Northeast Industries Group Co., Ltd. Business Report FY ended Dec. 2017

Acqusition

ｰOn June 12, 2018, Changchun Yidong Clutch Stack Co., Ltd. announced that it intends to respectively acquire the 100% equity of Jilin Dahua Machine Manufacturing Co., Ltd. with 586.7 million Yuan and Shandong PengXiang Automobile Co.,Ltd. with 306.6 million Yuan, total 893.3 million Yuan. After the completion of acquisition, the Dahua Machine and PengXiang Automobile will become the wholly-owned subsidiaries of Changchun Yidong, besides the clutch and hydraulic turnover mechanism, the business scope of Changchun Yidong will be added flywheel, gear ring, steering knuckle, vehicle axle and so on.

In the meanwhile, Changchun Yidong plans to raise funds of 576 million Yuan for the equity acquisition and project investment. Among them, the total investment in the expansion project of 320 million sets of flywheel and gear ring assembly whose implement subject is Dahua Machine will be 250 million Yuan; the total investment in the R&D and industrialization project of medium and heavy new energy unmanned intelligent transfer system, the R&D and industrialization project of electric drive system for new energy commercial vehicles, and the intellectual reconstruction project of high-end drive axle for heavy commercial vehicles are respectively 71.4 million Yuan, 165 million Yuan and 91.96 million Yuan.(From a press release on June 13, 2018)

-On December 30, 2016, the Northeast Industry Group acquired Delphi’s mechanical project in accordance with a contract signed between the two companies on October 11, 2016, and set up Merit Automotive Electronic System Co. Ltd. The mechanical project division mainly produces column switches, switch modules, and switches, having an annual production capacity of 30 million sets. It has the newest technology in the field and is one of the biggest manufacturers which account for the largest proportion in the European market. Currently, the company employs 290 people including 50 engineers, and holds 261 patents in force. It is headquartered in Spain, operates an R&D center in Poland, and has five plants in Poland, Mexico, Brazil, and China. Its main customers include BMW, Daimler, Fiat, Ford, Jaguar Land Rover, General Motors, Peugeot Citroen, and Renault. (From a press release on January 23, 2017)

Strategic Cooperation

-The Company and Jiangling Motor Corporation signed cooperation framework on September 1, 2016, the two sides will cooperate in receiving system, double mass flywheel, ACS and brake system of Northeast Industrial. (From a press release on September 6, 2016)

-Recently, the Company and Ricardo signed a Memorandum of Understanding (MoU), the two sides will cooperate in automotive parts and system research. Northeast Industrial will use Ricardo’s technology for product development. Ricardo is a global cross-industry consulting company, providing engineering, technology, project innovation and strategic consulting. (From a press release on October 29, 2015)

Award

-Shandong Pengxiang Automobile Co., Ltd, subsidiary of the Company, got “2014 Outstanding Supplier” form Xuzhou Construction Machinery Group Co., Ltd. (XCMG) in March. (From a press release on April 15, 2015)

R&D Facility

-The Company's Automotive Parts Environmental Testing Lab passed audit by China National Accreditation Service for Conformity Assessment (CNAS) and was awarded as CNAS accreditation. The lab has automotive electronics control system testing, environmental testing, vehicle matching test and evaluation capabilities. (From a press release on August 18, 2015)

-The Company has 1 national enterprise technology center, 2 post-doctoral research station, 4 nationally recognized laboratories.