Review on the Management of Gree Electric’s 2022 Annual Board of Directors

() The business review of the Board of Directors in 2022 is as follows:

　　I. The industry in which the company is located during the reporting period.

　　1. Consumption field-The household appliance industry as a whole is under pressure, and consumption upgrading is promoted in multiple dimensions.

　　In 2022, the overall sales of home appliance industry was under pressure, and the market competition became more and more fierce. The penetration rate of emerging channels continues to grow, accelerating the integration of online and offline channels.

　　Gree Electric’s consumer products cover household air conditioners, HVAC, refrigerators, washing machines, water heaters, kitchen appliances and environmental products. In 2022, the company forged ahead in the challenges and changes, constantly consolidated its internal strength, upgraded its industry, deeply tapped consumer demand, and continued to provide users with innovative products to achieve steady growth in overall performance.

　　(1) The scale of the home appliance industry has declined.

　　In 2022, the export and domestic markets of the home appliance industry declined to varying degrees. According to the 2022 China Household Appliance Industry Annual Report issued by the National Household Appliance Industry Information Center, the domestic sales scale of the household appliance industry in 2022 was 730.72 billion yuan, down 9.5% year-on-year. The export of household appliances is affected by global inflation and the complicated international situation, and the export of household appliances in China has declined. In 2022, the export scale of household industry was 568.16 billion yuan, down 10.9% year-on-year.

　　(2) The air-conditioning market will decline in 2022.

　　In 2022, the external environment of the global and China air-conditioning markets was not good, and the sales market scale dropped significantly. According to the total data of AVC, in 2022, the global domestic air-conditioning market scale was 160 million units, down 3.1% year-on-year; The market size in China was 80.22 million units, down 1.6% year-on-year. According to the statistics of Aiken. com, the overall market capacity of central air conditioners in China dropped by 2.6% in 2022 compared with the previous year.

　　(3) Increasing the penetration rate of emerging channels and changing the channel structure.

　　With the changes of users’ lifestyles, interests and hobbies, the traditional offline mode has changed to online mode. According to the Annual Report of China Household Appliance Industry in 2022 issued by the National Household Appliance Industry Information Center, the online retail sales of China’s household appliance industry in 2022 was 422.66 billion yuan, accounting for 57.8%, and the proportion of online channels was further strengthened. The rise of emerging channels such as short video and live broadcast has carved up the market share of traditional e-commerce and driven the adjustment of channel structure.

　　2. Industrial field-the industry is moving forward steadily, and structural adjustment, transformation and upgrading are accelerating.

　　According to the data of the Ministry of Industry and Information Technology, in 2022, China’s total industrial added value exceeded 40 trillion yuan, accounting for 33.2% of GDP. Among them, the added value of manufacturing industry accounts for 27.7% of GDP, and the scale of manufacturing industry ranks first in the world for 13 consecutive years; High-tech manufacturing accounted for 15.5% of the added value of industrial enterprises above designated size, and equipment manufacturing accounted for 31.8% of the added value of industrial enterprises above designated size. The output of new energy vehicles and photovoltaics has remained the first in the world for many years. The transformation and upgrading of traditional industries have been accelerated, the pace of new industries has been significantly accelerated, the industrial system has been improved, and the industrial structure has been continuously optimized.

　　The company actively carries out industrial transformation, and its products in the industrial field cover high-end equipment, precision molds, compressors, motors, industrial energy storage, new energy buses, renewable resources, etc., transforming and upgrading from "traditional manufacturing" to "intelligent manufacturing", and making every effort to build high-end, intelligent and green technology-based enterprises.

　　(1) Intelligent manufacturing promotes industrial transformation and upgrading.

　　From "Made in China 2025" to "Intelligent Manufacturing Development Plan in the 14th Five-Year Plan", the development of advanced intelligent manufacturing industry is the core goal, and the promotion path of manufacturing power is planned. Based on the country’s strong support for intelligent manufacturing, China’s intelligent manufacturing industry has maintained a rapid growth rate, and intelligent manufacturing has become a new development direction of China’s modern advanced manufacturing industry. According to the data of Champ Consulting Group, a market research organization, in 2022, the market size of China’s intelligent manufacturing industry will be US$ 540 billion. It is estimated that by 2024, the market size of intelligent manufacturing industry in China will reach 700 billion US dollars.

　　(2) Sustained high prosperity in the new energy field.

　　Driven by the "double carbon policy", the growth trend of new energy industry is obvious. The peak carbon dioxide emissions Action Plan before 2030 issued by the State Council clearly puts forward that new energy vehicles should be vigorously promoted, and by 2030, the proportion of vehicles with new energy and clean energy power will reach about 40%. According to the data released by the Association, the market penetration rate of new energy passenger cars will reach 27.6% in 2022, and the penetration rate will be further improved. It is predicted that the market penetration rate of new energy passenger cars will reach 36% in 2023. In the future, the penetration rate of new energy vehicles will still increase rapidly. According to the data of China Bus Statistics Information Network, in 2022, the sales volume of new energy buses with a height of more than 6 meters of domestic key bus enterprises increased by 21.49% year-on-year, and the new energy bus market flourished.

　　(3) The energy storage industry keeps developing at a high speed.

　　In 2022, China’s energy storage industry continued to maintain a high-speed development trend, the policy system supporting energy storage continued to improve, energy storage technology made a major breakthrough, global market demand was strong, and energy storage standards were accelerated, which provided strong support for the rapid development of the industry. According to the data released by the National Energy Administration, by the end of 2022, the installed capacity of new energy storage projects put into operation nationwide reached 8.7GW, a year-on-year increase of over 110%. In 2022, the National Energy Administration and the National Development and Reform Commission issued several policies related to energy storage development, and made overall plans to promote new energy storage pilots. According to the Guiding Opinions on Accelerating the Development of New Energy Storage issued by the National Energy Administration and the National Development and Reform Commission, it is estimated that the installed capacity of new energy storage in China will increase to 30GW by 2025. The new energy storage will continue to develop at a high speed, with the compound annual growth rate of 55%-70%, and the market scale will hit record highs.

　　(4) The capacity growth of air-conditioning compressor is under pressure, and the technology of driving compressor with high efficiency and energy saving is iteratively optimized.

　　According to industry online data, the output of rotary compressors in 2022 was 232.61 million units, down 2.4% year-on-year, and the sales volume was 233.26 million units, down 2.2% year-on-year. With the in-depth implementation of the new air-conditioning energy efficiency standards in China, the air-conditioning industry has entered an era of high energy efficiency, with high-efficiency energy-saving technologies such as frequency conversion becoming standard, frequency conversion products occupying the absolute mainstream, and the first-and third-class products with new energy efficiency taking the lead. According to the total data of AVC, in 2022, the frequency conversion sales in online and offline markets accounted for more than 90%. The frequency conversion, high efficiency and energy saving of air conditioning products continue to drive the compressor technology upgrade.

　　

　　II. Main businesses of the Company during the reporting period

　　Gree Electric is a diversified, high-tech global industrial group, which owns three major consumer brands, namely Gree, TOSOT and Jinghong, as well as industrial brands such as Lingda, Kaibang and SGD, covering two major fields of household consumer goods and industrial equipment. The consumption field covers household air conditioners, HVAC, refrigerators, washing machines, water heaters, kitchen appliances, environmental appliances, communication products, intelligent buildings and smart homes; The industrial field covers high-end equipment, precision molds, refrigeration equipment, motors, compressors, capacitors, semiconductor devices, precision casting, basic materials, industrial energy storage and renewable resources. The products are exported to more than 190 countries and regions, and we are committed to providing consumers with quality product services and intelligent scene selection to create a better life for consumers.

　　According to the Grass-roots Investigation Report of Central Air Conditioning Industry in China in 2022 released by I Media HVAC and Heat Pump, Gree won the first place in the central air conditioning market in 2022 with a market scale of over 20 billion yuan, and maintained a leading market share for eleven consecutive years. In the modular machine market, Gree ranks first with a share of 12.7%; In the multi-online market, it is far ahead with a share of more than 20%; In the unit machine market, it takes the lead with a share of 35.6%; In the engineering project market, it is ahead of all other brands with a market share of over 15%. And won the first place in the central air-conditioning market in 2022 with a market scale of over 20 billion. Gree Central Air Conditioning has served more than 100,000 projects around the world, and the sales volume of Gree water chillers leads the industry, and has served many large-scale data centers and telecom operators’ 5G centralized procurement projects with national influence, becoming the first 10 billion central air conditioning brand in the industry.

　　In 2022, the company continuously improved the product line of household electrical appliances and gradually formed the product image of "Good Electrical Appliances Made by Gree". According to the data of Aowei Cloud, Gree electric fans have a market share of 20.68%, ranking first in the industry; The market share of electric heater products is 14.01%, ranking second in the industry.

　　Gree Electric insists on "building a world-class enterprise and achieving a century-old brand of Gree" as corporate vision, and "carrying forward the industrial spirit, mastering core technology, pursuing perfect quality, providing first-class service, and making the world fall in love with China!" For the mission, adhere to "an enterprise without innovation is an enterprise without soul;" An enterprise without core technology is an enterprise without backbone; A company without fine products is a company without a future. " Our business philosophy, with the continuous precipitation of technical strength and national characteristics of R&D thinking to help China create.

　　

　　Third, the core competitiveness analysis

　　Facing the opportunities and challenges in the development of China’s household appliances industry, the company takes quality as the support and brand as the carrier, unswervingly takes the road of brand development, continuously increases investment in scientific research and development, and promotes intelligent manufacturing; Strengthen brand building and marketing promotion, continuously improve product quality and competitiveness, and realize sustainable development and long-term competitiveness; Relying on core advantages, strengthen the deep layout of industrial chain and grasp the initiative of industrial chain layout; Actively explore the international market, enhance international competitiveness, and sail in the direction of high-quality development with significant core competitiveness.

　　(1) A world-famous brand that makes the world fall in love with China.

　　The company unswervingly follows the road of independent brand development and has established a high brand value with leading core technology, excellent product quality and perfect service system. And keep pace with the times, constantly inject new ideas, from "good air conditioning, made by Gree" and "Gree, mastering the core technology" to "making the world fall in love with China", from leading technology to serving the world, and constantly refine and upgrade the brand value.

　　The company ranked first in the home appliance industry for many years in China brand value evaluation list, and its brand value gradually increased. In 2022, with its outstanding comprehensive strength, it was once again listed on Forbes’ "Top 2000 Global Enterprises" list, and has been listed on Fortune Global 500 for four consecutive years. The company has won many honors, such as China World Famous Brand, the most competitive brand in the market, National Quality Award, Export Inspection-free Enterprise, China Brand Innovation Award, and won the second "China Brand Power Festival-the Light of National Products" honor, and the "Guangdong Glorious Career Contribution Award", and became the "Belt and Road Construction Case" in 2022. The company builds and establishes a brand with perfect quality and international leading technology, and continues to create value for the society.

　　(2) Strong core technology and innovation ability, highlighting the leading position in the industry.

　　Adhering to the concept of "independent research and development of core technologies" and "no upper limit for investment on demand", the company has established a multi-level and high-level R&D platform system based on national scientific research platforms, and formed a technological innovation system of "enterprise-oriented, market-oriented and Industry-University-Research-integrated", with innovation chain driving the value chain and innovation chain supported by the value chain, implementing the leader strategy and laying out diversified development strategies.

　　The company has built 16 research institutes, 152 research institutes, 1,411 laboratories and 1 national key laboratory around new energy environment, intelligent equipment, refrigeration and washing technologies. It has the world’s largest air-conditioning R&D center, including 5 national scientific research platforms, 1 academician workstation and over 1,000 laboratories. Up to now, the company has applied for more than 100,000 patents, becoming the only household appliance enterprise in the household appliance industry to enter the top 10 invention patents granted in China for seven consecutive years. It has 39 "international leading" technologies, and won 6 gold medals in China, 12 gold medals in Geneva Invention Exhibition and 9 gold medals in Nuremberg Invention Exhibition, and won 106 important awards at the national, provincial and ministerial levels. The number and quality of the company’s patents have increased steadily, and the momentum of innovation and development has continued to increase. The forward-looking technology layout ensures that the company’s product strength always ranks in the forefront of the industry.

　　The company’s laboratory certification and accreditation work always adheres to the international standards and practices the high-quality development path of certification and accreditation. By the end of 2022, Gree Electric has 1,041 sets of nationally recognized laboratory equipment, and 11 laboratories have been certified by world-renowned third-party organizations such as CNAS, TUV, UL and CSA, and 7 laboratories have been externally accredited and evaluated.

　　(C) The leading perfect quality management model helps the development of China manufacturing.

　　The company pursues perfect quality, takes consumer demand as the highest standard, pursues the excellent strategy, and constantly develops and innovates in quality management concepts, methods, systems and technologies. We adhere to the three quality control principles of "not taking consumers as experiments", "everyone is a quality inspector" and "perfect quality comes from struggle", and build a unique Gree perfect quality management model of "Let the world fall in love with Made in China" through "five steps of quality prevention" and "D-CTFP method of quality technology innovation cycle", which effectively solves the path and method problems of organization’s quality innovation and promotes the continuous improvement of enterprise quality level.

　　The company actively participates in leading the standardization construction at home and abroad, showing the leading position of standard construction in the industry, promoting the high-quality development of products with high standards, and leading the industry with strength. In 2022, the company’s air conditioners, refrigerators, washing machines, rice cookers, air purifiers, electric fans, water purifiers and other 19 categories of products, 385 product models and 24 standards were listed on the "Leader" list of national enterprise standards in 2021, which is the enterprise with the largest number of selected products in the home appliance industry. Gree Electric became the first enterprise in the refrigeration industry to serve as the chairman of the International Standardization Committee, and Dong Mingzhu, the chairman and president of the company, was re-elected as the chairman of the Experiment and Evaluation Sub-committee of Refrigeration Compressor of the Technical Committee of Refrigeration and Air Conditioning of the International Standardization Organization (ISO/TC86/SC4). Gree won the certification of "seven-star leading laboratory for air conditioner inspection and testing service" and became the first batch of enterprises in China to reach the highest seven-star level. The project of "Disinfection and Purification Technology and Product Application Based on CKER System" won the first prize of "International Quality Innovation Competition". The company implements a "ten-year warranty policy" for household air conditioners, which protects consumers’ interests to a greater extent, and is the longest warranty period promised by the household air conditioner industry in China so far. Since joining AHRI (American Air Conditioning, Heating and Refrigeration Industry Association) in 2009, it has won many awards from AHRI for its leading product technology and solid product quality.

　　(D) the integrated layout of industrial chain, and comprehensively enhance the core competitiveness

　　With the steady development of household appliances, smart home and industrial manufacturing, the company has actively laid out green energy sectors, mainly photovoltaic energy storage, lithium batteries and new energy vehicles, through acquisition and self-research. The industrial chain has expanded to intelligent equipment, CNC machine tools, robots, precision molds, new energy, cold chain, logistics, communication, small household appliances and other fields, and has developed in the direction of intelligence, refinement, high-end and quality. At the same time, the company has six renewable resource bases in Zhuhai, Changsha, Zhengzhou, Shijiazhuang, Wuhu and Tianjin, covering the whole industrial chain from upstream production to downstream recycling, realizing green, circular and sustainable development. All-category household appliances: The company’s products cover all-category household appliances including household air conditioners, HVAC, refrigerators, washing machines, environmental appliances, kitchen appliances and household appliances, providing consumers with high-quality intelligent life solutions. Jinghong refrigerator’s "38℃ super frozen fresh-keeping technology", Dasong rice cooker’s "efficient and uniform cooking technology", the first "circulating cooling fan equipped with evaporative circulation system" and the self-developed pure fog-free humidifier "wet curtain hot drying technology" have all reached the leading level in the industry. Gree Electric will make great efforts from air conditioning, floor heating, fresh air, water purification and intelligent multi-system product lines, and combine the six constant system concepts of "constant temperature, constant humidity, constant oxygen, constant cleanliness, constant quietness and constant wisdom" in the new era to create Gree’s "healthy, intelligent and comfortable home" ecological home system for consumers. Core component plate: the company has strong independent supporting ability.The production capacity, quality and performance of wholly-owned subsidiaries Lingda Compressor, Kaibang Motor, Xinyuan Electronics and Electrician are among the highest in the industry, ensuring excellent quality and effective cost control, and ensuring a sound, stable and efficient supply chain system through the rational layout of upstream and downstream industries, which has provided strong support for the company’s leap-forward development. Ten products independently developed by the company, such as "high efficiency scroll compressor", "high performance linear servo motor and driver", "high performance servo motor and driver for industrial robots" and "rare earth-free permanent magnet reluctance main drive motor system for new energy buses", have obtained international leading certification, and fully mastered the advanced technology from core components to products.

　　Diversified plate: At present, the industrial robot developed by the company has completed the development of 1-600KG industrial robot products, which is suitable for industrial use scenarios under various conditions. GR35/1.8 robot, GR50_2.0 robot and GR200/3.2 large-wingspan robot have been developed in the fields of power battery and body die casting of new energy vehicles, which further improves the company’s demand coverage in application scenarios such as high overload, high protection requirements and large penetration depth. In the field of heavy-load series, GR270/2.65 industrial robot was developed, which solved the problems of vibration at the reducer caused by insufficient stiffness of the reducer during high-speed operation, broke the absolute monopoly position of foreign technology, promoted the localization process of heavy-load industrial robots in China, and achieved market breakthroughs; Completed the company’s first robot motion control system development with independent intellectual property rights. The successful research and development of core components of robots and machine tools has broken the technological monopoly of foreign brands and improved the competitiveness of national brands.

　　Smart home sector: The company insists on independent innovation, independent research and development, independent manufacturing, builds a zero-carbon healthy home with core technology, continuously upgrades five smart living systems of the whole house, including energy, air, health, security and lighting, and independently creates a full range of smart home products, IoT platform, intelligent decision-making system, G-Voice voice voice interactive system, intelligent vision system, G-OS IOT operating system, G-Learning comfort and energy-saving algorithm, etc.

　　(V) Digitalization empowers efficient retail transformation and consolidates the position of the industry.

　　Supply chain sector: The company adheres to the group’s centralized procurement strategy, aims to build an industry-leading supply chain, establishes a perfect supply chain management system, gives full play to the role of "chain owner" in the industrial chain, enhances industry consolidation’s ability, and enhances the competitiveness of the supply chain through mutual promotion with partners. The company has established a self-controlled, mutually beneficial and win-win sales channel and sales model, and implemented the "new retail" marketing model reform of online and offline integration. Based on 30 regional sales companies, over 30,000 offline outlets and the official flagship store of the third-party e-commerce platform, a nationwide dual-line sales network will be established, providing dual-line linkage integrated services of offline experience, online ordering, national unified distribution and installation, activating channel advantages and realizing a win-win situation for enterprises, distributors and consumers.

　　In the domestic market, channels are diversified and flat, and agents are transformed into service providers. The company pays attention to the layout of sinking channels, and continuously expands the second and third tier markets, county and town markets through online approval mode and cooperation with e-commerce and logistics enterprises in sinking channels. Pay attention to new retail e-commerce forms such as live broadcast, lay out new retail channels in the form of live broadcast and community marketing through new media platforms, and gradually create new media matrices to enhance their influence among young people. At present, the reform of new retail channels has achieved phased results, and emerging household appliances have been accelerated by online channels. In overseas markets, we actively adopt "online and offline" ways to expand the company’s sales channels. The company has established overseas production bases in South America and Asia, and expanded overseas air-conditioning market through independent brands and OEMs. At present, Gree air-conditioning products have been exported to more than 190 countries and regions.

　　(six) accurate production capacity layout and leading intelligent manufacturing level, and quickly respond to market demand.

　　At present, according to the characteristics of market demand of different products and the differences of regional factors of production, Gree Electric has established production and manufacturing bases for air conditioners, household appliances and industrial products in Zhuhai, Chongqing, Hefei, Zhongshan, Zhengzhou, Wuhan, Shijiazhuang, Wuhu, Changsha, Hangzhou, Suqian, Luoyang, Nanjing, Chengdu, Ganzhou, Linyi, Brazil, Pakistan and other places. The layout of the production bases is reasonable, which effectively guarantees the contract performance.

　　The company has formed a mature intelligent manufacturing production process, and advanced technologies such as industrial robots, CNC machine tools, 5G and AI are fully integrated into the production scene; The virtual simulation of the whole production line realizes the digitalization of the whole process from product design, production planning to manufacturing execution; On the production line, industrial robots replace traditional labor to complete various quality inspection procedures with high quality; On the workshop passage, AGV navigation vehicle and intelligent electronic warehouse realize intelligent dispatching and accurate distribution, and high automation has become the normal state of Gree factory. Gree Electric Zhuhai Base has been recognized by Guangdong Provincial Department of Industry and Information Technology as the first batch of 5G+ industrial Internet application demonstration parks in Guangdong Province.

　　Gree intelligent equipment not only serves the interior, but also actively exports the experience of automation transformation to the external market, and uses intelligent manufacturing to boost the overall industrial upgrading in China. In the future, Gree Electric will continue to deepen the field of intelligent manufacturing, strengthen the advantages of core industries, realize independent control of core technologies, and lead the transformation and upgrading of intelligent manufacturing with innovation.

　　(7) Cultivate talents independently and win development opportunities with talent advantages.

　　Adhering to the concept of "focusing on the company’s strategic layout and persisting in cultivating talents independently", the company attracts talents with excellent strength, cultivates talents with independent innovation, and serves talents with generous benefits. It has gradually formed an independent talent training mode with independent talent introduction channels, independent training and development mechanism and all-round incentive and guarantee system as the core.

　　The company’s talent team continues to grow and the talent structure continues to upgrade. By the end of 2022, the company had about 72,000 employees, including 2 leading talents in scientific and technological innovation under the National Ten Thousand-Person Plan, 3 experts enjoying special allowance from the State Council, 1 national technical expert, 1 outstanding contribution award from Nanyue, 94 high-level talents from Zhuhai, 548 outstanding young talents, 948 scientific and technological experts and more than 30,000 skilled workers.

　　The company uses its own social resources and industrial chain advantages to actively establish Gree Vocational College to deliver outstanding talents for enterprises and even the whole industry. At the same time, based on the cultivation of independent talents, we will speed up the cultivation of applied skilled talents, integrate the resource advantages of Guangdong technicians, master skill studios and technician workstations, empower production through training, help innovation through competition, and select and cultivate "high-precision and sophisticated" skilled talents through a series of measures such as skill training, skill competition and skill rating. Up to now, the number of newly assessed skilled talents in the whole group has exceeded 14,000, including 8 technical experts in Guangdong Province, 2 technical experts in South Guangdong, 5 technical experts in Zhuhai, 4 post technical experts in Zhuhai, 12 chief technicians in Zhuhai, 10 special craftsmen in Zhuhai and 232 craftsmen in Zhuhai. The company adheres to the continuous cultivation of innovative, compound and applied skilled talents, and seeks benefits for employees through employee stock ownership plan, talent subsidy, talent housing, Gree school and other channels to continuously improve employee satisfaction and happiness. The company has been shortlisted in Forbes magazine’s list of "Best Employers in the World" for 8 consecutive years, and has obvious advantages in talent training and talent welfare system construction.

　　

　　Fourth, the main business analysis

　　1. Overview

　　2022 is still a challenging year. In the face of the adverse effects brought by factors such as the still complicated and severe global economic situation and the continuous fluctuation of raw material prices, the overall sales of the home appliance industry are under pressure. The company adheres to the general tone of steady progress and promotes various tasks in an efficient and orderly manner; Continue to promote technological innovation, and win breakthroughs in core technologies and international leading technologies; Constantly consolidate the construction of strong quality enterprises and create a perfect quality management model of Gree; Optimize the sales channel model, continue to deepen the diversification strategy, and continuously improve profitability. In 2022, the company achieved a total operating income of 190.151 billion yuan, a year-on-year increase of 0.26%; The net profit attributable to the parent company was 24.507 billion yuan, a year-on-year increase of 6.26%.

　　(A) take the market as the center and continuously provide users with innovative products.

　　1. Air-conditioning sector-improve the product line in the air-conditioning field and consolidate the market position.

　　(1) Household air conditioning plate-tap the market potential and expand the new products of subdivided track.

　　In 2022, the company continued to develop household air conditioners that meet different consumption levels, improved new platforms and panels, and launched mid-to high-end Airy highlight products; Develop a new generation of flagship cabinet with upper and lower air outlets, realize full upper air outlet for refrigeration and full lower air outlet for heating, and open the era of zero temperature difference air supply; The split machine was introduced to expand the products of Leng Jing Wang+and Time Painting, and the air deflector was upgraded from the original closed single air deflector to a 360-degree motion large air deflector to enhance the competitiveness of mid-range models; The frequency conversion window machine developed without drainage technology can replace the existing gas or electric heating equipment in North America; The new cold air dehumidifier developed is exported to Japan, which realizes the automatic cleaning function of the filter and breaks the monopoly of Japanese brands. Overseas household markets switch refrigerants and add new product lines. After developing ultra-low temperature frequency conversion window machines, North American markets supplement ultra-low temperature frequency conversion PTAC, and at the same time realize the conversion of new products to R32 refrigerants. Development of R290 pilot splitter in European market; The high temperature resistance of frequency conversion and constant frequency enthalpy-increasing compressors in the Middle East market is further improved to meet the specific high temperature environment. According to the domestic sales data of household air conditioners in Industry Online in 2022, Gree air conditioners ranked first in the industry with a share of 33.9%, leading for 28 years.

　　(2) HVAC equipment plate-improve the product line and promote the product structure upgrade.

　　At present, Gree Central Air Conditioning has launched 13 series of thousands of categories including centrifuges, multi-line machines, screw machines, modular machines, unit machines, household machines, precision air conditioning, etc., which can meet the equipment needs of different working conditions, different scenes and different industries and serve major benchmark projects.

　　(1) family central air conditioning plate-innovation, create a comfortable home space.

　　In 2022, Gree created a brand-new concept of "Gree Comfortable Home" in the field of comfortable home. For the mid-to-high-end consumer groups mainly in the pre-installed market, we will create a space of "product coverage and scene-driven experience", and combine the deep integration of online and offline to bring customers a brand-new and comfortable consumption experience. Focus on the introduction of the supreme "Zunshu series triple supply" and "Enjoying series double supply" central floor heating air conditioning products, one machine to solve the user’s "air conditioning+heating+domestic hot water" multiple needs; Innovate and launch a new fan with full heat exchange of Zhenxuan air. The plasma sterilization module can effectively meet the user’s indoor air sterilization and cleaning needs, and the purification rate is as high as 99%, creating an all-round high-quality life for users and providing a healthy home environment.

　　(2) commercial multi-line plate-relying on core technology to create intelligent new products.

　　Gree takes root in science and technology and takes science and technology as the concept of serving life. In 2022, Gree GMV 6S+ artificial intelligence multi-connection was newly introduced, which combined artificial intelligence with multi-connection to enable the unit to learn and optimize independently and build personal tailor products; The energy efficiency of the system is further improved, far exceeding the first-class energy efficiency, and it is the first choice for various commercial projects. Update Gree GMV EM DC frequency conversion multi-line group, adopt CAN network multi-line communication technology, the communication response speed is faster and more reliable, and realize non-polar free wiring and automatic addressing of internal machines and automatic addressing of external machines when multiple external machines are connected in parallel. The company has made continuous efforts in the project expansion of data communication, real estate and rail transit industries, reached strategic cooperation agreements with many industry leaders, and continuously exported multi-line and commercial multi-line models, creating sample projects in many fields.

　　(3) heating product plate-build a whole building heating product system to realize innovative and sustainable development.

　　Facing the needs of the country, the company is committed to developing advanced heat pump technology and equipment, and building a full-scene high-efficiency thermal energy system based on six types of low-temperature heat sources (air source, surface water, geothermal, data center, process industry and power plant), serving four application scenarios (domestic hot water, building heating, industrial and agricultural heat, industrial steam) and three types of key heat pump equipment (air source heat pump, water source heat pump and large-capacity high-temperature heat pump). At present, the company has built a whole building heating product system, with a series of advanced heat pump technologies, such as air supply and enthalpy-increasing vortex, three-cylinder two-stage rotor, permanent magnet variable frequency variable capacity screw, double-head series centrifugal, air suspension/magnetic suspension oil-free steam compressor and so on, and won the leading brand award in the heat pump industry for many years. In 2022, Gree heat pump technology combined with a variety of industry-leading technologies, improved the annual energy efficiency of air-source heat pump, and expanded the application of air-source heat pump technology in extremely cold areas; Form a high-capacity and high-efficiency high-temperature heat pump compressor system, and realize the breakthrough of high-pressure ratio oil-free steam compressor; K series red ice air energy heating hot water units were launched, which were used for heating projects in hotels and schools with hot water tanks, and used for central heating, residential heating renovation and other commercial places with wind trays and radiators. The Fire Phoenix Supreme household heating and cooling (integral) unit is introduced to meet the winter heating demand in extremely cold areas in the north. Gree makes heat pump air conditioning provide an optimal choice for heating in the north, and opens up a new research direction of heat pump comfort and energy saving. By improving the heating technology, we successfully signed a large-scale coal-to-electricity project.It makes green development have a new direction and new strategy.

　　④ precision air conditioning plate-actively independently research and develop its own brand to ensure that the equipment environment meets the use requirements.

　　In 2022, the company launched a brand-new JQF series cabinet air conditioner, which can be widely used to cool down all 5G base stations, ensure the stable operation of base station equipment, and help the development of 5G; JKLC series chilled water inter-train air conditioners, JHPQ series cabinet-level heat pipe air conditioners and JKLF series air-cooled variable frequency inter-train air conditioners are introduced. The units have the advantages of safety, reliability, high efficiency and energy saving, and are widely used in various data centers, effectively reducing the PUE index of data centers.

　　⑤ Refrigeration equipment plate-core technology empowers the whole cold chain series products and accelerates the development of the industry.

　　The company has been deeply involved in the refrigeration industry, increased product research and development, constantly improved and developed products that meet the market demand, and developed a series of full cold chain products, from the frozen storage fields such as front-end origin warehouses, transit logistics centers, sales and distribution warehouses, to the ocean-going and land-based refrigerated transportation fields, and the cold chain terminal closest to consumers, mastering the core technology of low-temperature storage and preservation, and providing customers with the best solution. In 2022, the diversified needs of consumers in North America and other regions were covered through product line expansion and shell optimization and upgrading; Innovative introduction of integrated photovoltaic direct-drive inverter refrigeration unit, which perfectly combines photovoltaic direct-drive technology with photovoltaic power generation technology and condensing unit, provides continuous power for cold storage refrigeration through photovoltaic power generation, and forms a clean, safe, reliable, intelligent and efficient multi-energy integrated application system, which solves the user’s pain point problem, gives light and energy, and is widely used; The single-machine two-stage ultra-low temperature refrigeration unit is introduced, which is mainly used in ultra-low temperature quick-freezing scenes such as aquatic products and meat, and can realize uninterrupted refrigeration and reliable operation throughout the year. As the main responsible unit, he participated in the revision of the national standard for condensing units and accelerated the development of the refrigeration and refrigeration industry. The self-developed high-speed full direct-drive vertical processing center and intelligent hot fluorine defrosting technology for cold storage won the silver award in the 2022 Nuremberg International Invention Exhibition in Germany. At present, the company’s frozen and refrigerated products have successfully served the State Banquet Kitchen in the Great Hall of the People, the People’s Bank of China’s cold storage, JD.COM, SF Fresh Logistics, South Island Reef and other places, bringing quality upgrades to the industry and consumers with brand-new technology.

　　⑥ Compressor plate-study market demand, innovate technology continuously, and be the industry leader.

　　In 2022, the company launched a brand-new magnetic levitation centrifugal compressor with independent intellectual property rights, an ultra-efficient permanent magnet synchronous frequency conversion screw compressor for high-efficiency machine room, a single-machine two-stage frozen screw compressor with double slide valves and the lowest evaporation temperature of -65℃, and other large-scale compressor series products that can realize regional accompanying air supply, which are widely used in air conditioning and refrigeration, heat pump, refrigeration and ultra-low temperature quick freezing, etc., to meet the needs of different users.

　　In 2022, the company provided more than 40,000 sets of air-conditioning equipment for FIFA World Cup Qatar 2022 Education City Gymnasium, 974 Gymnasium, Maidina Fan Village and other venues, including various product types such as split machine, GMV, fan coil unit, combined cabinet, U-match, roof machine, etc., and sent the "Gree cool wind" to the world’s top competitions with high-quality products and services. As the exclusive supplier of water chillers for Fengtai Station in Beijing, the largest railway hub in Asia, the company has provided eight magnetic levitation centrifugal units, which provide a strong guarantee for the opening of Fengtai Station with core technology and high quality. The company provided low-temperature air-cooled screw units, Gree permanent magnet synchronous frequency conversion centrifuges, Gree GMV6 artificial intelligence multi-line central air conditioning and other products for the 2022 Beijing Winter Olympics, and provided all-round products and services for the National Speed Skating Hall, including the intelligent cold source system of the main building and BIM model. While practicing the green Olympics, it perfectly ensured the construction quality and progress of major national landmark projects.

　　2. Household appliances sector-assigning products with technical advantages to achieve steady growth in performance.

　　The company’s product positioning is healthy, intelligent and personalized, and a systematic layout is implemented to achieve full coverage of kitchen appliances, environmental appliances, ice washing products and other industries.

　　(1) Environmental electrical appliances-bringing forth the old and bringing forth the new to meet the application requirements of different scenarios.

　　Gree cold fan series products are well received by users in the Middle East, North America and other countries, and become the first choice brand products for users. Gree’s first circulating cooling fan 03X60DgZ is equipped with evaporative circulation system, which delivers coolness to the whole house and effectively circulates indoor air. 8-speed accurate wind control, 3 air supply modes, and intelligent matching of various usage scenarios; Using DC frequency conversion motor, the low-grade noise is as low as 30 decibels. In response to consumers’ demands for healthy household appliances, we have successively introduced health products such as disinfectant maker and in addition to formaldehyde air conditioner to create a comprehensive healthy life for consumers. Hunter series virus-killing purifier won the first prize of 2022 International Quality Innovation Competition, the first prize of Science and Technology Progress Award of China Light Industry Federation and the first prize of Science and Technology Progress Award of Guangdong Light Industry Federation.

　　(2) Kitchen electrical appliances plate-enrich the product line and form a nested layout.

　　The company released the strategy of "new light kitchen" to create a healthy cooking food life in the whole region from three dimensions: meal preparation, cooking and kitchen waste. Five categories of hoods, cookers, gas water heaters, steaming and baking dual-energy machines and dishwashers continued to introduce new products. In the aspect of steaming and roasting dual-energy machine, aiming at the daily dietary nutrition needs of China people, we innovated and developed the technology of multi-ingredient nutrition coordination and control, and developed a three-dish and one-meal nutrition package to provide users with a delicious and nutritious food experience, and won the gold medal of the Geneva International Invention Special Exhibition and the second prize of the Guangdong Light Industry Federation for technological invention. For Jingyunxing range hood, the technology of no-cleaning of inner cavity was applied for 10 years, which solved the problem that the interior of the range hood was difficult to disassemble and clean and had a strong odor when users used it. In the aspect of anti-dry burning gas stove, multi-gear dry burning temperature control technology was invented to provide differential temperature control protection for frying and frying, which made the cooking process more secure. As for the gas water heater, the instant Muwang zero cold water series products adopt Gree triple constant temperature multi-stage control technology, which can realize surging water quantity and meet the water demand of many families, while the water temperature fluctuates by 0.5℃, and won the good product award of China Household Electrical Appliances Research Institute. According to the monitoring data of Aoweiyun.com, in 2022, the market share of online retail sales of Gree air energy water heaters reached 23.4%, ranking second in the industry.

　　(3) Refrigerator plate-Multi-dimensional optimization of products and technologies, customized preservation and storage solutions.

　　In 2022, based on the accurate grasp of consumer demand and driven by innovative technology, the refrigerator business achieved high-quality development, and launched a series of fine-stored, healthy and fresh-keeping refrigerator products, which realized the continuous upgrade from product functions to scene experience and became the creator and leader of high-quality life. Gree Jinghong refrigerator has been deeply ploughed in the dimension of "preservation", firmly grasping the pain point of preservation demand, and providing healthy preservation solutions for different ingredients such as meat, fruits and vegetables. As the first product of Jinghong refrigerator’s -38℃ series, the -38℃ ultra-frozen (456 or BCD-456WPSG) refrigerator is equipped with a brand-new upgraded -38℃ ultra-frozen fresh-keeping technology. Through the industry’s first broadband fully sealed piston compressor and frequency conversion control technology upgrade, the highest running speed of the compressor is increased by 50% compared with the industry, effectively retaining the smell and color of ingredients, and making the gravy full and longer; The technology of cell micro-dormancy, moisturizing and refreshing enables fruits and vegetables to enter a "micro-dormancy" state, reducing the loss of nutrients and vitamins in fruits and vegetables and delaying the deterioration of fruits and vegetables; Equipped with PLASMA full-space sterilization and odor purification technology, the sterilization rate is as high as 99%, keeping the refrigerator clean and hygienic. BCD-448WPSGA is equipped with the company’s fresh-keeping technology-cell-level fresh-keeping technology, which has three advantages: no loss of nutrition, good taste, and easy and one size fits all. There are 5 zones of independent storage and 18 fresh-keeping spaces to meet the needs of fine storage of raw and cooked meat, fruits and vegetables.

　　(4) washing machine plate-inherit the core technology, and the washing effect leads the industry level.

　　Gree washing and maintenance machine adheres to the direction of "leading heat pump washing and maintenance" and "AI intelligent washing", and is oriented to consumer demand, and is committed to the product research and development of customers’ targeted needs. Gree heat pump washer adopts 100% self-developed flexible baking custom double-rotor variable frequency compressor and low-frequency torque control technology won the "National Science and Technology Progress Award". In 2022, Ruchu heat pump washer was introduced, which integrates heat pump drying, steam care technology and intelligence to meet the embedded installation. The upgraded products of heat pump washing and care machine, such as the new series, are introduced, and the molecular steam care program is carried at the same time by using heat pump technology, so that clothes can be directly cared without washing and drying; The Zhibo washing machine was launched, and intelligent perception and AI decision-making were carried out from multiple dimensions such as users, clothes and environment, so as to comprehensively improve the washing effect.

　　(B) all-round development in the field of industrial products, to achieve independent and controllable industrial chain supply chain.

　　The company has strong R&D and manufacturing capabilities of core components of household appliances, covering Lingda compressor, Kaibang motor, Xinyuan electronics and other major sectors, laying a solid foundation for the company’s high-quality development. In 2022, the company focused on high-tech and tried to break through the "stuck neck" technology to achieve leap-forward growth in the field of industrial products. For compressors, aim at elite customers and make domestic and overseas sales strategies according to seasonal changes of products. In terms of motors, the sales of servo motors have nearly tripled, and domestic and foreign head customers of high-efficiency reluctance motors have achieved batch orders. In terms of enameled wires, we will focus on developing high value-added market segments such as new energy vehicles and electronic components, which will promote the overall profit level. In terms of capacitors, the sales volume of DC thin film capacitors has tripled year-on-year, and new customers have been successfully developed in industries such as industry, water pumps, new energy wind power and photovoltaics.

　　1, compressor plate-innovative technology, better intelligence, accelerate domestic substitution.

　　Gree compressor has five production bases, and has 13 series of products such as C39/C44/C48/C49/C55/C63, covering more than 300 kinds of high-efficiency energy-saving and environmental protection products such as fixed frequency, DC frequency conversion, dual-rotor, scroll type, etc., and its application scope covers many air-conditioning fields such as home, commerce, vehicle, refrigeration, dehumidification and heating, etc. In two-stage enthalpy-increasing compressor, three-cylinder compressor,

　　In 2022, in view of the high temperature environment with the highest temperature of 60℃ in the Middle East, a high-temperature refrigeration enthalpy-increasing rotary compressor was developed through technologies such as "high-temperature and large-capacity output structure" and "patented air supply structure design based on injection principle", which greatly improved the high-temperature refrigeration capacity of the compressor, with an outdoor refrigeration capacity of 8.8%, 14.7% and 23% at 48℃ and 54℃.

　　Based on the long-term big data analysis of the actual operation characteristics of household multi-series, combined with the research of "unique double-cylinder start-up variable capacity technology" and the innovative design of "compressor low-load and high-energy-efficient compression structure", the company developed a new generation of variable capacity rotary compressor for household multi-series, which improved the APF energy efficiency of the compressor by 8%, further improved the low-load operation by 20%, and doubled the start-up cooling and heating speed to achieve full-load and efficient operation. A new generation of variable displacement compressor will be applied to 12-18KW wide-load full-scene high-efficiency household multi-line and lead the energy-saving upgrade of household multi-line in the industry.

　　Through the innovation and breakthrough of the magnetic levitation system, the company proposed a three-degree-of-freedom radial-axial integrated bearing structure, which effectively reduced the bearing volume, successfully developed a 50-120RT magnetic levitation compressor with small cooling capacity, broadened the application scope of the company’s magnetic levitation products, and improved the market competitiveness of the company’s magnetic levitation centrifuge.

　　2. Motor plate-deepening technological innovation and being a high-quality pioneer in the industry.

　　The high-efficiency rare-earth-free reluctance motor produced by Gree has entered all fields and channels of the company’s layout. At present, 5 categories, 24 series and more than 1,000 varieties of products have been developed and launched, with 2,235 national patents. The self-developed reluctance main drive motor system of non-rare earth passenger cars has obtained "international leading" technical appraisal; The high-efficiency and low-noise permanent magnet-assisted synchronous reluctance motor won two gold medals in Pittsburgh International Invention Exhibition, and the research and development of a new high-efficiency rare-earth-free reluctance motor and its application in inverter compressors and air conditioners won the Guangdong Science and Technology Special Prize. Harvest rich professional scientific and technological research and development achievements. From inverter air conditioners to new energy commercial vehicles, motor systems for logistics owners and motors for construction machinery, Kaibang series products have been widely used and recognized in many domestic clients, with an annual production capacity of more than 80 million units, ranking among the top in the same industry in China.

　　The rare-earth-free reluctance main drive motor system developed by the company has achieved rare-earth-free and cost-effective, reaching or exceeding the level of rare-earth permanent magnet main drive system in terms of comprehensive energy efficiency and reliability, which has an important role in promoting the new energy vehicle drive system industry to get rid of the limitation of rare-earth resources and realize healthy, stable and sustainable development; The industry’s first 200kW main drive motor system without rare earth reluctance was developed and applied in new energy buses.

　　3. Refrigeration parts plate-Empowering shield and improving the layout of core parts.

　　In 2022, the company increased its diversified layout, acquired () and improved its supply chain. As a leading enterprise in the global refrigeration (components) industry, Dunan Environment covers the whole HVAC&R industry, and fully supports domestic air conditioners, commercial air conditioners, air source heat pumps, refrigeration, thermal management of new energy vehicles and other sub-fields. Dunan Environment has a nationally recognized enterprise technology center, a national postdoctoral workstation, an academician workstation, a nationally recognized (CNAS) laboratory, and a national central air-conditioning performance test center. The energy efficiency of frequency conversion direct-drive centrifuge in Dunan environment far exceeds the national first-class energy efficiency. The thermosiphon/vapor compression composite air conditioning unit can run efficiently in both thermosiphon cycle and vapor compression cycle by using advanced technology and methods, and has won international leading recognition.

　　During the reporting period, Dunan Environment actively expanded the application of refrigeration and heating equipment in emerging industries such as electronic purification, new energy, high-end precision manufacturing, hospital medicine, agriculture, forestry, animal husbandry and fishery, and regional energy, continued to deepen the market penetration of special industries such as nuclear power, communication, rail transit, and cold chain, and launched customized solutions around the needs of emerging industries, which achieved remarkable results. In 2022, Dunan Environment realized an operating income of 10.144 billion yuan, a year-on-year increase of 3.12%, and a net profit attributable to the parent company of 839 million yuan, a year-on-year increase of 106.98%. The market share of cut-off valves ranks first in the world, the four-way valve ranks second in the world, and the electronic expansion valve ranks third in the world. The core parts industry of thermal management of new energy vehicles has entered a new stage of rapid rise.

　　4. Precision mould plate —— Vigorously develop precision machining and build a leading mould enterprise.

　　Precision mould is an important part of the company’s industrial plate. Gree Precision Mould adheres to the strategy of "refinement, standardization, specialization and productization". There are 4 R&D platforms, 1 national skill master studio, 1 municipal skill master studio, 1 municipal skill workstation and 12 technical manufacturing service centers in Gree Electric. By the end of 2022, Gree had more than 1,500 employees and over 600 technicians, and applied for 586 patents.

　　In 2022, Gree precision molds continued to exert its strength in the fields of household appliances, automobiles, batteries, energy storage, 3C, medical devices, optical devices, motor cores, etc., focusing on projects such as New Energy Automobile Battery Mold+Injection Molding Products Project, Intelligent Factory (Turnkey Project) Project, Precision Automobile Interior and Exterior Mould Project and Battery PACK Project. Among them, high-impact dies can reach up to 380 punches per minute, which is equal to the leading level at home and abroad. At present, Gree Precision Mould has provided services to customers in many fields, with high quality and long-term stability, effectively promoting the development of upstream and downstream industries, strengthening market competitiveness and consolidating industry position.

　　(3) Adhere to innovation drive, break through technical problems, and help China create.

　　1. Focus on key technologies, and the momentum of innovation and development will continue to increase.

　　In 2022, in view of market demand and pain points, new technological breakthroughs and innovative achievements were made in the heat pump floor heating industry and high temperature heat damage in deep wells. The company’s "Key Technology and Application of High Efficiency Heat Pump Based on Building Thermal Storage" project has solved the problems existing in the floor heating industry of heat pump in China, such as mismatch between supply and demand, low energy efficiency in actual operation, and large attenuation of energy efficiency in frosting operation. The project "Key Technology and Application of New Refrigeration Complete Equipment for Heat Damage Control in Deep Mine" has overcome the problems of poor refrigeration and dehumidification effect of local cooling equipment in mine, large consumption of fresh air and water resources, poor heat exchange effect of exhaust air and narrow operating range of compressor. After the authoritative technical evaluation, these two technologies have reached the international leading level.

　　In 2022, the company took the lead in undertaking two national-level projects, and Gree advanced refrigeration compressor development team was approved by Zhuhai Innovation and Entrepreneurship Team. Among them, the national key R&D plan of the Ministry of Science and Technology "R&D and Application of Industrial Interconnection Platform for Large-scale Manufacturing Industry" provides support for the factor integration, structural optimization and operation control of large-scale manufacturing industry chain; The industrial Internet pilot demonstration project of the Ministry of Industry and Information Technology "Gree G-FIEMS Energy Internet Factory System" helps factories to save energy and reduce emissions, and promotes low-carbon transformation and technological innovation of enterprises.

　　2. Continue to promote standardization and establish the right to speak internationally.

　　The company takes the standard of meeting consumer demand as the core concept, implements the standard leading strategy oriented to consumer demand and social responsibility, and promotes the high-quality development of enterprises and industries with technical standards. Since 2018, Gree has been listed as the "leader" of enterprise standards for five consecutive years, and the enterprise standards in the past three years have led the number one in the industry; At the same time, it exported more than 2,500 Gree spare parts standards to the industrial chain, driving nearly 100 small and medium-sized manufacturing enterprises to become industry leaders. Gree took the lead and participated in the revision of 756 international and national standards, and realized "standards going out" to drive "products going out".

　　In 2022, in terms of domestic standards, Gree Electric served as the leader of the DC controller working group (SAC/TC212/WG11) of the first national home automation controller standardization technical committee; The national energy-saving standardization demonstration project "low-temperature heating air source heat pump technology energy-saving standardization demonstration creation" successfully passed the national examination and acceptance with excellent results, highlighting Gree’s industry benchmark position in the field of energy conservation and environmental protection; The research and evaluation base of technical trade measures for refrigeration equipment has passed the formal examination of the General Administration of Customs of the People’s Republic of China, becoming the first batch of national-level research and evaluation bases of technical trade measures that have passed the examination, and one of the first batch of six evaluation bases officially signed in China; Pass the review and evaluation of AAAAA-level enterprises with high scores, and gain the authoritative recognition in the field of standardization work again.

　　In 2022, in terms of international standards; Dong Mingzhu, as the first chairman of the refrigeration compressor sub-committee chaired by an entrepreneur from the refrigeration industry in China, convened representatives from nine countries to hold the 10th plenary meeting (ISO/TC86/SC4), and took the lead in proposing two international standards for refrigeration compressors, namely, ISO/NP 18501 Performance Evaluation of Volumetric Refrigeration Compressor and ISO/NP 18483 Performance Evaluation of Centrifugal Refrigeration Compressor, and successfully established the project, which provided references for the energy efficiency evaluation of volumetric refrigeration compressors and centrifugal refrigeration compressors. The international standard IEC TS 63349-2: 2022 for photovoltaic direct-drive electrical appliances led by Gree Electric was officially released, which filled the international gap. IEC 63349-1 "Photovoltaic Direct-Drive Electrical Controller Part 1: General Requirements" is expected to be officially released in 2023; Six ISO international standards, such as multifunctional heat pump, water heater and refrigeration compressor, have been successfully established, and the new ideas and technologies from China have been passed on to the outside in time.

　　3. Improve the intellectual property protection system to gain a firm foothold in the competition of scientific and technological innovation.

　　The company attaches great importance to the protection of intellectual property rights, ensures its leading position in the field of intellectual property rights and enhances its core competitiveness. In order to improve the level of intellectual property management, the company developed a "full-process intellectual property management system", which realized the electronic management of the whole life cycle of intellectual property from the source to the end; A scientific intellectual property reward mechanism has been set up, and a high amount of scientific and technological progress reward fund has been set up every year to reward units and individuals who have made outstanding achievements in management innovation and technological innovation in that year, which has greatly mobilized the innovation enthusiasm of scientific researchers. In 2022, Gree Electric applied for 12,520 patents at home and abroad, including 7,508 invention patents, and 3,270 invention patents were granted, which highlighted the advantages of independent property rights.

　　4. Optimize product design ability and enhance product design value.

　　The company takes users’ needs as the center, has a unique design concept in product manufacturing, and does not test products for consumers. After the design of Gree’s new products was completed, it was officially put into production and listed after a long-term testing process such as trial production, long-term running experiments and redesign, providing consumers with a safer, more reliable, intelligent, convenient and natural and comfortable use experience. In order to improve the ability to optimize product design, the company has developed a "scientific and technological innovation platform", which contains patent data related to products, and updates the data information in real time to enhance the starting point of research and development. In 2022, Gree products won 12 international design awards (1 German IF Design Award, 6 German Red Dot Awards and 5 American IDEA Awards) and 1 China Excellent Industrial Design Award (Bronze Award).

　　(D) quality is imperative, user-oriented professional services, and create a good brand.

　　1, build a perfect quality management model, and promote the continuous improvement of enterprise quality level.

　　During the reporting period, the company continuously optimized the quality management system, innovated the quality control mode, and promoted the system process reengineering. The company is equipped with leading laboratories that meet the needs of diversified electrical products research and development tests, and have many advanced instruments and testing talents to protect product quality. In 2022, it became the world’s first "internationally certified enterprise laboratory"; Won the "seven-star leading laboratory for air conditioning inspection and testing service" and became the first batch of enterprises in China to reach the highest seven-star level; The project "Construction of Data-driven Product Lifecycle Quality Management System and Its Application in Central Air Conditioning" won the first prize of china association for quality Quality and Technology Award; The research and application of key technologies for improving the R&D quality of air conditioners based on edge computing won the china association for quality Quality and Technology Award for Excellence, and the research and application of key quality technologies of Gree titanium energy storage system and the research of key technologies for improving the reliability of domestic chips and devices based on TSQ won the second prize of china association for quality Quality and Technology Award. The technical team of commercial air conditioning testing center won the nomination award of Guangdong provincial government quality award. The quality management of the company continues to be superb, and the certification and testing ability and the professionalism and internationalization of testing and certification technicians are further improved.

　　2. Provide quality service and help upgrade quality.

　　In 2022, the company launched the activities of "recycling used air conditioners" and "exchanging old ones for new ones". Based on the home appliance recycling system with the full link between the consumer end and the recycling end, the "trade-in" will be regarded as a long-term and stable preferential project, which will undertake the target recycling of 5.12 million home appliances and continue to exert its strength in the field of waste air conditioning recycling. Consumers can choose to enjoy the preferential price of the old machine to the new machine, free disassembly and assembly of air conditioners and other high-quality services, or they can choose to scrap the old machine and receive subsidies to realize it, and enjoy the quality upgrade at preferential prices. In 2022, it was selected as "the leader organization in the field of quality consumption"; According to the survey results released by the Customer Satisfaction Evaluation Center of China Institute of Standardization, in the evaluation of various indicators of air-conditioning products, Gree Electric’s customer satisfaction and loyalty have remained the first in the industry for 11 consecutive years, which shows consumers’ recognition of Gree.

　　3. Actively increase logistics and warehousing construction and improve data service capabilities.

　　The company has overweight warehousing construction, self-built trunk logistics, outsourced feeder and intercity logistics, and used e-commerce platform logistics for online channels. At the same time, Gree Cloud Group was launched to promote channel information online. In terms of warehousing, 17 base warehouses have been built at present, and supporting regional warehouses have been added in various provinces to achieve full coverage of warehousing. In terms of logistics, a logistics company was established to implement the mode of "self-built logistics of trunk lines+branch lines/intercity third-party outsourcing". Online sales use e-commerce platform logistics to make full use of social logistics resources, effectively reduce logistics loss and improve response speed. The digital system, represented by "Gree Cloud Network Batch", is connected in series with channel system, warehousing system, logistics system and dispatching system, so as to realize all-round information access to the Internet and empower channels through digitalization. In terms of order management process, we continue to explore digitalization and warehouse network optimization. In the aspect of intelligent dispatching, intelligent dispatching is used instead of traditional manual dispatching to improve the efficiency of dispatching service. For predictive maintenance, ID cards of data acquisition equipment are installed for the sold online air conditioners, which are distributed in various provinces and cities in China. Through the multi-connected air conditioner, the machine operation data of the big data platform is returned every day, so as to dynamically grasp the operation situation of the equipment, carry out operation and maintenance in time, and deploy the maintenance personnel and accessories in the sales area more reasonably and intelligently, so as to make the service more accurate and effective. In terms of smart property, we will build a talented and intelligent community in Gree Electric, and integrate security, facilities, personnel, energy efficiency, environment and other property services by using Internet, Internet of Things and artificial intelligence technologies to create a comprehensive service platform from point intelligence to overall intelligence.Provide a new mode of convenient service for the community and build a new experience of smart living environment.

　　(E) Business blossomed more, and innovation and diversification took off in an all-round way, making it stronger.

　　The diversified layout of the company ranges from intelligent equipment and precision molds in the vertical direction of the industrial chain, refrigerators, washing machines, water heaters and water dispensers in the horizontal direction of the products, to new energy, renewable resources and prefabricated vegetable equipment. In 2022, with smart equipment, new energy and other aspects as the key direction of diversified development, we will enter a new stage of multi-industry sector maturity and gradual release of performance, and show the world a multi-faceted and three-dimensional enterprise structure and competitive strength.

　　1, intelligent equipment field-master the core technology, promote high-end, intelligent development.

　　At present, the products independently developed by Gree Intelligent Equipment have exceeded 100 specifications, covering more than 10 fields such as servo manipulator, industrial robot, intelligent storage equipment, intelligent detection, special machine tools for heat exchangers, unmanned automatic production line, CNC machine tools, etc., and basically completed the industrial layout from industrial robots to core components and CNC machine tools, providing solutions for customers’ customized integrated application of industrial robots and large-scale automated production lines. In 2022, the company’s marketing strategy of intelligent equipment centered on technology, market breakthrough and model breakthrough focused on breakthroughs in the field of CNC machine tools, industrial robots, logistics warehousing and overseas markets.

　　CNC machine tool plate: The company focuses on the automobile lightweight market, rod-type machine tools extend to the die-casting market, and cut into the integration project in the automobile field. The large-kilogram industrial robot won the bid for several industry demonstration projects.

　　Robot plate: The company has made a major breakthrough in the four core components of controller, driver, servo motor and reducer, and launched a full series of products such as five-axis CNC machine tools, vertical CNC machine tools, horizontal CNC machine tools and gantry machining centers. Five-axis CNC machine tools can process complex curved materials and are widely used in energy, automobile, general machinery and other fields. Gree heavy-duty and high-rigidity six-axis industrial robot won the "Silver Award of 2022 Geneva International Invention Special Exhibition", Gree Intelligent Equipment Company won the high-tech enterprise and the national intellectual property advantage enterprise, and was awarded the Silver Award of Nuremberg International Invention Exhibition, Guangdong Patent Excellence Award and many other awards.

　　Overseas markets: The company has successfully entered the high-end markets in North America and Europe, and built high-end CNC machine tool demonstration projects in developed areas such as North America and Europe to enhance the overseas market influence of the company’s intelligent equipment.

　　2. In the field of green energy-a milestone of "zero carbon source" to promote the realization of green energy strategy.

　　The company continues to exert its strength in the field of green energy, and is committed to the research and product development of key technologies of new energy appliances and near-user-side energy Internet systems, and cooperates to build a new ecology of energy informationization and DC, and promote the transformation of green economy.

　　(1) photovoltaic (storage) air conditioning plate-the integration of light, storage and air, leading a new zero-carbon ecosystem.

　　At present, Gree photovoltaic air conditioning system has realized the full coverage of multi-connection, screw machine, centrifuge, condenser, modular machine and split machine, which effectively fits more application scenarios; Covering many types of typical climate zones around the world, it serves many countries and regions, and has reached more than 12,000 projects. Gree photovoltaic direct-drive air conditioning system and optical storage full DC air conditioning system have been successfully upgraded to "zero carbon source" air conditioning system, and parallel cascade compression refrigeration has been innovated. The photovoltaic (storage) DC air-conditioning system is equipped with the photovoltaic direct-drive frequency conversion technology pioneered by Gree Electric in the world, which has been appraised as "the world’s leading" scientific and technological achievements, realized the DC air-conditioning, energy informatization and refined management, and created a zero-carbon DC ecosystem with multiple commutations of "source-storage-network-load". It can not only realize the spontaneous self-use of electricity, but also supply the surplus electricity to other electrical equipment to realize the self-sufficiency of electricity. Gree’s "zero carbon source" air conditioning technology won the highest prize in the global refrigeration technology innovation grand prix. The technology related to photovoltaic (storage) DC air conditioning system has won the first China patent gold award, British RAC annual achievement award, Geneva International Invention Gold Award and many other domestic and foreign awards.

　　(2) the new energy sector-the first layout of new energy industries, to contribute to new energy forces.

　　The company further improves the layout of new energy industry and builds an integrated industrial chain covering lithium battery materials, lithium batteries, modules/packs, core components of new energy vehicles, downstream new energy vehicles, industrial and commercial energy storage and energy Internet systems. Two products, Gree Titanium New Energy Vehicle and Lithium Titanate Battery, were recognized as "Guangdong Famous High-tech Products" and were awarded "The Most Influential Enterprise in China Energy Storage Industry of the Year" again.

　　① New energy vehicle sector-accelerate the transformation of scientific and technological achievements and help build green and efficient transportation.

　　Companies adhere to independent innovation and research and development, according to the needs of different industries, the introduction of commercial vehicles, special vehicles two series of products. The new energy vehicles produced by Gree Titanium have been operated in more than 230 cities in China, including Beijing, Shanghai, Guangzhou, Chengdu, Nanjing, Tianjin and Wuhan. In 2022, Gree Titanium products won the Achievement Award of Bus Technology Innovation and Application, the Annual Hydrogen Fuel Cell Vehicle Award and so on, and won the "China New Energy Automobile Industry Influential Brand", "China Photovoltaic Industry Top Ten Influential Brands", "China Charging Facilities Industry Top Ten Quality Brands", "Comprehensive Energy Service Innovation Pioneer Enterprise", "National New Energy Vehicle Industry Quality Leading Enterprise" and "National Product and Service Quality Integrity Demonstration Enterprise".

　　Gree Titanium commercial vehicles are mainly city buses and city road buses (commuter buses), including antique clank buses, dolphin buses, double-decker buses, hydrogen fuel cell buses and minibus series. In view of the regional characteristics of urban and rural areas, Gree Titanium has laid out micro-circulation public transport products with diversified transportation needs in advance, and given full play to the synergy between micro-lines and large public transport networks to solve the pain points of urban and rural traffic operations. In 2022, following the 18-meter Dolphin Bus, Dangdang Bus, Double-decker Bus, Classic Road Bus and Facebook Road Bus were put into use in Beijing, Gree Titanium New Energy Classic Bus was once again affirmed to serve many lines in Beijing; Gree Titanium New Energy Bus has been added to Ganzhou, Maanshan, Weinan, Linfen, Yantai, Weihai, Shijiazhuang, Zunyi, Xixian New Area and other places to help build a green and efficient bus system. Gree Titanium Hydrogen Fuel Cell Bus was awarded the "Hydrogen Cup" annual hydrogen fuel cell bus.

　　Car ferry, Gree Titanium Airport, was awarded the "Inspection Certificate of Aviation Ground Equipment" by the National Construction Machinery Quality Supervision and Inspection Center, and became a special vehicle for civil airports recognized by the inspection agency designated by the Civil Aviation Administration of China. At present, Gree Titanium new energy vehicles have been operated in several airports, providing safe, fast and economical services for airport passenger transport.

　　(2) Lithium battery plate —— Insist on independent innovation to provide strong support for the development of new energy.

　　Based on lithium battery technology, with advanced battery management system (BMS) and thermal management system, the company has a variety of energy storage products, such as battery module, container energy storage system, rack energy storage system and photovoltaic off-grid energy storage system, covering KW to MW levels, providing efficient solutions for industrial peak shaving, power grid frequency modulation, communication base stations, data centers, rail transit, scenery consumption, commercial complexes and other energy storage fields. In 2022, we will actively expand the research and application of key technologies in various fields of new energy, and improve the bottleneck performance of traditional lithium batteries such as battery safety, low temperature resistance and high rate. Gree titanium energy storage system lays a technical foundation for the integrated development of source, grid, load and storage in Tibet and other high-altitude areas with large temperature difference. Gree Titanium was awarded the "2023 Polaris Cup" battery supplier with energy storage influence, and the project "Research and Development and Application of Key Technologies of High Safety and Large Rate Energy Storage System" was awarded the Guangdong Science and Technology Progress Award, the first prize of Science and Technology Award of Mechanical Engineering Society and the first prize of Science and Technology Award of Mechanical Industry.

　　In 2022, Gree Titanium New Energy "a lithium titanate composite material and its preparation method, negative plate and lithium-ion battery" was successfully selected for the 23rd China Patent Award, and won the "first gold" for the invention patent in the lithium-ion battery industry in the new energy field, which was also the first and only lithium-ion battery product technology selected in the new energy industry. Gree Titanium pioneered a new type of lithium titanate composite material with high conductivity through the gold-winning patented technology. The Gree Titanium cylindrical battery prepared by the award-winning patented technology essentially improved the safety performance of the battery, and at the same time broke through the technical bottleneck that high-rate charge and discharge and long cycle life could not be balanced, which was of great significance and significant social benefits for expanding the application range of lithium battery products in the new energy field. The hydrogen-titanium powertrain technology independently developed by Gree Titanium was appraised as the "international leading" key technology of high safety and large rate energy storage system. Successfully settled in the world’s first empirical experimental platform for photovoltaic energy storage, providing an effective scientific solution for the stable application of energy storage system in renewable resource power development and consumption scenarios in high altitude and ultra-low temperature areas, and has entered optical storage projects such as Qinghai and Xinjiang oil stations. By the end of 2022, Gree Titanium had applied for 3,463 patents, and achieved a leap from an enterprise with superior intellectual property rights to a demonstration enterprise, and was successfully selected as a "national intellectual property demonstration enterprise".

　　3. Diversified layout-Explore transformation and innovation to create a diversified industrial ecosystem.

　　(1) Semiconductor plate-improve the layout and solve the upstream bottleneck.

　　The company has developed products including 32-bit series MCU, AIoT SoC and power semiconductor. The 32-bit series MCU chips have been applied in batches in household air conditioners, commercial multi-connections, wire controllers, remote controllers and other products, with an annual consumption of more than 10 million, and can be widely used in consumer electronics, wearable devices, household products, health care facilities, commercial large units, industrial sensing, high-performance motor control and other fields. Power semiconductors have completed the mass production of FRD, IGBT, IPM and other series products, and have been applied in batches in inverter air conditioners, which can be widely used in household appliances, intelligent equipment, new energy and other fields. The cumulative shipment of the company’s products exceeded 100 million pieces, and the power semiconductor products were rated as "Guangdong Famous High-tech Products in 2022", recognized as "Guangdong Specialized and Special New Enterprise", and won the second prize of the Quality and Technology Award awarded by china association for quality in 2022.

　　(2) renewable resources-practicing social responsibility with green renewable resources system.

　　The company has established a mature and perfect home appliance recycling system, and has successively established six renewable resources environmental protection treatment plants in Zhuhai, Changsha, Zhengzhou, Shijiazhuang, Wuhu and Tianjin, with rich green treatment technologies to promote the development of national environmental undertakings with the concept of low-carbon development.

　　In 2022, the company actively responded to the call of the state, as one of the six enterprises to carry out the recycling target responsibility system in 2022, which was determined by the Notice of the General Office of the National Development and Reform Commission and the General Office of the Ministry of Industry and Information Technology, to undertake the recycling target of 5.12 million waste household appliances, implement the recycling target responsibility system for waste household appliances, build Gree’s reverse logistics recycling system, and integrate social recycling resources for reuse. At the same time, carry out and upgrade the "trade-in" activities, eliminate backward household appliances with potential safety hazards, promote the upgrading of household appliances consumption, replace new products with higher efficiency, better quality and better protection for consumers, and create a green and high-quality development path of "scientific and technological innovation-green management-recycling". During the reporting period, 6.7 million sets of waste household appliances were disposed of, and more than 46.7 million sets of various waste electrical and electronic products have been disposed of.

　　(3) medical and health sector-layout of new track to enhance comprehensive strength and anti-risk ability.

　　The company has set up several medical equipment companies, such as Zhuhai Gejian Medical Technology and Chengdu Gree Xinhui Medical, which are engaged in the research and development of medical protective products, laboratory equipment and mobile medical equipment. By building a common technology research and transformation platform, we can meet the customization needs of products in different application scenarios, promote the localization of equipment in biomedicine and life sciences, and promote the diversified layout of the company.

　　(4) Prefabricated vegetable equipment plate-launching refrigeration equipment and production equipment to help open up the industrial chain.

　　In 2022, the company initiated the establishment of Guangdong Prefabricated Vegetable Equipment Industry Development Federation, and established Zhuhai Gree Prefabricated Vegetable Equipment Technology Development Co., Ltd., a subsidiary, to continuously promote the financial service alliance and provide supporting specialized manufacturing, storage and transportation refrigeration equipment for upstream and downstream enterprises of prefabricated vegetables. Focusing on the three themes of intelligent production, digital management and intelligent decision-making, the company will combine automatic production equipment, intelligent logistics equipment and high-end refrigeration equipment to create an intelligent prefabricated vegetable factory with automatic equipment, information-based operation and intelligent factory for enterprises.

　　(6) Deeply cultivate the Internet of Everything and improve the omni-channel ecological layout.

　　In 2022, the company focused on channel layout and expansion, and constantly consolidated the quantity and quality of channels; Grasp major projects and obtain rich orders in public buildings, traditional manufacturing, clean heating, public transportation, data center, high-end manufacturing, medical and health care and other fields; Focusing on users, we will deeply cultivate users in different circles, explore and promote the diversity and professionalism of channels, and the complementarity between different channels.

　　1, in-depth layout of smart homes, leading a smart and healthy life.

　　In 2022, the company made in-depth layout in smart home system, smart home network, intelligent voice interaction, intelligent scene scheme and intelligent product technology, and continuously upgraded the five smart living systems of energy, air, health, security and lighting in the whole house. Develop personalized space intelligent solutions for different living spaces such as living room, bedroom and kitchen; In view of different scenes such as villas, large flat floors and commercial houses, the R&D planning of intelligent hub products and intelligent interconnection solutions for the whole house has been increased to better meet the needs of different user groups for creating a green, efficient, convenient and safe home internet space. According to the "Top100 list of global smart home invention patents in 2022" published by IPRdaily, the intellectual property industry media, Gree ranks among the top four in the world, and the company’s research and development strength in smart home has once again gained professional recognition.

　　In terms of smart products, Gree has independently created a full range of smart home products, IoT platform, intelligent decision-making system, G-Voice voice interactive system, intelligent vision system, G-OS IOT operating system, G-Learning comfort and energy-saving algorithm, and other intelligent IOT technologies, providing home life with Internet of Everything solutions and creating a high-quality life of Internet of Everything. Gree’s centralized management platform provides one-stop management services, connects to the management systems of hotels, apartments and dormitories, and realizes the rental, centralized management, control and data statistics of air conditioners, door locks, water purifiers and other equipment. It has served many operators all over the country and connected more than 100,000 equipment.

　　In terms of marketing, the company integrated smart homes into Gree stores, showing Gree Shuxiang homes linked by the whole house. In 2022, it has landed nearly 20 Gree Shuxiang homes in Guangzhou, Foshan, Chengdu, Chongqing, Nanning, Zhangzhou and Zhengzhou. "Gree Comfortable Home" integrates five systems, namely central air conditioning, floor heating, fresh air, healthy water and smart home, and relies on Gree’s smart connection, intelligent perception, intelligent interaction, intelligent cloud platform, smart energy and artificial intelligence in the field of smart home, covering all Gree smart products.

　　In terms of smart home eco-interconnection, Gree Standard Cloud has strong cooperation with domestic Baidu, Tmall, Huawei, overseas Google, Amazon and other manufacturers. By providing authorized services for cooperative manufacturers, it provides convenient Gree equipment inquiry and control for a large number of users, which improves Gree’s influence and brand effect.

　　2. Promote the construction of digital stores and create a new omni-channel retail model.

　　In 2022, the company combined with digital tools to create an efficient new retail system, realizing the integration of sales and services, the equivalence of security rights and responsibilities, and the specialization of procurement and distribution.

　　In terms of offline stores, we will promote the construction of digital stores. By introducing digital devices such as smart shopping guide big screen, cloud shelf and electronic price tag and upgrading the store image, offline stores not only have offline and online sales functions, but also become a scene space for experience, meeting people and communication. Consumers will deeply feel the technological convenience and health and comfort brought by Gree products in the store.

　　The new retail store of Gree Terminal will create a new omni-channel retail model based on the experience of Wanjia Store. According to the local conditions, the corresponding reform plan is formulated, and the new retail reform is promoted throughout the country. Informatization, digitalization and intelligent technology have been deeply applied in the new retail marketing model.

　　3. Increase diversified channel layout and promote omni-channel strategic layout.

　　In 2022, the company continued to exert its efforts in online and sinking channels, and the whole network and platform settled in, strengthening the layout of outlets and effectively covering the whole market. The company strengthened its deep cooperation with the three-party e-commerce platform, joined Alibaba, newly settled in home appliance stores such as Cat Enjoy Channel and Meow Express, and built a joint store of Gree+JD.COM. The investment continued to increase, actively promoted the online distribution mode and enriched the e-commerce sales channels. According to Ovi data, Gree’s online share will increase to 28.9% in 2022. Relying on dealer resources, we built our own store system, and reached the third-and fourth-tier markets in depth. At the same time, we worked together with JD.COM to develop sinking channels and open up nearly 600 Gree+JD.COM joint stores; The sales of JD.COM stores and Tmall premium products continued to improve, further expanding the market scale of sinking channels. At the same time, take "the store in Dong Mingzhu" as the entrance to expand traffic. "Store in Dong Mingzhu" has been successfully transformed into an open platform, and as a terminal retailer of all-category e-commerce platform, it has laid the foundation for the integration of () and the promotion of online batch mode.

　　4. Vigorously develop independent brands and seize overseas markets.

　　In 2022, Gree products have been sold to more than 190 countries and regions, and the overseas business achieved an operating income of 23.27 billion yuan. Among them, the sales of independent brands accounted for 57%, and the sales increased by nearly 20% year-on-year. The company has been deeply involved in overseas markets, and through the industrial advantages of internal and external coordination, it has continuously improved the research and development capabilities of overseas products, so as to segment products more suitable for local consumers, and achieve sustained and steady growth in markets such as the Middle East, Europe and Southeast Asia. Through overseas offline exhibitions and many online and offline product promotion activities, we will enhance our brand power and operate Gree’s full-matrix overseas social media platform. And establish a new mode of bonded warehouse overseas to promote the steady growth of business. It has won the bid for several large-scale overseas model projects, such as Oman Ministry of Education, Dubai Emaar Villa Group, Brazil’s BAND TV Station, Venezuela’s La Rinconada Baseball Hall and Paddington Square in the UK, which have blossomed in various fields such as public facilities and commercial buildings, and established Gree’s international brand image.

　　(VII) Full breakthrough in data operation in the whole value chain, and sustainable development of digital intelligence and empowerment.

　　In 2022, based on the principle of "efficiency and benefit", the digital and intelligent transformation was vigorously promoted, and the organizational process, informationization and automation were integrated and designed, and the information synergy points and realization paths were clearly defined, forming a blueprint for the overall informatization construction of "one platform, one standard system and 18 fields". Successfully realize the full value chain operation driven by software and data, covering all links of the whole value chain, such as planning and research, order booking, intelligent scheduling, flexible manufacturing, collaborative supply, quality tracking, logistics capability, customer service installation, etc., and realize end-to-end collaborative pull-through, real-time delivery data, customization of orders, process visualization, intelligent production scheduling, timely push of abnormal reminders, supplier collaboration, intelligent warehousing and logistics, and delivery collaboration, so as to

　　1. Build a benchmark enterprise of "intelligent manufacturing" to improve quality, reduce cost and increase efficiency.

　　During the reporting period, the company actively responded to the call of the state and the government, urged the high-quality development of intelligent manufacturing, and made efforts to create and cultivate intelligent factories and intelligent manufacturing demonstration scenarios. Gree Changsha Intelligent Manufacturing Factory was selected as the "New List of the Most Influential Things" in Fortune; Gree Electric (Hefei) Co., Ltd. was recognized as an "excellent scene of intelligent manufacturing" by the Ministry of Industry and Information Technology; Gree Dasong (Suqian) Life Electric Appliance Co., Ltd. was rated as the benchmark factory of industrial Internet in Jiangsu Province; Gree Electric (Luoyang) Co., Ltd. was recognized as a provincial "smart factory"; Gree Electric (Nanjing) Co., Ltd. was recognized as a provincial "Intelligent Manufacturing Demonstration Workshop".

　　The company fully applies new information technologies such as industrial Internet, cloud platform, artificial intelligence, big data, blockchain and 5G, accelerates the construction of Gaolan Port’s "Lighthouse" demonstration intelligent factory, and gradually forms a digital and intelligent transformation golden triangle centered on Zhuhai, Changsha and Hangzhou bases. Gree Gaolan Port Unmanned Factory aims at building a demonstration project of 5G converged application smart factory, focusing on the production line to develop 5G+AI intelligent application solutions, and further increasing AI scenarios. There are over 300 AI application points in the park, including parts defect detection and automatic positioning and assembly. The 5G+AI intelligent detection platform provides a brand-new working mode for quality inspection, which is applied to scenes including high-precision positioning guidance and multi-modal quality inspection analysis, effectively improving the detection accuracy. Gaolan Port Factory will be based on Gree digital twin virtual factory platform, combined with equipment online diagnosis, predictive maintenance and other applications to realize intelligent equipment management; Gaolan Park will be based on 5G+MEC, carrying security applications such as AI video surveillance and mobile robot inspection in smart parks, realizing comprehensive security prevention and control, accelerating the implementation of artificial intelligence application solutions, and improving quality and efficiency.

　　2. Insist on system innovation and promote breakthroughs in key links.

　　In 2022, the company established an intelligent dispatching center for manufacturing process management by building a Gree manufacturing intelligent inspection platform and a prenatal preparation system to realize intelligent management and distribution of static tasks; On the basis of networking, the intelligent management platform of the group’s equipment is built to realize equipment data acquisition, data analysis, real-time monitoring and intelligent decision-making, and solve a series of problems such as incomplete data acquisition and inadequate supervision of operation and maintenance data. A major breakthrough has been made in the independent research and application of the intelligent production line of the two devices. The first set of condenser inflation and expansion integrated equipment in the industry has been put into production smoothly, realizing the full-automatic production of condensers without stopping. The first evaporator automatic tube piercing machine completed the factory production line, which solved the problem of automatic tube piercing of special-shaped fins and filled the technical gap of automatic tube piercing of special-shaped fins.

　　3. Continuously improve the level of intelligence and create a new trend of "industrial Internet enterprise"

　　In 2022, the company built an industrial Internet platform, integrated industrial big data, Internet of Things, artificial intelligence and other information technologies, and integrated the data resources of the existing information systems in the factory, thus improving the comprehensive supervision capability of the factory. In the fields of quality control, data management, rapid development, automatic production scheduling, etc., digital means are used to improve the working efficiency and management accuracy of internal plates, realize the goal of non-manual intervention in the whole process, unify business and platform, and provide customers with intelligent factory solutions. Gree is responsible for the high-efficiency intelligent environmental control system project, which was officially put into use in Shenzhen Metro Line 12. As the first batch of intelligent environmental control system construction projects in China, Line 12 of Shenzhen Metro adopts Gree high-efficiency frequency conversion equipment under all working conditions, including permanent magnet synchronous frequency conversion direct-drive water chillers, full frequency conversion air-conditioning pumps and permanent magnet direct-drive cooling towers, and all 458 air treatment equipment in the whole line adopt EC fans.

　　(VIII) Forging talents in all directions to boost the company’s high-quality development.

　　In 2022, the company thoroughly implemented the guiding principle of independent training of talents, continued to promote the reform of talent team construction, comprehensively promoted the systematic project of talent training, strengthened the training of applied skilled talents, and accelerated the establishment of competitive advantages in talent resources.

　　1. Promote personnel training in an all-round way and strengthen the training of applied skilled personnel.

　　On the one hand, the company takes the "project of strengthening enterprises with talents" as the core, and around the goal of training "10,000 technicians, 1,000 engineers and 100 expert leaders", promotes the formation of a 2+2 (theory+practice, skills+consciousness) training model for industrial workers, creatively puts forward "three-thirds system" and "one-use and one-standby" skills training methods, and actively adapts to the needs of automatic and intelligent transformation of production models. On the other hand, the company relies on 17 innovation studios for model workers and artisans and 9 skill master studios to establish industrial workers’ training bases, regularly carry out skills training, deepen the company’s collaborative training mechanism for high-skilled talents, and continuously optimize the employee training path. In 2022, a total of about 14,000 special trainings at all levels were held throughout the year, with about 670,000 participants. Third, the company builds a learning and competition platform, builds a multi-level skill competition echelon, and establishes a progressive vocational skill competition mechanism. Through competition to promote learning, competition to promote training, competition to promote talents, and tap the top soldiers and technical experts.

　　2. Deepen the path of integration of production and education, and cultivate highly skilled talents.

　　During the reporting period, the company carried out personnel training in three majors (precision mold intelligent manufacturing, intelligent manufacturing technology, refrigeration technology and service) in the national and municipal high-skilled personnel training bases, broadened the channels and forms of skills training, and built a collaborative mode of high-skilled new talent training. With the achievements in vocational education, it won the only national award in the field of vocational education-the seventh Huang Yanpei Vocational Education Award, and became the only enterprise to win this award. The company will speed up the implementation of smart campus construction, make full use of the company’s own R&D center, laboratory, innovation platform and production base, and realize the deep integration and seamless transformation of teaching scenes; Relying on Gree’s characteristic culture and industrial cluster advantages, facing the national major development strategy and Greater Bay Area’s talent demand, we will connect with strategic emerging industry layout majors such as intelligent equipment, artificial intelligence and Internet of Things, build a school-running brand of China enterprises with deep integration of production and education and international characteristics, and strive to cultivate more new high-quality skilled talents for the development of the real economy.

　　3. Carry out diversified training mode and build an efficient talent team.

　　During the reporting period, the company strengthened the promotion of cadres, and continued to build a cadre team with optimized structure and efficient operation. Establish a precise talent inventory and introduction mechanism based on project planning, adopt the recruitment strategy of project-driven, hierarchical planning and fine recruitment, start the recruitment in advance in autumn, and lock in key scarce talents as soon as possible. And deepen the school-enterprise cooperation mode, increase the introduction of talents in vocational schools, continue to promote the "Gree title class", and lock in outstanding talents in advance.

　　4. Improve the talent incentive mechanism to maximize the value of talents.

　　On the one hand, the company improves the internal management mechanism, stimulates the core kinetic energy of employees, promotes the company’s high-quality long-term development, and drives the intrinsic value to further enhance. The company has set up scientific and technological progress award, management innovation award, rationalization proposal award, quarterly award, year-end award and diversified bonus system, and set up honorary selection activities such as advanced individual, worker pioneer, gold medal employee, outstanding city employee and skill pacesetter to encourage employees in various positions to innovate constantly and give full play to their strengths. The company invested hundreds of millions of yuan to build Gree Kangle Park, staff living quarters, etc., to solve the problems of staff housing, leisure and entertainment; Establish a perfect employee welfare guarantee system, establish a "sunshine fund" in enterprises, and solve the urgent needs of employees in difficulty. On the other hand, the company makes full use of policy resources to complete the evaluation and award application of various talents such as high-level talents in Zhuhai, Zhuhai craftsmen, industrial development and innovative talents.

　　5, the implementation of employee stock ownership plan, promote long-term stable and healthy development.

　　The company launched the shareholder return plan for the next three years (2022 -2024) and the second employee stock ownership plan, further improving the benefit sharing and risk sharing mechanism between shareholders and management, middle-level cadres and core employees, fully mobilizing the enthusiasm and creativity of employees, further improving the cohesion of employees and the competitiveness of the company, and promoting the long-term, sustained and healthy development of the company.

V. Prospect of the Company’s Future Development

　　(A) the company’s development strategy

　　Adhering to corporate vision, "Building a world-class enterprise and achieving a century-old brand of Gree", the company adheres to the guidance of Socialism with Chinese characteristics Thought of the Supreme Leader in the new era, Do not forget your initiative mind, keeping in mind the mission, sticking to the real economy, adhering to the road of self-reliance and independent innovation, speeding up the realization of management informationization, production automation and product intelligence, making continuous efforts in the fields of intelligent equipment, communication equipment and molds, continuing to lead the technological development of the global HVAC industry, and constantly satisfying the global consumers’ yearning for a better life.

　　(II) Business Plan for 2023

　　1. Committed to high-quality party building and boosting the company’s continuous innovation and development.

　　Adhere to the guidance of the Supreme Leader’s Socialism with Chinese characteristics Thought in the new era, comprehensively implement the spirit of the 20th Party Congress, strengthen the construction of Party organizations and party member ranks, and deeply integrate Party building with enterprise development. By promoting the standardization of Party organizations, we will give full play to party member’s vanguard and exemplary role, actively explore new modes of personnel training, and help the company to innovate and develop continuously with high-quality party building work.

　　2. Improve the multi-faceted business structure and create a new engine for development.

　　Keep up with the national strategic needs, based on its own advantages, and closely linked with the industrial ecology. Adhere to the main business, with industrial products, intelligent equipment, household appliances and new energy as the key direction of diversified development. Many products of Gree, Jinghong and TOSOT, such as heat pump water heaters and high-end equipment, have gradually formed scale, and they have been constantly entering and breaking. And establish good cooperation with more than 190 countries and regions dominated by the "Belt and Road" countries to achieve mutual benefit and win-win results.

　　3. Adhere to independent innovation, strengthen the advantages of core industries, and promote high-quality development.

　　Continue to deepen technical research, focus on key core technologies, adhere to original and leading scientific and technological research, constantly improve professional global certification technical team and advanced experimental facilities, realize technical iterative upgrading, develop more efficient and energy-saving system solutions and equipment, ensure the independent control of key technologies of products, and consolidate the dominant position of industry leaders. Give full play to technological innovation ability, provide assistance from R&D, design and research to marketing and service life cycle, optimize product life cycle, and promote high-quality development through technological innovation.

　　4. Continuously consolidate product quality and set a benchmark for industry quality management.

　　Guided by consumer demand, with consumer satisfaction as the standard, we pursue perfect quality, constantly optimize the quality management system, build a digital and intelligent quality control model, establish an automated inspection and testing system, improve inspection capabilities, and promote product quality and efficiency with advanced standards. Build a first-class laboratory, and provide leading detection capability and rich services for the innovative development and scale application of high-quality products in the industry.

　　5. Accelerate industrial transformation and upgrading and deepen the integration of digital technology and industry.

　　Strengthen the Group’s informatization top-level planning, and build a full-scene digital application platform for the marketing sector that is leading the industry and conforms to Gree’s format. With data as the key element, value release as the core, and data empowerment as the main line, we will give full play to the advantages of technologies such as Internet of Things, AI, big data and cloud in industrial transformation and upgrading, speed up the digital upgrading, transformation and reconstruction of industries, create application solutions for the whole industrial chain of intelligent manufacturing, provide automatic production solutions for enterprise digital transformation to reduce costs, reduce consumption, improve quality and increase efficiency, and accelerate the construction of digital smart factories to build advanced demonstration bases of the Group.

　　6. Improve the efficiency of internal organization and management and promote the healthy development of the company.

　　Strengthen internal construction, improve the functional system of each department, and further promote the coordinated development of each department to improve the overall work efficiency and management level; Strengthen the maintenance and operation of the information system to ensure the efficient control of the information system, build a comprehensive risk management internal control system, and strengthen risk management and control; Continuously improve the cost management system, strengthen the awareness of reducing costs and increasing efficiency, realize the rational utilization of enterprise resources, promote the reasonable and orderly office of the company, and promote the healthy development of the company.

　　7, accurate talent introduction strategy, set an example of China manufacturing personnel training industry.

　　According to the training and supply characteristics of all kinds of talents, we will implement the strategy of introducing precise talents, focus on cultivating high-tech talents in the fields of automation equipment, precision molds, intelligent equipment, experimental testing, quality management, etc., and cultivate new skilled talents who can adapt to new fields and have comprehensive technical practice ability, so as to provide high-quality talents for the stable development of the company.

　　(C) the main risks facing the future development

　　1. Macroeconomic fluctuation risk

　　The products sold by the company are mainly consumer appliances such as HVAC and household appliances. Macroeconomic changes may affect consumers’ income and lead them to adjust their expenditure on household appliances. At the same time, as a post-cycle real estate industry, real estate policies have a significant impact on the demand for home appliances.

　　2. Risk of price fluctuation of production factors

　　On the one hand, the raw materials of the company’s products are mainly various grades of copper, steel, aluminum and plastics, etc. The main raw material costs account for a high proportion of the main business costs, and the fluctuation of raw material prices will have an impact on the costs. On the other hand, the rising labor cost has become a common phenomenon in economic development. The increase in labor costs will have an adverse impact on the company’s gross profit margin.

　　3. Market competition intensifies risks.

　　China’s urbanization rate has gradually increased, the number of household appliances has increased significantly, and the industry competition has become increasingly fierce.

　　4. Overseas political risks

　　With the overseas political situation, increasing trade friction and the uncertainty of economic globalization, overseas business may face more risks.

　　5. Risk of exchange rate fluctuation

　　Exchange rate fluctuations may weaken the competitiveness of products, adversely affect the export of products, and may also cause exchange losses and increase financial costs.

　　Facing the complicated internal and external environment and risks, the Company will continuously improve the corporate governance structure, improve the standard operation level of the Company, strengthen the internal control system, effectively prevent and control all kinds of risks and ensure the sustained, stable and healthy development of the Company in strict accordance with the requirements of the Company Law, the Securities Law and the relevant laws and regulations of the China Securities Regulatory Commission.