Financial overview

(million yuan)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	Rate of change	Factors
Sales	5,748.02	5,223.67	10.04%	-Efficient marketing; -Benefit from technology improvement; -Product brand advantage.
Operating profit	163.24	133.03	22.71%
Ordinary profit	180.47	150.35	20.03%
Net profit	138.84	113.23	22.62%

-In 2014, the Company produced 14.84 million of batteries, including industrial batteries. The Company's sales volume reached 14.23 million units. (From the Company's 2014 annual report)

Pass the Test

-The Company announced that it passed a series of testing to become FAW-VW’s A-class supplier in May 2014. The testing covered performances on supplier management, R&D, production, quality control, and after-sales services. (From a press release on May 16, 2014)

Strategic Cooperation

-In February 2014, the Company announced that it signed a strategic framework agreement with China Electronics Technology Group Corporation’s research center No.18 to collaborate on the development of new energy technologies. The two organizations would tie up in the development and production of advanced acid batteries, lithium batteries and solar batteries. (From an announcement by the company on February 22, 2014)

Awards

-The Company announced that it received Shanghai GM's Outstanding QRD (Quality, Reliability and Durability) Improvement Award 2014. (From a press release on January 9, 2015)

Business Plan for Next Year

-In 2015, the Company plans to reach CNY 5,817.17 million gross industrial output, 5.06% rise of last year; CNY 5,282.00 million industrial sales, 5.01% rise of last year; CNY 6,045.14 million sales revenue, 5.18% rise of last year; CNY 962.85 million industrial added value, 5% rise of last year; and CNY 197.27 million profits, 9.30% rise of last year.

R&D Expenditure

	FY ended Dec. 31, 2014 (million yuan)	FY ended Dec. 31, 2013 (million yuan)	FY ended Dec. 31, 2012 (million yuan)
R&D Expenditure	287.66	265.64	200.60
Ratio of R&D expenses to operating income	5%	5.09%	4.24%

R&D Facilities

-The Company has a national level technology center, Fengfan Technical Center, which consists starter battery R&D center and lithuim battery R&D center.

R&D Activities

-In 2014, the Company's AGM batteries for HEVs have been mass produced.

-In 2014, the samples of EFB batteries have been delivered to VW.

New Products

-The Company's original AGM battery for China’s first micro hybrid car passed testing by Volkswagen of Germany, and the company signed agreements to collaborate with VW, BMW, Mercedes-Benz, and GM. Compared with existing batteries, the new battery is lighter in weight and has thinner electrode plates (0.7 mm in thickness), while offering larger power capacity. These improvements were made possible by the adoption of a new processing method. Fengfan said the new battery could reduce CO2 emissions by 3 to 6 percent and cut down fuel consumption by 8 to 15 percent. (From news releases issued by multiple sources on September 23, 2014)

Capital investment projects using raised funds (as of Dec.2014）

(in million yuan)

Capital investment projects	Planned investment amount	Amount invested in 2014 (million yuan)	Project Progress
Construction project for lithium-ion battery production facilities	200.00	12.90	100%
AGM (absorbed glass mat) project in Baoding	33.98	0.08	100%
AGM (absorbed glass mat) project in Xushui	508.94	20.59	-
Constructing its new plant that will produce 5 million units high-performance maintenance-free lead-acid batteries in Xushui	675.72	73.12	80%
The Tangshan Fengfan project	138.68	4.81	100%
The upgrading of industrial technology in Qingyuan Branch	160.76	1.66	100%
The second phase of the upgrading of industrial technology in Qingyuan Branch	-	26.08	-