Ningbo Huaxiang Electronic Co., Ltd. Business Report FY ended Dec. 2014

Business Highlights


(in million yuan)
  FY ended Dec. 31, 2014 FY ended Dec. 31, 2013 Rate of Change(%) Factors
Slaes 8,712.81 7,291.83 19.49% The Company's sales increased due to the following reasons:
-The Company supplied auto parts to some hot-selling models;
-New customers brought new contracts;
-"Lean production" and "promoting automation equipment" to improve production efficiency;
-Strengthen cost control to decrease operating costs.
Operating profit 835.42 545.70 53.09% -Due to cost control, operating efficiency, the Company's profits rise.
Ordinary profit 859.88 575.84 49.33%
Net profit 721.92 477.14 51.31%


New Company

-The Company will establish a new joint-venture in Singapore. The new company will be owned 50 percent by Ningbo Huaxiang's wholly owned subsidiary in Singapore, 30 percent by Inoac Corporation of Japan, and 20 percent by Kenjou Industrial Co., Ltd. The joint venture will be tentatively called Inoac Huaxiang (Singapore) Automobile Products Investment Co., Ltd. The new joint venture will acquire shares in both Ningbo Inoac Huaxiang Automobile Products Co., Ltd., which is a Ningbo-Inoac joint venture, and Ningbo Huaxiang Auto Trim Parts Co., Ltd., a subsidiary of Ningbo Huaxiang Electronic. The total investment in this project is expected to reach CNY 430 million. (From a press release on October 25, 2014)

-The Company established a new joint venture with Jiangling Motors Corporation in Nanchang, Jiangxi. The new joint venture, Nanchang Huaxiang Automobile Parts Co., Ltd, registered at the capital of RMB 50 million. Each party holds 50% shares. It will mainly produce automotive instrument panels, door panels, center channels, A / B / C pillar trim, front and rear bumpers and other auto parts. (From an announcement by the company on June 21, 2014)


-The Company announced that the company and Shenyang Fengmei Plastic Co., Ltd. have signed a contract, under which Ningbo Huaxiang Electronic will acquire part of Shenyang Fengmei Plastic's assets for CNY 27 million. Shenyang Fengmei Plastic generated CNY 71.55 million in sales and CNY 49,400 in net profit by September 30, 2014. Since September 2013, when Ningbo Huaxiang Electronic supplied its products to Shenyang Brilliance BMW and Shenyang GM based on a short-term contract, it has developed a strong partnership with Shenyang Fengmei Plastic. Ningbo Huaxiang Electronic leased production lines and injection molding machines from Shenyang Fengmei Plastic. (From an announcement by the company on December 24, 2014)

-The Company announced that its board has decided to acquire a 75 percent share in Germany-based Alterprodia, which develops and produces natural fiber materials and natural fiber plastic products mainly for the automotive industry. The shares will be purchased by Ningbo Huaxiang Electronic’s wholly owned subsidiary, NBHX Automotive System GmbH, for EUR 900,000. Alterprodia is the world’s sole maker of wood short-fiber mats, having a definite technical edge over other suppliers in terms of making lightweight auto parts. The company’s products are used on Audi’s Q7 and A8; BMW’s 5-series, 7-series, and X5; Volkswagen’s BUS T5; and Mercedes-Benz’ S- and SLK-series. Alterprodia generated EUR 16.14 million in sales during 2013. (From a press release on August 20, 2014)

R&D Facilities

-Ningbo City Auto Plastic Mould Provincial Level R&D Center
-Ningbo Huaxiang Auto Research and Design Institute
-Shanghai Huaxiang Auto Parts Design Co., Ltd.
-Ningbo Huaxiang Automotive Parts and Accessory Systems R & D Co., Ltd.

R&D Expense

Year FY ended Dec. 31, 2014 FY ended Dec. 31, 2013 FY ended Dec. 31, 2012
R&D expense
(million yuan)
195.44 181.37 168.64
Sales 8,712.81 7,291.83 5,599.70
Proportion of sales 2.24% 2.49% 3.01%

Investment in China

-The Company increased its investment of CNY 30 million in Shenyang Huaxiang Auto Parts Co., Ltd. in order to expand the subsidiary’s capacity to supply products for BMW in October 2014. Shenyang Huaxiang Auto Parts’ capital will be increased to CNY 50 million after the transaction is completed. In order to expand the subsidiary's production capacity, the Company invest an additional CNY 30 million in Shenyang Huaxiang Auto Parts Co., Ltd. in February 2015. The expansion plan was decided based on large orders the company has already received for the next two years. Shenyang Huaxiang Auto Parts' capital will be increased to CNY 80 million from the current CNY 50 million after the transaction. (From an announcement by the company on February 11, 2015)

-The Company will stop its scheduled investment project "constructing a plant for interior systems in the northeastern region of China". Instead, the company will allocate funds for its subsidiary, Changchun Huaxiang Exhaust System Co., Ltd. to "remodel large turret punch press automated lines of the subsidiary". The total investment will amount to CNY 150 million. After the remodeled press lines begin full operation, sales and net income by Changchun Huaxiang Exhaust System are expected to be CNY 485.1 million and CNY 12.34 million, respectively. (From an announcement by the company, July 30, 2014)