Weifu High-Technology Group Co., Ltd. Business Report FY ended Dec. 2023

Financial Overview

(CNY millions)

	FY ended Dec. 31, 2023	FY ended Dec. 31, 2022	Change (%)	Factors
Sales	11,093.14	12,729.63	(12.86%)	-Although natural gas heavy-duty trucks and export markets had good results, due to the combined effects of the macroeconomic environment, intensified competition in the automotive industry, and falling prices of precious metals, sales decreased by 12.86% compared with the same period last year.
Operating income	1,921.64	181.63	958.00%
Ordinary income	1,934.34	179.61	976.97%
Net income	1,913.15	190.95	901.91%

- Analysis of main business products:

Fuel injection: The annual sales of common rail pumps exceeded 1.45 million units. The annual sales of gasoline-engine purification systems were about 2.8 million sets, for diesel purification systems over 260,000 sets, and for natural gas purification systems more than 60,000 sets.
Intake systems: The annual sales of four-cylinder diesel turbochargers was about 580,000 units, and of gasoline turbochargers more than 260,000 units. The company obtained six-cylinder turbocharger projects for diesel and alternative fuel applications from multiple key Chinese domestic customers.
Electric drive system components: The annual sales of motor shaft products were nearly 1.4 million units, an increase of nearly 1.5 times year-over-year.
4D imaging radar: Strategic cooperation was reached with KargoBot and Arbe to complete prototype delivery and road testing. Strategic cooperation was reached with Shanxi Anshu Intelligent Technology Co., Ltd. to promote commercial applications in the field of smart mines.

Orders

‐Arbe Robotics Ltd. announced that Weifu High-Technology Group Co., Ltd. (Weifu High-Tech) has issued a USD 11.6 million preliminary order for Arbe radar chipsets, for its estimated requirements for 2024. In addition, Weifu has placed a USD 1 million order of professional services for radar systems design based on the Arbe chipset, including engineering services, setup of a testing lab, and advanced support from Arbe, for the upcoming 12 months. Arbe and Weifu have been collaborating since 2019, serving the automotive industry in China. Arbe's perception radar chipsets offer advanced capabilities that address recent causes of ADAS and autopilot accidents, prioritizing the safety of drivers, pedestrians, and other vulnerable road users. Its advanced capabilities include free space mapping around the vehicle, and stationary object detection across the entire field of view while eliminating false alarms. (From a press release dated July 28, 2023)

-The company announced that it has received orders from several Chinese and foreign leading NEV (New Energy Vehicle) manufacturers. The company has begun volume production of its traction motor shaft, with annual production capacity expected to reach 5 million units by 2025. Volume production of the electric oil pump is scheduled to begin in the first half of 2023. The 4D millimeter wave radar is under development. To promote localized production of fuel cell components, Weifu High-Technology has established a hydrogen energy business unit and a fuel cell joint venture. The company also revealed that its partnership with Bosch has expanded from diesel oil and gasoline systems to new business fields including electric drives and fuel cells. Bosch Powertrain Systems Co., Ltd., a joint venture between the two companies, is pushing ahead with the fuel cell business centered around key components such as stacks and air compressors, and has established an R&D center. Wuxi Weifu Hydrogen Long Power Technology Co., Ltd., a subsidiary of Weifu High-Technology, is working on the fuel cell component business. (From a public notice dated February 8, 2023)

Strategic cooperation

Dongfeng Motor
-The Company held the global launch ceremony for its wheel-hub-drive passenger car demonstration project in Wuxi, Jiangsu Province. The passenger car uses pure electric four-wheel-drive (4WD) and high-integration technology of the in-wheel motors and controllers. Compared with the traditional drive configuration, the vehicle's acceleration time from 0-100km/h is improved by 42%, and its maximum turning speed under extreme conditions is increased by 18%. Dongfeng Motor’s self-developed central motor is installed at the front axle, while in-wheel motors are incorporated into the rear wheels. The vehicle adopts a three-motor, 4WD layout. In March 2022, Dongfeng Motor and Weifu Hi-Tech established a partnership to promote the development of four-wheel-drive passenger cars. The recent cooperation will focus on exploring new business models and accelerating the industrialization of in-wheel motors through demonstration projects. (From multiple sources dated March 13, 2023)

Exhibitions

-The company announced its participation in FCVC 2023 held from July 5 to 7 in Shanghai, where it exhibited core parts for hydrogen fuel cells and products concerning hydrogen production from PEM (proton exchange membrane) water electrolysis, including electronic water pumps, hydrogen circulation pumps, membrane electrodes, and electrocatalysts. (From an FCVC press release dated July 11, 2023)

R&D

-The Company established a post-doctoral scientific research station and a national-level approved enterprise technology center in 1999.

-The Company has an engineering center (provincial level), an exhaust aftertreatment system center, and a turbocharger R&D center.

-The company and semiconductor manufacturer STMicroelectronics have established a joint laboratory in the Company's Technical Center to conduct research and development of automotive power ICs. The company hopes to introduce STMicroelectronics' advanced automotive electronics solutions to raise the technology level of its electronically controlled diesel pumps and electronic aftertreatment systems to international standards.

-In 2021, the construction of the "Weifu intelligent manufacturing 5G+" laboratory was completed.

R&D expenditure

	FY ended Dec. 31, 2023	FY ended Dec. 31, 2022	FY ended Dec. 31, 2021
R&D expenditure (CNY millions)	667.87	581.49	595.41
R&D expenditure as percent of Sales (%)	6.02	4.57	4.35