Camel Group Co., Ltd. Business Report FY ended Dec. 2023

Financial Overview

(CNY millions)

	FY ended Dec. 31, 2022	FY ended Dec. 31, 2021	Rate of Change (%)	Factors
Sales	14,078.85	13,425.36	4.87%	-Thanks to the sales growth in the Chinese automobile market in 2023, the company's sales of automotive low-voltage lead-acid batteries increased by 7.45% year-over-year (y/y), and sales of automotive low-voltage lithium batteries increased by 27.87% y/y.
Operating income	710.73	483.87	46.88%
Ordinary income	686.23	477.08	43.84%
Net income	572.59	455.96	25.58%

Automobile related business

1. Automotive low-voltage lead-acid battery business
-In 2023, the company's automotive low-voltage lead-acid battery production and sales continued to grow, with a total production of 35.23 million KVAH, a y/y increase of 10.98%, and a total sales of 34.60 million KVAH, a y/y increase of 7.45%.

-In 2023, the company supplied products for 51 models throughout the year. Among its customers, deliveries increased for Changan, Chery, BYD, Dongfeng Honda, GAC Honda, SAIC GM, Kia, Foton, FAW Jiefang, Dongfeng Commercial Vehicle, and JAC Motors. Sixty new OEM project points were obtained, including the new lead-acid AGM product project of BMW Brilliance for 2025-2028. For New Energy Vehicles, the company has obtained 18 new projects, with customers including SAIC, BYD, Neta, DeepWay, Leapmotor, IM Motor and others.

-In terms of overseas production capacity, in July 2023, the first phase of the company's U.S. chemical plant project was completed, with an annual production capacity of approximately 1 million KVAH. In September 2023, the second phase of the company's Malaysian plant was completed and put into production, and the Malaysian plant currently has an annual production capacity of approximately 4 million KVAH.

2.Automotive low-voltage lithium battery business
-In 2023, the company mainly carried out the research and development of 12V/24V/48V low-voltage lithium battery products and project promotion, and completed 35 projects. In order to ensure future product delivery capacity and market demand, the company's new energy and low-carbon industrial park project (Phase I) started construction in July 2023. At present, the construction of the industrial park is proceeding in an orderly manner according to the plan, and it is expected that equipment and production line commissioning will be carried out by the end of 2024.

3.Battery recycling business
-In 2023, the company has formed a layout of a lead-acid battery plant and a lead recycling factory. During the reporting period, the company's Anhui recycling plant achieved full production. The company continues to promote the construction of the second phase of the lithium battery recycling plant project and the lithium battery "purchase and sales integration" industrial layout. Among these, the wet-process production line for annual processing of 50,000 tons of waste ternary lithium batteries has been put into trial production.

Added to the UFLPA Entity List

-Camel Group announced that the U.S. Department of Homeland Security (DHS) added the company to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List. Camel Group is now comprehensively assessing the potential impact of this matter and will tackle it in accordance with laws and regulations. The company will keep a tab on this matter, strictly abide by the relevant rules depending on developments, and fulfill the obligation of information disclosure in a timely manner. (From a press release dated August 5, 2023)

Strategic cooperation

-Camel Group) announced the signing of a strategic cooperation agreement on battery recycling between Camel Group Resource Circulation Xiangyang Co., Ltd., its subsidiary, and Tengqingqing Recycling Resources (Shangrao) Co., Ltd., an SVOLT Energy subsidiary. Having agreed to promote cooperation in such fields as recycling of ternary materials, cascade utilization of waste batteries, and warehouse logistics, the two parties will draw up more specific cooperation rules and implement them as soon as possible. (From a Camel Group press release dated June 14, 2023)

New projects

-Camel Group announced that it broke ground on a low-carbon industrial park. The construction includes a low-voltage lithium battery plant with an annual production capacity of 12 million units and an energy storage lithium battery plant with a capacity of 10GWh. With a total investment of CNY 6.8 billion, the industrial base is planned to cover an area of around 350,000 square meters. The project will be constructed in two phases. As of now, Camel Group has received more than 40 orders for its automotive low-voltage lithium batteries from clients around the world. (From a press release dated August 1, 2023)

-Camel Group announced the opening of its North American formation plant in Battle Creek, Michigan, USA. The first phase of the plant includes a formation and packaging line for flooded batteries and a formation and packaging line for AGM batteries, upon commissioning of which a maximum annual capacity of 1 million batteries will be achieved. (From a Camel Group press release dated July 19, 2023)

-Camel Group announced that it plans to build a battery plant in the Xiangyang Hi-Tech Development Zone, Hubei Province, annually producing 12 million units of low-voltage lithium batteries and 10GWh of energy storage lithium batteries. Construction will be completed in two phases. Camel Group plans to invest CNY 3.3 billion in the first phase to build a plant with an annual production capacity of 4 million units of low-voltage lithium batteries and 2GWh of energy storage lithium batteries, covering an area of around 187,000 square meters. The initial planned investment for the second phase is CNY 3.5 billion on construction to expand annual production capacity to 8 million units of low-voltage lithium batteries and 8GWh of energy storage lithium batteries, on a site covering an area of around 167,000 square meters. (From a press release dated March 1, 2023)

Orders

-Camel Group announced that Camel Group Battery Trading Co., Ltd., its wholly-owned subsidiary, has been designated by BMW Brilliance for the company’s lead-acid product projects from 2025 to 2028 to become an official supplier of 12V lead-acid products to the company. (From a Camel Group official website press release dated January 11, 2023)

R&D expenditure

(CNY millions)

	FY ended Dec. 31, 2023	FY ended Dec. 31, 2022	FY ended Dec. 31, 2021
R&D expenditure	530.22	528.47	491.49
Ratio of R&D expenses to sales (%)	3.77	3.94	3.96

-As of the end of 2023, the company had 1,183 R&D staff, accounting for 15.83% of the total number of employees.

R&D Structure

Name	Main business	Location	Year established	Percentage of voting rights held
Camel Group Battery Research Institute Co., Ltd.	Development and production of technology for new energy-powered lithium-ion batteries, etc.	Xiangyang, Hubei	2004	100%
Camel Group Wuhan Optics Valley R&D Center Co., Ltd.	R&D, prototype production of lithium batteries, fuel cells, new batteries, materials and energy storage-batteries	Wuhan, Hubei	2016	100%
Camel Energy Inc.	Advanced batteries, materials, power systems	Michigan, America	2016	100%

Patent

-The Company applied for 128 patents and obtained 108 patents for lead-acid batteries. As of the end of 2023, it holds a cumulative total of 787 patents.

-The Company applied for 210 patents and obtained 131 patents for lithium batteries. As of the end of 2023, the company holds 414 patents.

Certifications

-The company has obtained IATF16949, ASPICE L2、ISO26262 ASIL-D, and other certifications.

Exhibitions

-Camel Group announced its participation in the 2023 China International Supply Chain Expo (CISCE) with low-pressure lead-acid and lithium batteries and portable energy storage products. The group has been making deployment for the low-pressure lithium starter battery business since 2019 and has formed partnerships with over 40 OEMs at home and abroad so far. Multiple high-end automakers have placed orders for its 12V low-pressure lithium battery. (From a Camel Group press release dated December 6, 2023)

-Camel Group announced its participation in Automechanika Ho Chi Minh City 2023 held from June 23 to 25 in Vietnam, where it exhibited its full range of in-house developed automotive batteries, such as the latest automotive lithium batteries with long service life, small size, and long range, as well as AGM and EFB automotive start-stop batteries, and the SLI automotive starter battery. (From a Camel Group press release dated June 27, 2023)

-Camel Group announced its participation in Latin Auto Parts Expo 2023 (LAPE 2023) held in Panama from June 14 to 16, where it exhibited the latest lead-acid and low-voltage lithium batteries. In addition to automotive batteries, the Group exhibited the latest battery technologies that will contribute to reducing battery size, increasing output power, and extending battery service life. (From a Camel Group press release dated June 15, 2023)

-Camel Group announced that it participated in the Indonesia Auto Parts Exhibition (INAPA) held from May 24 to 26, where it exhibited its newly launched Hitec brand of storage batteries that meet the needs of the local market, such as passenger car batteries, truck batteries, and heavy machinery batteries. In 2022, the Group established a branch in Indonesia to supply products to local customers. (From a Camel Group press release dated May 30, 2023)

-Camel Group announced that it brought multiple lithium batteries and lead-acid batteries to the Automechanika Shanghai held in Shenzhen. In the field of lithium batteries, Camel Group exhibited starter batteries, parking air-conditioner batteries for commercial vehicles, and trailer batteries. In the field of lead-acid batteries, the key exhibits were start-stop absorbed glass mat (AGM) batteries, start-stop enhanced flooded batteries (EFB), and starting, lighting and ignition (SLI) batteries. (From a press release dated March 10, 2023)