Weichai Power Co., Ltd. Business Report FY ended Dec. 2023

Financial Overview

(CNY millions)

	FY ended Dec. 31, 2023	FY ended Dec. 31, 2022	Change (%)
Sales	213,958.48	175,157.54	22.15
Operating profit	12,905.24	5,834.03	121.21
Ordinary income	13,151.28	6,085.21	116.12
Net income	11,211.61	5,682.69	97.29

-In 2023, China's heavy-duty truck industry recovered due to an improved Chinese economy and a strong export market. The company has been pursuing a restructuring of its product and business structure, and production and sales volumes of complete vehicles, powertrains, and key components have increased significantly year-on-year.

New Product

-The Company launched the commercialized product of its high-power metal-supported solid oxide fuel cell (MSSOFC), which has received European CE certification from the international testing institution, TÜV SÜD. It achieves an electricity generation efficiency of over 60% and a combined heat and power (CHP) efficiency of 92.55%. (From a press release dated February 18, 2023)

Strategic partnership

-MAHLE Holding (China) Co., Ltd. (MAHLE China) entered a strategic alliance with Weichai Power. In the field of internal combustion engines, the two companies mainly aim to improve the reliability, carbon emissions, and thermal efficiency of medium- and heavy-duty engines. In addition, they will develop new energy power sources such as hydrogen. The scope of the partnership covers MAHLE’s engine components, filter systems, engine peripherals, thermal management, automotive electronics and mechatronics, natural gas, hydrogen energy and other related products. (From a MAHLE China press release dated February 14, 2023)

Share transfer

-According to multiple press releases, Weichai FinDreams Battery Co., Ltd. was established in Yantai, Shandong. With a registered capital of CNY 1 billion, the company’s business scope includes manufacturing and sales of batteries and recycling and cascade utilization of waste power storage batteries for New Energy Vehicles. The company is 49% and 51% owned by Weichai New Energy Power Technology Co., Ltd., a Weichai Power subsidiary, and FinDreams Battery Co., Ltd., a BYD subsidiary, respectively. (From multiple press releases dated October 29, 2023)

-Weichai Power announced that it intends to transfer its 38% stake in Shengrui Transmission Co., Ltd. (Shengrui Transmission) to China National Heavy Duty Truck Group Co., Ltd. (Sinotruk) for about CNY 760 million. According to Weichai Power, the transfer will be conducive to promoting the synergy of the industrial chains of vehicles and automotive parts within the company, which is in line with its strategic development and long-term interests. Founded in 2003 in Weifang, Shandong, Shengrui Transmission is engaged in such businesses as R&D of automotive parts and manufacturing of automotive parts and accessories. Weichai Power, Sinotruk Ji’nan Commercial Vehicle Co., Ltd., and other shareholders currently hold 38%, 20%, and 42% of the company, respectively. (From a Weichai Power SZSE press release dated June 6, 2023)

Exhibition

-Weichai Power announced that it exhibited a fuel cell system and core parts at the 10^th World Hydrogen Technologies Convention (WHTC 2023) held from May 23 to 26, 2023, in Foshan, Guangdong. The 200kW fuel cell system developed for transportation of heavy-duty trucks on trunk lines has passed tests in cold regions at minus 34 degrees Celsius and has a maximum efficiency of over 60%, featuring high integration, high economy, and high reliability. (From a Weichai Power press release dated May 23, 2023)

-The Company announced that at the Middle East Energy 2023 energy exhibition held in Dubai, UAE, the company debuted the 8M33 engine under the Baudouin brand. In addition, Weichai Power exhibited the Baudouin 16M55 large-bore engine, gas engines produced by U.S. brand PSI, and lithium battery energy storage devices. (From a press release dated March 10, 2023)

R&D Expenditure

	FY ended Dec. 31, 2023	FY ended Dec. 31, 2022	FY ended Dec. 31, 2021
R&D expenditure (CNY millions)	8,982.68	8,850.90	8,568.71
R&D expenses as a percent of Sales (%)	4.20	5.05	4.21

-As of Dec. 31, 2023, the Company has 14,992 R&D staff, accounting for 16.81% of the total staff.

R&D

Project name	Description	Phase
WP2H National VI Diesel Engine Development	Develop 2L diesel engine for light vehicles that meets National VIb emission requirements	Market verification
WDM0382 electric drive bridge high-speed flat wire motor development	Develop electric drive bridge high-speed flat wire motor and complete the layout in the heavy truck industry	Market verification
WMC62 all-in-one controller development	Develop highly integrated all-in-one controllers and complete the layout in the bus industry	Vehicle verification
Integrated electric drive system	Upgrade motor voltage, enhance product adaptability, and improve product competitiveness	Prototype trial production
High-efficiency rear axle development project	Increase product competitiveness by increasing motor voltage and product adaptability	Small batch verification
Central electric drive axle development project	Increase vehicle layout space and recover braking energy	Bench verification