Weifu High-Technology Group Co., Ltd. Business Report FY ended Dec. 2016

Financial Overview

(million CNY)
FY ended Dec. 31, 2016 FY ended Dec. 31, 2015 Rate of change Factors
Sales 6,422.70 5,741.64 11.86% -The resumption of the growth of commercial vehicle market, thus, market demand for vehicle common rail high pressure pump products increased;
-The implementation of the national purchase tax halved policy and the increase in the market share of Chinese brand passenger cars;
-Diesel superchargers seized key customers, thus, diesel superchargers marketshare steadily increased; petrol turbocharger began to bulk supply.
Operating profit 1,778.26 1,602.81 10.95%
Ordinary profit 1,818.55 1,663.52 9.32%
Net profit 1,726.00 1,552.76 11.16%

New Plant

-The Company has launched the second phase of its Industrial Park project. The new facilities will include two factories and an engine testing room, and will have total a floor area of 42,181 square meters. Construction work is scheduled to be completed by December 2016. (From a press release on April 8, 2016)

R&D Facility

-The Company has a Post-Doctor Working Station for fuel injection pump R&D and state Technical Center in 1999.

-The Company has provincial engineering center - engineering institute of technology center, exhaust aftertreatment R&D center and supercharger R&D center.

-The Company announced that the company and STMicroelectronics have jointly established a testing laboratory on the premises of Weifu High-Technology's technical center. This new facility will be used to develop automotive power integrated circuits. Weifu High-Technology aims to reach the international levels in terms of electronic fuel pumps for diesel engines and electronic exhaust gas aftertreatment systems by utilizing STMicroelectronics’ advanced electronics solutions for automobiles. (From a press release on March 16, 2016)

R&D Expenditure

FY ended Dec. 31, 2016
(million CNY)
FY ended Dec. 31, 2015
(million CNY)
FY ended Dec. 31, 2014
(million CNY)
R&D Expenditure 319.39 287.09 311.72
Ratio of R&D expenses to operating income 4.97% 5.00% 4.91%

R&D Activity

-Wuxi Weifu Leader Catalytic Converter Co., Ltd., which is a subsidiary of the Company, announced that it has signed a joint development project with SDCmaterials, Inc. The two companies agreed to collaborate on the development of catalysts for Chinese automakers. The new catalysts will adopt SDCmaterials' Nano-on-Nano technology, which requires as little as 40% of platinum used in traditional catalysts, while doubling the efficiency of precious-metal composition. The technology will be first delivered to OEMs including SAIC GM. SDC manufactures Nano-on-Nano catalyst ingredients by using its patented plasma-synthesis technology, which integrates nano-sized precious metal particles onto nano-oxide support particles. When incorporated into traditional catalysts, the ingredients inhibit catalyst-degrading and agglomeration, creating more stable and predictable emissions control, and allowing the catalyst manufacturer to significantly reduce use of precious metals. (From news releases issued by multiple sources on December 2, 2016)

Major Investment Project

(in million CNY)
Project Investment in 2016
Industrial Park Phase II construction project 52.25
Plant construction of Weifu Lida 47.28
Technical transformation equipment of Ningbo Tianli 6.30
Technical transformation equipment of parent company
Eqipment of Wuxi Autocam Precision Machine Co., Ltd. 21.06
102 warehouse construction of Wuxi Weifu ITM Supercharger Technology Co., Ltd. 13.14

Investment in China

-On September 28, 2016, the Company signed a contract with the authorities of the Chongqing Tongliang High-tech Industrial Development Zone for its plan to construct a vehicle exhaust system factory in the zone. The new facility will be one of the largest of its kind in China. It will be established and operated by Wuxi Weifu Leader Catalytic Converter Co., Ltd. The planned amount of investment in this project is CNY 100 million. Annual sales are expected to reach 200,000 units after full-scale production begins. (From news releases issued by multiple sources on October 10, 2016)