China Auto Electronics Group Limited (THB Group) for FY2011

Business Highlights

Financial Overview

(in million Yuan)
FY2011 FY2010 Rate of change Factors
Sales 1,536.90 1,624.28 (5.38%) Note:1)
Operating profit  275.58 313.58 (12.12%) -
Profit before tax 3.27 85.62 (96.18%)
Profit after tax (4.97) 74.91 -
-Group revenue decreased by 5% to RMB1.54 billion while Group gross profit decreased by 12.1% to RMB275.6 million for FY2011. As a result, the Group recorded a net loss after tax of approximately RMB4.97 million For FY2011, Group gross profit margin was also affected and decreased by 1 percentage point to 18% due to the increase in material prices and the increase in interest costs. (From the Company's 2011 annual report)

<By Regions>
China Operations

-Revenue from the Company's China operations decreased by 9% to approximately RMB1.29 billion for FY2011. The decrease was attributable to the termination of the Chinese government's economic stimulus package. Furthermore, the gross profit margin of the Company's China operations decreased from 22% to 20% for FY2011. The decline was mainly due to the increase in material costs and change in product mix. While there was an increase in sales of wire harnesses products, they have a lower profit margin than connector products. As a result, gross profit from the Company's China Operations dropped by 15.1% to RMB259.7 million in FY2011 as compared to RMB305.8 million in FY2010. (From the Company's 2011 annual report)

Operations Outside China

-The Group's operations overseas recorded an increase in revenue by 20% to approximately RMB 248 million for FY2011, which was mainly attributable to higher sales to customers in the USA and Europe. Overseas operations were profitable, recording a gross profit of approximately RMB 15.9 million for FY2011. That was an increase of 105% over that in FY2010. The increase was mainly attributable to the improvement in sales. The gross profit margin of overseas operations for FY2011 was 6.4%, as compared to 3.8% in FY2010. The Group's American operations continued to be awarded new business as customers retooled their vehicles to meet new market demands. To facilitate the manufacturing of these new products, most products are being produced at the Company's Chinese plants at a lower cost. (From the Company's 2011 annual report)


-On 9 February 2012, the Company entered into a sale and purchase agreement with Shenzhen City Deren Electronic Co., Ltd. to divest the Group's entire automotive connector and wiring harness business, including but not limited to 100% of the equity interest of Henan Tianhai Electronics Co., Ltd. and 100% of the equity interest of all companies controlled by Henan Tianhai. This sale and purchase transaction is subject to the terms and conditions of the Agreement and the approvals by the shareholders of the Company and Deren Electronic. (From the Company's 2011 annual report)


-In 2011, the Company received 14 distinguished Awards from estimed customers including Chrysler and Behr. The Company has also built a R&D Center which is certified as a "National R&D Center" in Chongqing in 2011. (From the Company's 2011 annual report)


R&D Structure

-The Company has its research institute, which is a national-level technology center, Henan Province automotive electrical engineering technology research center, Henan Province automotive electronics engineering technology research center, conducting R&D activities on connectors, wiring harnesses, auto electronics, harness equipment and parts for clean-energy vehicles. In total, there are six engineering research centers.

R&D Subsidiaries 

Name Main business Shareholding Location Year 

Tianhai Technologies Co., Ltd.

Develop and produce automotive electronics

100% Hebi

Tianhai Snow-city Auto Electric R&D(Shanghai) Co., Ltd

Develop automotive electronics

100% Shanghai 2007

Zhengzhou Tianhai Xinke Auto Electronic Co., Ltd.

Develop new energy car motor drive and control systems

65% Hebi

Hebi Tianhai Huanqiu Electric Co., Ltd.

Develop and produce automotive wiring harness

100% Hebi

R&D expenses

-The Company believes in contributing to a clean and sustainable living environment. As such, the Company has been investing RMB 5 million every year on developing products that are more environmentally friendly.

Investment Activities

Capital investment

(in million Yuan)
  Construction period Budget Production capacity after completion
Motor drives and control systems for new energy vehicles
Jun. 2010 to Mar.2012 148.00 50 thousand sets annually

-The Group plans to invest 148 million yuan to build a new plant to produce 50 thousand sets of motor drives and control systems for new energy vehicles. The total construction area will be 27,100 square meters. It will take 21 months,  fromJune 2010 to March 2012. The annual sales are expected to reach 506 million yuan.