Harbin Dongan Auto Engine Co., Ltd. Business Report FY ended Dec. 2016
Financial Overview |
(in million yuan) |
| FY ended Dec. 31, 2016 | FY ended Dec. 31, 2015 | Rate of change | Factors | |
| Sales | 2,537.93 | 1,261.40 | 101.20% | -Achieve transformation and upgrading, M series and other products sales got substantial increase in total and market share increased. M15 series engine sales reached 282,000 units, accounting for 91% of total sales. |
| Operating profit | 69.40 | 18.00 | 285.56% | - |
| Ordinary profit | 78.55 | 23.44 | 235.11% | - |
| Net profit | 78.55 | 23.44 | 235.11% | - |
Recent Development
-One of the subsidiaries of the Company, Harbin Dongan Automotive Engine Manufacturing Co., Ltd., announced the start of the mass production of its original 6-speed automatic transmissions with the first unit produced on June 20, 2017, in Harbin. The transmission built in a compact structure has the output density which is on par with other advanced products in the global market and is suitable for sedans and sport utility vehicles (SUVs). It can be used for vehicles with weight varying from 1.2 tons to 2.6 tons and mated to engines with the maximum output of less than 300Nm. It can be deployed in vehicles with front-wheel or four-wheel drives and with many types of driving styles. It comes with a start-stop function and its product reliability index is as high as 0.3 million kilometers. The company has already signed supply agreements with some auto manufacturers including Zotye Auto and Haima Automobile. Its annual production volume is expected to reach 30,000 in 2017 while the market demand in 2018 will grow up to 200,000. (From news releases issued by multiple sources on June 20, 2017)
-In June 2017, the Company commenced a project to revamp its DAM15K engine production lines in full scale. The DAM15K engine is an upgraded version of naturally-aspirated engines of DAM series. Very advanced technology to improve fuel efficiency has been adopted to make it meet more stringent fuel economy standards to be enforced in 2018, according to the company. (From a press release on June 16, 2017)
-The Company said on May 8, 2017, that it will launch a new project to mount a DAM15L engine on Foton Motor Group’s Forland TM. This is the first project after signing the alliance agreement with Foton Motor. (From a press release on May 12, 2017)
-In April 2017, the Company's joint debugging of DAM10E new energy hybrid engines was officially launched. (From a press release on April 15, 2017)
-In January 2017, the Company successfully ignited the first DAM15TGDI supercharged direct injection engine. The engine will be in production conditions in April 2018. It can be installed in MPV, SUV, cars, pickups, medium-sized passenger cars. (From a press release on January 23, 2017)
-In December 2016, the Company's 300,000th engine was off assembly line. (From a press release on December 15, 2016)
-The board members of the Company voted to dissolve Harbin Dongan Liyuan Piston Co., Ltd. that has been operating in the red over the past few years. Harbin Dongan Liyuan Piston was established in 2002. It was formed jointly by Harbin Dongan Auto Engine, which invested 35%, and Hebei Tianma LiYuan Industry (currently called the Liyuan Piston Industry Group), which invested 65%. The joint venture is capitalized at CNY 15 million. In 2015, the engine piston supplier generated CNY 3.57 million in sales and posted a net loss of CNY 1.27 million. (From an announcement by the company on April 16, 2016)
-The Company announced that it has successfully ignited its DAM12TGDI direct-injection turbo engine. This engine, developed in-house by the company, features an all-aluminum case, high compression ratios, DOHC4 valves, and Dual VVT technologies. It offers up to 85kW/L, maximum torque of 180Nm/L, and meets the China 5 emissions standards. The company says the engine is capable of meeting the China 6 emissions standards as well. (From a press release on February 16, 2016)
Pass the Audit
-The Company has passed an initial QCA2.0 process screening by Changan Automobile Co., Ltd. QCA is a supplier quality assurance system of Changan Automobile. (From a press release on April 17, 2017)
Product Platform Plan of the Company
-As of December 31, 2016, the Company formed four plantforms including three-cylinder supercharged, four-cylinder supercharged, M series upgraded and hybrid engines. Meanwhile, the Company promoted new front and rear transmissions development of Plantform V and VI .
Production Status of Products
Inside Group
-DAM15B model equipped with Nanjing Changan Oushang models had been mass production.
-DAM15DR model equipped with P102 model of Baoding Changan Bus had been mass production; DAM15DR model equipped with Q001 model of Baoding Changan Bus had been mass production; Three-cylinder supercharged platform engine (M12T) equipped with G201 model of Baoding Changan Bus had been completed prototype and was in progress vehicle calibration.
Outside Group
-DAM15 series engine equipped in Beiqi Weiwang "M20/M30" and Changhe Frieda "M50S" models began first batch production.
-DAM15 series engines equipped in Foton Gratour "V5" project began to be listed in bulk in January 2016.
-DAM15 series engines equipped in Beiqi Foton Gratour "V5" project began export in small quantities from October 2016; Gratour front drive project began road test from June 2016 and planned to be batch production in the first half of 2017.
-Beiqi Weiwang M50N project planned to be in production condition in the first half of 2017.
Production Capacity
-Current production capacity of the Company:
| Main factory | Designed production capacity (thousand units per year) |
Production capacity in 2016 (thousand units) |
Capacity utilization |
| M series engine | 400 | 400 | 75% |
| F series engine | 190 | 190 | 1.6% |
-As of 2016, the Company increased the production capacity of M series engine to 400 thousand units.
-Current production capacity of Harbin Dongan Automotive Engine Manufacturing Co., Ltd., the subsidiary of the Company:
Current prduction capacity:
| Main factory | Designed production capacity (thousand units per year) |
Production capacity in 2016 (thousand units) |
Capacity utilization |
| Engine | 300 | 360 | 120% |
| Transmission | 300 | 300 | 5.6% |
Development Strategy
-Sales volume plan of engines in future:
| Target | 2017 | 2018 |
| Sales volume (in thousand units) | 306 | 335 |
| Sales (in billion yuan) | 2.46 | 2.64 |
Business Plan for Next Year
-In 2016, the Company plans to reach 2.377 billion sales and sell 305,800 units powertrains.
R&D Facility
-The Company has Heilongjiang Provincial Enterprise Technology Center. The technical center has 20 years experience in engine design and development. As of Dec. 2016, the center has more than 450 staff.
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 | 52.32 | 36.34 | 33.65 |
| Ratio of R&D expenses to operating income | 2.06% | 2.88 | 4.53% |
Patents
-As of Dec. 2016, the Company has 248 patents, 5 of them are invention patents, and finished the patent protection of M series products.
Product Development
-M series three-cylinder booster platform (M12TGDI / M12T)
-M series four-cylinder engine upgrade (M15K engine)
-M series four-cylinder booster platform (1.5TGDI engine)
- Beiqi New Energy M10E extender
-DAT15F front drive transmission
-DATT18R rear drive transmission
-DAT20F6 front drive transmission
-DAT15R-A rear drive transmission
Investment |
(in million CNY) |
| Project | Budget | Investment in 2016 | Project progress |
| VVT | 531.16 | 22.55 | 48.25% |
| Six-speed transmission | 197.26 | - | 7.66% |
| Small displacement | 155.63 | 1.60 | 7.46% |
| Outsourcing equipment | - | 14.07 | - |
| Quality improvement | 19.80 | 6.92 | 49.16% |
| Transmission quality improvement | 17.24 | 10.22 | 59.28% |
| Casting capacity upgrade | 55.61 | 21.43 | 34.42% |
| F series engine assembly line transformation | 81.09 | 13.08 | 16.13% |