Wanxiang Qianchao Co., Ltd. Business Report FY ended Dec. 2022

Financial Overview

(CNY millions)

	FY ended Dec. 31,2022	FY ended Dec. 31,2021	Rate of change (%)	Factors
Sales	14,014.96	14,322.14	(2.14)	-Due to the increase in passenger car sales in 2022, the company's sales and production volumes of brake system assemblies increased by 52.93% and 57.77% year-over-year (y/y), respectively.
Operating income	846.22	752.04	12.52
Ordinary income	855.30	759.38	12.63
Net income	817.74	701.23	16.62

Name change

-The company announced that it changed its Chinese name. The necessary procedures to change its status with the State Administration for Industry and Commerce have been completed. (From a press release dated May 17, 2022)

New projects

-The Company announced that it plans to set up a subsidiary in Binhai New Area, Shaoxing, Zhejiang Province, investing CNY 1 billion. 100% funded by Wanxiang Qianchao, the subsidiary will focus on planning and building a new auto parts plant in Binhai New Area. The company will promote business revolving around the automobile development in the “connected, autonomous, sharing, and electric” fields and the decreasing weight of clean energy vehicles. This investment will be mainly used for the construction of plant facilities. (From a press release dated July 14, 2022)

-The Company announced that it signed a strategic cooperation framework agreement with the Management Committee of Binhai New Area, Shaoxing, Zhejiang Province. Wanxiang Qianchao will build a digital intelligence industry base for auto parts in Binhai New Area, Shaoxing. With a total planned area of about 667,000 square meters, the base will be an auto parts industry cluster in the Zhejiang Greater Bay Area, aiming to become a world-class auto parts innovation and intelligent manufacturing center. The agreement that the two parties have signed is a framework agreement, which means the implementation content and schedule still need to be specified by both parties later. (From a press release dated February 15, 2022)

Orders

-In 2022, the company was awarded the MMA platform project from Beijing Benz, a platform project from BMW, the MEB platform project from VW, the C9 project from Audi, and the HCEEC and PAH projects from BYD.

-The Company announced that its subsidiary, Zhejiang Wanxiang Precision Industry Co., Ltd. (Wanxiang Precision Industry), announced that it has received an order for wheel bearing units from a major overseas vehicle manufacturer. The wheel bearing units will be installed in a premium model under this vehicle manufacturer. (From a press release dated August 31, 2022)

-The Company announced that its tech center has been chosen by Company H as a designated developer of airbag control units (ACU). Wanxiang Qianchao is expected to provide qualified prototypes for Company H by September 15. Mass production will start by the end of 2023. By 2028, a total of 1.275 million ACU will be sold, with sales reaching CNY 200 million. (From multiple sources dated June 9, 2022)

R&D Expenditure

(CNY millions)

	FY ended Dec. 31, 2022	FY ended Dec. 31, 2021	FY ended Dec. 31, 2020
R&D Expenditure	530.48	498.50	471.59
R&D spending as percent of Sales (%)	3.97	3.48	4.33

-As of Dec. 31, 2022, the Company had 639 R&D staff, accounting for 7.02% of the total staff.

Patents

-By 2022, the company had obtained a total of 2,983 Chinese domestic certified patents, including 264 invention patents. (From 2022 Annual Report)

R&D Facility

Name	Wanxiang Technical Center
Year established	1994
Overview	-It was formerly known as Wanxiang Group Technology Center. -With the concept of green design, green manufacturing and intelligent manufacturing, it provides modular, lightweight and intelligent integrated system solution technologies for smart cars and New Energy Vehicles.

Change in shareholding ratio of subsidiaries

-The Company announced that Wanxiang Tongda Co., Ltd. (Wanxiang Tongda), a Wanxiang Qianchao holding subsidiary, has transferred its 100% equity interest in Haikou Tongda Exhaust System Co., Ltd. (Haikou Tongda) to Shangwan Clean Intelligent Vehicle Co., Ltd. (Shangwan), a Wanxiang Group wholly-owned subsidiary, in a transaction amounting to CNY 28.705 million. Wanxiang Group is the controlling shareholder of Wanxiang Qianchao. (From a Wanxiang Qianchao SZSE press release dated January 12, 2023)