Wanxiang Qianchao Co., Ltd. Business Report FY ended Dec. 2017
Financial Overview |
(in million yuan) |
| FY ended Dec. 31,2017 | FY ended Dec. 31,2016 | Rate of increase (decrease) | Factors | |
| Sales | 11,154.24 | 10,785.82 | 5.32% | -The Company keeps pace with the development trend of automobile electrification, intelligent network and lightweight, further reduces costs and deepens KPI performance. |
| Operating profit | 1,014.62 | 971.76 | 11.65% | |
| Ordinary profit | 1,029.99 | 1,003.08 | 8.48% | |
| Net profit | 923.54 | 890.52 | 6.20% |
Equity Transfer
-On February 1, 2018, Wanxiang Qianchao Co., Ltd. announced that its subsidiary, Wanxiang Tongda Co., Ltd., is going to sell 76.38% shares in its own subsidiary, Bengbu Tongda Auto Parts Co., Ltd., to Qinghe Yongfeng Auto Parts Manufacturing Co., Ltd. at Chinese yuan (CNY) 10.96 million. Bengbu Tongda Auto Parts’ main products are fuel tanks and mufflers. In 2016, it generated sales of CNY 70.28 million and a net profit of CNY 0.61 million. (From a corporate announcement on February 2, 2018)
-Wanxiang Qianchao Co., Ltd. announced in July 2017 a plan to sell a 10% stake in Tianjin Santroll Electric Automobile Technology Co., Ltd. to CITIC Heavy Industries Co., Ltd. for Chinese yuan (CNY) 132 million. However, on December 6, the company said that the share transfer plan was canceled as a result of amicable discussions. (From a corporate announcement on December 6, 2017)
-Wanxiang Qianchao Co., Ltd. said on October 20, 2017, that one of its subsidiaries, Wanxiang Tongda Co., Ltd., signed a contract on the transfer of 100% of shares in Shiyan Judi Metal Pipe Co., Ltd., a subsidiary of Wanxiang Tongda. The shares are going to be transferred on October 27, 2017, to Shiyan Xinbaiqiang Industrial & Trade Co., Ltd. at Chinese yuan (CNY) 9.6 million. Shiyan Judi Metal Pipe was established in 2001 with a registered capital of CNY 513 million. Its main products are engine oil inlet pipes, oil return pipes, intake manifolds, exhaust manifolds, and mufflers. (From a corporate announcement on October 20, 2017)
Cancellation of Subsidiary
-Wanxiang Qianchao Co., Ltd. said on October 20, 2017, that the company is going to dissolve and liquidate one of its subsidiaries, Xiaoshan Wanxiang Shele Precision Universal Joint Co., Ltd, for reduced management cost and improved efficiency. Xiaoshan Wanxiang Shele Precision Universal Joint was established in 2001 with a registered capital of USD 2 million as a manufacturer of precision universal joints. Currently, it's owned 75% by Wanxiang Qianchao and 25% by Wanxiang's U.S. unit. Wanxiang Qianchao is going to take over all business of Xiaoshan Wanxiang Shele Precision Universal Joint. (From a corporate announcement on October 20, 2017)
Relocation of subsidiary of A123 Systems headquarters
-A123 Systems, the subsidiary of Wanxiang Group, announced that its headquarters will be transferred from Livonia, Michigan to Novi. The investment in the new headquarters is $40 million, covering an overall floor area of 150,000 square feet. With this transfer, the Romulus Plant will be closed and integrated into the Novi Headquarters. The new headquarters can accommodate up to 400 employees, and has all headquarters functions, engineering centers, research spaces and production plants. The construction is expected to begin in the second half of 2017 and the transfer will be completed by the end of 2018. (From Detroit Free Press on April 10, 2017)
Award
-On February 9, 2018, Wanxiang Qianchao Driveshaft Co., Ltd. announced that the company received a FY2017 excellent supplier award from GAC Hino Motors. (From a press release on February 23, 2018)
-On February 9, 2018, Zhejiang Wanxiang Marelli Shock Absorber Co., Ltd. announced that the company received the best supplier guarantee award of FY2017 from GAC Mitsubishi Motors. The company passed a screening of GAC Mitsubishi Motors and became a certified supplier in 2016. (From a press release on February 23, 2018)
-Wanxiang Group announced that Zhejiang Wanxiang Precision Industry Co., Ltd. was chosen by Guangzhou Automobile Group Motor Co., Ltd. as one of its top 10 suppliers and by Changan Mazda Automobile Co., Ltd. as one of its excellent suppliers. Wanxiang Group’s sales in 2017 were Chinese yuan (CNY) 2.29 billion, and its primary customers are Guangzhou Automobile, Changan Mazda Automobile, SAIC VW and FAW-Volkswagen. (From a press release on January 29, 2018)
-Wuhan Faurecia Tongda Exhaust System Co., Ltd. said that it received a special contribution award from Dongfeng-Peugeot-Citroen Automobile Co., Ltd. The most prestigious award given by the automaker was presented to other suppliers as well, including Dongfeng Plastic Omnium Automotive Exterior Systems Co., Ltd. and Shanghai GKN Drive Line Sale Company Co., Ltd. Wuhan Faurecia Tongda is a joint venture established by Faurecia S.A. and Wanxiang Tongda Co., Ltd. on an equal basis. (From a press release on January 29, 2018)
New Contract
-A123 System, a subsidiary of the Wanxiang Group has been awarded a contract to supply 2.6 million units of 48V lithium-iron phosphate battery packs to SAIC GM. The business is worth over USD 1 billion in sales. The new battery consists of fourteen 8Ah cells, and is 96mm in height. Its cell power is 3kW/kg and battery power is 2kW/kg. Adopting this battery is expected to contribute to a 15% reduction in fuel consumption. A123 has already won a program to supply low-voltage batteries to Jaguar Land Rover in Europe. (From news releases issued by multiple sources on February 8, 2017)
R&D Expenditure |
(in million yuan) |
| FY ended Dec. 31, 2017 |
FY ended Dec. 31, 2016 |
FY ended Dec. 31, 2015 |
|
| R&D Expenditure | 487.01 | 438.78 | 397.44 |
| Ratio of sales (%) | 4.37 | 4.07% | 3.88% |
R&D Facility
| Name | Wanxiang Technical Center |
| Name | Wanxiang Technical Center |
| Year established | 1994 |
| Overview | -The center conducts R&D activities for all the companies under the Wanxiang Group. -In Nov. 2003, its automotive product laboratory was authorized by the China Quality Certificate Center (CQC) as a contracted CQC testing facility. This enabled the Company to carry out testing of its products based on CCC (China Compulsory Certification) by itself. Qualified products for self-testing include six kinds of automotive components: brakes, drive shafts, CVJ shafts,; universal joints, shock absorbers, and wheel bearings. |
Capital Investment Projects |
(As of Dec. 2016) |
| Project | Planned amount of investment (in million yuan) | Investment made in 2017 (in million yuan) | Project progress (%) |
| 100,000 tons of cold temperature precision casting project | 370.00 | 105.42 | 59 |
| Wheel Hub Investment Project | 2,521.50 | 101.34 | 12 |
| Intelligent plant construction project | 3,508.35 | 116.15 | 10 |
| R&D Project of Automotive Intelligence, Lightweight, Modularity Technology | 963.60 | 51.39 | 21 |
Investments in China
-Wanxiang Group said on March 16, 2018, that Ministry of Industry and Information Technology (MIIT) of the Chinese government added a new project of the company's subsidiary, Wanxiang 123 LLC., of building a plant for 48V micro hybrid systems to the list of MIIT's technical improvement projects. The new plant is going to have a capacity to make 570,000 sets of the systems. The project requires an investment of a total of Chinese yuan (CNY) 1.3 billion. It aims to build a new production line for the lasted lithium-ion battery system, which is to be launched in April 2018. The production line is expected to generate additional sales of CNY 1.13 billion upon completion. (From a press release on March 19, 2018)
-Wanxiang Qianchao Co., Ltd. said on September 16, 2017, that the company would prepare Chinese yuan (CNY) 6.25 billion for multiple new projects. The company intends to invest a total of CNY 2.52 billion in a project to increase the production of wheel bearing units by 30 million sets. The CNY 2.0 billion among this will be prepared through the capital increase of Zhejiang Wanxiang Precision Industry Co., Ltd. Wanxiang Qianchao also plans to invest a total of CNY 3.51 billion in a project to build a new Wanxiang Qianchao intelligent plant. CNY 1.84 billion among this will be prepared through the capital increase of Zhejiang Wanxiang Precision Industry Co., Ltd., Wanxiang Qianchao Driveshaft Co., Ltd. and Zhejiang Wanxiang System Co., Ltd. The new plant will provide Wanxiang Qianchao with an additional production capacity of 3 million sets of drive units, 0.7 million sets of braking units, 2.7 million sets of universal joints, 1.4 million sets of electric parking brake (EPB) units, 0.5 million sets of electric power steering (EPS) units, 1 million sets of aluminum-alloy drive units, and 10,000 sets of new energy car powertrain units. In a research project on technologies regarding automobile intelligence, weight reduction, and modularization, the company plans to spend a total of CNY 964 million. This includes CNY 720 million procured by Wanxiang Qianchao itself. (From a corporate announcement on September 16, 2017)