Ningbo Tianlong Electronics Co., Ltd. Business Report FY ended Dec. 2021

Financial Overview

(CNY millions)

	FY ended Dec. 31,2021	FY ended Dec. 31,2020	Rate of increase/ decrease (%)	Factors
Sales	1,184.89	960.49	5.89	-In the fiscal year ending December 2021, the company focused on two areas, electronic parts for automobiles and weight reduction. Sales of products for automobiles increased by 17.97% year-over-year (y/y), and sales of electrical and electrical-related parts increased by 38.13% y/y due to increased demand. Earnings growth slowed due to higher raw material costs and rising labor costs.
Operating income	106.19	102.58	41.68
Ordinary income	106.24	102.90	42.57
Net income	97.96	92.88	39.37

Orders

-In the fiscal year ending December 2021, the company received a total of 159 new project orders, including 45 related to New Energy Vehicles.

-In the fiscal year ending December 31, 2021, the Company's automotive parts sales increased by 17.97% year-over-year (y/y) to CNY 832,607,700. Of which, automotive electronic control system products sales were CNY 363,237,300, up 19.18% y/y, and automotive precision plastic functional parts/structural parts were CNY 469,370,300, up 17.05% y/y. By product, the sales of door system parts increased by 79.90% y/y, and the sales in the dies business were CNY 116,143,400, up by 21.19% y/y.

R&D Expenditure

(CNY millions)

	FY ended Dec. 31,2021	FY ended Dec. 31,2020	FY ended Dec. 31,2019
R&D expenditure	47.53	41.87	45.85
Ratio of R&D expenses to Sales (%)	4.01	4.30	5.00

-As of December 31, 2021, the company had 417 R&D and technical personnel, accounting for 31.38% of the total number of employees.

R&D projects

1.Continuous fiber-reinforced thermoplastic resin (CFRTP) composites (Organo technology)
-The technology enables significant weight reduction of parts and can be applied to the design and development of various parts including in the automobile industry. Validation is complete.

2.Module project with highly integrated IGBT function
-The direct integration of numerous metal terminals, electromagnetic rings, and conductive copper plates into conventional plastic greatly simplifies subsequent processing and improves product stability. Mass production will start in the second half of 2022, and will be indirectly supplied to Honda's next-generation hybrid New Energy Vehicles. In 2021, the company established the first IGBT functional carrier module production line.

3.Multi-insert technology
-Integration of a continuous electric heating wire of a specific shape into the thick wall of a plastic product in the form of an integral injection molding to achieve heating and thermostatic functions of the product. It can be used in a variety of fields, including the automotive industry.

4.Insert molding technology window motors
-The metal pins of the electronic module of a car window motor are embedded in a mold, and the part is inserted into the mold for injection molding, thereby integrating the metal terminal with the plastic part.

5.Dichromatic, injection-molding technology
-It is possible to form products by injection molding by injecting two materials at once, improving production efficiency and quality, and reducing production costs.

6.Technology using sliders during molded product removal
-With this technology, the product is not pulled by the slider during removal from the die, avoiding the possibility of product breakage due to conventional strong pulling structures. The technology can be widely used in all kinds of molds of the Company, and has now reached the level of mass production.

7.Technology for separating runners during molded product removal
-This technology allows products to be automatically separated from the material head without manual selection, thus improving production efficiency and reducing labor costs. In addition to being widely applicable to all types of molds developed by the company, mass production is also possible.

R&D Facilities

-The company also has a wind tunnel test chamber it uses to conduct performance testing of products such as the centrifugal impeller assemblies of automotive air-conditioning systems, and engine cooling fans.