- Diversified business strengths continue to rise in operating results
Weichai Power Company Limited (Weichai Power or the Company, HKG: 2338.HK Shenzhen Stock Exchange stock code: 000338.SZ) announced its annual results for the year ended 31 December 2021 (the year) on 30th March, prepared in accordance with PRC accounting standards.
Steady growth in operating performance and continued to increase shareholder returns
During the reporting period, the Company focused on its established strategic objectives and main business, gave full play to its diversification advantages, continued to increase investment in research and development, accelerated breakthroughs in key core technologies, continuously strengthened its product competitiveness and improved operational efficiency, firmly stabilized its fundamental and supported its future development, to achieve the Company’s leading growth and gather a win-win situation.
In 2021, the Company overcame the adverse impact such as commodity price increases, with a steady increase in gross margin level and high turnover efficiency, demonstrating strong operational resilience. During the reporting period, operating revenue of RMB 203.55 billion was achieved, representing a year-on-year growth of 3.2%. Net profit attributable to the shareholders of the parent was RMB 9.25 billion, with an increase of 0.3% year-on-year. Basic earnings per share were RMB 1.1. The Company attaches great importance to shareholder returns and paid a total dividend of RMB 3.7 per 10 shares throughout the year.
Powertrain market share increased, and the product structure was significantly optimized
During the reporting period, the Company’s powertrain business maintained positive and steady development, with annual sales of 1.02 million engines, increased by 3% year-on-year. Sales of 1.153 million gearboxes, including 1.01 million gearboxes for heavy trucks, with the market share increased by 5.3 percentage points to 72.4% year-on-year. And sales of 938,000 axles, including 697,000 axles for medium and heavy truck.
The engine series had significant advantages in all fields, with the proportion of non-road engines in total sales increased by 5.3 percentage points to 34.4%, and maintaining the industry’s top position in the markets of loaders, cranes and bulldozers. Seizing the opportunity of upgrading emission standards, the Company’s China VI engine sale volume ranked top position in the industry, with 429,000 heavy truck engines sold and the market share increased by 2.8 percentage points year-on-year to 30.7%.
Strategic high-end products continued to gain momentum, achieving revenue of RMB1.41 billion, increased by 49.3% year-on-year. High-end hydraulics achieved domestic revenue of RMB560 million, increased by 11.8% year-on-year. Relying on the differentiated advantages of products, the Company has achieved rapid growth in market segments such as crawler excavation and agricultural equipment. The commercialization of CVT powertrain has been accelerated, and it has been matched to Lovol 240hp CVT intelligent tractor, achieving a 15% increase in overall operating efficiency and a 10% reduction in fuel consumption.
Technology leads industry development, diversified power all-round champion
The Company continued to increase its investment in research and development around its core technologies and products. During the reporting period, the amount of investment in R&D was RMB 8.57 billion, and the ratio of R&D investment to revenue was 4.2%. The Company has made multiple efforts to firmly keep traditional high-end power and new energy power in the forefront. For the first time in the world, the base engine thermal efficiency of diesel engines reached 51.09%, which can reduce fuel consumption and CO2 emissions by 10% respectively and reach a new peak in power; For new energy, the Company actively laid out multiple technical routes such as fuel cell, pure electric, hybrid, hydrogen internal combustion engine and methanol to meet the diversified needs of the market, among which the core performance indicators of hydrogen fuel cell products are industry-leading.
Outstanding achievements in new energy, accelerating industrialization
The Company has developed a full range of fuel cell product platforms from 30-200kW and released them for mass production. The new energy product testing center has obtained the laboratory accreditation certificate issued by the China National Accreditation Service for Conformity Assessment (CNAS), becoming the first laboratory in the industry to pass the testing certification for both hydrogen fuel cell and solid oxide fuel cell products at the same time. Relying on the National Fuel Cell Technology Innovation Center, heavy trucks equipped with the Company’s hydrogen fuel cell products have been used in ports, industrial parks, steel mills, highways, and other scenarios.
Heavy trucks pursued progress while ensuring stability, and overseas sales have increased significantly
In 2021, the Company continued to adjust and optimize its product mix by focusing on the upgrading of the China VI emission regulations and sold a total of 150,000 heavy-duty trucks. Seizing the opportunity of China VI switchover, the market share of major segments continued to increase. Port tractors, muck trucks and coal and gravel transporters continued to maintain leading position in the industry, and the 480 hp model for standard load logistics had the highest growth rate in the industry; Export volume grew significantly, with over 19,000 units exported in the year, increased by 72% year-on-year. Innovation-driven development, comprehensive shaping of new advantages of the heavy truck.
Intelligent logistics reaches new highs, profit contribution continues to increase
The Company’s Intelligent Logistics business achieved the high targets set, demonstrating its key position in the industry and contributing significantly more profit to the Company. During the reporting period, sales revenue of EUR 10.29 billion was achieved, increased by 23.4% year-on-year; Net profit of EUR 570 million increased by 169% year-on-year; Meanwhile, the increased share of supply chain solution business drove profitability to continue to improve, with the adjusted EBIT margin increased by 1.6 percentage points year-on-year to 8.2%. At the end of the reporting period, orders on hand amounted to EUR 6.66 billion, increased by 49.9% compared to the beginning of the year. With the completion of the new forklift plant in Jinan and the start of construction of a new plant for supply chain solutions, KION is fully committed to exploiting the business potential in the Asia-Pacific market in the future to promote sustainable and high-quality growth.
Technological revolution boosts industrial transformation, and make precise efforts to promote structural adjustment. Looking into the future, Weichai Power will continue to consolidate its dominant position in the main business, further enhance product competitiveness and market share, and lead the industry to the high-end. Weichai Power will scale up efforts to promote new business formats, significantly increase the profit contribution of large-bore engines, and achieve rapid production volume increase in hydraulic products. Weichai Power will promote synergetic development of export business, the steady growth of intelligent logistics, and the take-off of overseas business. Weichai Power will also accelerate the technological breakthrough and industrialization of the fuel cell industry chain to demonstrate the new advantages of its high-quality development.
About Weichai Power Co., Ltd (Stock Code: 2338.HK, 000338.SZ)
Founded in 2002, Weichai Power is one of the strongest comprehensive automotive and equipment manufacturing industry groups in China. It owns Shaanxi Heavy Duty Automobile Co.,Ltd., Shaanxi Fast Gear Co. Ltd., Weichai Torch Technology Co., Ltd., KION Group AG, and Linde Hydraulics GmbH & Co. KG, Dematic, and other dozens of high-quality companies in a cluster, building a new pattern of synergistic development of three major industrial segments, namely, the complete machine segment, the powertrain segment and the intelligent logistics segment, forming the most complete and competitive industrial chain in the national automobile industry. The Company was listed on the Main Board of the Hong Kong Stock Exchange on 11 March 2004 and returned to the mainland A-share market by way of a share swap on 30 April 2007.
