格力电器：2024年年度报告（英文版）

Section I Important Notice, Contents and Paraphrase 2

Section II Company Profile and Main Financial Indicators 6

Section III Management Discussion and Analysis 11

1. The accounting statements signed and sealed by Dong Mingzhu, the legal representative, Liao Jianxiong, chief accountant and Liu Yanzi, head of accounting department.

2. The original audit report sealed by Union Power Certified Public Accountants (Special General Partnership) with signatures and seals of certified public accountants Qiu Yiwu and Wang Huijun.

3. Originals and original drafts of all the Company's documents and announcements published on the media and CNINFO designated by the Company within the report period.

1. Company information

   Stock Abbreviation	Gree Electric Appliances	Stock code	000651
   Stock Exchange	Shenzhen Stock Exchange
   Name in Chinese	Gree Electric Appliances, Inc. of Zhuhai
   Name Abbreviation in Chinese	Gree Electric Appliances
   Name in Foreign Language (if any)	Gree Electric Appliances, Inc. of Zhuhai
   Name Abbreviation in Foreign Language (if any)	GREE
   Legal Representative of the Company	Dong Mingzhu
   Registered Address	Office 608, No. 108, Huitong Third Road, Hengqin New Area, Zhuhai City
   Post Code of Registered Address	519031
   Historical Changes to the Company's Registered Address	On August 26, 2021, it was changed from Jinji West Road, Qianshan, Zhuhai City, Guangdong Province to its current registered address
   Office Address	Jinji West Road, Qianshan, Zhuhai City, Guangdong Province
   Post Code of Office Address	519070
   Website	https://http://www.gree.com.cn
   Email	gree0651@cn.gree.com

2. Contacts and contact information

   	Secretary of the Board of Directors	Securities Affairs Representative
   Name	Zhang Zhouhu
   Address	Jinji West Road, Qianshan, Zhuhai City, Guangdong Province
   Tel.	0756-8669232
   Fax	0756-8614998
   Email	gree0651@cn.gree.com

3. Information disclosure and place of the report

   Website of the stock exchange to which the Company's Annual Report is disclosed	Shenzhen Stock Exchange (https://http://www.szse.cn)
   Media to which the Company's Annual Report is disclosed and their website	China Securities Journal, Securities Times, Shanghai Securities News, Securities Daily, and CNINFO (https://http://www.cninfo.com.cn)
   Place where the Company's Annual Report is available for inspection	Investment Management Department of the Company

4. Alteration of registration

   Unified Social Credit Code	91440400192548256N
   Changes (if any) in the main business since the listing of the Company	No change
   Changes (if any) in the controlling shareholders	On December 2, 2019, GREE GROUP and Zhuhai Mingjun signed the Share Transfer Agreement. GREE GROUP planned to transfer 902,359,632 shares of the Company with unlimited sales conditions held by GREE GROUP to Zhuhai Mingjun at a price of CNY46.17/share; On December 13, 2019, the Zhuhai Municipal People's Government and the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) of Zhuhai City separately approved the share transfer. GREE GROUP obtained the Transfer Registration Confirmation issued by China Securities Depository and Clearing Corporation Limited (CSDC) Shenzhen Branch on February 3, 2020. The share transfer registration procedures for the transfer of this agreement have been completed, and the transfer date is January 23, 2020. After the completion of the share transfer registration, the Company has neither a controlling shareholder nor an actual controller.

5. Other related information

   Accounting firm engaged by the Company

   Name of the accounting firm	Union Power Certified Public Accountants (Special General Partnership)
   Office address of the accounting firm	F/17−18, Yangtze River Industry Building, No. 166 Zhongbei Road, Shuiguohu Sub-district, Wuchang District, Wuhan, Hubei Province
   Names of undersigned accountants	Qiu Yiwu, Wang Huijun

   Sponsor engaged by the Company to perform continuous supervision during the report period

   • Applicable ☑Not Applicable

     Financial adviser engaged by the Company to perform continuous supervision during the report period

   • Applicable ☑Not Applicable

6. Main accounting data and financial indicators

   Whether the Company has retroactive adjustment or restatement of previous accounting data

   • Yes ☑No

     Item	2024	2023	Increase/Decrease Over the Previous Year	2022
     Operating revenue (CNY)	189,163,654,064.64	203,979,266,387.09	-7.26%	188,988,382,706.68
     Net profits attributable to shareholders of the listed companies (CNY)	32,184,570,372.28	29,017,387,604.18	10.91%	24,506,623,782.46
     Net profits attributable to shareholders of the listed companies less non-recurring profits	30,099,760,382.99	27,565,461,117.79	9.19%	23,986,248,264.15

     and losses (CNY)
     Net cash flows from operating activities (CNY)	29,369,250,570.66	56,398,426,354.17	-47.93%	28,668,435,921.27
     Basic earnings per share (CNY/share)	5.83	5.22	11.69%	4.43
     Diluted earnings per share (CNY/share)	5.83	5.22	11.69%	4.43
     Weighted average ROE	25.42%	26.53%	-1.11%	24.19%
     Item	At the End of 2024	At the End of 2023	Increase/Decrease Over the End of Previous Year	At the End of 2022
     Total assets (CNY)	368,031,704,522.86	368,053,902,576.37	-0.01%	355,024,758,878.82
     Net assets attributable to shareholders of the listed companies (CNY)	137,416,898,946.39	116,793,716,103.39	17.66%	96,758,734,892.25

     The net profits of the Company before and after deducting non-recurring profits and losses in the last three fiscal years, whichever is lower, is negative, and the audit report of the last year shows that the Company's ability to continue as a going concern is uncertain

   • Yes ☑No

     The net profits before and after deducting non-recurring profits and losses, whichever is lower, is negative

   • Yes ☑No

7. Accounting data differences under domestic and foreign accounting standards
   1. Differences in net profits and net assets in the financial report disclosed under the international accounting standards and that disclosed under the domestic accounting standards

      • Applicable ☑Not Applicable

        There was no difference in net profits and net assets in the financial report disclosed under the international accounting standards and that disclosed under the domestic accounting standards during the report period.

   2. Differences in net profits and net assets in the financial report disclosed under the overseas accounting standards and that disclosed under the domestic accounting standards

      • Applicable ☑Not Applicable

        There was no difference in net profits and net assets in the financial report disclosed under the overseas accounting standards and that disclosed under the domestic accounting standards during the report period.

8. Quarter-based main financial indicators

   Currency: CNY

   Item	Quarter 1	Quarter 2	Quarter 3	Quarter 4
   Operating revenue	36,364,269,766.89	63,418,846,729.70	46,939,261,479.69	42,441,276,088.36
   Net profits attributable to shareholders of listed companies	4,675,160,247.24	9,460,959,120.36	7,824,777,633.58	10,223,673,371.10
   Net profits attributable	4,525,486,717.09	9,338,477,416.48	7,298,976,638.82	8,936,819,610.60

   to shareholders of listed companies after deduction of non- recurring profits and losses
   Net cash flows from operating activities	-2,940,867,716.29	8,063,034,127.69	7,590,273,332.59	16,656,810,826.67

   Whether major differences exist between the above financial indicators or their sum and those in the disclosed quarterly report and semi-annual report

   • Yes ☑No

9. Non-recurring profit and loss items and amounts

☑Applicable □ Not applicable

Currency: CNY

Details of other profit and loss items conforming to the definition of non-recurring profits and losses:

☑Applicable □ Not applicable

Currency: CNY

Description of defining the non-recurring profit and loss items listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public - Non-recurring Profits and Losses as recurring profit and loss items

No non-recurring profit and loss items listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public - Non-recurring Profits and Losses were defined by the Company as recurring profit and loss items.

1. Industry situation of the Company during the report period
   1. Consumption field - stable growth in the home appliance industry and sustainable growth in the air conditioner market

      In 2024, China's economy maintained an overall recovery and positive trend. Policies promoting the consumption economy's large circulation accelerated the release of updated demand and further stimulated the market's consumption potential. According to data from AVC, the retail sales of all home appliance categories in China (excluding 3C products) reached CNY907.1 billion in 2024, representing a year-on-year growth of 6.4%.

      In March 2024, the state officially launched the "Large-scale Equipment Renewal and Consumer Goods Trade-in" action plan. In late July, the central government further increased its support, clearly stating that it would provide trade-in subsidies for consumers purchasing eight types of home appliances, including air conditioners, refrigerators, and washing machines, that meet or exceed the secondary energy or water efficiency standards. The subsidy rate is 15% of the product's sales price. For products that meet or exceed the primary energy or water efficiency standards, an additional 5% subsidy will be provided to promote the upgrading of home appliance consumption. From August to September, local governments successively introduced supporting policies, and the policy effects continued to be released, with the consumer market showing a recovery and improvement trend. Driven by the trade-in and fiscal subsidy policies, the domestic sales volume of white goods in the fourth quarter increased significantly quarter-on-quarter. Data from the National Bureau of Statistics shows that the annual production of air conditioners, washing machines, and refrigerators increased by 9.7%, 8.8%, and 8.3% respectively, indicating a continuous recovery in the home appliance consumption market.

   2. Industrial sector - production shows a sustained recovery trend

      Data from the National Bureau of Statistics indicates that in 2024, China's large-scale industrial enterprises achieved operating income of CNY137.77 trillion, representing a year-on-year growth of 2.1%. The industrial economy is demonstrating a sustained recovery trend.

      The industrial scale of air conditioner core parts and components increases significantly. According to data from ChinaIOL.com, in 2024, the overall scale of the rotor compressor market reached a new high, with an annual sales volume of nearly 300 million units, representing a year-on-year growth of 13.7%. In the domestic market, the sales volume was approximately 251.69 million units, increasing by 11.9% year-on-year; in the export market, the sales volume was about 44.88 million units, growing by 24.8% year-on-year. Benefiting from the growth in the sales scale of the downstream air conditioner market, the domestic sales volume of air conditioner motors was approximately 396 million units, increasing by 13% year-on-year; the export volume was about 92 million units, growing by 28.9% year-on-year.

      The scale of the intelligent manufacturing equipment industry is growing. The Development Plan on Smart Manufacturing During the "14th Five-Year Plan" takes the development of advanced intelligent manufacturing industry as the core goal to overall arrange and plan the promotion of manufacturing power. At present, China has formed an intelligent manufacturing industry system represented by automated production lines, intelligent detection and assembly equipment, intelligent control systems, industrial robots, etc., and the scale of the industry is growing. According to data from INSIGHT AND INFO, the market size of China's intelligent manufacturing equipment was CNY3.4 trillion, representing a year-on-year growth of 6.3%. Data from the China Machinery Industry Federation shows that the output of industrial robots in 2024 was 556,000 units, increasing by 14.2% year-on-year. According to data from the Zhongshang Industry Research Institute, the scale of the CNC machine tools exceeded CNY430 billion, with a year-on-year growth of approximately 5.7%. With the advancement of technology and the coordinated development of industries, the industrial chains of CNC machine tools and industrial robots will continue to expand and deepen, becoming the core driving force for industrial transformation and upgrading.

2. Major businesses of the Company during the report period

   Gree Electric Appliances, Inc. of Zhuhai is a diversified and technological global industrial group and has three major consumer brands of GREE, TOSOT and KINGHOME, and industrial brands of LANDA, Kaibang, and Xinyuan. Its industry covers two major areas of household consumer goods and industrial equipment. In the consumption field, it covers residential air conditioners, HVAC, refrigerators, washing machines, water heaters, kitchen appliances, environmental appliances, smart buildings, and smart home appliances. In the industrial sector, it covers high-end equipment, precision molds, freezers and refrigeration equipment, motors, compressors, capacitors, semiconductor devices, precision casting equipment, basic materials, industrial energy storage, renewable resources, etc. So far, GREE products have served more than 190 countries and regions around the world, and continue to meet people's needs for a better life.

   During the report period, GREE's sales of central air conditioners remained the largest in the industry. According to the "2024 China Central Air Conditioner Industry Development Report" released by ihos's "HVAC & Heat Pump" magazine, GREE achieved the top sales volume in the domestic central air conditioner market with a market share of over 15%, leading the market for 13 consecutive years.

   During the report period, GREE continuously enriched its product categories. Multiple categories of its home appliances were highly favored by the market, with its retail sales and volumes ranking among the top in the industry. According to data released by Euromonitor, GREE ranked first in the global retail volume of split air conditioners in 2024. Data from AVC shows that in 2024, GREE's share of online retail sales of residential air conditioners was 25.40%, ranking first in the industry; its share of online retail sales of electric fans was 13.01%, ranking second; its share of online retail sales of electric heaters was 9.66%, ranking third; and its share of online retail sales of air source water heaters was 17.45%, also ranking third in the industry.

   In the future, the Company will continue to take "promoting the industrial spirit, mastering core technologies, pursuing perfect quality, providing first-class services, Made in China, Loved by the World" as its mission, and steadily move forward towards the realization of its corporate vision of "building a world-class enterprise and making GREE a century-old brand".

3. Core competence analysis

   The Company adheres to independent innovation, breaks through core technologies, focuses on consumer demands, provides professional services, leads industry development, and jointly creates a better life for humanity.

   1. World-famous brand, continuing to create value for the society

      GREE is a diversified technological global industrial group integrating R&D, production, sales and service. Over the years, the Company has successively won numerous honors such as "China World-famous Brand", "Most Competitive Brand in the Market", "National Quality Award", "Enterprise Exempted from Export Inspection", "China Brand Innovation Award", "Top 100 Scientific and Technological Enterprises in China's Light Industry", and "Top 500 Creditworthy Enterprises in China".

      During the report period, the Company was once again listed on Forbes "Global 2000", made it onto the "2024 China's Top 500 Private Enterprises List", and was included in the "2024 World IoT 500 Golden List", receiving multiple honors including the "Global Business Contribution Award". It was also selected for the "2024 China's Top 100 Overseas Brands Index" and the "People's Craftsmanship Brand" list. In the "2024 China Brand Value Evaluation Information", it ranked first in the home appliance industry of the light industry group with a brand value of CNY188.253 billion.

      GREE adheres to the core values of quality first, customer satisfaction, honest operation and win-win for all parties. It builds and establishes its brand with perfect quality and world-leading technology, and continuously creates value for society and consumers.

   2. Outstanding R&D capabilities demonstrate an industry leading role

      The Company adheres to the principle of "independent research and development of core technologies", builds a multi-level and high-level R&D platform system relying on national-level scientific research platforms, and forms a technological innovation system that is "enterprise-oriented, market-driven, and combines industry, academia, and research". It continuously overcomes key core technologies and leads the development of the industry.

      The Company has the world's largest air conditioner R&D center, with 16 institutes, 152 research institutions, 1,411 laboratories, and 1 academician workstation (electric motor and control). It also has one National Engineering Technology Research Center, one State-level Industrial Design Center, one State Recognized Enterprise Technology Center, and one Robot Engineering Technology R&D Center. At the same time, it has become the research and evaluation base for refrigeration equipment of the National Notification Enquiry Center and the national standard verification point for energy conservation of refrigeration equipment. As of the end of 2024, the Company has cumulatively won 2 National Science and Technology Progress Awards; received a total of 122 important awards at the national, provincial, and industrial levels, and has possessed 46 "World Leading" technologies; has applied for 129,524 patents, including 70,884 invention patents; has obtained 25,883 invention patent grants, making it the only home appliance enterprise to enter the top ten in China's invention patent grants for 9 consecutive years; has won 81 Chinese patent awards, including 3 gold awards for invention and 4 gold awards for appearance; and has got 15 gold awards of International Exhibition of Inventions of Geneva and 12 gold awards of iENA. At the same time, the Company is one of the first batch of national enterprise intellectual property demonstration units, "National Patent Operation Pilot Enterprise", and won the China Trademark Gold Award. The Company's steady increase in the number and quality of patents fully demonstrates GREE's invention and creation capabilities and international leading research and development strength to the world.

   3. Leading PQAM mode, achieving "Made in China, Loved by the World"

      The Company adheres to the quality policy of "pursuing perfect quality, establishing an international brand, and building a century-old enterprise". It always prioritizes quality and is guided by the pursuit of perfect quality. Through continuous innovation, it enhances product quality to give back to consumers.

      Innovation drives quality management. GREE's quality model sets an industry benchmark. Since 2012, the Company has vigorously carried out quality management innovation, method innovation and theoretical innovation, deepened the construction of a quality-strong enterprise, and proposed the forward quality-driven "Five-step Quality Prevention Method" and the reverse quality-driven "D-CTFP Quality Technology Innovation Cycle" methodology; with the T9 comprehensive quality control model and PQAM (perfect quality assurance model) as the core framework, it has established a unique GREE "perfect quality" management model, and won the third "China Quality Award" in 2018. In March 2021, the Company launched a "ten-year free repair" policy for residential air conditioners, which is the longest repair period promised by the Chinese residential air conditioner industry to date. It is also an upgrade of the service quality since GREE was the first in the industry to introduce the "six-year free repair" policy for residential air conditioners in 2005, and it is a demonstration of the strength of GREE air conditioners in leading the industry service standards.

      The Company adheres to the original intention of "taking consumer demand as the highest standard" and contributes to the high-quality development of Made-in-China products with the spirit of "conduct self-examination". In 2019, the Company's quality technology innovation cycle D-CTFP was elevated to the national standard Quality Management - Innovation Cycle Guide Based on Customer Demand (GB/T 38356-2019). In 2023, the book "Pursuing Perfection - Innovation & Progress: GREE Quality Model", co-authored by GREE and South China University of Technology, was selected for the "Best Quality Practices in China in the 21st Century" series published by Standards Press of China. During the report period, the Company once again received the two highest honors in its field, "Enterprise Market Quality Credit AAA Level" and "Five-Star User Satisfaction Benchmark Enterprise", awarded by the China Association for Quality, demonstrating consumers' recognition of GREE's high-quality products and showcasing GREE's strong strength as a leading player in the industry.

      Through continuous innovation and outstanding management, GREE has set an industry benchmark with its "Perfect Quality" management model, demonstrating the absolute advantage of "Made in China". In the future, we will continue to take "pursuing perfect quality" as our responsibility and "satisfying users" as our goal, to win global admiration for "Made in China"!

   4. The full series of home appliances, providing consumers with a high-quality living environment

      GREE's products cover a full range of home appliances, including residential air conditioners, HVAC systems, refrigerators, washing machines, water heaters, kitchen appliances, and environmental appliances, fully meeting consumers' comprehensive needs for a high-quality living experience. During the report period, the Company adhered to the principle of user demand-oriented and launched a

      series of new home appliances, including AI Savenergior Air Conditioner, Cool Comfort-II Energy-saving Air Conditioner, Ultimate Refresh Air Conditioner, Pure Fresh Air Conditioner, residential central air conditioners with Gentle Air Comfort technology, Pular and Charmo series of photovoltaic storage air conditioners for tropical regions, All-round Freshness Preservation series refrigerators, "Zhenrou" series washing machines, high-efficiency heat exchange series gas water heaters, instant heating wall-mounted pipeline water dispensers, stove range hood sets, air circulators, air cooler, new tower-type warm air fans, and new humidifying skirting boards, providing consumers with a high-quality home living environment.

      The Company has deepened its layout in areas such as the whole-house intelligent system, the whole-house communication architecture, intelligent voice interaction, and the intelligence of home appliances, achieving the construction of a "Healthy Home" from individual smart products to the entire smart home appliance ecosystem. The Company takes "A Better Life, One Step Ahead" as its core concept and independently created the IoT platform, intelligent decision-making system, G-Voice voice interaction system, intelligent vision system, G-OS IoT operating system, G-Learning comfort and energy-saving algorithm and other intelligent IoT technologies. It has launched a series of smart home products and formed a smart home solution covering five systems: energy, air, health, security and lighting. It has achieved a leap from "GREE, Making Better Home Appliances" to "Smart life, Created by GREE", and comprehensively and systematically created a healthy and intelligent home environment.

   5. A new retail system under autonomous control, meeting consumers' new demands through digitalization

      The Company is committed to building an independent, controllable, mutually beneficial and win-win channel system. By continuously promoting the innovation of the new retail marketing system, it has formed a dual-line integrated sales network covering the whole country. Through the in-depth application of digital technology, the Company continuously enhances channel efficiency, achieving a win-win situation for the enterprise, distributors and consumers.

      The Company has established a nationwide dual-channel integrated sales network through 30 regional sales companies across the country, over 30,000 offline outlets, its own online platform and official flagship stores on third-party e-commerce platforms, further strengthening its channel retail capabilities and market service capabilities. It has also set up a unified national marketing and inventory management plan to enhance the transparency and controllability of channel management, reduce channel inventory, optimize logistics costs and improve channel operation efficiency. The Company is actively creating an offline experiential shopping environment and has launched a new channel strategy brand, "Dong Mingzhu Healthy Home", integrating multiple categories of home appliances to meet consumers' diverse needs and provide comprehensive and high-quality home life solutions for them.

      Digitalization empowers new advantages in channel management. By building an advanced digital information system, the Company has achieved full-process digitalization from procurement and logistics to sales and services, enhancing overall efficiency. Digital technology improves the timeliness of sales information for dealers, facilitating precise decision-making and efficient implementation, and further enhancing the service efficiency of dealers and inventory turnover rate. Digital means make the Company's terminal business situation visible, enhancing user stickiness; through the digital upgrade of terminal stores, it deepens the flattening reform of the channel, improves operational efficiency, continuously improves the shopping experience of consumers, and further consolidates the Company's market position.

   6. Scientific production capacity layout and leading intelligent manufacturing level to respond to market demand flexibly

      The Company scientifically arranges its production capacity distribution based on factors such as the market demand characteristics of different products and the differences in regional production factor endowments. By the end of 2024, the Company had established 77 production bases in multiple provinces and cities including Guangdong, Chongqing, Anhui, and in countries such as Brazil, covering air conditioners, home appliances, industrial products, etc., achieving industrial agglomeration and highly coordinated development of the upstream and downstream industrial chains. The Company, guided by the principles of serving the market, overall planning, local production, and regional collaboration, and following the allocation principles of economic transportation and balanced production, arranges the production capacity of each base to promote the optimal benefits. Meanwhile, the Company has established 6 recycling

      resource bases, covering the entire industrial chain from upstream production to downstream recycling, and has achieved a green, circular and sustainable development model.

      With the goal of enhancing the operational efficiency of the entire production process, the Company fully integrates advanced technologies such as industrial robots, CNC machine tools, 5G, and AI into its production scenarios, striving to build and cultivate leading demonstration factories in the industry. By the end of 2024, the Company had been awarded a total of 2 national-level intelligent factories, 3 national-level 5G factories, 9 national-level green factories, and 8 national-level industrial internet pilot demonstrations/application cases, fully demonstrating the Company's leading position in the field of intelligent manufacturing.

      Precise production capacity layout and leading intelligent manufacturing level further enhanced GREE's manufacturing and cost advantages, realized the rapid response to market demand and brought high-quality life enjoyment to consumers.

   7. With strong self-research and self-made ability of core components, the comprehensive competitiveness of products continues to lead the industry

      The Company possesses strong capabilities in core component research and development as well as manufacturing. It has subsidiaries such as Landa Compressor, Kaibang Motor, Xinyuan Electronics, Gree Electric, and Gree Mold. It leads the industry in terms of production capacity, technology and quality, and has successively won honors such as the "National Quality Award", "National Quality Benchmark", "Top 100 Enterprises in China's Electronic Components Industry", "National Intellectual Property Advantage Enterprise", "Guangdong Famous Product", and "Guangdong Provincial Enterprise Technology Center". It has established key industry experimental and testing centers and research centers such as the "National CNAS Testing Center", "Guangdong Provincial Engineering Technology Research Center for Key Electronic Components", "Guangdong Provincial Engineering Technology Research Center", and "Guangdong Provincial Intelligent Mold Technology Innovation Center", demonstrating the Company's hard power and brand influence in industrial product development.

      The Company's independently developed products, including the two-stage enthalpy-increasing compressor, three-cylinder two-stage variable displacement compressor, rare-earth-free main drive motor system, high-performance linear servo motor and driver, high-performance servo motor and driver for industrial robots, and magnetic levitation motor drive system, have all received the "World Leading" technology certification. The CD294W large ripple aluminum electrolytic capacitor with welded plates has been shortlisted for the 2024 AWE Award. The Company has a comprehensive grasp of the advanced technology of core components and continuously consolidates its leading position in the market.

      GREE has strong R&D capability of core components and excellent processing and manufacturing capability. The GA-UHD500 horizontal machining center from GREE adopts a stepped column lightweight and high-rigidity structural design, breaking through the technical challenges of high speed and high precision. Its maximum feed rate reaches 60 m/min, with a minimum division of 0.001°. The positioning accuracy and repeatability of the equipment are 0.006 mm and 0.004 mm respectively, and the efficiency is increased by more than 15% compared with the same type of equipment. It meets the high-quality processing requirements of core components. The powerful R&D and manufacturing capabilities of core components ensure the extremely high degree of autonomy and comprehensive competitiveness of the Company's products, providing strong support for the Company's continuous and stable development and guaranteeing that the Company's products always remain at the leading position.

   8. Refine the cost control system and continuously enhance the competitiveness of products

      The Company adheres to the customer demand-oriented approach, combines its business goals, and establishes and improves the cost control system. It deepens the cost control of products, implements value chain analysis, and through the decomposition and analysis of the impact of the input, transformation and output of costs in each business link inside and outside the group on the final value of the product, it improves operations and reduces costs accordingly, thus forming a sustainable competitive advantage.

      Supply chain integration promotes cost reduction on a large scale. The Company implements a centralized procurement policy, continuously expands its layout in the upstream and downstream of the industrial chain, actively builds strategic partnerships with leading enterprises in the industry, continuously optimizes the supply chain structure, integrates and utilizes high-quality supply chain resources, and is committed to achieving a win-win situation for all parties. The Company continuously deepens its cooperative

      relationship with high-quality suppliers, shares resources, and strives to maximize the interests of both parties, achieving mutual benefit and win-win results.

      Digital technology drives cost reduction across the entire value chain. The Company continuously increases the application of digital technology in its operation and management, achieving digital control over the entire chain from product research and development, procurement, production to sales, and promoting optimization throughout the product life cycle and the entire manufacturing process, as well as overall cost reduction.

      Continuous innovation leads to cost reduction in product technology. The Company has further enhanced material utilization and accelerated the generalization of materials by improving product structure design, optimizing process links, and developing lean models, achieving a sustained decline in costs.

   9. A well-developed system for cultivating independent talents to ensure a high-quality supply of human resources

   GREE always adheres to the principle of "focusing on the strategic layout of the Company and adhering to independent training of talents" and gradually forms an independent talent training mode with an independent talent introduction channel, independent training and development mechanism and all-round incentive and guarantee system as the core based on the development experience and cultural deposit of the Company, striving to make employees and the Company make progress and develop together.

   The Company has established a systematic "selection, cultivation, utilization and retention" independent talent training system. It attaches great importance to introducing outstanding talents from universities. Through various forms such as employer brand characteristic activities, university-enterprise co-construction of characteristic courses and campus recruitment fairs, it recruits professional talents who recognize the Company's corporate culture and have high quality. It always regards talent cultivation as an important strategic resource for the development of the enterprise. By building a learning organization, it promotes the inheritance of management experience, the sharing of R&D technology and the improvement of skills and qualities. For key groups, it organizes and conducts "Cornerstone Plan" supervisor training camps, "Spark Plan" team leader training camps and college student talent training projects, providing all-round and multi-level training support for employees. It continuously strengthens the talent evaluation and selection mechanism to provide strong support for talent identification. It also enhances talent care, enabling employees to share the dividends of the Company's development through employee stock ownership plans, talent subsidies, talent housing and other aspects, thereby improving employee satisfaction and happiness.

   By the end of 2024, the Company had been awarded 2 National Ten Thousand Talents Program Leading Talents in Science and Technology Innovation, 4 experts enjoying special government allowances from the State Council, 4 advanced basic process talents from the MIIT, 1 national leading talent in intellectual property, 1 national technical expert, 1 outstanding contribution award in South Guangdong, 2 young outstanding talents under the Guangdong Special Support Program, 76 high-level talents in Zhuhai, 390 outstanding young talents in Zhuhai's industries, 14 Guangdong Provincial Technical Experts, 2 Nanyue Technical Experts, 17 Zhuhai Municipal Technical Experts, 16 Zhuhai Municipal Chief Technical Experts, 14 Zhuhai Special Artisans, and 341 Zhuhai Artisans. The Company's strong capabilities in talent cultivation lay a solid foundation for its long-term development.

4. Analysis of main business
   1. Overview

The Company, with the vision of "building a world-class enterprise and establishing a century-old brand of GREE", relies on the enterprising and pioneering spirit of all GREE employees to forge ahead and overcome challenges. In 2024, the Company achieved a total operating revenue of CNY190.038 billion; the net profit attributable to the parent company was CNY32.185 billion, representing a year-on-year growth of 10.91%, with its profitability continuously improving.

1. Focus on market demand and continuously provide users with innovative consumer products.
   1. Residential air conditioner sector

      During the report period, the Company focused on "energy conservation and low carbon, comfort and health, and personalization and intelligence" to upgrade its residential air conditioners, creating a new generation of high-performance, healthy and intelligent residential air conditioner products.

      In terms of energy conservation and efficiency, the Company has launched a series of wall-mounted air conditioners such as "Cool Comfort-II" and "Savenergior". These products are designed to meet the high standards of green and energy-efficient operation, integrating key technologies for low-carbon dynamic operation of inverter air conditioners, energy-saving control technologies based on artificial intelligence algorithms, and highly applicable AI chips, effectively enhancing the dynamic energy efficiency throughout the year. Based on the number of air conditioners sold in this series, it is estimated that about 308 million kilowatt-hours of electricity can be saved each year, and about 306,700 tons of CO2 emissions can be reduced, truly achieving energy conservation and carbon reduction in the operation of air conditioners.

      In terms of comfort and health, the Company has launched fresh air conditioner series such as "Ultimate Refresh" and "Pure Fresh". These products focus on users' demands for low-noise and high-efficiency fresh air replacement, as well as bacteria removal and purification. They are equipped with technologies like low-noise and large fresh air volume, and high-efficiency water condensation purification and bacteria removal, achieving professional-level air circulation, purification and bacteria removal. With low noise and large fresh air volume, they significantly enhance users' experience of using the fresh air function.

      In terms of personalized intelligence, the Company has launched the "Pure Air" floor-standing air conditioner, which is equipped with millimeter-wave radar technology. It intelligently monitors the situation of people in the area and adjusts the air supply of the air conditioner accordingly, achieving the intelligent and flexible "wind avoids direct blowing people and follows people". It can also intelligently detect when users leave the area and automatically turn off the air conditioner, eliminating the trouble of forgetting to turn it off and providing consumers with a more intelligent, worry-free, comfortable experience.

      In response to the environmental protection requirements of the EU region, the Company has independently developed active and precise detection technology, full-system collaborative control leakage prevention technology, and high-precision regulation technology of the unique electronic expansion valve for R290. It has launched a new series of residential air conditioners with R290 eco-friendly refrigerant, achieving safe, reliable and efficient operation within a wide temperature range from -25°C to 50°C. The SEER reaches A+++, and the SCOP reaches A++. It has been successfully launched in many countries and regions in Europe, Africa and others. In response to the high-temperature environment in tropical regions, the Company has developed the Pular and Charmo series products suitable for different areas. These products integrate technologies such as stepwise heat exchange parallel compression refrigeration, photovoltaic direct drive, and energy storage, achieving efficient and stable cooling under high-temperature conditions and solving the problem of cooling demands in high-temperature environments.

      
      
      
   2. HVAC equipment sector

      The Company's HVAC sector covers over a thousand categories of 13 major series, including centrifugal chiller, VRF, screw chiller, chiller, unit chiller, household chiller, and precision air conditioner, which, by continuously upgrading product technology, can meet the application demands of different working conditions, scenarios, and industries, and serve major benchmarking projects.

      Residential central air conditioner

      In response to the long-standing industry pain points such as poor heating efficiency and cold air blowing directly onto people in traditional air conditioners, the Company has innovatively extended the "Gentle Air Comfort" technology from the residential air conditioner field to the residential central air conditioner field, and launched the central air conditioner with gentle air comfort technology. The product adopts the industry's first reversible air supply technology, which ensures that the air does not blow on people during cooling and quickly warms up the human activity area in the room during heating. The vertical temperature difference in the room is as low as 0.11°C, keeping people in the most comfortable zone.

      In response to consumers' demands for comfort and weather resistance of residential air conditioners, the Company has launched the "Smart Comfortable Home" central air conditioner system for homes based on years of technological accumulation. The product is equipped with temperature and humidity balance technology, enabling intelligent adjustment; it is combined with an air purification function to meet customers' health demands; it adopts a brand-new sand-textured black appearance and standard golden anti-corrosion fins, effectively resisting daily wind and rain erosion.

      In response to the problems of traditional water floor heating systems, such as freezing in winter and large pipe diameters that occupy floor height, the Company has launched the "Yuxiang" dual-purpose central air conditioner system for home use that combines ceiling and floor heating. The product adopts fluorine floor heating, with capillary copper tubes as the heating pipes, which have a diameter of only 4 mm, effectively saving floor height. Meanwhile, the entire system is designed without water, eliminating the risk of freezing in winter. The product is equipped with the world's leading intelligent predictive control technology, which reduces room temperature fluctuations and saves over 30% of energy in actual operation. At the same time, it undergoes functional upgrades, featuring body-sensing control and self-cleaning functions. It meets the demands of three-dimensional heating in winter, cooling in summer, and temperature control and dehumidification in the high-humidity transitional seasons, achieving precise regulation of indoor temperature and humidity throughout the year and fulfilling the comfort requirements.

      In response to the limited installation space issue for modern green buildings, the Company has launched a full range of "GMV ES"

      high-capacity side discharge VRF, with the maximum cooling capacity increased to 68.5 kW. The floor space occupied by the product is 45% less than that of the same cooling capacity top discharge VRF. It does not require the operation of a large hoisting machine. A single outdoor unit can support up to 40 indoor units, reducing installation difficulty and cost, and meeting the usage requirements of more installation scenarios.

      In response to consumers' demands for indoor air purification and low maintenance costs of equipment, the Company has launched the "SelectAir" DB series of full heat exchange fresh air purifiers. The product features a high-molecular washable core, achieving "zero consumables" for the core. It is equipped with an air quality detection device inside, making air quality visible. The PM2.5 and carbon dioxide concentration parameters can be viewed through the wire controller. It adopts a four-layer purification and antibacterial filter combined with ion sterilization technology, effectively removing formaldehyde, purifying PM2.5 and eliminating bacteria.

      In response to the challenges of on-site energy efficiency detection and regulation for commercial VRF in large buildings, the Company has conducted research and development in areas such as real-time performance calculation technology, flexible refrigerant regulation technology, and full-scenario AI energy-saving technology. It has launched the "AI Wide-range Energy-saving" GMV9 Zhiyue series VRF, which is the first in the industry to achieve an online measurement accuracy of indoor unit capacity of ≥90%, real-time power consumption measurement accuracy of the unit of ≥95%, and an average energy-saving rate of 25%. This technological achievement was appraised by the Appraisal Committee of China Machinery Industry Federation as being at the "World Leading" level.

      
      
      Commercial air conditioner

      In response to the energy efficiency demands in public buildings, rail transit, data centers and other fields, the Company has conducted research in the directions of screw compressor structure design and high-precision control, and launched a new generation of two-stage permanent magnet variable frequency screw water chillers, achieving a significant improvement in performance across all operating conditions, with a COP of 7.0+ under national standard conditions. This technological achievement was appraised as "World Leading" by the Appraisal Committee of the China Machinery Industry Federation, won the First Prize of the Guangdong Science and Technology Progress Award, and was selected as a "Gold Award Product" and "Product of the Year" at the 2024 China Refrigeration Expo. It has been widely applied in various projects such as public buildings, subway stations, and industrial refrigeration, and is exported to many countries and regions including Singapore and Russia.

      In response to the market demand for energy-saving renovations of buildings, the Company has launched modular integrated dynamic pressure gas suspension centrifugal machines. Product COP and IPLV both reach dual primary energy efficiency. It adopts a small modular design, equipped with dynamic pressure air suspension bearings, ensuring all-time high efficiency, flexibility, compactness,

      and ease of maintenance, making building renovations simple and flexible.

      In response to the problems of low energy efficiency, difficulty in batch replication at the line level, large variations in operating conditions, and inability to self-adjust operating parameters in traditional metro station air conditioner systems, the Company has developed a fully-conditioned high-efficiency intelligent environmental control system for metro stations based on variable frequency and variable capacity technology, variable dynamic correction energy-saving control technology based on actual operating data of air conditioner systems, and a full-condition integrated environmental control system with low thermal resistance heat exchange and low water resistance pipe networks, achieving batch application in the metro field. This technological achievement was appraised by the Appraisal Committee of China Energy Conservation Association as being at the "World Leading" level.

      
      
      Clean heating

      In response to the demand for clean energy heating in place of coal in northern regions, the Company has launched the low-temperature and high-efficiency integrated heat pump heating product. This series of products adopts dual-stage compression low-temperature heating gas injection and enthalpy increase technology, direct current variable frequency drive liquid cooling and heat recovery technology, and stepwise precise gas injection control technology, achieving ultra-low temperature heating at -35°C and high water supply temperature of 60°C, with heating/cooling energy efficiency exceeding the first level. The integrated modular design makes selection, installation and operation simple and flexible, meeting the heating market demand in northern regions.

      For non-process industrial heating applications, the Company has launched industrial large-capacity high-temperature centrifugal heat pump units. The product features high temperature, high efficiency, low carbon emissions, large capacity, and significant temperature rise. It breaks through the bottleneck of comprehensive utilization of low-grade heat sources such as waste heat, with a single unit heat output reaching 10 MW and the highest outlet water temperature reaching 150°C. It can replace boilers for heating and promote energy conservation in the industrial sector.

      In response to the diverse demands for engineering hot water, the Company has launched a new generation of "Hot.Spa Area" full DC inverter air source heat pump water heaters. The product features two operation modes: hot water and heating, making it more adaptable to various engineering projects. It supports wide ambient temperature operation, providing stable heating from -20°C to 45°C and can produce hot water up to 60°C. The side discharge shell design offers greater installation flexibility, reducing the floor space by up to 37%, meeting diverse engineering requirements. It has obvious advantages in energy-saving performance, hot water supply capacity, operational stability, and ease of installation, effectively addressing the demand for clean hot water in public places such as schools, hotels, shopping malls, and shops.

      
      
      Refrigeration and freezing

      In response to the demands for rapid freezing and high energy efficiency in the cold chain logistics market, the Company has launched ultra-low temperature single-stage double-screw parallel units. The product's COP has been increased by more than 40% compared to single-stage compression, ensuring long-term efficient and stable operation of the units under rapid freezing conditions, significantly reducing freezing time and operational energy consumption. In response to the demand for large-scale cooling applications, the Company has launched an open-type screw compressor unit. The product has a single-unit displacement of up to 3,000 m³/h, achieving a 5% increase in energy efficiency. It adopts a new 7/8 tooth high-efficiency rotor profile, which is more suitable for low-temperature conditions and effectively ensures the stable operation of the unit under harsh conditions.

      "Zero-carbon source" air conditioner

      After ten years of technological research and development, the Company innovatively integrates photovoltaic energy and air conditioner products across borders. The world's first GREE "zero carbon source" air conditioner system won the highest award at the 2021 Global Cooling Prize, which is highly in line with the national "dual carbon" goals.

      During the report period, the advanced photovoltaic energy storage direct current flexible system quality standard laboratory, led by GREE and jointly established with the University of Macau and Guangdong Power Grid, was approved for establishment in June 2024. The "zero carbon source" photovoltaic energy storage air conditioner system product series were further enriched, increasing to 15 categories and 101 models. This successfully addressed the technical pain points of local consumption of photovoltaic power and peak shaving and valley filling of electricity. The application of this technology was included in the "Opinions of the Central Committee of the Communist Party of China and the State Council on Accelerating the Comprehensive Green Transformation of Economic and Social Development". As of the end of 2024, the technology related to the photovoltaic (storage) DC air conditioner system has won multiple domestic and international awards, including the first Chinese Patent Gold Award in the home appliance industry, the UK RAC Annual Achievement Award, and the International Exhibition of Inventions of Geneva Gold Award; the Company's "zero carbon source" system has been implemented in 35 countries and regions around the world, and it is estimated that it can achieve an annual reduction of about 110,000 tons of carbon emissions.

   3. Home appliances

      The Company, centering on the product strategy of "GREE, Making Better Home Appliances", has achieved full coverage of a series of products including refrigerators and washing machines, kitchen appliances, water heaters, environmental appliances and medical aesthetics, etc. The products are positioned towards health, intelligence and personalization, and a set-based layout is implemented.

      Refrigerator and washing machine

      The Company's All-round Freshness Preservation series of refrigerators have developed self-balancing fruit and vegetable preservation technology, natural convection meat preservation technology and meat ultra-freezing storage technology. These technologies effectively solve problems such as fruit and vegetable dehydration, meat surface drying and discoloration, nutrient loss, myoglobin and unsaturated fatty acid oxidation and deterioration in complex storage scenarios, achieving constant humidity control in fruit and vegetable storage scenarios and reducing meat juice loss rate. This technological achievement was appraised by the Appraisal Committee of China National Light Industry Council as being at the "World Leading" level.

      
      
      

      The Company has launched the "Zhenrou" series of washing machines and washer dryer. These products feature an active water rinse technology, addressing users' demands for deep cleaning, efficient sterilization, and smart interconnection scenarios of washing machines. It achieves uniform and full coverage within the rinse bucket, saving 40% of time compared to traditional soaking rinse methods, significantly reducing laundry time. The rinse efficiency reaches up to 97.4%, and the sterilization rate exceeds 99.99%. Additionally, they are equipped with smart WiFi functionality, enhancing the user experience. The product won the bronze medal at the 49th International Exhibition of Inventions of Geneva with its outstanding performance and innovative technology, and has been widely praised by users.

      
      
      Kitchen appliance

      The Company has launched a wall-mounted instant hot water dispenser that can achieve "boiling and then cooling to produce warm water in seconds", provide hot water at all temperature ranges and offer 1°C precise temperature adjustment. With a large flow rate of 800 mL/min, it is compatible with full-flow water purifiers, making it convenient to use. Moreover, the water tank is equipped with ultraviolet sterilization technology to ensure drinking water safety.

      The Company has launched uncoated cast iron rice cookers and stainless steel rice cookers. The cast iron rice cooker adopts the ancient casting process and combines modern high-temperature nitriding and oxidation surface treatment technology to achieve a chemical-free coating, preventing air, moisture and the iron base material from coming into contact, thus making the cast iron inner pot less prone to sticking and rusting, allowing consumers to use it with confidence and enjoy healthy meals. The stainless steel rice cooker is made of high-quality 316L food-grade stainless steel, treated with polishing and brushing processes, without coating, wear-resistant, corrosion-resistant, and resistant to hard object scratches, ensuring a longer service life. Meanwhile, the inner pot is specially designed with micro-scale dot array pits, which can reduce the contact area of the rice and lower the adhesion force of the rice, achieving long-lasting non-stick performance.

      The Company has launched the "Clean Star" range hood, which is equipped with a 10-year inner cavity maintenance-free cleaning technology, solving the industry's difficult problems of hard-to-clean and strong odor inside the range hood. Through the motor FOC control technology and NVH noise reduction technology, it has continuously broken through in terms of air volume and performance. The Company has launched a new type of built-in disinfection cabinet. With its efficient sterilization and drying composite technology, it can easily kill 99.99% of bacteria and viruses, and its disinfection level has reached the highest two-star standard in the industry.

      
      
      Water heater

      The Company has launched a 18-liter large-capacity gas water heater. The product is equipped with a zero-cold-water function, achieving constant temperature and comfortable bathing needs, which is more suitable for families with many people, multiple kitchens and bathrooms, and villa-type families. Moreover, in response to the problem of water tank corrosion caused by poor water quality, a no-coil high-efficiency heat exchange system has been developed, successfully solving the problem of water tank corrosion.

      Environmental appliance

      The Company has launched a tower-shaped voice-activated warm air blower. It is equipped with an offline voice module and features a separate sound cavity structure. Without the need for an internet connection, it achieves a voice recognition rate of over 91% and has no false wake-ups within 48 hours. It adopts an anti-disturbance dual-power pressurized air duct to keep the noise level at or below 50 dB. The design of a large arc-shaped air outlet with anti-scalding structure ensures even heat dissipation, better meeting the needs of consumers.

      The Company has launched the Flame Humidifying Baseboard, which integrates ultrasonic humidification to ensure warmth without dryness. It features a flame-like ambient light design to create a cozy fireplace-like heating experience. Equipped with IPX4 water resistance and graphene heating elements, it offers a temperature range of 16°C to 30°C, with smart temperature control, making it safe for both home and bathroom use.

      Medical aesthetic products

      The Company, centering on users' demands for a healthy and high-quality life, has launched a series of home health products such as the GREE Double-sided Beauty Instrument, blood pressure monitors, nebulizers, and pulse oximeters.

      The Double-sided Queen Microcurrent Beauty Device is equipped with 1.5 kHz oscillating current technology that adapts to skin characteristics and dual cold and hot face plates technology, allowing you to enjoy salon-level care at home.

      The Masked Queen Spectral Beauty Device adopts a rapid response self-sensing technology, completely solving the problem of dazzling strong light during use.

      The blood pressure monitor adopts a stable pressure measurement technology, which can reduce the risk of measurement result fluctuations caused by factors such as patients' psychology during the testing process, ensuring the accuracy of the measurement data. The nebulizer adopts reflux liquid level detection technology, lengthening the path between the electrode and the nebulization membrane, solving the problem in the industry where the liquid level detection of nebulizers is inaccurate due to the influence of water film, and ensuring the accuracy and reliability of liquid level detection for drug solutions with different conductivities.

      The blood oxygen monitor adopts photoelectric blood oxygen detection technology combined with volume pulse plethysmography technology to enhance the accuracy of blood oxygen saturation and pulse rate sensing, and achieve rapid analysis and measurement results.

      
      
      
2. Adhere to independent innovation, constantly make breakthroughs in world-leading technologies

   The Company adheres to independent research and development of core technologies, upholds the concept of "unlimited investment based on demand", and has established a multi-level and high-level R&D platform system relying on national-level scientific research platforms. It has formed a technological innovation system that is "enterprise-oriented, market-driven, and combines industry, academia, and research", achieving remarkable results.

   1. Major scientific research achievements have been certified as "World Leading", and core technologies have been broken through.

      The project "120°C+ Industrial Large-capacity High-efficiency High-temperature Centrifugal Heat Pump" has been appraised by the Appraisal Committee of China Machinery Industry Federation as being at the "World Leading" level. The Company has independently developed three innovative technologies: 120°C+ high-speed direct-drive high-temperature heat pump centrifugal compressors, 60K+ temperature rise dual-compressor series and multi-stage compression gas injection high-efficiency industrial heat pump units, and high-temperature enhanced heat exchange. These innovations have addressed industry problems such as the difficulty in cooling compressors in high-temperature environments, the easy overheating and failure of bearings, motors, and lubricating oil, the poor stability of rotor high-speed operation under high-temperature and heavy load conditions, the low system performance with a 120°C water outlet and large temperature rise, and the poor performance of heat exchangers at high temperatures.

      The project "COP7.0+ Dual-stage Permanent Magnet Variable Frequency Screw Chiller" has been appraised by the Appraisal Committee of China Machinery Industry Federation as being at the "World Leading" level. The Company has applied the two-stage screw compressor technology to water-cooled chillers, achieving inter-stage gas injection to enhance system efficiency. At the same time, it is equipped with a new type of small pressure ratio, same-tooth, different-structure, isochoric and highly efficient rotor profile, as well as precise and adaptive control of the two-stage pressure ratio without position identification, significantly improving the efficiency across all operating conditions. The COP under the national standard condition C reaches 7.0+, which can meet the usage requirements of various public buildings, rail transit, data centers and other fields.

      The project "Research and Application of Key Technologies for Low-carbon Dynamic Operation of Inverter Air Conditioners"

      has been appraised by the Appraisal Committee of China National Light Industry Council as being at the "World Leading" level. The Company has launched air conditioners equipped with the "Key Technology for Low-carbon Dynamic Operation of Inverter Air Conditioners". After third-party testing, the product's dynamic energy efficiency optimization control technology based on artificial intelligence algorithms and room load adaptive technology based on neural network self-learning have achieved a dynamic energy efficiency improvement of over 15.8% throughout the year and a reduction in annual power consumption of 13.6%. It realizes the best dynamic operation effect of air conditioners, rapid temperature control, comfort and energy saving, and solves the problems of the lack of dynamic operation energy efficiency evaluation methods for current air conditioners and inconsistent actual energy-saving effects. The project "Research and Application of Key Technologies for Fresh-keeping of Fruits, Vegetables and Meats in Household Refrigerators" has been appraised by the Appraisal Committee of China National Light Industry Council as being at the "World Leading" level. The Company has developed a series of innovative technologies for preserving fruits and vegetables and meats, including self-balancing high-permeability moisture membranes and air-source vapor humidification for fruits and vegetables, natural convection overcooling for meat preservation, and wide-frequency fully enclosed piston compressors for ultra-freezing storage of meats. These technologies have effectively addressed the challenges of excessive moisture condensation and bacterial growth or insufficient humidity leading to dehydration in complex storage scenarios for fruits and vegetables, with measured humidity reaching up to 95%. Additionally, the Company has expanded the maximum operating frequency of R600a fully enclosed piston compressors to 120 Hz, enabling long-term stable operation of refrigerators at -38°C. This breakthrough has overcome the issues of rapid volume efficiency decline and poor reliability of existing refrigerator compressors at ultra-high frequencies.

      The project "Key Technologies and Applications of High-Efficiency Intelligent Environmental Control System for Metro Stations under All Operating Conditions" has been appraised by the Appraisal Committee of China Energy Conservation Association as being at the "World Leading" level. The Company has established a comprehensive standard system for the entire life cycle of efficient computer rooms for intelligent environmental control systems in subway stations, adopting a full-process standard digital implementation and delivery model to ensure the efficient construction and operation and maintenance of the environmental control system. At the same time, it has developed a full-condition efficient integrated environmental control system based on permanent magnet variable frequency variable capacity screw chillers, low-resistance distribution pipelines throughout the process, matrix EC fan walls, and variable flow direct-drive cooling towers with permanent magnet synchronous motors, solving the industry problem of the inability to decouple flow and pressure ratio. It has also created a simulation system architecture with data model accompaniment and invented a variable dynamic correction energy-saving control technology based on actual operation data of the air conditioner system, achieving global optimization of operating parameters for the environmental control system under all conditions and ensuring a comprehensive improvement in the "quantity-quality-efficiency" of the environmental control system in subway stations. The project "Key Technologies and Applications of Magnetic Bearing Motor System" has been appraised by the Appraisal Committee of the China Electrotechnical Society as being at the "World Leading" level. The Company has broken through the technical barriers of the industry, independently mastered the full set of core technologies of the magnetic bearing system, and for the first time achieved the industrialization of the full series of magnetic bearing compressors. It has also realized the serialization of industrial products such as magnetic levitation air compressors and magnetic bearing high-speed motors, solving the key technical problems of magnetic bearing motor systems and their application in refrigeration and air compressors, as well as the stability, reliability and safety issues of magnetic bearing technology in complex environments.

   2. Multiple R&D projects have won important awards, and the achievements in innovation are remarkable.

      The project "Key Technologies and Industrialization of High-Performance Screw Refrigeration Compressors in Complex Environments" won the First Prize of Science and Technology Progress of Guangdong Province. The Company, in collaboration with Xi'an Jiaotong University and Zhejiang University, has gone through four generations of technological innovation and spent ten years in research and development to break through the bottleneck. It has achieved significant breakthroughs in compressor theory, rotor profile, flow layout, and pressure ratio control. It has overcome the challenge of simultaneously enhancing the rated efficienccy and variable working condition efficiency of compressors under complex climatic conditions. Moreover, it has broken through the

      reliability guarantee technologies for compressors in extreme environments, such as anti-impact, long service life, and low vibration. The first small pressure ratio dual-stage permanent magnet variable frequency adaptive variable pressure ratio screw compressor has been created. The COP of the entire series under national standard conditions has exceeded 7.0, setting a new energy efficiency benchmark for water chillers.

      The project "Research and Application of Key Technologies for Efficient Room Temperature Catalytic Formaldehyde Removal" won the second prize of Science and Technology Progress of Guangdong Province. The Company has invented a highly active and selective dual-metal room-temperature catalytic formaldehyde removal material, which can rapidly, effectively and environmentally decompose formaldehyde into harmless carbon dioxide and water at room temperature. The formaldehyde decomposition efficiency is as high as 99.9%, making it suitable for high-quality air purification in enclosed and semi-enclosed spaces. The technological achievement has been applied to the Company's room-temperature catalytic formaldehyde removal series of air purifiers, and has won the Gold Award at the International Exhibition of Inventions of Geneva and the China Patent Excellence Award. The project "Research and Industrialization of Key Technologies for Servo Motors and Control of High-Performance Robots" won the second prize of Science and Technology Progress of Guangdong Province. The Company has successfully developed an integrated high-power density servo motor and a single-chip multi-core multi-axis integrated collaborative precision servo control technology. It has also overcome a new high-anti-disturbance technology for complex multi-dimensional disturbances, and developed high-performance servo motors and drivers dedicated to robots, achieving industrialization. These products have now been widely applied by mainstream domestic robot manufacturers and have been extended to fields such as CNC machine tools and semiconductors.

   3. Actively participating in the formulation of standards, the Company has demonstrated its leading innovative strength

      The Company has taken the lead in or participated in formulating 873 international standards, national standards, etc., among which 64 are international standards. The Company actively participates in and assumes responsibilities for a total of 153 domestic and international standardization organizations related to the home appliance industry, among which 40 are international and foreign standardization organizations. The Company is among the first batch of intellectual property demonstration units of enterprises and institutions in the country and has won the China Trademark Gold Award. As of the end of 2024, Gree Electric Appliances's 7 subsidiaries have been selected as National Intellectual Property Demonstration Enterprise and 17 subsidiaries as National Intellectual Property Advantage Enterprise. During the report period, the Company filed 10,112 patent applications, including 6,959 invention patent applications, and was granted 5,413 invention patents. It won one Gold Award for China's Design Patent, three China Patent Excellence Awards, and two provincial patent gold awards. It also received three Gold Awards, four Silver Awards and one Bronze Award at the Geneva and Nuremberg International Invention Exhibitions, demonstrating the power of innovation of GREE to the world.

   4. Continue to increase investment in research and development in new product areas and continuously enhance product competitiveness

      The Company has vigorously promoted the development of original products and achieved remarkable success in industrial design, winning 26 international design awards, including 15 iF Industrie Forum Design Awards and 11 Red Dot Design Awards. By the end of 2024, the Company had 4 national-level research platforms and 13 provincial and ministerial-level research platforms. It had accumulated a total of 122 important awards at the national, provincial and ministerial, and industry levels. It also possessed 46 "World Leading" technologies, demonstrating the Company's strong innovation capabilities.

      During the report period, the Company not only achieved fruitful results in technological research and development, but also demonstrated outstanding capabilities in standard setting and intellectual property protection, fully reflecting the Company's development strategy of adhering to the spirit of independent innovation and continuously breaking through world-leading technologies.

3. Continuously optimize the quality management system to achieve outstanding product quality for the Company

   The Company has always adhered to the principle of quality first, with the pursuit of perfect quality as its guiding orientation. It implements strict quality control throughout the entire process, from the design of products to procurement, production, packaging, transportation, installation and service. By strictly controlling the quality at the source and building a sound system, we ensure the high stability and leading level of the Company's product quality.

   Continuously leading industry standards, the Company has received numerous honors. During the report period, the standards it led in formulating, namely Quality Management - Innovation Cycle Guide Based on Customer Demand (GB/T 38356-2019) and Evaluation Method and Testing Method for Energy Performance of Refrigerating Systems - Part 1: Energy-Storage Air Conditioning Systems (GB/T 37227.1-2018), won the second and third prizes respectively in the Guangdong Province Standardization Outstanding Contribution Award for Standard Projects, making it the home appliance enterprise that received the most awards this time. It undertook the work of the Refrigeration Equipment Research and Review Base of the China WTO/TBT-SPS National Notification Enquiry Center and was recognized as one of the six outstanding review bases nationwide by the General Administration of Customs. It was also awarded the titles of "Guangdong Province Leading Standard Enterprise" and "Guangdong Province Standardization Outstanding Contribution Award for Standard Organization", and was approved to establish the Guangdong Province Advanced Light Storage Direct System Quality Standard Laboratory, being rated as a "2024 Outstanding Contribution Unit in Standardization".

   During the report period, the Company's products were recognized in both domestic and international markets for their outstanding quality and leading edge. The Company's ACCL, WCCL, USHP, PTAC, PTHP, and VRF have maintained a 100% pass rate in market spot checks for three consecutive years, and have once again been awarded the "Outstanding Performance" certificate by the AHRI. The Company has won one first prize, two second prizes and nine third prizes in the China Quality Technology Award. According to the evaluation data from the Customer Satisfaction Evaluation Center of China National Institute of Standardization, since 2011, GREE's air conditioner products have maintained the industry's top customer satisfaction for 13 consecutive years.

4. Focus on industrial transformation, continuously promote diversified development, and actively explore new growth areas

The Company has launched a broadband and high-efficiency rotor compressor. Its operating frequency range is 33% wider than that of conventional mass-produced inverter compressors, with energy efficiency improved by more than 10% and low-temperature heating capacity increased by more than 10%. The maximum operating frequency reaches 160 Hz, solving the problems of insufficient high-frequency operation and low-temperature heating in air conditioners. It has been fully serialized and mass-produced for export in residential air conditioners.

The Company has launched a new generation of high-efficiency compressors for base station air conditioners. With innovative designs such as low-power motors, compact and efficient pump structures, and low-friction bearing systems, the energy efficiency ratio has been increased by 5%.

The Company has launched a new generation of ultra-efficient floor-standing air conditioner compressors, featuring innovative designs such as friction-reducing and energy-saving materials and low-power motors. The energy efficiency ratio has been increased by 5.3%, and they have been fully applied to residential floor-standing air conditioners.

The compressor series products help further enhance the core competitiveness of the Company.

In home appliance motors, the Company has adopted new energy-saving materials, optimized motor design and electromagnetic schemes, etc., to introduce high-performance, noise-reducing motor vector controllers and shock-absorbing structures that block the transmission of motor noise. It has also promoted the application of high-power-density 10-pole IPM DC brushless motors in home appliances.

In servo motors, the Company has launched high-reliability, ultra-high power density and ultra-compact servo motor products. In the domestic robot market, our market share has rapidly increased.

In new energy motors, the Company has successfully developed the industry's first high-speed reluctance main drive motor for logistics vehicles, with a higher efficiency than rare earth motors. The Company has also completed the development of the Company's first main drive motor platform for integrated electric drive axles in buses. Compared with traditional direct drive motors, the new product reduces costs by 15%. Additionally, the Company has completed the research and development of new energy generators for extending the range of ships, oil pump motors for heavy trucks, and generators for extending the range of mining trucks, expanding the application of new energy motors to the fields of electric ships and construction machinery.

In industrial motors, the Company has tackled the industry's bottlenecks, such as magnetic circuit saturation, easy demagnetization, and large torque pulsation at deep weak magnetic fields in high-power new reluctance motors through technological breakthroughs. The Company has launched a series of high-efficiency, high-power new reluctance motors with power ranging from 0.75 to 315 kW, exceeding the industry's highest efficiency IE5. The related products have been widely applied in equipment in industries such as metal wire drawing, ball mills, and rubber open mills, breaking free from the constraints of rare earth resources and ensuring the sustainable development of the industry.

The Company has launched large-sized enameled flat wires, which have been successfully applied in transformers, inverters, wind power, photovoltaic and other fields. It has also introduced a series of products including 155, 180 and 200 grades, covering varieties such as EI/AI/SB, UE/SB, EI/SB, with self-adhesive temperatures ranging from 150 to 230°C. Moreover, it has developed new types of wires for the automotive industry and passed the IATF16949 system certification. The continuous breakthroughs in new products and new technologies help the Company enhance the competitiveness of its products in emerging fields.

The Company has continuously achieved technological breakthroughs in reducing the cost of electrolyte, new energy products of film capacitors and intelligent power modules. In terms of reducing the cost of electrolyte, by applying low-cost electrolyte and high-tolerance ripple electrolyte technology, the Company has launched large-capacity and high-performance products for the home appliance sector, which can operate stably at 125°C with a 4.0 A ripple for 500 hours. In the field of film capacitors for new energy, the Company has introduced new products that feature high energy density, high voltage resistance, and low loss, and can work stably at 110°C, with a broader range of applications. Regarding intelligent power modules, through the technological upgrade of bonding wires, the packaging cost of the products has been significantly reduced, further enhancing their competitiveness in the market.

In recent years, the Company has accelerated its diversified layout, acquired DunAn Environment, optimized the supply chain, and improved its industrial chain layout. Focusing on the main business of refrigeration, DunAn Environment manufactures a series of products aimed at the entire HVAC&R industry to fully support segmented fields such as residential air conditioners, commercial air conditioners, air source heat pumps, freezing and refrigeration, and new energy vehicle thermal management. It has a state recognized enterprise technology center, a national postdoctoral workstation, an academician workstation, a CNAS laboratory, and a national full performance testing center of central air conditioner. Therefore, it has formed a product development platform and core technology system with independent intellectual property rights. Relying on the R&D platform and following the orientation of "green, efficient, comfortable, and intelligent" technology development, DunAn Environment makes doubled efforts in research and development and pursues progress in key new products.

During the report period, the market share of DunAn Environment's cut-off valve ranked first in the world, that of four-way valve ranked second in the world, and that of electronic expansion valve ranked second in the world.

The Company offers a range of products including MCU, power semiconductors, and AIoT SoC series. Among them, the 32-bit series MCU chips have been widely applied in batch in terminal products such as residential air conditioners, commercial VRF, wire controllers, and remote controls, with an annual usage exceeding 40 million units. They can be widely used in consumer electronics,

wearable devices, home appliances, health care equipment, commercial large-scale units, industrial sensors, high-performance motor control, and other fields. The power semiconductors such as FRD, IGBT, IPM, and PIM have been applied in batch in inverter air conditioners, with an annual usage exceeding 30 million units. They can be widely used in home appliances, intelligent equipment, new energy, and other fields. The AIoT SoC intelligent chips, with innovative embedded architecture, integrate high-performance AI computing power and the real-time performance of MCUs, and have been applied in batch in air conditioner products, further improving the energy efficiency of air conditioners. At the same time, they can be widely used in machine vision, intelligent voice, HMI, intelligent home appliances, and other fields. By the end of 2024, the Company had cumulatively applied for 738 patents related to integrated circuits in the semiconductor field and obtained 255 patents. It has successively won the Excellent Award of the 22nd China Patent Award, the Silver Award of the 7th Guangdong Province Patent Award, the Excellent Award of the 10th Guangdong Province Patent Award, and the Excellent Market Performance Product Award of the 16th "China Chip". A total of 9 products have been awarded the title of Guangdong Province Famous and High-tech Products, and 2 products have been awarded the title of Zhuhai City Innovative Products.

The Company actively practices the producer responsibility extension system and innovatively proposes the circular development model of "green design - green manufacturing - green recycling" to ensure the green efficiency of the whole industrial chain.

In accordance with the requirements of the "Action Plan for Promoting Large-scale Equipment Upgrading and Consumer Goods Trade-in" issued by the State Council, the Company has comprehensively integrated its 30 regional sales networks, 20,000 sales stores, and 30,000 service outlets to provide users with an integrated "delivery, disassembly, and installation" service. All old devices are 100% traceable through the system and enter standardized recycling and dismantling factories to achieve resource recycling and regeneration. Through its unremitting efforts in the construction of the recycling system and the closure of the circular resource chain, Gree Recycling Resources Co., Ltd. has been approved as a national pilot for circular economy standardization and a pilot enterprise for the construction of the recycling system of the Ministry of Commerce. By the end of 2024, the Company's recycling resource system has processed more than 64.77 million units (sets) of various types of waste electrical and electronic products, and has transformed about 880,000 tons of recycled copper, iron, aluminum and plastic.

The Company is actively making strategic plans in CNC machine tools, industrial robots and automation, providing intelligent equipment products for many leading enterprises both at home and abroad. By the end of 2024, the Company had established 2 provincial-level scientific research platforms in the field of intelligent equipment, including 1 provincial-level enterprise technology center and 1 provincial-level manufacturing innovation center. It had cumulatively applied for 5,096 patents and obtained 1,966 patents, among which 3,642 were invention patents and 1,081 were granted.

The Company has launched three new products for processing components of new energy vehicles in the new energy vehicle market. These include high-speed five-axis swivel heads, high-rigidity and high-torque electric spindles, and servo motors for machine tools, which are core components of CNC machine tools. Based on its expertise in processing battery trays for new energy vehicles, the Company has expanded its services to offer one-stop solutions for processing die-cast aluminum and large-scale integrated die-cast parts for new energy vehicles, increasing processing efficiency and stability by 50%.

For the new energy photovoltaic and lithium battery sectors, the Company has launched a series of six-axis robot products such as GR35 and GR50, as well as SCARA robot products like GRS10 and GRS20. For the shipbuilding and steel structure welding markets, the Company has introduced new products such as the GRH6 arc welding robot and intelligent welding workstations. Based on different customer demands, the Company provides intelligent robot automation application solutions for the manufacturing of new energy vehicle components and the welding of ships and steel structures. Guided by the demands of industrial development, the Company has established stable cooperative relationships with key national universities through multi-level and multi-form collaborations. We are committed to promoting resource sharing, mutual empowerment, enhancing academic and research exchanges, and intensifying research and breakthroughs in standards, processes, and key technologies in the field of intelligent manufacturing equipment.