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Public company info - Weichai Power Co. Ltd. - H Shares , 02338.HK
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Weichai Power Co. Ltd. - H Shares, 02338.HK - Company Profile
Chairman Tan Xu Guang
Share Issued (share) 1,943,000,000
Par Currency Renminbi
Par Value 1.0
Industry Automobiles & Components
Corporate Profile Business Summary: The principal activities of the Group are： (a)manufacturing and sale of engines and related parts (“Engines”); (b)manufacturing and sale of automobiles and automobile components other than Engines (“Automobiles and automobile components”); (c)Forklift trucks production, warehousing technology and supply chain solution services (“Intelligent logistics”). Performance for the year: Revenue was approximately RMB197,491 million, representing an increase of approximately 13.3%. Net profit attributable to the shareholders of the parent was approximately RMB9,207 million, representing an increase of approximately 1.1%. Basic earnings per share was approximately RMB1.16. Business Review In 2020, facing the severe and complicated environment domestically and abroad, particularly the outbreak of the novel coronavirus (“COVID-19”), the Chinese government has implemented various measures to prevent and control the spread of COVID-19 and to facilitate economic and social developments. China’s economy recovered steadily and the progress of fulfillment of the key targets of economic and social development was better than expected. The annual gross domestic product reached RMB101.6 trillion, representing a year-on-year increase of 2.3% in terms of comparable prices. The heavy-duty truck industry of China delivered sales volume of 1,619,000 units, representing a year-on-year growth of 37.9%; the construction machinery industry of China delivered sales volume of 919,000 units (including forklift trucks using internal combustion engines), representing a year-on-year growth of 23.9% and the agricultural equipment industry1 of China delivered sales volume of 521,000 units, representing a year-on-year growth of 53.9%. During the reporting period, the Company scientifically prevented and controlled the pandemic, took the lead in resuming operation and production, focused on technological innovation, seized market opportunities and continuously optimised its business structure and enhanced its operational efficiency, leading to significant improvement in its core competitiveness. In 2020, the Company’s revenue increased by approximately 13.3% as compared with that in the corresponding period of 2019 to approximately RMB197,491 million. Net profit attributable to shareholders of the listed company was approximately RMB9,207 million, representing an increase of 1.1% as compared with that in the corresponding period of 2019. Basic earnings per share was RMB1.16, representing an increase of 1.1% as compared with that in the corresponding period of 2019. 1.Power System Business The Company upheld an innovation-driven approach to establish its core competitiveness. Through simultaneous growth in both products with competitive advantages and strategic products, its product mix became more reasonable. The new generation of the high-end platforms “N+H+M” are constantly upgraded and market performance of products such as WP8, WP10.5H and N series are outstanding with exponential growth in accumulated sale volume. The performance of N-series products has been significantly improved in terms of prime power in high-altitude environment and fuel consumption of complete vehicles. The Company has made breakthroughs in a brand new H-series products development project that aims to benchmark the world’s most advanced standard and large diameter engines project that strives to achieve the first class in the world. Reliability of natural gas engines has been further enhanced and the research and development (R&D) of the technology of high thermal efficiency and zero emission diesel engines continued to progress. All series of engines met the China VI-b Emission Standard and preparation work for products complying with standards including non-road-going China IV was completed ahead of schedule, which will enable the Company to firmly secure its leading position amidst the new round of emission standards upgrade. Leveraging the globally coordinated R&D platform, the Company made strenuous efforts in achieving breakthroughs in core technologies, and the Company's product competitiveness was significantly strengthened by continuously optimising engines and performance strengths of parts and components, lowering costs and fuel consumption, light-weighting, etc. The Company was committed to creating synergy by combining its resources and speeding up the integration of the industrial chain. With engines as the Company's principal axis, the Company achieved rapid breakthroughs in core technology of three major powertrain systems, namely, commercial vehicles, construction machineries and agricultural equipment, and took full advantage of systematic matching of its products, thereby forming Weichai’ s unique technological solutions. Following the completion of test for multi-operating conditions of hydraulic powertrain for construction machineries and agricultural equipment CVT powertrain, the Company achieved selfdevelopment of and full control over its core technologies. By strengthening self-development and innovation, the Company made fruitful technological achievements. The Company launched the first commercial diesel engine in the world with an over 50% thermal efficiency, setting a benchmark for thermal efficiency of diesel engines worldwide. Its “Key Technology and Application of Diesel Engines with High Efficiency and High Reliability” project was awarded the special prize for technological advancement in the mechanical industry in the PRC (中國機械工業科技進步特等獎). During the reporting period, the performance of the Company’s power system business hit another record high: sales volume of engines increased year-on-year by 32.2% to 981,000 units; sales volume of gear boxes increased year-on-year by 18.4% to 1.186 million units; sales volume of axles increased year-on-year by 39.7% to 1.09 million units. In addition, the Company's strategic high-end products continued to develop, with sales revenue of large-diameter engines achieving RMB950 million, representing a year-on-year growth of 21.7%, and sales revenue of high-end hydraulic products achieving RMB500 million, representing a year-on-year growth of 53.8%. 2.Commercial Vehicles Business Upholding a strategy driven by complete vehicles and machineries, the Company sped up resources coordination and industrial chain structural upgrades, and further enhanced the comprehensive competitiveness of the Company's products. Shaanxi Heavy-duty Motor Company Limited (陝西重型汽車有限公司), a controlling subsidiary of the Company, effectively overcame the impacts brought by COVID-19 pandemic by making continuous efforts in the adjustment of the major products, market structure and services network, and achieved stable growth with a total heavy-duty trucks sales volume of 181,000 units, representing a year-on-year growth of 16.4%. the Company focused on the segment markets and consolidated the Company's leading advantages. The Company sustained the top position in various segment markets such as coal transportation, port tractor, sand and gravel transportation and crane truck. The Company also overcame the impacts of COVID-19 pandemic in the overseas market and actively expanded channels of cooperation, thereby significantly enhanced the Company's ability in grasping market opportunities. the Company continued to uphold an innovation-driven approach to create a leading edge. To satisfy the demands in the short-to-medium distance transportation market, the Company launched new generation of M3000S products, fully covering tractors, self-unloading, loading and special vehicles; and developed Delong X6000 heavy-duty trucks, which are internationally leading in key performance such as fuel efficiency, comfort, safety and intelligence and taking lead in the era of smart heavy-duty trucks in China. The Company accelerated the development of battery electric vehicles and hybrid vehicles and the application of new energy technologies so as to win the market initiative; the Company also expedited the exploration of effective combination of management of customers’ demands with the Internet throughout the life cycle of trucks and introduced innovative models of cooperation with major customers and platform customers on an ongoing basis, proactively forming a new business format. 3.Intelligent Logistics Business KION Group AG (“KION”), an overseas controlling subsidiary, is a globally leading supplier in the area of intralogistics which assists factories, warehouses and distribution centres to optimise their materials flow and information flow through the design, establishment and improvement of logistics solutions in over a hundred countries and regions around the world. Dematic Group is a globally leading automated logistics expert, with its products meeting the comprehensive needs in areas of intelligent supply chain and automated solutions. In 2020, the total order value of KION amounted to EUR9.44 billion, representing a year-on-year increase of 3.6%, among which the order value of supply chain solutions amounted to EUR3.65 billion, representing a year-on-year increase of 31.9%. 4.New Business Format, New Energy and New Technology While the Company has been devoted to the Company's traditional business, the Company also focused on the Company's 2020-2030 strategy by actively facilitating the re-engineering of the industrial chain and upgrade of the value chain as well as accelerating the Company's expansion in new industries such as new energy, hydraulics and smart driving. The Company focused on key technologies to take lead in the development of the industry. The strategic restructure of Germany-based ARADEX AG allowed the Company to make up for the weakness in electric control system and successfully developed a new energy power system integrating “cell+ motor+ ECU” providing a market advantage. The strategic restructure of Austria-based VDS Holding GmbH filled the gaps in large-scale CVT power system of agricultural equipment technology in China. the Company has built a hydrogen-fueled batteries engine factory with a production capacity of 20,000 units, which is currently the world’s largest manufacturing base of engines powered by hydrogen-fueled batteries. With the support of the new generation of information technology, the Company sped up the pace of digital transformation. With customers as the centre and digital technology as the carrier, the Company served and empowered the Company's business and sped up the pace of digital transformation. the Company has actively developed artificial intelligence and internet of vehicles businesses. For the intelligent connection network, the development and testing of major functions of driving assistance and development of the auto-driving system have been completed, the technology of which is capable of being transferred to different models of vehicles under different driving conditions. the Company has been continuously optimising the Company's supply chain business and empowering upstream and downstream suppliers and customers, so as to achieve highly-efficient synergy in the industry chain and enhance the consistency in product quality. Prospects: Looking into 2021, due to the impact of pandemic, the overall global economy will be in a sluggish recovery under a number of constraints including the impact brought by a new wave of the pandemic, weak growth momentum and gloomy employment market, resulting in a high level of uncertainties in economic outlook. From the perspective of the domestic economy, making progress while maintaining stability remains the general keynote. As China has a stronger momentum of economic recovery, the domestic consumption power will be further stimulated through the strategy of expanding domestic demand under the development model of domestic and international dual circulation. Remediation of shortcomings in infrastructures, “new infrastructure, new urbanisation initiatives and major projects” (“兩新一重”) and the expansion of strategic investments in emerging industries will constantly boost the demands in auxiliary markets such as trucks and construction machineries markets. Limitations on production for environmental protection, replacement of China III vehicles, and anti-overloading policies will continue to drive replacement demands in industries including the truck industry. Motivated by the development of new infrastructures such as 5G facility construction, market demand for energy and electricity will gradually expand. The work concerning agriculture, rural areas and farmers (“三農”) has shifted from “winning the battle against poverty” to “comprehensive rural vitalisation”, thereby creating development opportunities for agricultural machinery auxiliaries. In view of the goals of “CO2 Emission Peak by 2030 and Carbon Neutrality by 2060” and the huge potential brought by the trend of energy saving and intelligent network, there will be a rapid development in the new energy business, which will bring opportunities for the highquality development of related businesses of the Company. The Company will continue to carefully implement pandemic prevention and control measures as part of the Company's normal operations, make continuous effort in optimising production and operation, fully expedite the pace of technological innovation, enhance product competitiveness and brand influence, and make best efforts to accomplish the Company's full-year goals. Focusing on the annual sales target, the Company will strive for market expansion. Adhering to a customer demand-oriented approach, the Company will seize the development opportunities in the “post-pandemic era”, make efforts to improve product offerings, steadfastly capture the market demands and secure orders. the Company will cultivate different segment markets and adjust the Company's marketing strategies from time to time to precisely address diversified needs from different customers, as well as to further upgrade the Company's business model with innovative marketing models and optimised sales and service systems. Through scientific research on emission-related regulations and policies and the development pattern of the industry, the Company will make scientific planning of products and technologies based on the Company’s “14th Five-Year” development plan. the Company also aim to digitalise all business processes and efficiently respond to the needs of customers and market through enhancement of product development, delivery, quality and services. the Company will accelerate the pace of technological innovation and move towards the high end in all aspects. Through coordinating global R&D resources, the Company will continuously work on optimising the new four-in-one technology innovation system consisting of “self-developed innovation+ open innovation+ professional innovation+ basic-research innovation”. In particular, in terms of the basic research area and “bottleneck” technologies, the Company will strive to make breakthroughs to address thorny issues and master the core technologies. the Company will efficiently introduce road-going China VI and non-road-going China IV products and improve product consistency to maintain a leading edge in the new cycle of emission standard upgrade. Moreover, the Company will make efforts to expedite breakthroughs in key and core technologies of fuel cells to significantly lower the cost of fuel cell engines so as to reach a leading position in the industry. the Company will accelerate the development of electric control of engine, new energy and hydraulics to master key control technologies and improve the Company's forward development capacity of both software and hardware. the Company will also speed up the implementation of additive manufacturing by developing a design and simulation platform for additive manufacturing in order to achieve the goal of integrating product design and manufacturing. the Company will strengthen risk management and control, and comprehensively enhance the quality of operation. the Company will adopt innovative management approach and tools, establish a data administration system and explore data value based on the needs of the Company's customers and characteristics of their businesses, with a view to facilitating the digital transformation of the management of the Company. the Company will make continuous effort to lower costs, improve efficiency and enhance the profitability of all series of products in a comprehensive manner. the Company will further enhance the methodology, tools and approaches of the WOS management system, and accelerate the promotion and implementation of WOS at different classes and levels. With a business-oriented approach, the Company will systematically identify weakness in the Company's operation and make continuous improvement to the Company’s operational management and control. the Company will establish a risk-oriented internal control system focusing on the supervision of compliance and based on internal control guidelines in order to promote the sound and orderly operation of domestic and overseas subsidiaries. the Company will step up the construction of an innovative eco-system and build a pool of talents. In the new era, under the new landscape and to meet new demands, the Company will strive to establish an optimal top-level design of the innovative eco-system, enhance the integration of industry-university-research innovation chain and coordinate the innovation resources for optimised allocation. the Company will optimise the precise appraisal and incentive system, establish a multi-level incentive system, innovate incentive measures such as equity-based incentive, results-sharing and upfront incentives to encourage innovation and creativity. the Company will formulate human resources planning in a scientific way, step up the recruitment of strategic talents and expedite the training of skillful talents with craftsmanship, with a view to building a team of international talents with a reasonable mix of different age groups and a scientific medium-to-high level hierarchy, thereby providing full support for the Company to move towards high-end.

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