Zhejiang Vie Science & Technology Co., Ltd. Business Report FY ended Dec. 2015

Financial Overview

(in million CNY)

	FY ended Dec. 31, 2015	FY ended Dec. 31, 2014	Rate of Change (%)	Factors
Sales	1,690.40	1,322.29	27.84%	-Continue innovation strategy; -Strengthen marketing to develop mid and high-end market.
Operating profit	106.14	88.42	20.04%	-Sales increase brought profit growth; -Strengthen internal control and management.
Ordinary profit	112.46	91.70	22.64%
Net profit	97.07	74.93	29.55%

Contracts

-The Company announced that its wholly owned subsidiary Anhui Vie Auto Parts Co., Ltd. has been awarded a contract from Hebei Yogomo Automobile Manufacturing Limited Company. The subsidiary will supply rear torsion beam assembly for new energy car 331 (development code), sub-frame assembly for new energy car 331SUV (development code), front lower arm assembly for new energy car 330SUV (development code). (From an announcement by the company on January 22, 2015)

-The Company announced that its wholly owned subsidiary Zhejiang Zhuji Wanbao Machinery Co., Ltd. has been awarded a contract from Guangzhou Automobile. The subsidiary will supply front brake caliper assemblies, vacuum booster, and brake master cylinders with a reservoir tank for the A5H (development code). (From an announcement by the company on January 18, 2015)

New Company

-In June 2015, Anhui Vie Auto Parts Co., Ltd., subsidiary of the Company, established a new fully subsidiary in Liuzhou, Guangxi. The new company is called Guangxi Vie Automotive Chassis Systems Co., Ltd., mainly produced automotive chassis system parts. (From the Company's 2015 annual report)

-The Company announced that it had officially decided to establish a joint-venture company with Fawer Automotive Parts Limited Company in Changchun, Jilin Province.The two companies signed a letter of intent regarding this project in August 2014. The new company will be called Fawer VIE Control System (Changchun) Co., Ltd., and will develop and produce automotive brake systems and related components. It will be capitalized at CNY 50 million, of which CNY 20 million (40 percent) will be invested by Fawer Automotive Parts, and CNY 30 million (60 percent) will be invested by Zhejiang VIE. (From an announcement by the company on April 29, 2015)

Pass the Audit

-Recently, Anhui Vie Auto Parts Co., Ltd., subsidiary of the Company, passed potential supplier audit by Automotive Engineering Institute of Guangzhou Automobile Group Co., Ltd. (GAC Engineering). (From a press release on August 22, 2015)

-Recently, Anhui Vie Auto Parts Co., Ltd., subsidiary of the Company, passed potential supplier audit by SAIC-GM-Wuling. (From a press release on August 22, 2015)

-Recently, Anhui Vie Auto Parts Co., Ltd., subsidiary of the Company, passed project audit of front subframe developed for model F507 (internal code) by Dongfeng Sokon Motor Co., Ltd. (From a press release on August 22, 2015)

Awards

-In May, the Company announced that its wholly owned subsidiary Zhejiang Zhuji Wanbao Machinery Co., Ltd. received the following awards.

“2014 Best Supplier Award” from GAC Gonow Automobile Co., Ltd.
“Quality Improvement Award” from Great Wall Motor Co., Ltd.

(From a press release on May 30, 2015)

-In 2015, the Company received Best Supplier Award from Shaanxi Automotive Group and JAC motor. (From the Company's 2015 annual report)

Annual Business Plan for Next Year

-The Company plans to reach 18,500 million CNY sales and 120 million CNY ordinary profit for the year 2016.

R&D Facilities

-The Company's technology center has been designated as a nationally accredited technical center.

-The Company has two R&D centers in Beijing and Shanghai and five institutes such as pneumatic brake institute, disc brake institute, hydraulic brake system institute, chassis electronic institute and brake chamber institute.

R&D Expenditure

	FY ended Dec. 31, 2015 (in million CNY)	FY ended Dec. 31, 2014 (in million CNY)	FY ended Dec. 31, 2013 (in million CNY)
R&D Expenditure	50.90	43.80	42.17
Ratio of R&D expenses to operating income	3.01%	3.31%	3.29%

Patent

-As of Dec. 31, 2015, the Company had obtained 188 authorized patents, 23 of them are invention patents.

R&D Cooperation

-In 2009, the Company cooperated with Nanjing University of Science and Technology to establish "Nanjing University of Science and Technology - Vie Automobile Chassis Parts Joint Institute" to conduct research and development of electronic parking brake (EPB).

-The Company's technology center cooperated with Tsinghua University, Shanghai Jiao Tong University, China Automotive Technology Center, China FAW Group Corporation Technical Center, Dongfeng Automobile Technology Center, Chongqing Automobile Research Institute to jointly develop new products.

Capital investment project

(in million CNY)

Project	Budget	Investment in 2015	Project status
Automotive brake system development platform installation	33.51	2.55	34.50%
2 million air brake system components technological transformation project equipment installation	37.07	5.41	56.93%
0.2 million air disc brakes technological transformation project equipment installation	65.32	2.21	68.56%