Fengfan Co., Ltd. Business Report FY2009

Business Highlights

Financial overview

(million yuan)

(in million yuan)	FY2009	FY2008	Rate of change(%)	Factors
Sales	2,683.34	3,149.71	(14.8%)	-Lower raw material prices were passed on to customers in the form of lower selling prices of batteries.
Operating profit	49.09	(291.26)	-	The company rid itself of deficits and posted gains due to the following factors: - Developing new products and reinforcing its marketing activities. -Increasing revenue and reducing costs. -Strengthening the quality of its management structure.
Ordinary profit	50.75	(283.95)	-
Net profit	44.54	(287.37)	-

Contract

In 2009, the Company sold a total of 7.91million automotive starting batteries, and for the first time, won program business from a US auto manufacturer to supply its products. By increasing the volume it supplies to Japanese auto transplants in China, the Company was able to begin mass-producing and supplying its products to Dongfeng Nissan.

R&D

R&D activities

- The Company conducts its development activities at Fengfan Technical Center.

Investment Activities

Capital investment projects using raised funds (as of Dec. 2009)

(in million yuan)

Capital investment projects	Planned investment amount	Funds	Progress (%)	Status report as of Dec. 2009
Construction project for lithium-ion battery production facilities	200.00	Funds raised	72.7%	The Company completed the first phase and already launched production. *It, however, has been unable to meet its earnings target due to the changing market environment.
Construction project for production facilities to make sealed maintenance-free lead- acid batteries	270.00	Funds raised	3.43%	This facility is now under construction.
Construction project for production facilities to manufacture both thin-film amorphous silicon solar cells and photovoltaic (PV) power generation systems	100.0	Own funds	2.37%	The company established a joint-venture company