Weichai Power Co., Ltd. Business Report FY ended Dec. 2019
Financial Overview
|
(in million CNY) |
| FY ended Dec. 31, 2019 | FY ended Dec. 31, 2018 | Rate of change | Factors | |
| Sales | 174,360.89 | 159,255.83 | 9.48% |
-Company was at the top of the industry, as sales of heavy-duty engines, heavy-duty chasses, and transmissions were strong. |
| Operating profit | 14,155.89 | 13,603.73 | 4.06% | |
| Ordinary profit | 14,351.65 | 13,858.28 | 3.56% | |
| Net profits | 11,907.01 | 11,625.73 | 2.42% |
-In FY2019, the Company announced that it had developed 20 models that are compliant with the China 6 exhaust-gas-emissions standards.
-Conducted experiments on a Level 2 road-adherence assist-system for self-driving commercial vehicles, launching production.
Acquisition
-On December 16, 2019, Weichai Power Co., Ltd. (Weichai Power) announced that it has completed the strategic acquisition of ARADEX AG (ARADEX). Established in 1989, ARADEX is a German company focusing on the R&D of electric motors, electronic controllers and power sources. In the future, Weichai Power and ARADEX will cooperate on the development and integration of power systems for new energy commercial vehicles. (From a Weichai Power website press release on December 16, 2019)
-The Company became a founding shareholder in Tianjin Tsintel Technology Co., Ltd. (Tsintel Technology), signing a stock-sales agreement on Nov. 18, 2019 and obtaining the stock shares worth CNY 6.6 million on Nov. 28, 2019. The transaction gave the Company a 55% stake in the company. Tsintel Technology is engaged in developing business involving the connected-car field delivering advanced-driver-assist systems (ADASs), core technologies for Level 4 self-driving for special situations, and technological services for connected cars. (From the Company’s annual report and Tsintel Technology’s website)
Strategic partnership
-On January 15, 2020, Weichai Power Co., Ltd. (Weichai Power) announced that it signed a strategic cooperation agreement with ARADEX AG (ARADEX) in Jinan, Shandong Province. ARADEX was established in 1989 and engages in the R&D of electric motors, electronic control units and power sources. The companies will work together to develop new energy drive systems. (From a Weichai Power website press release on January 15, 2020)
-On June 12, 2019, Weichai Power Co., Ltd. and Dongfeng Hua Shen Motor Co., Ltd. held a meeting on their strategic alliance. The two companies are going to strengthen their partnership in the areas of the product that meet China VI emission standards. (From a press release on June 17, 2019)
-Shaanxi Hande Axle Co., Ltd. and Geely New Energy Commercial Vehicle Group Co., Ltd. signed an alliance agreement on June 14, 2019, according to their announcement. The two companies will cooperate to promote the further development of the new energy commercial vehicles. (From a press release on June 17, 2019)
-On July 25, 2019, Weichai and JAC Motor Group Co., Ltd. signed a strategic alliance agreement. The two companies will cooperate in research on innovative ideas such as technologies for energy-saving and new energy products, especially software. (From a post on JAC Motor’s official media account on July 25, 2019)
Outlook for FY ending December 2020
-Sales for 2020 is expected to be CNY 186 billion increased by 9% on YoY basis (From the Company's annual report 2019).
R&D Achievements
-In terms of new-energy developments, the Company advanced R&D activities on new-energy powertrains and parts. The Company created a series of fuel-cell battery systems that cover a broad spectrum, which uses can be expanded to fuel-cell buses and hydrogen stations. It launched sales of new 2-shift powertrains, controllers, etc. In addition, the Company speeded up in-house development of AMTs, ATs, and second-generation new-energy, all-electric systems products. It is developing Internet systems for new-energy vehicles and lane-keeping-assistant (LKA) systems, as well as launching production and sale of advance-driver-assistance systems. Its new-energy products are significantly competitive and continuing to sell well.
R&D Expenditure
| FY ended Dec. 31, 2019 (million CNY) |
FY ended Dec. 31, 2018 (million CNY) |
FY ended Dec. 31, 2017 (million CNY) |
|
| R&D Expenditure | 7,347.01 | 6,493.62 | 5,646.57 |
| Ratio of R&D expenses to operating income | 4.21 | 4.08 | 3.73 |
R&D structure
-As of Dec. 31, 2019, the Company has 7,504 R&D staff, accounting for 9.36% of the total staff.
R&D Facilities
-The Company has R&D centers in China, Japan and Austria.
Capital investment projects for FY2018 |
(in million CNY) |
| Project | Budget | Investment in 2019 | Progress (%) |
| Plant-construction project C | 780.00 | 274.50 | 41 |
| Plant-construction project B, Phase 3 | 723.87 | 204.94 | 80 |
| Testing facilities project A | 1,033.00 | 216.46 | 26 |
| Plant-construction Project D | 378.87 | 236,50 | 62 |
| Transmission project for mid- and small-sized trucks | 270.00 | 113.50 | 78 |
| Transmissions project: basic architecture | 182.90 | 63.64 | 92 |
| Plant-construction project A- | 342.67 | 94.41 | 41 |
Investment
-On May 14, 2019, Weichai Group and Kamaz held a ceremony to commemorate the launch of a joint venture project in Beijing. On September 11, 2018, they signed a strategic alliance agreement in Vladivostok, Russia, and agreed to establish a joint venture, Kamaz Weichai Co., Ltd., to start producing and selling industrial diesel and gas engines. The two companies are going to cooperate in the transmission and axles businesses., as well. (From some media reports on May 15, 2019)
Activity of Factories
-The company has officially begun the operation of a hydrogen fuel cell power system plant in the city of Weifang, Shandong Province. Construction of the plant began in 2018 when Weichai Power started to build a fuel cell industrial park. The park includes test benches for key fuel cell materials, fuel cells, fuel cell stacks, engines, powertrains and complete vehicles. It has complete testing capabilities not only for fuel cell systems but also for complete vehicles. With the 20,000-unit-capacity production lines for fuel cell power systems and fuel cell stacks, the park is currently world’s largest hydrogen fuel system manufacturing site. The recently-produced hydrogen fuel cell power systems will be delivered to a domestic bus manufacturer. After assembly work is completed, the buses equipped with Weichai Power’s hydrogen fuel cell systems will be put into Weifang municipal bus service where a large-scale demonstration program will be conducted. (From a Weichai Power website press release dated March 31, 2020)
-On October 14, 2019, MAZ Weichai Co., Ltd. held a ceremony to celebrate the start of the mass production and the production of the 1,000th engine at a plant in the China-Belarus Great Stone Industrial Park. MAZ Weichai is a joint venture between the Weichai Group and Minsk Automobile Plant (MAZ) and produces EUR IV and V engines. Its annual production capacity is 20,000 units. It celebrated the plant construction on September 13, 2017, and started full-scale trial production on November 18, 2018. (From a release on October 15, 2019)