Ningbo Huaxiang Electronic Co., Ltd. Business Report FY ended Dec. 2023

Overview

(CNY millions)

	FY ended Dec. 31, 2023	FY ended Dec. 31, 2022	Change (%)	Factors
Sales	23,236.26	19,626.12	18.39%	-The growth in domestic New Energy Vehicle sales drove revenue growth, and the adjusted losses of overseas business narrowed.
Operating income	1,708.30	1,506.14	13.42%
Ordinary income	1,695.46	1,500.04	13.03%
Net income	1,441.07	1,338.39	7.67%

Subsidiary spin-off

-The company announced that the Board of Directors authorized the management layer to initiate preliminary preparations for spinning off Changchun Huaxiang Automobile Metal Parts Co., Ltd. (Changchun Huaxiang) for listing on a stock exchange in China. Founded in December 1991, Changchun Huaxiang is mainly engaged in such businesses as thermoformed vehicle body products, large welding assemblies for bodies-in-white, and New Energy battery housings. (From a Ningbo Huaxiang SZSE press release dated June 13, 2023)

Orders

OEM	Model
VW	Bora, CC, Golf, Magotan, Sagitar, Passat, Santana, Lavida, Lamando, Polo Tiguan X, Talagon, Tayron, Tavendor, T-Roc, Gran Lavida, Touran, Tiguan, Viloran, Teramont, Taigun, Tharu ID3, ID4X, ID4Crozz, ID6X, ID6 Crozz, ID7
Audi	A3, A4, A6, A7, A8 (Overseas) Q2, Q3, Q4 e-tron, Q5, Q6, e-tron
Mercedes-Benz	A-Class, C-Class, E-Class, V-Class GLA, GLB, GLC, Vito EQA, EQB, EQE
BMW	5 Series, 3 Series, 1 Series X5, X3, X2, X1 i3, iX3
Toyota	RAV4, Granvia, Harrier, Crown, Vios, Wildlander, Frontlander, Sienna, Avalon, Allion, BZ3, BZ4X, Camry, Corolla, Levin, C-HR, Yaris, Izoa, Venza
Hongqi	HS9, HS7, HS5, HS3, HQ9 H9, H7, H6, H5 LS7, EQM5
Volvo	VOLVO: S90, S60, XC40, XC60, XC90, EX30, EX40, EX90 Polestar: 2, 3, 5
GM	Cadillac: XT4, XT5, XT6, CT4, CT5, CT6, Lyriq, Optiq, Vistiq Chevrolet: Trailblazer, Malibu, Explorer, Camaro, Tracker, Cruze Buick: GL8, Envision, Regal, Enclave, Encore, Envista, Verano, Lacrosse
Tesla	Model-3, Model-Y
NIO	EC6, EC7 ES6, ES7, ES8 ET7
XPeng Motors	G3, P5, P7i
Li Auto	L6, L7, L8, L9, Mega
BYD	Yangwang U8, Yangwang U9 Dynasty: Song, Yuan, Tang, Han Ocean: Seal, Destroyer 07 Denza: X, D9
Huawei	Seres: AITO M5, M7, M9 Zhijie S7 (Partnership with Chery)
Geely	Lynk: 01, 02, 03, 05, 09 Zeekr: 009, X Smart: #1, #3 Lotus: Eletre
Chery	OMODA 5, Tiggo Series: 3, 3X, 5X, 7, 8 Exceed Series: LX, TX, VX Arrizo: 5 Zhijie S7
SAIC	MG: ZS, ONE, HS, 6, 3 Roewe: RX5, IMAX8, Ei5, RX9 IM Motors: LS6, LS7, L5 R: R7, F7, ER6, Marvel R
Dongfeng	Voyah Series
GAC Aion	Aion V, Aion LX

New project

-According to multiple press releases, the groundbreaking ceremony for the Huaxiang New Energy Vehicle (NEV) Parts Industrial Park Project was recently held in Tiexi District, Shenyang, Liaoning. The Project, invested and built by the Company, is a modern NEV parts industrial park integrating R&D, production, and sales, with a total investment of about CNY 1.5 billion. With a total floor area of about 120,000 square meters, the park will mainly manufacture such products for BMW Brilliance NEVs as chassis, interior and exterior trims, and battery housings, and conduct upstream and downstream businesses related to the automotive parts industry upon completion. It is planned to be completed and commissioned in May 2024, and is expected to add an annual output value of CNY 1.8 billion upon commissioning. (From multiple press releases dated May 29, 2023)

Acquisitions

-The company plans to acquire equity in six International Automotive Components Group (IAC Group) Chinese subsidiaries for around CNY 600 million in total. In consideration of business strategy, IAC Group, an international supplier of automotive components and systems, plans to sell its Chinese operations, namely, 100% of equity in IAC (Shanghai) Automotive Components Technology Co., Ltd., Shanghai IAC Automotive Interior Trim Co., Ltd., IAC Group (China) Co., Ltd., IAC Automotive Parts (Changshu) Co., Ltd., and IAC Automotive Components (Tianjin) Co., Ltd. and 75% in Wuhan Xiangxing Automotive Parts Co., Ltd. (IAC China). IAC China focuses on developing and manufacturing automotive interior trims such as cockpit modules, instrument panels, center floor tunnels, door panels, and columns. It serves customers such as German luxury automakers, well-known Chinese New Energy Vehicle manufacturers, and well-known European and US automakers. (From an NBHX press release dated June 26, 2024)

-The companyplans to acquire 47.5%, 99.5%, 100%, and 10% of equity in Ningbo Schlemmer Automotive Parts Co., Ltd. (Ningbo Schlemmer), Schlemmer Japan Co., Ltd., Schlemmer Korea Co., Ltd., and Schlemmer Automotive Singapore Pte Ltd., respectively. Established in March 2001, Ningbo Schlemmer, an NBHX holding subsidiary, is mainly engaged in the manufacturing and sales of automotive circuit protectors and New Energy Vehicle battery protectors. It manufactures corrugated pipes, buckles, guide slots, battery module plastic components, cooling water pipes, and more. (From an NBHX press release dated June 26, 2024)

R&D Expenses

	FY ended Dec. 31, 2023	FY ended Dec. 31, 2022	FY ended Dec. 31, 2021
R&D expense (CNY millions)	821.67	690.07	640.42
Proportion of R&D to Sales (%)	3.54	3.52	3.64