Zhejiang Vie Science & Technology 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	2,522.05	2,249.12	12.14	-Due to the recovery of the domestic market and positive factors such as the elimination of vehicles with "China 3" level emission standards, stricter penalties for overloading, and infrastructure investment, the full-year sales volume of commercial vehicles increased significantly, resulting in an increase in revenue.
Operating profit	87.83	133.90	(34.41)
Ordinary profit	87.01	132.05	(34.11)
Net profit	65.47	127.78	(48.76)

Orders

-In 2020, the cCmpany won the following orders: Foton Daimler "H6", wireless charging solution for FAW Hongqi; front (rear) chassis subframe for NIO, Li Auto, XPeng, Ford, and others; EPB for JAC light-duty trucks; EBS, ESC for FAW, Dongfeng, and Shaanxi Heavy Duty Automobile , Vacuum booster for Chang'an Ford; XEPS for Foton Forland; and AEBS for JAC, Qingdao Sealing. In addition, the construction of the electromechanical brake (EMB) production site in Kunshan, Suzhou has been completed.

New Company

-On May 21, 2020, the Company announced that it signed a joint venture agreement with Haldex Vehicle Products (Suzhou) Co., Ltd. (HVP) on May 20, 2020, to respond to company strategies and business development demands. The companies intend to establish a joint venture that is tentatively named Suzhou Haldex Vie Electro Mechanical Brake Systems Co., Ltd., on a fifty-fifty basis in Suzhou. The joint venture will have a registered capital of CNY 30 million, to be contributed equally by the Company and HVP. The joint venture will engage in the design, production, and sale of automotive electro-mechanical brake systems and parts. (From a press release on May 21, 2020)

Stock Shares Sold

-The Company will transfer 6.5% shares of the 30.15% shares it owns in Shanghai Tongyu Automotive Technology Co., Ltd. (Tongyu Automotive). Upon completion of the transfer, the Company’s stake in Tongyu Automotive will decrease from 30.15% to 23.65% Tongyu Automotive is engaged in the development of technologies in the areas of automotive technology, new energy technology, and electronics technology, as well as the development and production of electro-hydraulic brakes. (From a press release on June 2, 2020)

Acquisition

-Zhejiang Vie Science & Technology Co., Ltd. (Zhejiang Vie Science & Technology) announced that it signed an equity transfer agreement with Protean Electric Limited (Protean) on March 15, 2021. Zhejiang Vie Science & Technology will acquire 40% of the shares held by Protean in Zhejiang Vie Zhiqu Science & Technology Co., Ltd. (Zhejiang Vie Zhiqu) at a price of 1 US dollar. After the deal is finalized, Zhejiang Vie Zhiqu will become a wholly-owned subsidiary of Zhejiang Vie Science & Technology. (From a press release dated May 27, 2021)

R&D Expenditure

(CNY millions)

	FY ended Dec. 31, 2020	FY ended Dec. 31, 2019	FY ended Dec. 31, 2018
R&D Expenditure	97.06	97.23	88.12
Ratio of R&D expenses to sales (%)	3.85	4.32	3.91

-As of Dec. 31, 2020, the Company had 380 R&D staff, accounting for 11.50% of the total staff.

Patents

-As of the end of 2020, a total of 724 patents have been applied for. Of these, in 2020, 169 new applications were filed and 103 patents were granted.

-The Company obtained IATF16949 quality control system certification, ISO14001 environmental management system certification, and OHSAS18001 occupational health and safety management system certification.

R&D

-Since the Company focuses on developing automotive electronic control systems it established connected vehicle technology R&D center in Beijing. It has completed the R&D and launched production of pneumatic/hydraulic ABSs, EBSs, and commercial-vehicle electronic stability control (ESC) systems. It also completes development and testing of electric parking brakes (EPBs), electronically controlled air suspensions (ECASs) and other key automotive electronics. Currently, electromechanical brakes (EMBs) are undergoing on-road tests while advanced driver assistance systems (ADAS) are in the development testing phase.

-The Company has R & D centers in Zhejiang, Beijing, and Shanghai, China and in Hungary. It has a summer automobile test site in Zhejiang Province and a winter automobile test site in Heihe City, Heilongjiang Province.

-The Company's technology center collaborated with the following entities to jointly develop new products: Tsinghua University, Shanghai Jiao Tong University, China Automotive Technology Center, China FAW Group Corporation Technical Center, Dongfeng Automobile Technology Center, and Chongqing Automobile Research Institute.