Weichai Power Co., Ltd. Business Report FY ended Dec. 2020
Financial Overview
|
(CNY millions) |
| FY ended Dec. 31, 2020 | FY ended Dec. 31, 2019 | Rate of change(%) | Factors | |
| Sales | 197,491.09 | 174,360.89 | 13.27 |
In 2020, a unit sales increase of 37.9% year-over-year in heavy-duty trucks in China boosted demand for the company's commercial vehicles and commercial vehicle products. |
| Operating profit | 12,460.73 | 14,155.89 | (11.97) | |
| Ordinary income | 12,681.68 | 14,351.65 | （11.64) | |
| Net income | 11,274.84 | 11,907.01 | （5.31) |
-In terms of sales volume by product units, in the powertrain business, 981,000 units of engines (up 32.2% year-over-year (y/y)), 1,186,000 units of transmissions (up 18.4% y/y), and 1,090,000 units of axles (up 39.7% y/y) were sold. On a sales value basis, sales of large-bore engines increased 21.7% y/y to CNY 950 million, and high-end hydraulic equipment increased 53.8% y/y to CNY 500 million.
Acquisition
-On March 2, 2020, the Company’s subsidiary KION Group AG, acquired 100% of the shares of Digital Applications International Limited (DAI) for a consideration of CNY 852.04 million (EUR 110 million) and obtained control over DAI's financial and operating policies and other related activities. DAI will be placed within the Supply Chain Solutions division of the KION Group AG and will expand the software portfolio of the Dematic Group.
Strategic partnership
-The Company announced that it signed a strategic cooperation framework agreement with Beiqi Foton Motor Co., Ltd. (Beiqi Foton) at its headquarters in the city of Weifang, Shandong Province. According to the agreement, they will perform in-depth cooperation on 2.0L and 2.5L diesel engines. They will strive to build a manufacturing base for small-bore diesel engines in Weifang, Shandong to offer products and services to customers around the globe, through cooperation in processes including R&D, manufacturing, purchasing and market expansion in all industry chains. (From a press release dated August 8, 2020)
-The Company announced that they have succeeded in increasing the efficiency of a Weichai diesel engine for heavy commercial vehicles to 50 percent for the first time and setting a new global standard. On average, the thermal efficiency of truck engines is currently around 46 percent. In addition to its common rail system with an injection pressure of 2,500 bar, Bosch has also contributed all of its technical know-how to injection systems. Bosch and Weichai started their joint development project in September 2018. The six-cylinder diesel engine with a displacement of 12.9 litres has the modular common rail system for commercial vehicles from Bosch. The Bosch system can be used for pressure levels between 1,800 and 2,500 bar and in engines having up to eight cylinders. High nozzle flow rates enable optimization of the combustion strategy and high engine performance. A service life of up to 1.6 million kilometres can be achieved, depending on requirements. The common rail system is also designed for the electrification of the drive train. (From a press release on September 16, 2020)
-The Company announced that it has signed a strategic cooperation agreement with Shengrui Transmission Corporation Limited (Shengrui Transmission). They will cooperate on Shengrui’s 8AT and jointly advance the industrialization of transmission technologies for light commercial vehicles and passenger vehicles in China. They plan to further strengthen technological cooperation and accelerate the development of new-generation 8AT diesel powertrains based on Weichai’s 2L diesel engines. (From a press release dated August 31, 2020)
-The Company announced that it has formed a strategic partnership with FISCHER Spindle Group Ltd. (FISCHER). Weichai Power will acquire a share of FISCHER through an investment in its fuel cell compressor operations and establish a joint venture with FISCHER in China. The partnership with FISCHER will enable Weichai Power to expand its fuel cell industry chain and strengthen the core competitiveness in the field of fuel cell powertrains. The companies plan to invest in engineering and large-scale production projects in Shandong Province of China and provide fuel cell compressor solutions to global users. (From a press release dated March 25, 2021)
-The Company 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)
R&D Expenditure
| FY ended Dec. 31, 2020 (CNY millions) |
FY ended Dec. 31, 2019 (CNY millions) |
FY ended Dec. 31, 2018 (CNY millions) |
|
| R&D Expenditure | 8,294,09 | 7,347.01 | 6,493.62 |
| Ratio of R&D expenses to Sales (%) | 4.20 | 4.21 | 4.08 |
R&D structure
-As of Dec. 31, 2020, the Company has 5,485 R&D staff, accounting for 6.72% of the total staff.
R&D Facilities
-The Company has R&D centers in China, Japan and Austria.
Investment
-The Company 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 will cooperate in the transmission and axle businesses, as well.(From some media reports on May 15, 2019)
Plant Activities
-The company announced that it 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)