Financial Overview

(million yuan)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	Increases (%)	Factors
Sales	3,278.88	2,718.60	20.61	-Explored the medium and high-end passenger car market and got several supply agreements with some car makers; -Improved the production process to control the production cost; -Developed new products, EABS, EPB, and ESC, and got several supply agreements of ESC and EPB.
Operating profit	186.93	150.21	24.45
Ordinary profit	210.00	164.27	27.84
Net profit	181.14	141.39	28.11

New Company

-The Company announced that it will establish a subsidiary in Guangde County, Anhui Province in May 2014. The new company, Guangde Asia-Pacific Foundry Co., Ltd., will be capitalized at CNY 9 million. It will develop, produce and sell automotive cast parts. Its annual production capacity is expected to reach 120,000 tons. (From an announcement by the company on May 17, 2014)

Liquidation

-Hangzhou TBK-APG Brakes Co., Ltd., the Company's subsidiary, completed the registration of cancellation procedures in Decenber 2014.

Recent Development

-The Company announced that it has been given an approval from Dongfeng Xiaokang Automobile Co., Ltd. to produce the prototypes of a new electric parking brake for the automaker’s new model. Zhejiang Asia-Pacific Mechanical & Electronic will build and test its trial products by using a prototype vehicle provided by the automaker. (From an announcement by the company on October 29, 2014)

-Changchun ZA Chassis Co., Ltd, a subsidiary of the Company, announced that it has broken ground for its production facility. This plant will have 42,242.88 square meters of floor area on 59,987 square meters of land at the Changchun Economic and Technological Development Zone. The plant is expected to be completed by August 2015, and will produce products for automakers such as the FAW Group, FAW Car, FAW VW, and Shenyang Brilliance. (From a press release on June 16, 2014)

Contracts

-The Company announced that it has received from SAIC Commercial Vehicle a letter of intent, under which Zhejiang Asia-Pacific Mechanical & Electronic will develop and produce front/rear brake caliper assemblies for the automaker's new model, SK81 (development code). (From a press release on January 9, 2015)

-The Company announced that its anti-lock brake systems (ABSs) have been chosen for installation on Dongfeng Xiaokang Automobile's new vehicle (development code: K07S). (From an announcement by the company on December 13, 2014)

-The Company announced that it has been awarded a new contract to supply anti-lock brake systems for Chery Commercial Vehicle (Anhui) Co., Ltd.’s new pickup truck (development code: H98). (From an announcement by the company on December 10, 2014)

-The Company announced that it will supply its anti-lock brake system (ABS) products for Jiangling Motors’ Kaiyun series trucks, high-floor trucks, and low-floor trucks. (From an announcement by the company on November 3, 2014)

-The Company announced that it has received from CIVC China International Vehicle Corp. (CIVC) a letter of intent to buy 70,000 sets of the Company's anti-lock brake system (ABS) products. CIVC intends to buy ABS modules, safety bolts, sensors, and other products from the end of 2014 through 2015. These products are intended to be supplied to automakers outside China. (From an announcement by the company on October 25, 2014)

-The Company announced that it will supply its electric parking brakes for the FAW Car Besturn B90 and X80. Details including production schedules and supply volumes have not been decided yet. (From an announcement by the company on October 21, 2014)

-The Company announced that the company has been chosen by SAIC Motor Commercial Vehicle Co., Ltd (SMCV) as a developer and a supplier of electric parking brakes (EPBs). SMCV says it intends to sign an exclusive supply agreement with the Company for the EPBs. (From an announcement by the company on September 25, 2014)

-The Company won a bid to develop ESCs for Dongfeng Motor's new model (internal code: M19) jointly with the automaker. The bid was made by Dongfeng Motor’s technical center. (From an announcement by the company on August 11, 2014)

-The Company announced that it will supply a large amount of rear brake discs for FAW-VW's Audi Q3 in June 2014. The company's share of rear disc brakes used on Audi Q3 vehicles is expected to reach 80 percent. (From an announcement by the company on June 10, 2014)

-The Company announced that it will supply disk brakes for FAW-VW's Magotan and B6L in May 2014. It will also supply disk brakes for Shanghai VW's four new models: the successor to the Touran; the successor to the Tiguan; an A+ segment SUV; and the successor to the Superb. The company will provide 80 percent of all disc brakes used on the successor to the Touran, and 20 percent of all disc brakes used on the Magotan, the B6L, the successor to the Tiguan, an A+ SUV and the successor to the Superb. (From an announcement by the company on May 14, 2014)

-The Company announced that its electric parking brake had been chosen by Jiangling Motor Holding Co., Ltd. for the Jiangling E313, and began development work for the new model. (From an announcement by the company on May 12, 2014)

-The Company announced that it will supply clutch master cylinders for Great Wall Motor's Haval H6. Unlike existing metal cylinders, the clutch master cylinders for the Haval H6 are made from new composite materials. (From an announcement by the company on April 29, 2014)

-The Company announced that it has won a new contract to supply rear drum brakes to Shanghai GM. Production of the rear drum bakes is scheduled to begin in September 2016. (From an announcement by the Company on April 4, 2014)

Awards

-The Company was awarded "A class Supplier" from FAW-VW and FAW car in 2014. (From the Company's 2014 annual report)

Business Plan for Next Year

-In 2015, the Company plans to reach CNY 3.7 billion sales, CNY 280 million ordinary profits and CNY 240 million net profits. (From the Company's 2014 annual report)

R&D Facility

-The Company established a technical center in 1996, which is identified as the only one state-level enterprise technology center in China's brake industry.

R&D Expenses

(in million yuan)

Year	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012
R&D Expense	93.90	79.96	71.24
Percentage in sales revenue (%）	2.86	2.94	3.38

R&D Activities

-The Company has obtained approval from the Ministry of Science and Technology of the People's Republic of China for "Research and development on energy regenerative ABS for electric vehicles", a project for "Key technologies for electric vehicles and system integration" jointly developed by the company and Tsinghua University. (From an announcement by the company, July 29, 2014)

Patents

-As of 2014, the Company has obtained 98 patents, including 15 invention patents, 81 utility model patents and 2 design patents.

Capital Investment Projects for FY2014

Project	Amount invested in 2014 (in million yuan)	Status
Disc brake facility (annual production capacity to be 4 million sets)	38.53	40%
The technical improvement project of the rear brake calipers integrated with EPB' (annual production capacity to be 400,000 sets)	49.36	35%
Key auto casting parts facility (annual production capacity to be 120,000 tons)	0.42	Main part of plant did not start.
Plant construction of Liuzhou Zheya Automotive Chassis Parts Co., Ltd.	4.03	100%
Plant construction of Changchun ZA  Chassis  Co., Ltd	57.69	70%
Plant construction of Anji Asia-pacific Brake Systems Co., Ltd.	53.28	60%

Investment in China

-The Company announced that it would invest CNY 60 million of its own capital in Anji Asia-pacific Brake Systems Co., Ltd., a subsidiary of the Company. After that, Anji Asia-pacific Brake Systems Co., Ltd. is capatilized at CNY 140 million in total.

-The Company announced that it would establish a subsidiary in Guangde County, Anhui Province in May 2014. The new company, Guangde Asia-Pacific Foundry Co., Ltd., is capitalized at CNY 9 million. Its annual production capacity is expected to reach 120,000 tons of automotive cast parts. (From an announcement by the company on May 17, 2014)

-The Company announced that it would invest CNY 60 million of its own capital in Changchun ZA  Chassis  Co., Ltd., a subsidiary of the Company. After that, Changchun ZA  Chassis  Co., Ltd. is capitalized at CNY 90 million in total.