Ningbo Tuopu Group Co., Ltd.(Formerly Ningbo Tuopu Brake System Co., Ltd.) Business Report FY ended Dec. 2023

Financial Overview

(CNY millions)

	FY2022 (ended Dec. 31, 2023)	FY2021 (ended Dec. 31, 2022)	Rate of change（%）
Sales	19,700.56	15,992.82	23.18%
Operating income	2,476.27	1,977.75	25.21%
Ordinary income	2,462.29	1,959.91	25.63%
Net income	2,150.02	1,698.97	26.55%

Recent business developments in 2023

-In 2023, the company's IBS project, EPS project, air suspension project, thermal management project, and smart cockpit project received orders from FAW, Geely, Huawei-Seres, Ideal, BYD, Xiaomi, SAIC, Dongfeng and other customers respectively.

-In 2023, the company's Hangzhou Bay Phase VI, Phase VII, Chongqing Factory, Huzhou Factory, and Anhui Shouxian Factory, covering an area of about 1,100 acres, have been completed and put into production. The construction of Hangzhou Bay Phase VIII, Phase IX, Xi'an Factory, and Mexico Factory is being planned.

Orders

AITO
-The company announced that the AITO Wenjie M9 SUV is equipped with a number of its products. Specifically, the C-ECAS (closed electronically controlled air suspension) system achieves a 30% faster lift responsiveness and a 10dB noise reduction compared with conventional open air suspension systems. The intelligent POD (Power Open Door) system contains a brushless motor to enable quiet and easy opening and closing of car doors. A built-in millimeter-wave radar intelligently senses various obstacles in conjunction with ADS to automatically adjust the door opening angle. In addition to chassis and door drive systems, Tuopu Group supplies supporting products for thermal management and steering systems. (From a Tuopu Group press release dated January 9, 2024)

NIO
-The Company and NIO 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)　

New plants

-The company announced the completion of its No.2 Air Suspension System Plant. Located in Qianwan New Area, Ningbo, Zhejiang, the Tuopu Group No.2 Air Suspension System Plant has a land area of around 66,667 square meters and a total investment amount of around CNY 600 million. Commissioning is scheduled for October 2024, upon which an annual production capacity of 4 million air springs will be achieved to meet the demand from 1 million vehicles per year. The Tuopu Group No.2 Air Suspension System Plant will come with core equipment such as 10 fully automatic air suspension assembly lines and 10 fully automatic woven fabric production lines. Adopting an advanced manufacturing concept, the plant will make extensive use of automated error proofing technology (including machine vision, intelligent sensors, intelligent error proofing, and intelligent inspection) to avoid potential failure risks. Through comprehensive digital management, it will realize real-time monitoring of process quality to guarantee the high-quality operation of the production lines. The Tuopu Group No.1 Air Suspension System Plant delivers an annual production capacity of 500,000 air suspensions, which is now close to saturation. (From a Tuopu Group press release dated May 22, 2024)

-The company announced that its Polish thermal management system plant was officially commissioned, where a heat pump assembly product rolled off the production line. The plant, Tuopu Group’s first overseas thermal management system plant, has an annual capacity of 500,000 sets. Based on the PCB design concept, the company’s integrated heat pumps systematically integrate thermal management elements and, ultimately, a whole set of core components into a single module, effectively improving winter range shrinkage for electric vehicles. (From a Tuopu Group press release dated November 15, 2023)

-Several media sources reported that two Chinese Tesla suppliers are planning to invest around USD 1 billion in Nuevo Leon, where the Tesla’s Gigafactory Mexico will be located, according to Nuevo Leon governor. This investment consists of USD 700 million from Ningbo Tuopu Group which produces shock absorbers among other auto parts, and USD 260 million from Hesai Technology which produces LiDAR sensors. The companies are expected to create 10,000 and 4,000 jobs respectively. (Based on various media sources dated October 18, 2023)

New products

-The company announced the launch of a next-generation nine-port electronic coolant valve. Integrating two four-port and one three-port valves, the nine-port valve achieves a 50% cost reduction. The product supports eight modes and enables more precise heat transfer, extending vehicle range in extreme working conditions such as winter by over 20% in conjunction with a thermal management module. The control accuracy reaches 0.1 degrees. A built-in sensor provides real-time feedback of position signals and comes with self-diagnosis for the protection of itself and the system. (From a Tuopu Group press release dated January 7, 2024)

-The company announced that it officially kicked off the production of its intelligent power door system. The brushless motor intelligent power door system that just rolled off the production line enjoys functions such as smart collision prevention (doors can open automatically, while millimeter wave radars can detect surrounding obstacles in real time), pinch prevention (doors can close automatically; when encountering obstacles, doors can automatically stop and move back), and prevention of “Open Car Door Accidents” (doors will give passengers a heads-up if there is a risk of collision with obstacles, pedestrians or other vehicles). This product is manufactured at the Tuopu Intelligent Power Door System Digital Factory, with an annual production capacity of 200,000 units. (From a press release dated December 28, 2023)

-The company announced that the first IBS 2.0 (Intelligent Braking System 2.0) officially rolled off the production line. Newly upgraded from the IBS 1.0, the IBS 2.0 has higher efficiency, higher safety, and more comprehensive features. The IBS 2.0 has been integrated with a redundant brake unit to form a dual-control electronic parking brake that supports autonomous driving above Level 3. The Tuopu Group IBS Digital Plant, where the IBS 2.0 is manufactured, is equipped with advanced manufacturing facilities for SMT assembly, ECU assembly, sensor assembly, solenoid valve assembly, automated set assembly, intelligent warehousing, and more. At full capacity, the plant can manufacture IBS products for 300,000 vehicles every year. (From a Tuopu Group press release dated December 8, 2023)

-The company announced that its EASC (Electric Adjustable Steering Column) officially rolled off the production line. Featuring in-house developed software and hardware, the product is an electric adjustment solution for intelligent cockpit steering wheels. So far, nine designated projects concerning the product have been finished, with an annual order quantity of 600,000 sets. (From a Tuopu Group press release dated November 22, 2023)

-The company announced that the C-ECAS, the first closed air suspension system independently developed by the company, rolled off the assembly line. Mass production will commence in November. It can effectively isolate high-frequency vibrations and improve the NVH performance of the vehicle. It can dynamically adjust the body and chassis height according to load conditions to adapt to different altitudes and road surfaces. It consumes less energy, thus reducing the power consumption of electric vehicles. To date, Tuopu Group has received 8 orders for this product. The C-ECAS will make its debut on a new model to be launched by a carmaker in late 2023. Tuopu Group has established the first closed air suspension manufacturing site in China. The site has the capability to develop and manufacture core air suspension components and systems (including electronic control systems) such as front and rear air spring assemblies and closed air supply units. (From a press release dated November 6, 2023)

R&D expenditure

(CNY millions)

	FY ended Dec. 31, 2023	FY ended Dec. 31, 2022	FY ended Dec. 31, 2021
R&D expenditures (CNY millions)	986.40	750.72	502.49
R&D expense as % of Sales	5.01	4.69	4.38
Number of R&D personnel	3,679	3,180	2,350
The proportion of R&D personnel in the entire company (%)	18.84	18.06	18.38

R&D Center

-The Company has established two overseas technology R&D centers in Detroit, USA and Gothenburg, Sweden, and deployed professional technicians in Toronto, Canada; Weinheim, Germany; Levallois-Perret, France; and Sao Paulo, Brazil. In addition to GM, Ford, Audi, and BMW, the company has established joint development with Valeo, SAIC Group, FAW Car, FAW Jiefang, Changan Automobile, Shenyang Brilliance, Geely Automobile, BYD, and others.