,896,140.5341,801,047.98130,179,163.94--Concerningtheextraordinaryprofit(gain)/lossdefinedbyQ&AAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublic---ExtraordinaryProfit/loss,andtheitemsdefinedasrecurringprofit(gain)/lossaccordingtothelistsofextraordinaryprofit(gain)/lossinQ&AAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublic---ExtraordinaryProfit/loss,explainreasons□Applicable√NotapplicableTheCompanyhasnoitemsdefinedasrecurringprofit(gain)/lossaccordingtothelistsofextraordinaryprofit(gain)/lossinQ&AAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublic---ExtraordinaryProfit/loss,intheperiod.CHANGHONGMEILINGCO.,LTD.AnnualReport201911SectionIII.SummaryofCompanyBusinessI.Mainbusinessesofthecompanyinthereportingperiod(i)MainbusinessesoftheCompanyTheCompanyisoneofChina'smajorelectricappliancemanufacturers,possessesfourmajordomesticmanufacturingbasesinHefei,Mianyang,JingdezhenandZhongshan,andtwooverseasmanufacturingbasesinIndonesiaandPakistan.Currently,wehavecompletedtheindustrylayoutofwhiteelectricitybasically,coveringthefullproductlineincludingrefrigerator,washingmachine,airconditioner,kitchenandbath,smallhouseholdappliancesandothers,atthesametime,theCompanyentersthenewindustrialfieldsasbio-medicalandwithcertainachievementsmade.Overthepast30years,theCompanyhasalwaysbeenadheringtothe"independentinnovation,createdinChina",andalwaysfocusonrefrigerationindustrywithoutstop,elaboratelybuildingthecorecompetitivenessofenterprisesbytechnologicalinnovationandproductinnovation.ThecompanyhassetupthefirstRoHSpublictestingcenterinAnhuiProvince,thestate-levelenterprisetechnologycenterandthetop-endR&Dteam,sothatMeilingcancontinuetoachievebreakthroughresultsinthevariablefrequency,intelligence,refreshment,thin-wall,energy-saving,forcedaircooling,deepcoolingandotherfields.Inrecentyears,theCompanyhassuccessivelyawardedmanyhonorssuchasthe―SmartRefrigeratorIntelligentManufacturingPilotDemonstrationProject‖,the―NationalGreenFactory‖,the―NationalIndustrialDesignCenter‖,the―GreenPioneerEnterpriseforyearof2019‖and―LeadingBrandofPreservationTechnologyinChina‘sRefrigerationIndustryforyearof2019‖.Meanwhile,in2019,thecompany‘sMFreshfull-thinseriesproductsperformedwell,threeMFreshfull-thinrefrigerators(BCD-482WQ3M,BCD-681WQ3S,BCD-686WQ3M)wontheReddotDesignAward.Thefull-thin656WQ3Mrefrigeratorwonthe2019AWEAward,andthefullthinBCD-501WQ3Srefrigeratorwonthe―Jiadian‖logoofChinaHouseholdElectricalAppliancesResearchInstitute.Inaddition,M-freshfullthinseriesrefrigeratorssetthreeworldrecordsoftheWorldRecordAssociation,i.e.―thedomesticrefrigeratorswithminimumembeddeddistanceintheworld‖,―thedomesticrefrigeratorswithmaximumvolumeratiointheworld‖,and―thedomesticrefrigeratorswithwideststoragetemperaturerangeintheworld‖,whichdemonstratedMeiling'sstrongbrandstrengthandinnovationabilityonceagain.Inrecentyears,drivenbytheindustrytransformationandupgradesandconsumptionupgrades,theCompanyhasadheredtothestrategyofsmartandvariablefrequencyproducts,promotedtheCompany‘sproductstotransformandupgradetobecomeintelligentandhigh-endandcomprehensivelyenhancedthecompetitivenessofproductsintheindustrybygraspingtheopportunitiesof―refreshment‖,―thin-wall‖,aircoolingandenergyefficiencyupgradesandeffectivelyresolvingthepainpointsofcustomers.Undertheguidanceofthe―intelligent‖CHANGHONGMEILINGCO.,LTD.AnnualReport201912strategy,since2014,theCompanyhasreleasedandlistedanumberofCHiQseriesofsmartrefrigeratorsandair-conditioningproducts,andcontinuetopromoteintellectualizedandhigh-endproducts.Especiallythe―MFreshLife‖seriesofrefrigeratorsequippedwithwatermoleculeactivationandpreservationtechnologylaunchedin2017,andtheCompanyhasreleasedtheMFreshLifehigh-endnewproducts―comprehensivethin‖seriesrefrigeratorswiththinbody,thinboxandthindoorin2019,solvethepainpointsofuserseffectively.Atthesametime,inordertoseizetheopportunityofenergyefficiencyupgradeandconsumptionupgrade,theCompany'sfrequencyconversionproductsaccountedforanincreasingproportionwiththeadvantageoffrequencyconversiontechnologyapplication.Facingthefuture,theCompanywillfurtherimprovethehomeinternetlayout,acceleratetheintelligentizationofhomeappliances,formadual-growthengineof―hardware+services‖,drivethetransformationandupgradingoftheCompany‘sprofitabilitymodel,investigatethenewvalue-addedservicemodelsforhomeapplianceenterprises,meetnewcompetitionpatternintheindustry,andachieveitsownsustainableandstabledevelopmentundertheguidanceofthecorevaluesof―professionalismandshareddevelopment‖.Meanwhile,basedonthe―SmartHomeEco-systemProject‖andtheexistingproducts,thecompanywillenhancetheR&D,manufacturing,salesandcooperativecapabilitiesofintegratedwhitegoodssoastoprovideuserswithacompletesetofsmartwhitegoodssystemsolutions.Inreportingperiod,mainincomeoftheCompanycomingfromrefrigerator(freezer),airconditioner,washingmachine,kitchen&toiletandsmallhomeappliancesproducts,totalamountingto15,241.6670millionYuan,a92.08%oftheoperatingincome.(ii)ConditionsoftheindustrythecompanyinvolvedIn2019,theinternationaltradesituationwascomplexandchangeable,competitioninthedomesticmarketwasfurtherintensified,homeappliancecompaniesweregraduallyslowingdownthepaceofexternalexpansion,andtheendogenousgrowthmomentumwassignificantlyenhanced.Atthesametime,affectedbyfactorssuchasthestructuralupgradeofhomeappliances,diversifiedintegrationofchannels,brandtransformation,assetrestructuring,andcross-borderentry,China'shomeapplianceindustryhasbeenstrugglingtoovercomeinternalandexternalproblems,andtheindustry'soveralloperationhasremainedstable.1.refrigeratorindustryIn2019,thehighpressureoftheupstreamrawmaterialsintherefrigeratorindustrycametoanendtemporarily,theproductionpressureandprofitpressureontheenterprisesidehavebeenalleviatedsignificantly,andtherefrigeratorindustrydepartingfromthehighpressureofthecostenteredanewdevelopmentcycle.Inthenewcycle,themarketmaintainedademandstructurethatfocusedonreneweddemandandsupplementedbynewdemand.Theaveragemarketpricedeclinedsignificantly,andtheoverallmarketshowedaslightincreaseindemand,andgoingdowninretailsales.AccordingtotheAllViewCloud(AVC)omnichanneldata,theChina‘sretailvolumeofrefrigeratormarketin2019was32.78millionunits,anincreaseof0.2%onayear-on-yearbasis,retailsalesamountedas91.2billionYuan,decreased4.8%fromayearearlier,therefrigeratorindustryenteredthenewdevelopmentcycleofproductpricedecline.CHANGHONGMEILINGCO.,LTD.AnnualReport2019132.AirconditioningindustryUndertheinfluenceofeconomicdownturn,poorrealestateperformance,andincreasingruralmarketholdings,theair-conditioningindustryencountereda―coldyear‖in2019.Fromtheperspectiveofthedemandside,therealestatemarketwassluggish,andthedemandforthethird-andfourth-tiermarketswasinsufficient.Fromtheperspectiveofthesupplyside,thecontinuousincreasingbrandsintheair-conditioningmarket,theexcessproductioncapacityoftheindustry,theleadingcompanies‘continuousexpansionoftheirproductioncapacity,andthedemandforperformancegrowthresultedinoversupplyintheindustry,andconstitutedtheinevitablebackgroundforthepricewartoreturntothemarket.Inaddition,inthetraditionalsalesseasonoftheair-conditioningindustryinMayandJune,theenthusiasmofthemarketwasrelativelylow,leadingtoincreasedmarketcompetition.Inordertocopewithmarketpressure,bigbrandsmadeprice-offpromotionstodrivethemarketdemand,andtheproductionspaceofsmallandmedium-sizedbrandswassqueezed.3.WashingmachineindustryDespitethatthemacroeconomicsituationin2019wassevereandChina‘shomeapplianceindustryfacedthreedilemmas,i.e.insufficientgrowthmomentum,highoperatingcosts,anddecentralizedusertraffic,thewashingmachineindustryhasperformedsteadilyundersuchcircumstances,andtheretailmarkethasgrownbeyondexpectations.Thewashingmachinemarketbenefitedfromsignificantproductupgradesandachievedasmallincrease.Front-loadingwashingmachineswithdryerwerewellreceivedbyconsumers;clothesdryerproductsattractedconsumerattention,andthemarketsizeexpandedrapidly,increasingbynearly50%.AccordingtotheAllViewCloud(AVC)omnichanneldata,theretailvolumeofwashingmachinemarketin2019was38.31millionunits,retailsalesamountedas76.4billionYuan,anincreaseof3.9%and2.5%respectivelyonay-o-ybasis.Onthewhole,inthecontextofthecomplexandchangeableinternationaltradesituationandthenewnormalofChina'seconomicdevelopment,themarketcompetitioninhomeapplianceindustrywasintensifying.Atthesametime,inthecontextofcontinuedlackofstimulusintherealestatemarket,noobviouspositivesinmacroeconomy,andtheawakeningofconsumers‘autonomousconsumptionconsciousness,theemergingcategoriesofproductsinthehomeappliancemarketbecamebrightspots,consumerdemandforhomeappliancesenteredaperiodofrenewal,andonlineandofflinesaleschannelstendedtobalancedandstabledevelopment.Inthemediumandlongterm,asdomesticresidents'incomecontinuedtogrowsteadily,nationalpoliciesguidedindustrialdevelopmenttogreenandintelligentacceleration,therevisionofmandatorystandardsforcedtheindustryupgradingandacceleratedtheeliminationofoutdatedproductioncapacity,homeapplianceenterpriseswithcorecompetitivenesswouldcomprehensivelypromotethehigh-qualitydevelopment.II.Majorchangesinmainassets(i)MajorchangesinmainassetsMajorassetsNoteofmajorchangesEquityassetsInvestedmorecapitalforjointventuresintheperiodCHANGHONGMEILINGCO.,LTD.AnnualReport201914FixedassetsTransfer-infromconstructioninprogressincreasedintheperiodIntangibleassetsLanduserightincreasedintheperiodfromsubsidiaryChanghongAir-conditionerConstructioninprogressConstructioninprogresstransfer-infixedassetsintheperiod(ii)Mainoverseasassets√Applicable□NotapplicableContentofassetsReasonfortheformationAssetsizeLocationOperationmodeControlmeasuretoensurethesecurityofassetsIncome(RMB)ForeignassetsaccountedfornetassetsoftheCompanyWhetherexistsignificantimpairmentrisk(Y/N)60%equityofChanghongRubaTradingCompanyInvestmentestablishmentUS$7.803millionPakistanSalesDetailsofriskscontrolmeasureshavebeendisclosedbytheCompanybywayofannouncementonappointedmedia(No.2011-028,No.2011-032,No.2014-023,No.2014-026,No.2016-027,No.2016-032,No.2017-053andNo.2017-059)on28May2011,19April2014,25March2016and10August2017-12,768,353.620.25%N40%equityofChanghongRubaElectricCompany(Private)Ltd.InvestmentestablishmentUS$6.9761millionPakistanManufactureDetailsofriskscontrolmeasureshavebeendisclosedbytheCompanybywayofannouncementonappointedmedia(No.2011-028,No.2011-032,No.2014-023,No.2014-026,No.2017-053andNo.2017-059)on28May2011,19April2014and10August2017-9,015,854.360.00%N100%equityofCHANGHONGMEILINGELECTRICINDONESIA.PTInvestmentestablishmentUS$6millionKELAPAGADING,JKT,IndonesiaSalesDetailsofriskscontrolmeasureshavebeendisclosedbytheCompanybywayofannouncementonappointedmedia(No.2016-027andNo.2016-033)on25March2016-1,369,150.340.48%NOthernotesN/AIII.CoreCompetitivenessAnalysis(1)BrandcapacityTheCompanyisoneofthefamoushomeappliancesmanufacturersinChina,ownsseveralproductlinessuchasrefrigerator,freezingbox,airconditioner,washingmachineandsmallhouseholdappliances.―Meiling‖brandislistedasoneofthemostvaluablebrandsinChina.Inrecentyears,theCompanyhascreatethecompetitivenessofthebrandbycontinuouslyreshapingitsbrandimage,innovatingcoretechnologyanddevelopinghigh-endCHANGHONGMEILINGCO.,LTD.AnnualReport201915intelligentproducts.Intermsofreshapingbrandimage,inordertoenhancethebrandimageandfurtherexpandthemarketinfluence,theCompanyrepositionthebrandbyimplantingthecorporatecultureintothebrandconstruction.InOctober2015,theCompanyholdapressconferenceof"NewLOGOreleaseandofflineofthe10thmillionsetoffrequencyconversionproducts"forrenewingLOGOandlaunchingthenewbrandpropositionof―Meiling,letthegoodcomes‖.AlongwiththereleaseofnewLOGO,Meilingwillalsoimplementabrandstrategyof"GoodTrilogy",includingthedirectsensoryexperienceof―experiencethegood",thespiritsoulenjoymentof―enjoythegood‖,andthelifestylefaithof―believeinthegood‖.Intermsofcontinuousinnovationofcoretechnologies,ontheonehand,thecompanycontinuouslypromotedtheinnovationofintelligentandfrequencyconversiontechnologiestomaintaintheleadingpositionintheindustryinordertomeettheneedsofindustryandmarketdevelopment;ontheotherhand,intheboostingofconsumptionupgrades,inordertomeetconsumers‘individualized,differentiatedanddiversifiedneeds,thecompanyreturnedtothefresh-keepingnatureofrefrigeratorthroughtheapplicationof―watermolecule-activatedfresh-keepingtechnology‖,createdthefirst―1cmfree-embeddedrefrigerator‖throughresearchanddevelopmentoffull-thinGLSintegrationtechnology,achievedthinbodyandthincabinetandthindoor.Thecontinuousinnovationofthecompany'skeycoretechnologieshighlightedMeiling‘sprofessionalcapabilities.Intermsofhigh-endintelligentproductdevelopment,thecompanypromotedproductinnovationthroughcontinuoustechnologicalinnovation.Since2014,thecompanyhassuccessivelyreleasedCHiQintelligentseriesproducts,―MFresh‖refrigerators,and―MFresh‖full-thinseriesproducts,andcreatedthreebrandbusinesscards,i.e.―MeilingFresh‖and―MeilingThin‖,and―MeilingEmbedding‖throughtheintroductionoftheaforementionedhigh-endintelligentproducts,whichnotonlymetmarketdemandinatimelymanner,butalsoenrichedandenhancedthebrandimage.Reshapingbrandabilitythroughcontinuousupgradingofproducts,Meilingwillrealizeayoung,internationalandprofessionalbrandimage.ThroughgradualconstructionoftheideasofWonderfulStartPoint,WonderfulLifeCircleandWonderfulEcologyCircle,Meilinghasbecomeapeople-orientedartistspecializinginwhiteappliances,asmarterscientificexpertandamorereliablehousekeeper.(2)ProductcapacityInmorethan30years,theCompanyalwaysfocusontherefrigerationindustry,hasdevelopedavarietyofdifferenttypesofrefrigeratorproducts,includingthreeserialproducesas―MELNG美菱,CHiQandAthena‖.Mainlyincluded―MFresh‖full-thinseriesfresh-keepingrefrigeratorsequippedwithwatermolecule-activatedfresh-keepingtechnology,suchasBCD-656WQ3M,BCD-681WQ3S,etc.,full-thinwalldoublecurvedembeddedseriesrefrigeratorssuchasBCD-482W,CHiQserieshigh-endintelligentrefrigeratorsandairconditioners,air-coolingcross-shapedside-by-sidedoorseriesrefrigeratorssuchasBCD-501WPUCXandBCD-432WPU9CX,CHANGHONGMEILINGCO.,LTD.AnnualReport201916air-coolingside-by-sidedoorseriesrefrigeratorssuchasBCD-566WUPC,BD-380Wair-coolingseriesproductsexportingtoEurope,BC/BD-106DTEB,156DTEB,211DTEBanddual-temperatureBCD-212DTEB2.0thgenerationthindoorseriesfreezer,andYCD-EL/FL289medicalrefrigeratorfreezercombo,etc.Intermsofair-conditioningproducts,thecompanyadheredtofocusingonthecorestrategyofintelligenceandfrequencyconversion,andemphasizedontheresearchofnewfrequencyconversioncontroltechnologies,amongthem,thetechnologicalachievementsofthe―researchandapplicationofhigh-efficiencyoperationandsecuritycontroltechnologyofinverterairconditionersbasedonmotorwindingtemperaturemeasurementmethods‖hasreachedinternationaladvancedlevels,thistechnologyisofgreatsignificancetothereliabilityofrefrigerationcompressorsandthesafeapplicationofflammableandenvironmentally-friendlyrefrigerantsinrefrigerationsystemsinthefuture;thefrequencyconversionsolutionsbasedonsingle-chipdual-driveon-boardreactorhavebeenappliedtonewenergyefficiencystandardproducts,andthenewenergyefficiencyproductplatformdevelopmentfornewenergyofairconditionerfrom1HPto3HPin2020hasbeencompleted,andtheproducthasbeenlaunchedinbatches.FocusedoncarryingouttheinvertercorecontroltechnologyresearchanddevelopmentandproductapplicationsuchasPMVcontroltechnologyforinfraredtemperaturemeasurementandwindingtemperaturemeasurement,andvigorouslypromotedthecompetitivelow-costfrequencyconversionhardwaresolutionsandtheresearchanddevelopmentofnewstructuralproductstocopewithcompetitionintheair-conditioningmarket.TheCompanyownedadvanceddevelopmentandqualityassurancesystems,passedmanagementsystemcertificationofISO9001,ISO14001andISO45001.Productqualityhasbeenqualityassuranceandproductperformanceisreliable.Atthesametime,thecompanyhasauthoritativecertificationsincluding―national-leveltechnologycenter‖,‖national-levelindustrialdesigncenter‖,―national-levelintellectualpropertydemonstrationenterprise‖asstrongguarantees.Intermsoftechnicalresearch,itiscommittedtoapplyingbasictechnologyresearchandindustrializationtransfer,andhasestablishedatechnicalstrategicplanwith―intelligence,frequencyconversion,simulation‖ascoretechnologies,and―energysaving,freshkeeping,andnewmaterials‖askeytechnologies,annualtechnicalresearchprojectachievementsconversionratereached85%above.Intermsofproductdevelopment,basedonthetechnologicalresearchresultsandconsumptionupgraderequirements,updatedtheannualproductplanningand……