Stock Code: 000581, 200581 Public Notice No: 2021-008Short Form of the Stock: WFHT, Su Weifu-B
Weifu High-Technology Group Co., Ltd.Summary of Annual Report 2020I. Important NoticeThe summary is abstract from full-text of annual report, for more details of operating results, financial condition and futuredevelopment plan of the Company, investors should found in the full-text of annual report that published on media appointed byCSRC.The directors, supervisors and senior officers declared that they guarantee the matters in the Report are truthful, accurate andcompleted without objection.All directors are attend the Meeting of the Board for Report deliberation.Prompt of non-standard audit opinion
□ Applicable √ Not applicable
Profit distribution plan of common stock or public reserve transfer into share capital deliberated by the Board in the reporting period
√Applicable □Not applicable
Transfer of public reserve into share capital
□Yes √No
The profit distribution plan that deliberated and approved by the Board is: based on total share capital of 1,008,894,293, distributed15 Yuan (tax included) bonus in cash for every 10-share hold by all shareholders, 0 share bonus issued (tax included) and no publicreserve transfer into share capital either.Profit distribution plan of preferred stock deliberated and approved by the Board in the reporting period
□ Applicable √ Not applicable
II. Company information
1. Company Profile
| Short form of the stock | WFHT, Su Weifu-B | Stock code | 000581, 200581 | |
| Stock exchange for listing | Shenzhen Stock Exchange | |||
| Person/Way to contact | Secretary of the Board | Rep. of security affairs | ||
| Name | Zhou Weixing | Yan Guohong | ||
| Office add. | No.5 Huashan Road, Xinwu District, Wuxi | No.5 Huashan Road, Xinwu District, Wuxi | ||
| Fax. | 0510-80505199 | 0510-80505199 | ||
| Tel. | 0510-80505999 | 0510-80505999 | ||
| wfjt@public1.wx.js.cn | wfjt@public1.wx.js.cn | |||
2. Main business or products introduction in the reporting period
(i) Main business of the CompanyAccording to the data released by China Association of Automobile Manufacturers: the production and salesvolume of automobiles for year of 2020 in the country amounted to 25.22 million and 25.31 million respectively,with 2% and 1.9% down from a year earlier respectively; of which, the production and sales volume of passengervehicles were19.99 million and 20.18 million respectively, with 6.5% and 6% declined over same period of lastyear respectively. In 2020, driven by the elimination of National III vehicles, the tightening ofoverload/over-speed and infrastructure investment, the annual production and sales of commercial vehiclesshowed significant growth. The production and sales volume of commercial vehicles in 2020 were respectivelyamounted as 5.23 million and 5.13 million, exceeding 5 million for the first time and reaching a record high. Theproduction and sales of commercial vehicle increasing by 20.0% and 18.7% on a y-o-y basis respectively.During the reporting period, the company's main business was the production and sales of automobile components.The main products included diesel fuel management system products, after-treatment system products and airmanagement system products. Since the beginning of the year, the company has actively seized marketopportunities, seized key products and key customers, and achieved a steady increase in market share. Thebusiness of the three major systems has grown rapidly, and achieved the company's goal of over tens of billions ofoperating income.Main uses of the Company's products:
1. The fuel management system products are widely used in different power diesel engines supporting all types oftrucks, passenger cars, buses, construction machinery, marine, and generator sets. The company not only makesproducts matching with the main engines used at home but also exports some products to the Americas, SoutheastAsia, and the Middle East. Products can meet the national emission regulation standards.
2. After-treatment system products, which mainly support the major manufacturers of automobile, motorcycle andgeneral machinery at home and meet the national emission standards.
3. Air management system products (supercharger),matches with most of the domestic small-bore diesel engineplants and some 6-cyl diesel engine manufacturers, and meet the needs of the light and heavy commercial vehicles,some passenger cars and engineering machinery. Products can meet the national emission regulation standards.
4. Key parts of the fuel cell, including membrane electrodes, graphite bipolar plates, metal bipolar plates and BOPkey components for domestic and foreign fuel cell reactor and system manufacturers.(ii) During the reporting period, development stage and periodical characteristics of the industry to which thecompany belongs, as well as the company’s position in the industry2021 is the first year for the development of the "14
thFive-Year Plan", and is also the year to embark on a newjourney of building a socialist modern country in an all-round way and march towards the second centenary goal.It is a milestone in our country's development process. As the epidemic prevention and control becomes normal,the economy as a whole will maintain growth under the influence of a low base and recovery resonance. Standingat the historical intersection of the "two centenary" goals, the auto industry will fully enter a new stage oftransformation and upgrading with high-quality development. The new development pattern, which is dominated
by the domestic large-scale cycle and the mutual promotion of the international and domestic double cycles, hasgiven China's auto industry more significant responsibilities. During the "14
thFive-Year Plan" period, ourcountry's auto industry will maintain a steady development trend. From the perspective of the developmentsituation, promoting automobile consumption is the main task of stabilizing growth and expanding domesticdemand; enhancing the independent controllability of the supply chain of the industrial chain is the main means toachieve high-quality industrial development; the upgrading of emission regulations and the new dual-slope policyare compelling companies to carry out more stringent reforms to reduce consumption and emissions; carbonpeaking and carbon neutrality promote the further development of new energy vehicles; intelligent networking,rapid penetration of ADAS and smart cockpits, and 5G promote the development of the Internet of Vehicles. In thenew round of technological revolution and industrial transformation, the company will respond to industrychallenges with a positive attitude, seize industry development opportunities, and strive to jointly create a bettertomorrow for the auto industry.After more than 60 years of hard work, the company has become a backbone enterprise of key parts of domesticauto, 80% products of the existing Automobile components core business are matched with the electronic controlsystems and electronically controlled. The company will actively respond to the national new energy andintelligent network strategy, take the Automobile components industry chain as the core and other related fields assupplements, lay out new energy auto drive technology, and promote the hydrogen fuel cell technology andintelligent network technology research and development capacity building. Market objectives: consolidate theexisting business market position and take a position in the new business potential market. Technical objectives:
strengthen the technical strength of the pillar business, lay out the new business frontier technology, and activelyexpand new areas based on the existing business. Strive to achieve the goal of becoming a leader in the auto coreparts enterprises.
3. Main accounting data and financial indexes
(1) Main accounting data and financial indexes for recently three years
Whether it has retroactive adjustment or re-statement on previous accounting data or not
□Yes √ No
In RMB
| 2020 | 2019 | Changes over last year | 2018 | |
| Operating revenue | 12,883,826,306.60 | 8,784,356,960.30 | 46.67% | 8,721,674,671.18 |
| Net profit attributable to shareholders of the listed company | 2,772,769,377.96 | 2,268,026,432.78 | 22.25% | 2,396,077,415.21 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses | 2,089,986,086.10 | 1,947,408,959.68 | 7.32% | 2,014,800,714.20 |
| Net cash flows arising from operating activities | 781,811,234.01 | 1,048,670,053.23 | -25.45% | 874,381,526.63 |
| Basic earnings per share (RMB/Share) | 2.79 | 2.25 | 24.00% | 2.37 |
| Diluted earnings per share (RMB/Share) | 2.79 | 2.25 | 24.00% | 2.37 |
| Weighted average ROE | 15.78% | 13.77% | 2.01% | 15.48% |
| Year-end of 2020 | Year-end of 2019 | Changes over end of last year | Year-end of 2018 | |
| Total assets | 27,350,695,388.21 | 23,958,348,185.78 | 14.16% | 20,892,041,460.30 |
| Net assets attributable to shareholder of listed company | 18,282,017,990.66 | 16,990,405,136.62 | 7.60% | 15,913,828,778.82 |
(2) Quarterly main financial index
In RMB
| Q 1 | Q 2 | Q 3 | Q 4 | |
| Operating revenue | 2,772,108,717.43 | 3,822,294,907.13 | 3,324,132,346.07 | 2,965,290,335.97 |
| Net profit attributable to shareholders of the listed company | 549,996,717.72 | 776,347,707.26 | 903,901,365.25 | 542,523,587.73 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses | 495,225,376.36 | 680,349,352.50 | 572,795,992.17 | 341,615,365.07 |
| Net cash flows arising from operating activities | 319,204,809.86 | 118,452,262.55 | 624,717,046.92 | -280,562,885.32 |
Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financialindex disclosed in the company’s quarterly report and semi-annual report
□Yes √ No
4. Shares and shareholders
(1) Particulars about common stock shareholders, preference shareholders with voting rights recovered andtop ten shareholders
In Share
| Total common stock shareholders in reporting period-end | 58,092 | Total common stock shareholders at end of last month before annual report disclosed | 63,444 | Total preference shareholders with voting rights recovered at end of reporting period | 0 | Total preference shareholders with voting rights recovered at end of last month before annual report disclosed | 0 | |||||
| Top ten shareholders | ||||||||||||
| Name of Shareholders | Nature of shareholder | Proportion of shares held | Amount of shares held | Number of lock-up stocks held | Number of shares pledged/frozen | |||||||
| State of share | Amount | |||||||||||
| Wuxi Industry Development Group Co., Ltd. | State-owned corporate | 20.22% | 204,059,398 | |||||||||
| ROBERT BOSCH GMBH | Foreign corporate | 14.16% | 142,841,400 | |||
| Hong Kong Securities Clearing Company | Foreign corporate | 6.44% | 65,003,072 | |||
| BBH BOS S/A FIDELITY FD - CHINA FOCUS FD | Foreign corporate | 1.60% | 16,093,515 | |||
| Central Huijin Assets Management Co., Ltd. | State-owned corporate | 1.27% | 12,811,200 | |||
| Basic Pension Insurance Fund- 1003 | Other | 1.11% | 11,163,306 | |||
| Monetary Authority of Macao - own fund | Foreign corporate | 0.78% | 7,824,148 | |||
| FIDELITY INVMT TRT FIDELITY INTL SMALL CAP FUND | Foreign corporate | 0.73% | 7,339,586 | |||
| NSSF - 412 | Other | 0.63% | 6,376,708 | |||
| NSSF - 413 | Other | 0.58% | 5,850,000 | |||
| Explanation on associated relationship among the aforesaid shareholders | Among the aforesaid shareholders, there has no associated relationship between Wuxi Industry Development Croup Co., Ltd. and other shareholders, the first largest shareholder of the Company; and they do not belong to the persons acting in concert regulated by the Management Measure of Information Disclosure on Change of Shareholding for Listed Company. | |||||
| Explanation on shareholders involving margin business (if applicable) | N/A | |||||
(2) Total preferred stock shareholders of the Company and shares held by top ten shareholders withpreferred stock held
□ Applicable √ Not applicable
The Company had no shareholders with preferred stock held in the reporting.
(3) Property right and controlling relationships between the actual controllers of the Company and theCompany is as follows:
5. Corporate bonds
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date whenannual report approved for released or fail to cash in full on dueNoIII. Discussion and Analysis of the Operation
1. Brief introduction of operation in the reporting period
(i) Overall situationSince the beginning of the year, the market environment has been complex and changeable. In the face of thesevere challenges brought by the epidemic, the government quickly introduced a series of policy measures to dealwith the epidemic and promote the resumption of work and production, so that the macro economy has shown arapid recovery after the COVID-19 epidemic was effectively controlled, realizing the economy from falling torising, maintaining the overall economic and social stability. The performance of the automobile industry wasmuch better than expected. Although the production and sales of the whole year were stable and slightly decreased,the overall performance presented strong development resilience and driving force. According to the data releasedby China Association of Automobile Manufacturers: the production and sales volume of automobiles for thewhole year amounted to 25.22 million and 25.31 million respectively, with 2% and 1.9% down from a year earlierrespectively; of which, the production and sales volume of passenger vehicles were 19.99 million and 20.18million respectively, with 6.5% and 6% declined over same period of last year respectively, the production andsales volume of commercial vehicles were respectively amounted as 5.23 million and 5.13 million, a y-o-y growthof 20.0% and 18.7% respectively.Facing the complex and changeable external environment, the company’s board of directors actively responded tothe national epidemic prevention requirements, actively did a good job in the epidemic prevention and control andthe resumption of work and production, had the courage to fulfill social responsibilities, seized the policyopportunities of national economic recovery, and concentrated on forging ahead in concert, the companyoutperformed the annual various operating performance indicators established at the beginning of the year. Duringthe reporting period, operating revenue achieved 12.884 billion yuan with 46.67% up on a y-o-y basis; total profitamounted to 3.003 billion yuan with 22.54% increase on a y-o-y basis; total assets of the Company was 27.351billion yuan with 14.16% up from a year earlier; and the owners interest attributable to parent company was
18.282 billion yuan, a y-o-y growth of 7.60% achieved.
(ii) Main work carried out
1. Seize market opportunities and achieve a new breakthrough in operating income of tens of billion yuan.Since the beginning of the year, the company actively responds to the complex market environment, seizedopportunities, seized key products and key customers, and achieved a steady increase in market share. The threemajor system businesses grew rapidly, achieving the company's goal of over tens of billion yuan in revenue fromits main business. Fuel management system business achieved annual sales of 2.1 million sets of common railpumps, hitting a record high; VE distribution pumps increased their share in the off-road market, with salesexceeding 350,000 sets, an increase of nearly 20% on a year-on-year basis; in terms of after-treatment system
business, gasoline purifiers achieved annual sales volume exceeding 2 million sets, diesel purifiers achievedannual sales volume exceeding 500,000 sets, both year-on-year increase of over 50%. The overall market share ofpassenger vehicles continued to rise. The commercial vehicle market was actively expanding its core customers'National VI projects. In the off-road market, a customer base for key projects has been established. In terms of airmanagement system business, the four-cylinder turbocharger has been deployed in the gasoline engine market toacquire key project customer groups. The company has maintained a leading position in the diesel engine marketshare. Sales volume of six-cylinder turbochargers increase of over 50%，and it successfully acquired importantcustomers in the National-VI projects. Meanwhile，the company's manufacturing capabilities for precisionmanufacturing and parts processing have been rapidly improved.
2. Intensify technological research and development and promote the development of new products.Continued to tap the technical potential of fuel injection system products and expand key customer projectproducts. The company has gradually achieved mass production in major customer projects for gasolineturbocharger products, six-cylinder turbochargers have won a full range of natural gas projects from importantcustomers, four-cylinder gasoline turbocharger passenger car projects have successively obtained newNational-VI B projects, and four-cylinder diesel turbocharger successfully obtained National-VI projects in keymarkets. The company has completed the packaging development of the National-VI GPF catalyst products ofcore customers on passenger vehicles for exhaust after-treatment system products, and realized mass supply. TheWSP2.0 packaging platform is being developed on commercial vehicles, and each stage of the test has beencompleted on schedule; completed the design, trial production and testing of functional samples of corecomponents for new energy products, and mastered the basic research and development capabilities. In terms ofhydrogen fuel cell products, the company has completed the fully independent development of core materials forthe fuel cell core materials from catalyst, gas diffusion layer (GDL) to membrane electrode (MEA); completed thefull water-based ink formulation optimization and catalyst layer leveling optimization of catalyst coatingmembrane (CCM), and the performance is greatly improved. For extended field products, the first smart seat hasleft the production line, and commercial vehicle seats have officially started mass production.
3. Layout new business in an orderly manner. Continued to promote the strategic planning of fuel cells andcore components of the intelligent network, newly increased and defined planning for key strategic products suchas metal bipolar plates, auxiliary components (BOP), situational awareness systems, automotive smart seats.Focused on the two major fields of hydrogen fuel cell and intelligent network connection for new business layout.The company has continued to increase the layout and investment of hydrogen fuel cells, acquired 100% equity ofBelgian Borit Company, and focused on developing IRD's business in the Chinese market, and accelerated theconstruction of the core competitiveness of bipolar plates with dual technology routes (metal, graphite). In thefield of intelligent network connection, the environmental situation awareness system has won a number ofcustomer projects, and the current focus is on intelligent security and industrial intelligent manufacturing toactively carry out product development, manufacturing and market capacity building. The company hascompleted the establishment of a joint venture of Weifu Autosmart Seating System Co., Ltd. (WFAS) and startedoperations.
4. Continuously improve operation and management capabilities. Information construction: the company
continued to promote projects such as intelligent manufacturing, supply chain collaboration, and processmanagement through information technology’s strong supports to the optimization and upgrading of thecompany's management level. Completed the high-level planning and design of the supply chain, data collectionand preliminary analysis; completed the construction of the Aris process management platform and the unifiedprocess management portal, which provided a guarantee for the efficient operation of the long-term mechanism ofthe process management system. Steadily advanced the company's information security work. Compliancemanagement: the company made plans for the overall construction of the company's risk management system soas to create three lines of defense for risk control with the goal of "essential compliance". Built a risk database forthe company’s people, finance, property, and engineering pilot domains, and integrated risk management andinternal control elements into the business process design. Controlled the legal compliance risks in the company'svarious investments and other major projects. Manufacturing quality: continuously improved the company'squality system management platform, including special process audits, cross-divisional cross-quantitative audits,professional auditor echelon construction and quality system group certification, etc., continued to improveproduct projects, promoted intelligent manufacturing projects, and realized equipment information management;Comprehensively promoted the manufacturing informatization, and completed the on-line of multiple functionalmodules; realized the comprehensive informatization management of the production process. Financialmanagement: strengthened internal business collaboration and optimized related transaction business processes.Strictly controlled slow-moving inventory and accounts receivable beyond credit period. Purchasing and logistics:
completed the second phase construction of the company's procurement sharing system, established andimplemented the indirect material category management processes to achieve cost control goals; completed theplanning and promotion plan of the organizational structure based on "category management", and immediatelystarted organizational optimization work. Carried out the logistics informatization and automation pilot work,started the overall planning project of the supply chain, completed the status survey and high-level design work.Human resources: continued to promote the strategic planning of human resources, and comprehensively analyzedthe future development direction of the management mechanism and the talent team. Starting from thecompetency model and actual business needs, strengthened team building, planned and carried out special training,and improved work efficiency; in order to fully mobilize the enthusiasm, sense of responsibility and mission ofthe company’s senior management and core personnel, paid attention to the interests of all shareholders and thecompany’s long-term development and the preservation and appreciation of state-owned assets, launched thecompany's 2020 restricted stock incentive plan, and the first grant was completed at the end of the year.
2. Whether the main business had major change in the reporting period
□Yes √No
3. The industries, products, or regions accounting for over 10% of the company’s operating income oroperating profit
√Applicable □Not applicable
In RMB
| Products | Operating revenue | Operating profit | Gross profit ratio | Increase/decrease of operating revenue y-o-y | Increase/decrease of operating profit y-o-y | Increase/decrease of gross profit ratio y-o-y |
| Automobile fuel injection system | 5,365,576,457.96 | 1,402,884,591.93 | 26.15% | 10.11% | -4.92% | -4.13% |
| Automobile exhaust after-treatment system | 6,408,508,512.76 | 659,958,345.55 | 10.30% | 111.08% | 51.83% | -4.02% |
| Air management system | 656,346,519.18 | 243,014,071.47 | 37.03% | 47.20% | 99.62% | 9.73% |
4. Whether the characteristics of management seasonal or cyclical need special attention
□ Yes √ No
5. In the reporting period, note of major changes in operating revenue, operating cost, total net profitattributable to common stock shareholders of listed company or composing the previous reporting period
□ Applicable √ Not applicable
6. Facing delisting
□Applicable √Not applicable
7. Relevant items involving financial report
(1) Particulars about the changes in aspect of accounting policy, estimates and calculation methodcompared with the financial report of last year
√ Applicable □Not applicable
Implementation of new revenue standards: the Ministry of Finance revised the Accounting Standards for BusinessEnterprise No.14- Revenue in 2017, which go into effect on 1 January 2020. The revised standard requires that thecumulative impact of the first implementation of the standard be adjusted by the amount of opening retainedearnings and other related items in the financial statement for the period of first-time implementation forcomparable periods. Found more in the “V.-35 Change of important accounting policy and estimation” carried inSection XII. Financial Report
(2) Major accounting errors within reporting period that needs retrospective restatement
□ Applicable √ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.
(3) Compare with last year’s financial report; explain changes in consolidation statement’s scope
√Applicable □Not applicable
| Changes of consolidate scope | Enterprise | Equity obtained method | Contribution ratio |
| Consolidate scope increased | Borit NV | A wholly-owned subsidiary purchased in cash during the period through SPV | 100.00% |
| Consolidate scope increased | Autosmart Seating | The enterprise jointly invested by controlling subsidiary of the Company - Weifu Leader and Qiqiong Automobile Technology (Shanghai) Co., Ltd. | 66% |
Board of Directors ofWeifu High-Technology Group Co., Ltd.20 April 2021