Huayu Automotive Systems Co., Ltd. Business Report FY ended Dec. 2023

Financial overview

(CNY millions)

	FY ended Dec. 31, 2023	FY ended Dec. 31, 2022	Rate of Change (%)
Sales	168,594.05	158,267.91	6.52
Operating income	8,817.64	9,107.91	(3.19)
Ordinary income	9,038.61	9,138.99	（1.10)
Net income	8,094.77	8,061.21	0.42

Orders of Affiliated companies

Company name	Products	Details
Huayu Automotive Electric Drive Systems Co., Ltd.	Drive motors	-Selected as the supplier for the controller motor project for SAIC-GM related models. Also supplying motors for the Leapmotor Project. -In 2023, the company sold 360,000 drive motors (sets).
Huayu Magna Electric Drive System Co., Ltd.	Electric drive system products	-In 2023, the company sold 95,000 units (sets).
Sanden Huayu Automotive Air-Conditioning Co., Ltd.	Electric air conditioner compressors	-In 2023, supplied HEV/NEV heat pump systems and electric air conditioner compressors to SAIC Motor Passenger Vehicle, IM Motors, SAIC VW, SAIC GM, Changan Automobile, Geely Automobile, Great Wall Motors, Huawei, Xiaomi, NIO, Seres, SAIC Maxus, Volvo, Jiangling Motors, etc. Supplied a total of 1.66 million electric compressors (sets) in 2023.
Shanghai Mahle Thermal Systems Co., Ltd.	Car air conditioning and heat management systems	-In 2023, supplied a total of 406,800 units (sets) of air conditioning assemblies, cooling modules, battery coolers, low temperature radiators, condensers, and cooling plates to SAIC Motor Passenger Vehicle, SAIC VW, SAIC GM, BMW Brilliance, Volvo, FAW-VW, XPeng Motors, and BYD.
Bosch HUAYU Steering System Co., Ltd.	Electric steering system products	-In 2023, supplied a total of 7.1 million electric steering system products, of which about 1.44 million were for New Energy Vehicles.
Yanfeng Visteon Automotive Electronics Co., Ltd.	Battery management systems	-In 2023, supplied a total of 370,000 battery management systems (including exports) for New Energy Vehicles.
Shanghai Superior Die Technology Co., Ltd. Huayu Automotive Body Components Technology (Shanghai) Co., Ltd.	Battery tray, motor housing	-In 2023, supplied a total of about 870,000 battery trays for New Energy Vehicles.
Huayu Pierburg Pump Technology Co., Ltd.	Electronic pumps	-In 2023, the total sales of electronic pumps reached 4.01 million units, of which about 410,000 were for New Energy Vehicles.
Shanghai Valeo Automotive Electrical Systems Co., Ltd.	iBSGs	-In 2023, supplied a total of about 470,000 48V integrated starter generators (iBSG).
HASCO KSPG Nonferrous Components (Shanghai) Co., Ltd. (KPSNC)	Battery tray	-In 2023, supplied a total of 14,000 sets of battery trays and 244,000 sets of motor housings.

Subsidiary trends

Company name	Details
Yanfeng International Seating Systems Co., Ltd.	-Yanfeng Seating inaugurated a new plant in Cienaga de Flores, its second in the Mexican state of Nuevo Leon. The company had invested USD 23 million in the project, which will generate 800 new jobs. The plant is expected to produce up to 800,000 sets of automotive seats for global customers. “Yangfeng Seating is here in Nuevo Leon inaugurating a first world plant, which are also Tesla suppliers”, said Samuel Garcia, governor of Nuevo Leon. Garcia went on to describe incentives the Mexican state is offering, “We announced a 50% discount on all expenses, taxes and duties for hybrid or electric cars in Nuevo Leon.” Yanfeng’s other facilities in Mexico are in Coahuila, Queretaro and San Luis Potosi. (Mexico-Now article on January 24, 2023)
Yanfeng Automotive Trim Systems Co., Ltd.	-Yanfeng Automotive Trim Systems Co., Ltd. (Yanfeng Auto), introduced the Wanfeng electric air outlet, the latest electric air outlet technology that blows air in waves to make occupants’ body temperature even and moderate. The unique blade structure design and motor combination allow for compatibility with different opening shapes, a reduced number of motors used, and free switching among multiple air blowing modes. In addition to a natural wind mode, the Wanfeng electric air outlet offers many other air blowing modes that can be freely combined on demand.(From a Yanfeng Auto press release dated March 28, 2024)
	-Yanfeng Automotive Trim Systems Co., Ltd. (Yanfeng Auto), introduced the next-generation ecoSkin wireless charging module. This product employs an integrated injection molding process for a maximum 37.5% weight reduction. Designed with breathing ambient lamps and hidden air outlets, it is skin-friendly, waterproof, stain resistant, and easy to clean. ecoSkin, a Yanfeng Auto innovative low-carbon, eco-friendly interior surface technology, eliminates vehicle interior odors to the greatest extent to create green mobile living space. (From a Yanfeng Auto press release dated March 5, 2024)
	Yanfeng Automotive Trim Systems Co., Ltd. (Yanfeng Auto), announced its first participation in the CES 2024 held in Las Vegas. The company exhibited innovations such as the EVI (Electric Vehicle Interior) concept, the Hover Seat with Seat Sensing Posture ID Technology, the ClickRim modular steering wheel, and the CYMATICX sound flow cabin. EVI removes the conventional instrument panel and integrates all key features and vehicle interior functions into the seats in an intelligent cockpit, simplifying the interior while retaining functions users expect. The next-generation Hover Seat adjusts adaptively according to the occupant’s sitting posture and comes with features such as fatigue detection and automatic massage. ClickRim enhances the efficiency of steering wheel assembly, saving around two-thirds of the time for the manufacturing of a conventional steering wheel while reducing carbon emissions by one kilogram. CYMATICX realizes authentic 3D sound and brings immersive acoustic experiences. (From a Yanfeng Auto press release dated January 9, 2024)
Yanfeng Global Automotive Interior Systems Co., Ltd. Sanden Huayu Automotive Air-Conditioning Co., Ltd. HASCO Vision Technology (Shanghai) Co., Ltd.	-According to multiple press releases dated February 3, Sanden HASCO and HASCO Vision, signed and settled their New Energy Vehicle (NEV) parts projects in the Changshu Economic & Technological Development Zone, with a total investment of CNY 3.1 billion. Sanden HASCO will build a production site for core parts of NEV thermal management systems, which is expected to be put into operation in 2023; HASCO Vision will build a R&D and manufacturing site for automotive intelligent vision products and automotive electronics. (From multiple press releases)
	-(HASCO Vision and Yanfeng, signed a strategic cooperation agreement on exterior lighting. Both parties have agreed to expand their business, improve operational efficiency, and enhance corporate competitiveness. (From a press release dated February 16, 2023)
Huayu Automotive System (Shanghai) Co., Ltd.	-HUAYU announced that its wholly-owned subsidiary, HUAYU Automotive Systems (Shanghai) Co., Ltd. (HUAYU Shanghai), intends to involve in the establishment of an automotive industry foundation in Henan. HUAYU Automotive aims to raise CNY 4 billion for the foundation, with the initial closing at CNY 3.373 billion. HUAYU Shanghai plans to contribute a subscribed capital of CNY 170 million, accounting for 5.04% of the total subscribed capital. The fund raised will be invested in areas such as automotive electronics, semiconductors, new energy, and industrial chain extension. Top priority will be given to sectors including autonomous driving, smart cockpits, low-carbon mobility, as well as semiconductors and information security related to the industrial chain. Besides HUAYU Shanghai, a total of 13 investors have been involved in the establishment of this foundation, including several subsidiaries of SAIC Motor: SAIC Motor Financial Holding Management Co., Ltd., Donghua Automotive Industrial Co., Ltd., and Zhong-Lian Automotive Electronics Co., Ltd. (From a press release dated March 10, 2023)
KS HUAYU AluTech	Rheinmetall announced that it has received a new order, worth a figure in the low three-digit million-euro range, for structural parts for a BEV made by a well-known premium carmaker. From 2026, Rheinmetall’s lateral girders will serve as lightweight structural parts for the customer’s fully electric high-performance models, for a period of 10 years. The contract encompasses hundreds of thousands of these fully processed parts. The parts, which are based on a highly complex casting solution and designed to attenuate crash energy, will support the chassis. The project will be carried out at KS HUAYU AluTech GmbH in Neckarsulm, Germany, a 50-50 joint venture between Rheinmetall and HUAYU Automotive Systems Co., Ltd., a subsidiary of China’s SAIC Group. (From a press release dated August 17, 2023)）
KS HUAYU AluTech	Rheinmetall announced that its Materials and Trade division has won the first order from Xiaomi EV to produce triangular beams for supporting the suspension strut mountings and the associated assembly plates. Now, with its new Xiaomi MS11, it is making its debut in the fast-growing market for electric vehicles. Some 600,000 sets will be supplied. The order is worth a figure in the mid-double-digit million-euro range. The sets consist of a triangular beam and four assembly plates. Production starts in 2024. The parts will be produced using high-pressure die casting and undergo special thermal processing. The Castings business unit is a 50:50 JV of Rheinmetall and HASCO, a subsidiary of the SAIC group. (From a press release dated April 17, 2023)

Strategic alliances

Brose	The company announced the renewal of an agreement on Shanghai Brose Automotive Components Co., Ltd. (Shanghai Brose) with Brose Fahrzeugteile SE & Co. KG, Coburg (Brose). Established in 1999 and located in Anting Town, Jiading District, Shanghai, Shanghai Brose is 60% and 40% owned by Brose and HASCO, respectively. The company is a supplier to automakers such as SAIC-VW, SAIC-GM, SAIC Motor Passenger Vehicle, and IM Motors. So far, it has manufactured a total of about 87.5 million products and achieved a total sales of CNY 26.88 billion. (From an HASCO press release dated December 12, 2023)
Black Sesame	Black Sesame announced the signing of a strategic cooperation agreement with Huayu Electronics, a subsidiary of Huayu Automotive Systems Co., Ltd. Based on Huashan-2 A1000-series chips, the two parties will co-develop a driving-parking integrated domain control platform for autonomous driving with high cost performance. They will also extend to the extensive automotive electronics field for in-depth cooperation in areas including but not limited to design, R&D, and designation for product supply. (From a Black Sesame press release dated November 23, 2023)
iMotion	The company announced the signing of a strategic cooperation framework agreement between Huayu Automotive Electronics Branch (Huayu Electronics), a subsidiary, and iMotion Automotive Technology (Suzhou) Co., Ltd. (iMotion) in Shanghai. The two parties will coordinate their respective R&D capabilities and advantageous resources in such areas as millimeter-wave radars, intelligent cameras, and domain controllers to conduct more in-depth business cooperation focusing on intelligent driving and promote the co-development and industrialization of more new technologies. (From a Huayu Auto press release dated September 22, 2023)
MINIEYE	Shenzhen Youjia Innov Tech Co., Ltd. (MINIEYE) announced a strategic partnership with Yanfeng Automotive Trim Systems Co., Ltd. (Yanfeng), a subsidiary of HUAYU Automotive Systems Company Limited (HUAYU). Both parties will make full use of their respective advantages and cooperate in multiple fields including smart cockpits, integration of cockpit and driving, and smart interaction. By establishing a long-term stable strategic partnership, the two companies will enhance innovations in smart cockpit technology, improve the AI-enabled driving experience, and develop next-generation smart cockpits for a win-win situation. (From a press release dated August 30, 2023)

R&D Expenditure

(CNY millions)

	FY ended Dec. 31, 2023	FY ended Dec. 31, 2022	FY ended Dec. 31, 2021
R&D Expenditure	7,121.59	7,161.46	6,351.56
Percentage of Sales (%)	4.22	4.52	4.54

-The number of personnel related to R&D was 11,420, accounting for 20.13% of the total company workforce.

Patents

-As of the end of 2023, the Group has applied for 1,431 patents, including 405 invention patents, and obtained 1,325 patents, including 425 invention patents. The Company and its affiliated companies hold approximately 10,639 patent rights.

Establishment of automotive industry foundation

-The company announced that its wholly-owned subsidiary, HUAYU Automotive Systems (Shanghai) Co., Ltd. (HUAYU Shanghai), intends to involve in the establishment of an automotive industry foundation in Henan. HUAYU Automotive aims to raise CNY 4 billion for the foundation, with the initial closing at CNY 3.373 billion. HUAYU Shanghai plans to contribute a subscribed capital of CNY 170 million, accounting for 5.04% of the total subscribed capital. The fund raised will be invested in areas such as automotive electronics, semiconductors, new energy, and industrial chain extension. Top priority will be given to sectors including autonomous driving, smart cockpits, low-carbon mobility, as well as semiconductors and information security related to the industrial chain. Besides HUAYU Shanghai, a total of 13 investors have been involved in the establishment of this foundation, including several subsidiaries of SAIC Motor: SAIC Motor Financial Holding Management Co., Ltd., Donghua Automotive Industrial Co., Ltd., and Zhong-Lian Automotive Electronics Co., Ltd. (From a press release dated March 10, 2023)