Review Of The Company's Business

- Dec 05, 2018-

(II) Review of the company's business

In 2017, the company tapped the potential and further improved production efficiency on the basis of giving full play to the company's R&D advantages and industrialization advantages through industrial upgrading, optimizing resource allocation, and saving efficiency. During the reporting period, the company achieved operating income of 860,528,600 yuan, an increase of 26.45%, operating profit of 423,356,100 yuan, total profit of 539,958,800 yuan, net profit of 448,888,200 yuan, of which the net profit attributable to shareholders of listed companies was 417,770,100 yuan, and Compared with the same period of last year, it decreased by 28.16%, 17.24%, 18.16% and 17.98% respectively.

1. Development of HM Business Unit

In 2017, the company's HM business unit developed strongly. In the case of large commodity prices and tight supply, the company's on-time delivery of products was guaranteed through excellent capacity planning and supply chain management. The annual production and sales of electric motors exceeded 73 million units. It hit a record high and achieved a main business income of 4,246.78 million yuan, a substantial increase of 41.78% over the same period last year.

During the reporting period, HM Business Unit increased product research and development efforts, and established two joint laboratories for noise and air volume testing in conjunction with Haier Central Air Conditioning Co., Ltd. to strengthen cooperation and win-win partnership with customers, continue to promote automation transformation, and introduce advanced automated production lines. Optimize production line layout; hire a team of professional lean management consulting experts to implement lean manufacturing system introduction, implement lean production and cost control, continuously improve production efficiency and reduce production costs. The Houston plant was officially completed and put into use during the reporting period, further enhancing the company's service capabilities to North American customers.

2. Development of the vehicle business group

In order to accelerate the integration of high-quality resources in the industry, give full play to the economies of scale and economic benefits of the company's automobile industry, and strengthen the core competitiveness of the Group, the company will be the four holding subsidiaries of Shanghai Electric Drive, Patelai, Wuhu Jienuoli and Dayang Motor New Power. Its subsidiary company is integrated into the Ocean Electric Vehicle Group, making full use of the above-mentioned company's respective technology accumulation and rich experience, lean production capacity, market channels and perfect after-sales service system to promote the company's new energy vehicle powertrain system. The promotion and sales of the overall solution have achieved initial results.

In addition, the company actively implements the strategic layout of the new energy industry, and has carried out strategic cooperation with Ballard and HydrogeniousTechnologies GmbH (hereinafter referred to as "HT Company") to pre-empt the market of hydrogen fuel cells and hydrogen storage and transportation equipment, and further improve the industrial layout of the company's vehicle business group. . It is expected that the effect of resource integration of the vehicle business group will gradually emerge in 2018. During the reporting period, the development of the two major business segments of the Vehicle Business Group was as follows:

(1) Development of new energy vehicle powertrain system

During the reporting period, the company has made a series of progress in product R&D through collaborative research and development of Zhongshan, Beijing, Shanghai and Detroit R&D centers. It has upgraded the power system and promoted platform development, and launched passenger cars. Integrated drive system, third-generation commercial vehicle pure electric drive powertrain assembly, commercial vehicle dual planetary hybrid powertrain assembly, internationally advanced passenger car weak hybrid powertrain assembly (48VBSG), hydrogen fuel Products such as battery powertrain assemblies further enhance the quality of the development process. The company currently has a complete new energy vehicle powertrain system product and its independent intellectual property rights (complete vehicle control + drive + hydrogen fuel cell), and through strategic cooperation with Ballard, the company has added a new energy source for new energy vehicles. Supply and control solutions.

In terms of customer development, through the integration of customer resources, vehicle business group customers basically cover domestic mainstream automakers. During the reporting period, it was appointed by the suppliers of Changan, Chery, Yundu, Dongfeng Renault, Great Wall and other passenger car OEMs. At present, the company has established joint ventures with BAIC, Chery, Zhongtong Bus (000957) and Dongfeng Industrial to gather the expertise and market advantages of the OEM and the company in their respective businesses, and carry out in-depth strategic cooperation to achieve strong alliance. Co-develop, manufacture and sell new energy vehicle products, provide customers with new solutions for new energy vehicle powertrain systems, and actively explore the market.

During the reporting period, the company and Ballard reached a hydrogen fuel cell module assembly authorization agreement, and has built a fuel cell engine manufacturing production line in Shanghai. The main cooperation customers include Dongfeng Special Auto, Zhongtong Bus, SAIC Datong, and Futian Ouhui Bus. Foshan speeding and so on. The company will give full play to Ballard's advantages in hydrogen fuel cell design, development and patent services, and promote hydrogen fuel cell power in combination with the company's industrialization capabilities, technology development capabilities, brand and channel advantages in automotive powertrain systems. The promotion and application of the assembly system in the Chinese market.

In addition, in order to solve the bottleneck of hydrogen energy storage and transportation, promote the utilization of hydrogen energy to practical and scale, and accelerate the promotion and application of hydrogen fuel cell vehicles, the company participated in the global hydrogen storage and transportation technology in the early 2018 through capital increase and subscription of convertible bonds. One of the leaders, HT, laid out the hydrogen storage and transportation equipment market in advance, further improved the company's strategic layout in the hydrogen fuel cell industry chain, and integrated the high-quality resources of the hydrogen energy industry chain.

During the reporting period, the company's new energy vehicle powertrain system achieved operating income of 1,141,290,000 yuan, an increase of 9.09%.

(2) Development of vehicle rotating electrical business

The vehicle rotating electrical appliance business fully utilizes the advantages of Pate in technology, brand, market channel and after-sales service platform. Combining the advantages of Wuhu Jienuo in cost control and lean production, the implementation of complementary advantages, highlighting synergies and promoting vehicles The integration and development of the rotating electrical industry has achieved steady growth.

Compared with the uncertainty brought about by the reorganization of international competitors' assets, Pate's stable and upward development has won the confidence of customers and won the praise of Navistar, Cummins, Scania and other complete machine factories. During the reporting period, Pete came to Europe. Sales in North America and China have achieved significant growth, and profit growth continues to grow.

Based on the cost advantages, quality advantages and market advantages of China Manufacturing, Pate has accelerated the development of BSG and a new generation of generators and starter products through joint efforts with the global R&D team of the Group; the company pursues excellence in product and service quality. For the purpose of using the company's client-side rapid response organization management model, strengthen the timeliness of communication with customers, synchronize development, shorten the introduction cycle of new products, increase the proportion of new product sales and profitability; Beijing Pate completed the production base from Beijing With the overall relocation to Weifang, production and operation costs will be further reduced. With the help of Ocean Electric's electronic electronic control front-end technology and Pate's technical support, Jenori has improved its independent research and development capabilities, significantly improved lean manufacturing capabilities, and has obvious advantages in managing manufacturing costs.

During the reporting period, Genorui successfully entered the supporting system of GAC and SAIC Datong, realized the mass production of Geely's third-generation flat-line generators, and won the “Excellent Quality Performance Award” of Chery Automobile in 2017, in customer development, product development and quality. Both control and information construction have achieved fruitful results.

During the reporting period, the vehicle rotating electrical appliance business achieved a revenue of RMB 2,066.5 million, a year-on-year increase of 5.33%.

3. Development of new energy vehicle operation business

In 2017, new energy vehicle operations were gradually promoted, including: new energy vehicle leasing; cooperation with logistics parks, the replacement of traditional vehicles with new energy logistics vehicles, and the speeding up of online mobile terminals (APP) speed. At present, the company has carried out new energy vehicle operation business in Zhongshan, Guangzhou, Shanghai and other places, and through cooperation with the use of vehicles, such as Jingdong Mall, Ctrip.com, the first travel home, etc., new energy vehicles are gradually put into operation.

The company's new energy vehicle operation business is still in the stage of market promotion. With the gradual promotion of operating vehicles, the vehicle operation/rental rate has steadily increased, and the operating income has increased substantially. During the reporting period, the main business income was 185.69 million yuan, a year-on-year increase of 269.52%. . At the same time, due to the increase in costs such as promotion expenses and vehicle depreciation, the business has not realized profitability during the reporting period.


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