Ningbo Tuopu Group Co., Ltd.(Formerly Ningbo Tuopu Brake System Co., Ltd.) Business Report FY ended Dec. 2022

Financial Overview

(CNY millions)

	FY2022 (ended Dec. 31, 2022)	FY2021 (ended Dec. 31, 2021)	Rate of change（%）
Sales	15,992.82	11,462.69	39.5
Operating income	1,977.75	1,144.63	72.8
Gross profit	1,959.91	1,146.27	71.0
Net income	1,698.97	1,017.83	66.9

Recent business developments in 2022

-The Company is collaborating and forming strategic alliances with OEMs as a Tier 0.5. The Company will work together to improve efficiency and reduce costs for all concerned parties by conducting joint development and other activities. The Company has worked mainly with OEMs that focus on new-energy vehicles, such as Huawei, Jinkang, BYD, Geely New Energy, Li Auto, NIO, and Xpeng. This has led to the Company’s winning large orders.

-The company's IBS, EPS, air suspensions, thermal-management systems, intelligent cockpits, and other products received orders from OEMs such as FAW, Geely, Huawei, Jinkang, Li Auto, BYD, Xiaomi, HYCAN Automotive, and Human Horizons.

New companys

-The company announced that it plans to establish a new wholly-owned subsidiary, Tuopu Skateboard Chassis (Ningbo) Co., Ltd. (tentative name), in the Hangzhou Bay New Area, Ningbo. The subsidiary will have a registered capital of CNY 2 billion, of which the business scope will include the R&D of auto parts and the manufacturing of auto parts and accessories. Possessing product lines such as those involving suspension systems, brake-by-wire, and steer-by-wire plus the capability of chassis tuning, Tuopu Group plans to integrate the above segments in the same platform to supply its customers with skateboard-mounted chassis products by establishing a new factory in the Hangzhou Bay New Area. (From Tuopu Group’s SSE announcement dated February 8, 2022)

Orders

Li Auto
-The company received orders for aluminum subframes from Li Auto and heat pump assemblies from FAW. Projects such as heat pump auxiliary parts, ESC parts, and IBS are underway.

NIO
-The two companies will conduct in-depth collaboration in supply chain localization, decarbonization, digital transparency, and global business development that should provide support for production at NIO’s Hefei plant. Both parties will engage in multidimensional cooperation in products such as chassis systems, vehicle weight reduction, thermal management systems, interior and exterior systems, and NVH (noise, vibration, harshness) damping systems. In addition, the duo will also have cooperation discussions in such areas as intelligent cockpit components, air suspension systems, and intelligent driving systems. (From a press release dated March 17, 2023)

Received orders for steering systems from multiple OEMs
-The company announced that its steering system products have been designated for 16 projects. Specifically, seven CD-EPS column-assisted electric power steering system projects for three OEMs will start mass production in Q4 2022; seven EASC electric four-way adjustable steering column projects for four OEMs are scheduled for mass production in Q3 2023; and two DP-EPS dual-pinion electric power steering system projects for one OEM are scheduled for mass production in Q4 2023. (From a Tuopu Group official WeChat account press release dated January 5, 2023)

Received order for air suspension system
-The company announced the commencement of the construction of its intelligent plant. Located in the Xinqiao International Industrial Park in Shou County, Huainan, Anhui, the first phase of the project covers an area of 133,333 square meters and has an expected total investment of CNY 1.5 billion. Annual capacity is designed to be 500,000 lightweight chassis and 500,000 acoustic sets. The project will mainly deliver local services to OEMs such as Nio and BYD, with a supporting radius of some 10-50km. (From a Tuopu Group official WeChat account press release dated December 6, 2022)

New factory

New location for lightweight chassis and acoustic units

For NIO,BYD
-The company announced that its air suspension system has been newly designated for 7 projects. Products involved are front air spring assembly, rear air spring assembly, and integrated air supply units (air pumps, valve bodies, and ECU integration), with mass production expected in Q3 2023. (From a Tuopu Group official WeChat account press release dated December 6, 2022)

For SERES and other OEMs in the Southwest
-The company announced that it broke ground on its Chongqing intelligent plant, which is also its 5th lightweight chassis plant. The plant is at Qingfeng High-tech Industrial Park, Shapingba District, Chongqing. The first phase of the project covers an area of 120,000 square meters and involves an investment of around CNY 1.5 billion. The plant will be built into a smart complex integrating R&D, trial production, and intelligent manufacturing. It is designed to annually produce 1 million sets of lightweight chassis and 500,000 sets of vehicle acoustic kits. It will provide localized services for SERES Wenjie and smart EV makers in Southwest China. (From a press release dated September 9, 2022)

-The company announced that it broke ground on the Chongqing smart factory, its fifth aluminum subframe factory. The factory is located at the Qingfeng High-tech Industrial Park, Shapingba District, Chongqing. The first phase of the project covers an area of 120,000 square meters and has an investment of about CNY 1.5 billion. In this phase, a smart factory complex integrating R&D, trial production and intelligent manufacturing will be built, featuring an annual production capacity of 1 million sets of lightweight chassis (aluminum subframes) and 500,000 sets of vehicle acoustic accessories. It will start production in 2023. The Chongqing factory has a complete set of processes and production equipment required for the production of integral and split aluminum subframes, covering links such as core manufacturing, casting, welding, and machining. The acoustic accessories produced at the Chongqing factory include acoustic insulation products such as ceilings, main carpets, hat racks, heat and sound insulation parts, and luggage insulation parts. (From a press release dated August 3, 2022)

Established plant for producing new-energy vehicle (NEV) parts
-The company announced that it signed an agreement with the administrative committee of the Changxing Economic and Technological Development Zone, Huzhou City, Zhejiang Province. The Tuopu Group plans to build a New Energy Vehicle (NEV) core parts plant in the Changxing Economic and Technological Development Zone. With a total investment no less than CNY 2 billion, the plant will cover an area of about 133,333 square meters. The plant will mainly produce core parts in NEVs, such as lightweight chassis, lightweight bodies, interior functional parts, automotive electronics, and other key products for new energy vehicles. (From a press release dated October 1, 2022)

-The company announced that it signed an agreement with the administrative committee of the Xi’an Economic and Technological Development Zone. Tuopu Group plans to build a New Energy Vehicle (NEV) core parts plant in the Xi’an Economic and Technological Development Zone, Xi’an City, Shaanxi Province. With a total investment of about CNY 3 billion, the plant will be constructed in three phases. It is planned to cover an area of about 266,667 square meters (80,000 square meters for first phase, 53,333 square meters for second phase, and 133,333 square meters for third phase). Xi'an Tuopu Automobile Parts Co., Ltd., a subsidiary of Tuopu Group, will run the project. (From a press release dated September 27, 2022)

Established production plant to manufacture lightweight chassis, integrated bodies, interior systems, etc
-The company announced that it plans to invest CNY 2.5 billion to build a New Energy Vehicle (NEV) core parts plant at Xinqiao International Industrial Park, Shou Country, Anhui Province. The plant is scheduled to cover a land area of about 333,333 square meters, of which 133,333 square meters will be for the first phase. The facility will mainly produce key products for NEVs, such as lightweight chassis, integrated vehicle bodies, and interior systems. (From a press release dated August 19, 2022)

Acquisition

-The company announced that it signed an equity transfer agreement with Antolin (China) Investment Co., Ltd. (Antolin China), a shareholder of its joint venture subsidiary Chongqing Antolin Tuopu Overhead Systems Co., Ltd. (Chongqing Antolin Tuopu). Tuopu Group intends to acquire the 61% stake in Chongqing Antolin Tuopu held by Antolin China for CNY 11,556,120.82. After the transaction, Chongqing Antolin Tuopu will become a wholly-owned subsidiary of Tuopu Group. (From a press release dated March 16, 2022)

Investments outside China

-The company announced that it plans to set up a wholly-owned subsidiary named Tuopu Group (Mexico) Co., Ltd. in Nuevo León, Mexico. The Tuopu Group also intends to build a plant there. The new subsidiary has a registered capital of MXN 50,000 and involves a total investment of less than USD 200 million. It will be 99% owned by Tuopu Group, and 1% by Ningbo Tuopu Electric Import & Export Co., Ltd., a subsidiary of Tuopu Group. It will engage in activities including research and development, production, and sales of auto parts; manufacturing and sales of equipment; import and export of equipment, raw materials, products, technologies, and services. The new plant in Mexico will mainly produce lightweight chassis, interior systems, thermal management systems, and robotic actuators. (From a press release dated September 30, 2022)

New products

-The company announced that the integrated huge die-cast rear cabin, which was developed based on using a 7,200-ton giant die-casting machine, rolled off the assembly line at the Hangzhou Bay plant in Ningbo. The rear cabin is about 1,700mm in length and 1,500mm in width, reducing its weight by 15%-20%. Tuopu Group cooperates with Human Horizons in integrated die-casting technology through which dozens of components can be integrated into one piece and cast together. (From a press release dated February 26, 2022)

R&D expenditure

(CNY millions)

	FY ended Dec. 31, 2021	FY ended Dec. 31, 2020	FY ended Dec. 31, 2019
R&D expenditures	502.49	354.85	314.31
R&D expense as % of Sales	4.38	5.45	5.87
Number of R&D personnel	2,350	1,729	1,385
The proportion of R&D personnel in the entire company (%)	18.38	18.96	18.51

R&D Center

-The Company has R&D centers in Detroit, USA and Gothenburg, Sweden. Engineers are assigned to Toronto, Canada; Weinheim, Germany; Levallois-Perret, France; and Sao Paolo, Brazil. R&D centers in Detroit, USA and Göteborg, Sweden. Tuopu R&D Centers have the capability to enter the global development systems of OEMs such as GM, Ford, Audi, and BMW, and to collaborate with domestic and overseas OEMs. Tuopu R&D Center have been engaged in joint development with OEMs including GM, Ford, Audi, BMW, Valeo, FAW Group, FAW Jiefang, FAW Jiefang Wuxi Diesel Engine Works, Changan Automobile, Shenyang Brilliance, Geely Automobile, and BYD, and has developed many products.