Ningbo Tianlong Electronics Co., Ltd. Business Report FY ended Dec. 2023

Financial Overview

(CNY millions)

	FY ended Dec. 31,2023	FY ended Dec. 31,2022	Change (%)	Factors
Sales	1,317.56	1,247.20	5.64%	-In 2023, China's economy recovered steadily and the company's turnover increased accordingly.
Operating income	121.92	131.76	-7.47%
Ordinary income	122.09	131.56	-7.20%
Net income	111.50	122.84	-9.23%

Business in 2023

-In 2023, a total of 127 new projects were designated by core customers, including 106 projects related to New Energy Vehicles.

-In 2023, the company's automotive parts business achieved sales of CNY 1,030,163,800, a year-over-year (y/y) increase of 9.59%, of which automotive electronic products achieved sales of CNY 518,622,600, an increase of 14.11% y/y; automotive precision plastic functional structural parts achieved sales of CNY 511,541,100, an increase of 5.36% y/y. The sales of automotive electronic products exceeded the sales of automotive precision plastic functional structural parts for the first time. The sales of parts directly used in New Energy Vehicles was about CNY 226,441,900, accounting for about 17.19% of total sales. The sales revenue of products shared by New Energy Vehicles and conventionally fueled vehicles was about CNY 239,577,100, accounting for about 18.18% of sales.

-In 2023, the company developed a new fisheye terminal. This technology provides a new connection method for communication and power supply between sensors, chips and PCBs, and has passed third-party certification.

R&D Expenditure

	FY ended Dec. 31,2023	FY ended Dec. 31,2022	FY ended Dec. 31,2021
R&D expenditure (CNY millions)	58.70	54.99	47.53
R&D expenses as percent of Sales (%)	4.46	4.38	4.01

-As of December 31, 2023, the company had 462 R&D and technical personnel, accounting for 32.22% of the total number of employees.

New projects

-The company announced that for the purposes of business development and increasing overseas manufacturing sites, it intends to invest up to CNY 120 million in the construction of a new manufacturing site in Thailand. The company plans to acquire about 30,000 square meters of land in the WHA Rayong Industrial Park in Thailand to build the manufacturing site in stages, with mass production planned in 2025. (From a Tianlong Electronics SSE press release dated July 12, 2023)

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 for 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.Modular Thermal Management System (Maniflex & Tank)
-An integrated thermal management system consisting of an 8-way valve, distributor, water pump, tank, and other components. It is currently in the research and development stage to integrate and improve the efficiency of vehicle thermal management.

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.

8.Threaded sleeve return technology
-This technology addresses the problem of deviation defects in the axial position of threaded features caused by the inadequate placement of the threaded sleeve during the molding of plastic parts with threaded features. A reset block structure is adopted to accurately reposition the threaded sleeve and ensure the correct position of the plastic screw pattern sleeve. This technology can be widely applied to the assembly of various products with threaded sleeves in the company, and has reached the level of mass production.

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.