Financial overview

(in million yuan)

	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012	Rate of increase (%)	Factors
Sales	1,279.78	1,414.20	(9.51)	-In 2013, the Company shut down aluminum alloy production, thus, the Company's sales decreased.
Operating profit	66.46	44.39	49.72	-
Ordinary profit	72.98	49.99	45.99
Net profit	60.81	42.73	42.31

Contract

-The Company annoucned that it will supply piston kits for Volkswagen’s EA111 engines, starting in the middle of December 2013. Mass production of these components will start in March 2014. The company will initially supply 26,000 units per month, planning to increase its supply volume in steps to 108,000 units eventually. The piston kit is composed of a piston designed by the company, piston rings, piston circlips and piston pins. (From a press release on December 10, 2013)

Pass the Audit

-The Company announced that it has been designated as one of the global suppliers to Daimler Benz. (From a press release on March 21, 2014)

-The Company announced that it passed the Daimler Benz’s VDA6.3 screening held from June 24 through June 27. With this achievement, the company was given recognition as an A-class supplier of the OEM, one of the world’s four largest automakers. (From a press release, July 5, 2013)

Awards

-In 2013, the Company announced that it has won the following awards from car makers:

• Excellent Quality Award from Liuzhou Wuling Automobile;
• Best Partner Award from BYD;
• Excellent Supplier Award from Beijing Foton Daimler for the seventh consecutive year;
• Outstanding Contribution to Product Development Award from Jiangling Motors;
• Excellent Supplier Award 2013 from Geely;
• Zero-defect Quality Award from Great Wall.

-In 2013, the Company announced that it has won the following awards from suppliers:

• A-class Supplier Award 2013 from Harbin Dong'an Auto Engine;
• Excellent Supplir Award from Weichai Power Yangzhou Diesel Engine Co., Ltd.;
• Excellent Supplier Award (the seventh consecutive year) from Changchai Co., Ltd.;
• Outstanding Technology Award from John Deere;
• Excellent Supplier Award from Power HF;
• Excellent Supplier Award from Dongfeng Chaoyang Diesel Engine;
• Excellent Supplier Award and the Outstanding Contribution to Product Development Award from Weichai Power;
• Excellent Quality Award from Guangxi Yuchai Machinery;
• Excellent Supplier Award from Shanghai Diesel Engine;
• Outstanding Contribution to Quality Award from Anhui Jianghuai Navistar Diesel Engine;
• Best Supplier Award from FAW Jiefang Automotive Co., Ltd. Wuxi Diesel Engine Works (second time to win).

Business Plan for Next Year

-In 2014, the Company plans to reach 1.48 billion sales. (From the Company's 2013 annual report)

R&D facility

-The Company owns a national level technical center for developing pistons.
-The Company established only one national technology center, National Recognized Testing Laboratory and enterprise postdoctoral working station. With the synchronized R&D, test and evaluation, the Company's many invention patents and new products reached advanced international level.

-The Company announced that its new testing facility to conduct friction testing of engine pistons passed a screening conducted by the development and reform committee of Binzhou City, Shandong province on April 8, 2013. The screening program included inspections and on-site reviews by specialists of an internal combustion engine research center and Shandong University. It has been acknowledged that the establishment of the new facility will allow the company to improve its capability to produce piston friction products in-house, as the company aims to advance development of fuel-saving and environmentally friendly engine technologies. (From a press release, April 10, 2013)

R&D Expenditure
-In 2013, the Company's R&D expenses is CNY 52.65 million, 4.11% of the Company's total sales.

Capital Investment Projects for FY2013

(in million yuan)

Project	Planned amount of investment	Investment made in 2013	Actual Spending by 2013 as a percent of planned amount of  investment
Improving technology for low-emission passenger vehicles	279.87	11.66	37%
Annual output of 8 million pistons construction project for luxury cars	392.41	82.23	21%
Annual output of 400,000 high reinforced steel forged pistons construction project for cars	273.66	18.95	7%
Annual output of 2 million pistons construction project for aluminum high-power diesel engine	298.39	19.75	7%
10 million new engine pistons / 30 million wearable piston rings construction project	100.00	13.23	13%

Investment in China

-The Company announced that it will raise CNY 1 billion by issuing new shares and will use the capital for expanding its production capacity. CNY 413 million will be spent on new equipment, which is capable of producing 8 million pistons for high-end vehicles per year. The company hopes to generate CNY 360 million through sales of these pistons. The manufacturer will also invest CNY 332 million in production lines to produce 2 million aluminum alloy pistons for large diesel engines per year. Sales of these pistons are expected to reach CNY 400 million. In addition, CNY 280 million will be spent on production lines to manufacture 400,000 high-strength forged pistons per year, which is projected to generate CNY 180 million in sales. Each project is expected to take about 18 months to complete. (From an announcement by the company on November 8, 2013)