Zhejiang Wanliyang Co., Ltd. Business Report FY ended Dec. 2022

Financial Overview

(CNY millions)

	FY ended Dec. 31, 2022	FY ended Dec. 31, 2021	Rate of Change (%)	Factors
Sales	5,113.14	5,475.01	(6.81)	-Due to the sluggish commercial vehicle market, the company's commercial vehicle transmission sales decreased by 40.80% year-over-year.
Operating profit	299.69	(743.97)	-
Ordinary profit	299.07	(746.79)	-
Net income	300.00	(749.47)	-

-The company is vigorously developing the transmission drive system business for NEVs, with EV reduction gear unit sales increasing 3,988.42% y/y in 2022.

Strategic cooperation

-Wanliyang announced that it has signed a strategic partnership with Yuchai Group. The two companies will cooperate in fields such as new energy and conventional commercial vehicle drive systems, and promote the development project of AMT systems for medium and heavy-duty trucks. (From Wanliyang's official Wechat account dated November 16, 2022)
　

New project

-In October 2022, the company invested in the 120,000-ton annual New Energy Vehicle alloy structural parts project (including structural parts processing and manufacturing). The project adopts advanced technologies such as high-pressure integral casting and gravity casting. Casting and forging will be carried out consistently, and the annual production capacity of aluminum alloy die-cast parts, aluminum forged parts and machined parts is planned to be 120,000 tons. Products mainly include transmission/clutch housings, speed reducer housings, hybrid system housings, integrated chassis parts (steering systems, suspension linkages), subframes and other aluminum alloy products. (From the company's 2022 annual report)

Orders

-The Company announced that the company passed the supplier eligibility assessment (SEA) of Stellantis. Next, Wanliyang will actively participate in the global bidding organized by Stellantis and facilitate the prompt supply of related products. (From a press release dated August 31, 2022)

-The Company announced that it has been selected as the designated supplier of BEV speed reducers by Zhejiang Leapmotor Technology Co., Ltd. (Leapmotor). Wanliyang will install its EV speed reducer product in Leapmotor’s pure electric vehicle models to be launched in 2023. (From a press release dated October 11, 2022)

-The Company is providing Chery's DHT hybrid system for passenger cars. It is now in the development stage before the model’s start of production. (From a press release dated April 28, 2022)

R&D Projects

-In 2022, the Company conducted the following R&D projects.

Electric vehicle ECVT electric drive system project
Passenger car DHT dual motor hybrid system project
Commercial vehicle hybrid power system project
Commercial vehicle heavy-duty truck AMT project
Commercial vehicle heavy-duty truck MT project

R&D Expenditure

(CNY millions)

	FY ended Dec. 31, 2022	FY ended Dec. 31, 2021	FY ended Dec. 31, 2020
R&D Expenditure	368.60	376.86	361.33
Ratio of R&D expenses to sales (%)	7.21	6.88	5.96

-As of December 31, 2022, the Company had 490 employees in research and development, accounting for 13.92% of all employees.

R&D Framework

-The Company has a state-recognized enterprise technology center and CNAS-accredited automotive transmission laboratory.

-Entered into a strategic partnership with Vector of Germany to enhance R&D capabilities.

-Signed ECVT strategic cooperation agreement with Bosch to promote innovation of new energy electric drive systems.

Certification

-Certifications obtained by the company include IATF16949 quality management system, ISO14001 environmental management system, TPS lean production management system, and "AAA class standardized good conduct".