Financial Overview

(In million yuan)	FY2009	FY2008	Increases (%)	Factors
Sales	>2490.70	1791.88	39%	A large increase in sales was achieved because of the following factors: - high growth in the diesel engine industry due to the high-speed growth in the Chinese automotive industry -the Company's largely increasing  its sales ability by integrating all its marketing and sales resources
Operating profit	47.25	62.34	(24.2%)	-The large difference seen between the operating profit and ordinary profit was due to government subsidies for reinstating the land use right of the old Chengdu Yunnei plant.
Ordinary profit	206.67	140.48	47.12%
Net profit	180.45	110.15	63.82%

Strategic partner
-On August 26 the Company and FEV (based in Germany) signed a basic agreement of understanding that will set the framework for them to form a strategic partnership. On the same day, a ceremony to celebrate the opening of a high altitude testing laboratory for FEV engines was held. (From a press release, August 26, 2009)

R&D Structure

Facility	Overview
Internal Combustion Engine Institute	- Designing and developing diesel engines, and developing manufacturing facilities to produce them - This facility and Beijing Institute of Technology are jointly operating the Internal Combustion Engine Engineering Center - This facility and Kunming Science & Technology University are jointly operating the Diesel Engine Test & Research Center

Items (in million yuan)	Planned Budget	Amount invested in 2009	Accumulated investment until 2009	Notes
New plant to manufacture diesel engines for passenger vehicles	1,796.40	228	433.06	Under construction, expected to start trial operations in Oct. 2010

The Company is constructing a new plant to manufacture diesel engines for passenger. The total amount of investment in this project is budgeted at 1,796.40 million yuan. When the new production lines are completed, the Company will be able to produce 200,000 diesel engines a year.

New Subsidiary

-The Company will establish a wholly owned subsidiary in the Kunming Economic and Technology Development Zone. Investment in this project is expected to reach 50 million yuan. The new company called Kunming Leimo Power System Co., Ltd. will manufacture and sell automotive parts and equipment such as diesel engines, transmission components, assemblies, and other auto parts. (From an announcement by the company, October 24, 2009)