Zhejiang Wanliyang Co., Ltd. Business Report FY ended Dec. 2023

Financial Overview

(CNY millions)

	FY ended Dec. 31, 2023	FY ended Dec. 31, 2022	Rate of Change (%)	Factors
Sales	5,912.76	5,113.14	15.64%	-A significant increase in vehicle sales, especially overseas export sales, of Chery Automobile, the company's main customer, has led to a significant year-over-year increase in sales of the company's passenger car CVT automatic transmissions, and in turn provided a significant year-over-year increase in revenue from the passenger car transmission business.
Operating income	327.58	299.69	9.31%
Ordinary income	318.89	299.07	6.63%
Net income	293.71	300.00	-2.10%

Business in 2023

-The company has developed a full range of heavy-duty truck transmission products, including manual transmissions, automatic transmissions, heavy-duty truck hybrid systems and electric drive systems.

-The company's New Energy Vehicle EV reduction gear product sales increased by 171.36% year-over-year.

-The first phase (60,000 tons of production capacity) of the company's "Annual Production of 120,000 Tons of New Energy Vehicle Alloy Structural Parts Project (including Structural Parts Processing and Manufacturing)" has been put into operation, forming a comprehensive capability of aluminum alloy smelting, die casting and machining. Currently, the project mainly produces aluminum alloy products such as automobile transmission housings and EV reduction gear housings.

New products

-The Company unveiled of various new products at a launch event held on August 17. The products include: the 12AG280 heavy-duty truck integrated automatic transmission for such models as tractors, freight vehicles, engineering vehicles, and specialty vehicles with an engine torque of 2,000-3,400Nm; the 10AG120 medium-duty truck integrated automatic transmission for such models as freight vehicles, dump trucks, and special purpose vehicles with an engine torque of 900-1,300Nm; the 10AG160 quasi-heavy-duty truck integrated automatic transmission for such models as medium-duty tractors, logistics vehicles, dump trucks, and special purpose vehicles with an engine torque of 1,300-1,600Nm; and the 4EG280 3-in-1 New Energy heavy-duty truck powertrain with a torque of 2,400-2,800Nm, which is widely applicable in the market to all kinds of battery electric heavy-duty trucks weighing 35-50 tons. (From Wanliyang press releases dated August 17 and 10, 2023)
　

New project

-The Company announced the groundbreaking of its headquarters building project in Jinhua, Zhejiang. The project covers a land area of about 16,667 square meters and a planned floor area of 44,000 square meters, including a headquarters building floor area of 21,000 square meters. The headquarters building will be a all-glass curtain wall intelligent building a modern office and R&D building integrating a corporate operating headquarters, a central research institute, and an intelligent manufacturing and control center. It will function as the Wanliyang global business control and management center and the centerpiece and brain of the Wanliyang intelligent manufacturing platform. (From a Wanliyang press release dated October 11, 2023)

Orders

-The Company announced that the officially launched Foton Forland G-series light trucks are equipped with its 6GS46 and 8GS46 light-duty transmissions. 6GS46 and 8GS46 are WLY 4th-generation high-end light-duty transmissions for commercial vehicles, with a B10 lifetime of 400,000km. Based on an all-aluminum alloy housing structure, the transmissions feature a high rated load torque, a light weight, and an excellent torque/weight ratio. They come standard with multi-cone fine-pitch carbon synchronizers and contain linear bearings to enhance shift comfort. The gear shafts adopt a full grinding machining process for reasonable distribution of gear ratios, reducing transmission noise while optimizing fuel economy. (From a WLY press release dated December 13, 2023)

R&D Expenditure

(CNY millions)

	FY ended Dec. 31, 2023	FY ended Dec. 31, 2022	FY ended Dec. 31, 2021
R&D Expenditure	357.91	368.60	376.86
Ratio of R&D expenses to Sales (%)	6.05	7.21	6.88

-As of December 31, 2023, the Company had 475 employees in research and development, accounting for 14.10% of all employees.

R&D Framework

-The Company has established research institutes in Beijing, Shanghai, and Guangzhou.

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

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

-The Company signed an 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".