HUAYU Automotive Systems Company Limited Business Report FY ended Dec. 2016

Financial overview

(million CNY)
FY ended Dec. 31, 2016 FY ended Dec. 31, 2015 Rate of change Factors
Sales 124,295.81 91,120.20 17.82% -Sales of major products increased.
Operating profit 9,413.63 7,362.94 22.12% -
Ordinary profit 9,860.78 7,726.75 18.29%
Net profit 8,582.33 6,928.65 16.21%



Recent Development

-In December 2016, the Company announced that Huayu Automotive System (Shanghai) Co., Ltd., its wholly owned subsidiary will invest CNY 120 million to acquire a 30% stake in Hubei Hangpeng Chemical Power Technology. An agreement on the deal was signed with Hubei Hangpeng Chemical Power Technology and its shareholders, including Hubei Aerospace Institute of Chemical Technology and Aerospace Hi-Tech (Suzhou) Venture Capital Management Co., Ltd. Hubei Hangpeng Chemical Power Technology is capitalized at CNY 68 million. It mainly develops, produces, sells, imports, and exports automotive airbag products, inflators, gas generators, emergency oxygen tanks, aerospace equipment, chemical equipment, and automated systems for industrial use. During the period between January and November 2016, Hubei Hangpeng Chemical Power Technology generated CNY 285.11 million in sales and CNY 19.45 million in net profit. (From an announcement by the company on January 3, 2017)

New Companies

-Yanfeng Automotive Interiors, a subsidiary of the Company, announced that it will establish a new plant in Belvidere, Illinois, U.S. The company will invest USD 28.1 million in this project. The new facility is expected to begin operations in 2017 and create 400 jobs. It will produce cockpit components primarily for the Cherokee that are assembled at the Belvidere Plant of Fiat Chrysler Automobiles (FCA). (From news releases issued by multiple sources on October 8, 2016)

-In July 2016, Yanfeng Automotive Interiors, the world’s largest supplier of automotive interior components, announced details on its USD 71 million investment in South Carolina. Yangfeng recently completed the acquisition of Faurecia’s manufacturing plant located at 101 International Boulevard, Fountain Inn, South Carolina. The acquisition includes the existing 365,000-square-foot plant and its current employees. Yanfeng Automotive Interiors will be expanding the plant by an additional 100,000 square feet to accommodate new business. The company will supply the BMW plant in Spartanburg with interior components, including door panels, instrument panels and floor consoles, for multiple models built by the automaker. (South Carolina Chamber of Department release on July 6, 2016)

-Huayu Sanden Automotive Air Conditioning Co., Ltd. held a groundbreaking ceremony for its new Heqing Plant in the Shanghai Zhangjiang Hi-Tech Park on January 15, 2016. The new plant will be constructed on 116,200 square meters of land, and will produce automotive air conditioners and compressors. The company will invest approximately CNY 1 billion in this project, which will be carried out in two phases. The first phase is expected to be completed in February 2017. (From a press release on January 18, 2016)

R&D Expenditure

(in million CNY)
FY ended Dec. 31, 2016 FY ended Dec. 31, 2015 FY ended Dec. 31, 2014
R&D Expenditure 2,445.35 1,539.73 1,649.11
Ratio of R&D expenses to operating income 1.97% 1.69% 2.23%



R&D Facility

-The Company announced that it will establish a technical center in Shanghai by investing approximately CNY 970 million. The new facility will be located at 501, Zhangjiang Keyuan Road, Pudong New District, Shanghai, and will have a floor area of 95,000 square meters. The company plans to integrate this new facility with its existing technical center, and thereby establish a comprehensive R&D center that will carry out major parts development for new energy vehicles, and also conduct application research on intelligent vehicle components. (From an announcement by the company on March 28, 2016)

-As of the end of 2016, the Company has 295 R&D, manufacturing and service bases. It has 79 manufacturing (including R&D) bases in the United States, Germany, Thailand, Russia, Australia, the Czech Republic, Slovakia, India, Mexico, Canada, South Africa, Japan, Spain, Italy and other countries.


New Product

-In 2016, the Company finished functional sample development of 24GHz rear millimeter-wave radar and prototype development of 77GHz millimeter-wave radar. Part of 24GHz rear millimeter-wave radar products are expected to begin mass production and supply for OEM in 2017. (From a press releases on June 1, 2016)

Investment in 2016

(in million CNY)
Project Budget Investment in 2016 Percentage of total input
MQB project of Shanghai Huizhong Automotive Manufacturing Co., Ltd. 212.03 41.42 74%
Technical center construction of Shanghai Huizhong Automotive Manufacturing Co., Ltd. 69.58 15.99 59%
Production line expansion of Shanghai Huizhong Automotive Manufacturing Co., Ltd. 336.09 101.08 57%
Plant construction of Shanghai Huizhong Automotive Manufacturing Co., Ltd. 190.95 149.27 79%
Headquarter renovation of Shanghai Tractor & Internal Combustion Engine Co., Ltd. 576.68 90.36 74%
Jiezhong plant construction and production capacity expansion project of Shanghai Tractor & Internal Combustion Engine Co., Ltd. 589.30 159.61 66%
Plant construction of Shanghai Union Automobile & Tractor Industry Trade Co., Ltd. 179.08 37.08 100%
Relocation phase III project of Shanghai Superior Die Technology Co., Ltd. 254.45 121.73 65%
Stamping expansion phase IV project of Shanghai Superior Die Technology Co., Ltd. 232.07 157.21 87%
Wuhan plant construction of Shanghai Superior Die Technology Co., Ltd. 479.51 168.23 35%
Welding phase III project in Jinqiao base of Shanghai Superior Die Technology Co., Ltd. 224.00 92.35 73%
Interior parts production line renovation project at Yanfeng Visteon 2,925.43 1,721.85 59%
Seat parts production line reconstruction project at Yanfeng Visteon 828.27 518.74 65%
Electronic parts production line reconstruction project at Yanfeng Visteon 318.28 175.74 55%
Automotive air conditioning compressor project of HUAYU Sanden Automotive Air Conditioning Co., Ltd. 1,000.00 187.77 19%
Plant construction in Hai'an at Shanghai Sandmann Foundry 1,182.21 163.83 34%



Investment in China

-Huayu Continental Brake Systems (Chongqing) Co., Ltd., a new joint venture between the Comnpany and Continental Automotive Holding Co., Ltd., broke ground for its 84,000-square-meter-facility in the Chongqing Liang Jiang New Area. The first phase of the construction project will include a plant with a floor area of approximately 25,000 square meters. This plant is expected to be completed and begin operating in February 2017. The second phase of the project is scheduled to be completed in 2022 and will increase the plant's annual production volume to CNY 2 billion. The joint venture will produce and assemble brake systems for automakers such as Changan Ford and Great Wall Motor. (From news releases issued by multiple sources on February 24, 2016)