Kunming Yunnei Power Co., Ltd. Business Report FY ended Dec. 2016

Financial Overview

(in million CNY)
FY ended Dec. 31, 2016 FY ended Dec. 31, 2015 Rate of change Factors
Sales 3,925.63 2,831.79 38.63% -In 2016, the Company's diesel engine sales increased, thus, total sales increased.
Operating profit 154.20 143.36 7.56% -
Ordinary profit 259.94 201.83 28.79%
Net profit 223.52 171.20 30.56%

New Company

-In July 2017, Hunan Corun New Energy Co., Ltd. said on July 22, 2017, its subsidiary, Corun Hybrid System Technology Co., Ltd. (CHS), and Yunnan Yunnei Power Group Co., Ltd. are planning to set up a joint company, Wuxi Tongrun Hybrid Power Technology Co., Ltd. with a registered capital of Chinese yuan (CNY) 600 million. CHS will invest CNY 306 million or 51% of the capital, and Yunnei Power Group will invest CNY 294 million or 49%. The new company will design, develop, manufacture and sell HT3800 (diesel/petrol), HT1800 (diesel), and HT2800 (diesel) engine hybrid transmission assemblies. The company plans to produce 300,000 units of diesel and gasoline hybrid transmission assemblies. The initial production will be 150,000 units. (From a corporate announcement on July 22, 2017)

-In June 2017, the Company said that its controlling shareholder, Yunnan Yunnei Power Group Co., Ltd, will set up a new company, CATARC Motor Vehicle Plateau Quality Inspection Center (Yunnan) Co., Ltd., jointly with China Automotive Technology and Research Center (CATARC) and Sino-Precious Metals Holding Co., Ltd. with a registered capital of Chinese yuan (CNY) 100 million. The joint company will be owned by 70% or CNY 70 million by CATARC and 15% or CNY 15 million by Sino-Precious Metals, and 15% or CNY 15 million by Yunnan Yunnei Power Group. The new company plans to spend CNY 250 million to build a plant and facilities for testing vehicles and engines in use in plateau at a 300,000-square-meter site. (From a corporate announcement on June 30, 2017)

Off the Production Line

-In January 2016, the Company's YNF40 State V engines began mass production. The four-valve engine has State IV and V version. The maximum power is 125KW, the maximum torque of 600N · m, and has the potential to upgrade the level of State VI. Currently, the Company focused on promoting "green and efficient light commercial vehicle engine construction project" based on YNF40 engine. It can form an annual output of 100,000 YNF40 engine production capacity. (From news releases issued by multiple sources on January 14, 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 134.78 132.73 114.45
Ratio of R&D expenses to operating income 3.43% 4.69% 4.73%

Product Development

(in million CNY)
Project R&D Expenditure in 2016
D09 State IV diesel engine development project 5.59
D25/D30 State IV diesel engine development and industrialization 24.77
Development and industrialization of YNF40 diesel engine 1.21
State V natural gas product development -
East technical center 0.43
Enterprise technology center platform construction 0.39
Sporadic product development 3.50
Development of diesel engine for YN series construction machinery 1.55
2.0L dual fuel engine development 1.89
D19 State V passenger car development 2.72
D65 non-road diesel engine development 3.95
State IV commercial vehicle product development and product development projects 1.17
State V commercial vehicle product development and product development project 3.00
Vehicle diesel engine post-processing integration technology research and modular product development and industrialization 0.62
Technical standard for high efficiency multi-cylinder trail diesel engine 0.19
Key technology research and development and industrialization for project of annual output of 50,000 sets of domestic common rail non-road diesel engine production 2.06
20-50KW gas generator development project 0.79
Application and extension of innovative methods in Yunnan province 0.48
Automatic transmission powertrain development project 9.18
D20 State V diesel engine ontology development and matching application development project 8.93
D14 diesel development project 1.96
D16 State IV diesel engine and Jianghuai "M3" vehicle application development project 0.44

State VI diesel development project


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
-Set up Su Wanhua Academician Workstation in cooperation with Tianjin University

-The Company has a national recognized enterprise technology center and Kunming Technical Center, Chengdu Gas Development Center, Eastern Technical Center and Shandong Technical Center.

-The Company's technology center was identified as Kunming Municipal Diesel Engineering Research Center by Kunming Science and Technology Bureau. (From a press release on January 21, 2016)

-The Company established a new subsidiary in Wuxi, Jiangsu in July 2014, named as Kunming Yunnei Power Co., Ltd.. It is one of the Company's technical centers in the east of China. At present, the Company has four R&D base, which are located in Kunming, Chengdu, Shandong and Wuxi.

New Product

-In July 2016, the Company successfully ignited the prototype of its D25 engine, a new DEV series Euro VI engine. This engine development project started at the end of 2015. The powertrain is targeted mainly at light- and heavy-duty vehicles that meet the Euro VI emissions standards. The engine uses an electronically controlled VNT turbocharger, an EGR system with a bypass valve, a 1,800 bar fuel injection system, an electronic throttle control heat management system, and a diesel aftertreatment system consisting of DOC/DPF/SCR/ASC. (From news releases issued by multiple sources on July 28, 2016)


(in million CNY)
Project Budget

Amount invested in 2016

(in million CNY)

Project progress
Second shipping department construction 272.73 4.20 99%
Commercial vehicle capacity construction 42.95 2.65 99%
Environmental protection and efficient light commercial vehicle engine construction projects 350.63 168.93 75%
Gas center construction project 79.94 27.95 65%
50,000 sets of natural gas country State Ⅲ, IV and V engine production line 60.00 6.34 85%
State Ⅳ and Ⅳ above engine production line assembly technical transformation project 4.46 0.04 90%
Construction of civil engineering of Shandong engine plant 25.00 8.39 95%
Multi-cylinder small-bore diesel engine cylinder head casting digital workshop project 80.00 11.69 20%
Eastern Technology Center construction project 342.47 52.23 50%

Investment in China

-The Company announced that Shandong Yunnei Power Co., Ltd., its subsidiary, will raise CNY 40 million in capital, with Kunming Yunnei Power investing an additional CNY 38 million and Shandong Donghong Industrial Co., Ltd. investing an additional CNY 2 million. When these transactions are completed, Shandong Yunnei Power will be owned 87.41% by Kunming Yunnei Power, 6.39% by Qingzhou Fumin Agricultural Machinery Co. Ltd., and 6.20% by Shandong Donghong Industrial. Shandong Yunnei Power will use the new fund for increasing its capacity to produce diesel engines for off-road vehicles that meet China III and China IV emissions standards. (From an announcement by the company on May 28, 2016)

-Corun Hybrid System (CHS), in which the Company has invested CNY 60 million, broke ground for its 1 million units/year hybrid system plant in Changsha on February 28, 2016. The plant is scheduled to begin operating in 2017, and to reach full-scale operations in 2018. Its initial capacity is planned to be 300,000 systems. (From news releases issued by multiple sources on February 29, 2016)

-The Company announced that it has signed a framework agreement with Hunan Corun New Energy Co., Ltd., Zhejiang Geely Holding Group Co., Ltd., and Chongqing Changan Automobile Co., Ltd. to make an investment in Corun Hybrid System (CHS). CHS was formed as a joint venture between Hunan Corun New Energy and the Zhejiang Geely Group on November 25, 2014 to produce drive systems for hybrid cars, electric batteries, and modules. Subsequently, Geely transferred its CHS shares to Shanghai Maple Guorun Automobile, which changed CHS's ownership to 51% by Hunan Corun and 49% by Shanghai Maple. In accordance with the framework agreement, a total of CNY 460 million is planned to be invested with Hunan Corun providing CNY 200 million in cash, Chongqing Changan providing CNY 200 million in cash and technology, and Kunming Yunnei providing CNY 60 million in cash. New investment ratios after the planned capital increase have not been announced yet. It has been decided that Shanghai Maple will return its CHS shares to Geely before an official investment agreement is signed, but Geely has not accepted them yet. Geely says its new investment, if any, will not be more than CNY 200 million. (From an announcement by the company on February 19, 2016)