• Important Notice
  1. This summary of the annual report is derived from the full text. To gain a comprehensive understanding of the company’s operating results, financial condition, and future development plans, investors should carefully read the complete annual report on the Shanghai Stock Exchange website and other media designated by the China Securities Regulatory Commission.

 

1. 2. The Board of Directors, the Supervisory Board, and the directors, supervisors, and senior management of this company hereby certify that the contents of the annual report are true, accurate, and complete, with no false records, misleading statements, or material omissions, and they assume individual and joint legal liability accordingly.

 

1. 3. All directors of the company attended the board meeting.

 

 

1. 4. Zhongshen Zhonghuan Certified Public Accountants (Special General Partnership) issued a standard unqualified audit report for the Company.

 

 

1. 5. Profit distribution plan or capitalization of reserves plan for the reporting period as reviewed by the Board of Directors

Audited by Zhongshen Zhonghuan Certified Public Accountants (Special General Partnership), 2020 Net profit attributable to parent company shareholders for the year 314,538,627.08 Yuan, the parent company achieved net profit 158,953,777.34 Yuan, appropriated surplus reserve 15,895,377.73 Yuan, plus retained earnings at the beginning of the year 300,396,451.43 Yuan, exclude 2020 Semi-annual dividend 277,826,400.00 Yuan, the parent company’s profit available for distribution to shareholders at the end of the reporting period was 165,628,451.04 Yuan.

In view of 2020 Following approval by the Board of Directors and the General Meeting of Shareholders for the first half of the year, the Company distributed cash dividends. In light of the Company’s future development and funding needs, the profit distribution plan approved by this Board of Directors is as follows: 2020 No distribution of annual profits will be made, nor will capital reserves be transferred to share capital.

 

• Basic Company Information

1. Company Profile

Company Stock Overview
Types of Stocks	Stock exchange	Stock Abbreviation	Stock code	Former Stock Abbreviation
A stock	Shanghai Stock Exchange	Changyuan Donggu	603950	None

 

Contact Person and Contact Information	Board Secretary	Securities Affairs Representative
Name	Liu Wangcheng	Xu Xiang
Office Address	No. 396, Diamond Avenue, Xiangzhou District, Xiangyang City, Hubei Province	No. 396, Diamond Avenue, Xiangzhou District, Xiangyang City, Hubei Province
Telephone	0710-3062990	0710-3062990
Email address	cydg2001@126.com	cydg2001@126.com

 

2. Overview of the Company’s Principal Activities During the Reporting Period

The company’s principal business is the research and development, production, and sale of diesel engine components. Its main business model comprises product sales and contract manufacturing. Under the product sales model, the company purchases blanks such as cylinder blocks, cylinder heads, and connecting rods, processes them, and then sells the finished products to customers. Under the contract manufacturing model, the company processes blanks—such as cylinder blocks, cylinder heads, and connecting rods—provided by customers according to their specifications. The company’s primary customers include major engine and complete vehicle manufacturers, such as Foton Cummins, Dongfeng Cummins, Dongfeng Commercial Vehicle, Guangxi Yuchai, and China National Heavy Duty Truck Group.

The company employs the industry‑standard “make‑to‑order” production model. It typically enters into framework agreements with major customers, outlining product types and other key terms. Under these agreements, customers submit specific orders on a regular basis, and the company conducts bulk procurement, manufacturing, and delivery in accordance with those orders. The company’s production approach is an order‑driven lean manufacturing system. Grounded in actual customer demand, it develops and implements tailored production and machining processes for diesel engine components based on the customer‑specified design drawings, process requirements, and supply standards. This results in a comprehensive solution for producing and machining diesel engine parts, ensuring that qualified products are delivered to the customer within the agreed timeframe.

The company operates in the automotive components industry, which is an important part of the specialized division of labor in automobile manufacturing. According to the “National Economic Industry Classification” ( GB/T4754-2017 ), the industry in which the company operates is “ Automotive manufacturing ” ( C36 ) in the “ Manufacturing of automotive parts and accessories ” ( C3670 ); according to the China Securities Regulatory Commission’s “Guidance on Industry Classification of Listed Companies” (CSRC Announcement [2012]31 No.), the industry in which the company operates is “ Automotive manufacturing ” ( C36 ）。

The automotive industry boasts a long industrial chain, broad coverage, and numerous upstream and downstream related sectors, playing a vital role in China’s national economic development. As China’s automotive industry continues to grow rapidly, its significance to the national economy has steadily increased, making it one of the leading industries that underpin and drive the country’s sustained rapid economic growth. 2005-2016 Year, the added value of the automotive industry nationwide GDP The proportion accounted for by 2005 year's 1.18% rise to 2016 year's 1.53% The vigorous growth of China’s automotive industry has also significantly boosted the development of upstream and downstream related sectors. China’s automotive industry has become an important component of the global automotive sector, fundamentally reshaping the landscape of the world’s auto industry and laying the groundwork for China to emerge as a major global automobile manufacturing power.

Looking at the various market segments, in the passenger car sector, 2017、2018 In year , growth in China’s passenger vehicle market demand slowed, increasing by year-on-year 1.58% 、 -4.08% . In the commercial vehicle sector, sustained high growth in infrastructure investment, coupled with expanding industrial, wholesale, and retail sectors driving increased trade volumes and related businesses’ demand for logistics, as well as the new national standards GB1589-2016 Driven by the implementation of new regulations and a policy encouraging nationwide crackdowns on overloading in coordination with the Ministry of Transport and other relevant ministries, China’s commercial vehicle market has… 2016 and 2017 It has seen relatively high growth in recent years. 2018 Year and 2019 Year, new edition of the national standard GB1589-2016 The stimulus to the commercial vehicle market has gradually waned, and the growth rate of China’s commercial vehicle production and sales has slowed.

2020 Year, since 4 Since the recovery from the pandemic earlier this month, benefiting from the national policies implemented “ New infrastructure, phase-out of China III-compliant vehicles, and stricter enforcement against overloading ” Driven by favorable policies, national automobile sales have continued to grow, consecutively 9 months, setting a new monthly record for production and sales, and in 2020 year 6 The monthly figure hit a record high. 2020 Annual commercial vehicle sales reached 513.3 ten thousand vehicles, a year-on-year increase of 18.7% , with heavy truck sales reaching 161.9 ten thousand vehicles, a year-on-year increase of 37.9% 。

 

3. Principal Accounting Data and Financial Indicators of the Company
   1. near 3 Principal Accounting Data and Financial Indicators for the Year

Unit: Yuan Currency: Renminbi

	2020 year	2019 year	This year compared with last year Increase/Decrease (%)	2018 year
Total assets	3,610,011,554.78	2,719,026,348.13	32.77	2,653,571,640.77
Operating revenue	1,677,984,515.70	1,155,220,399.34	45.25	1,066,643,910.33
Net profit attributable to shareholders of the listed company	314,538,627.08	268,806,254.47	17.01	181,504,706.03
Net profit attributable to shareholders of the listed company, excluding non-recurring gains and losses	278,820,562.74	159,251,254.12	75.08	154,253,796.87
Net assets attributable to shareholders of the listed company	2,010,827,770.37	1,090,588,513.77	84.38	821,782,259.30
Net cash flow from operating activities	433,995,214.92	255,610,974.42	69.79	331,077,307.33
Basic earnings per share (RMB/share)	1.52	1.55	-1.94	1.05
Diluted Earnings Per Share (RMB/share)	1.52	1.55	-1.94	1.05
Weighted Average Return on Equity (%)	18.57	28.11	A decrease of 9.54 percentage points	21.84

 

 

 

1. 2. Quarterly Major Accounting Data for the Reporting Period

Unit: Yuan   Currency: Renminbi

	First quarter ( 1-3 month)	Second quarter ( 4-6 month)	Third quarter ( 7-9 month)	Fourth quarter ( 10-12 month)
Operating revenue	268,245,115.46	484,904,055.63	458,305,181.43	466,530,163.18
Net profit attributable to shareholders of the listed company	44,245,204.28	110,193,302.98	62,866,938.52	97,233,181.30
Net profit attributable to shareholders of the listed company, excluding non-recurring gains and losses	37,774,644.68	97,575,596.12	58,135,599.97	85,334,721.97
Net cash flow from operating activities	173,656,554.35	19,596,180.45	71,098,482.25	169,643,997.87

 

Explanation of Differences Between Quarterly Data and Data in Disclosed Periodic Reports

 

4. Share capital and Shareholder Information
   1. Number of common shareholders and preferred shareholders with restored voting rights, and the top 10 Table of Shareholdings by Major Shareholders

 

Unit: shares

Total number of ordinary shareholders (accounts) as of the end of the reporting period					18,459
Total number of common shareholders (accounts) as of the end of the month preceding the date of annual report disclosure					17,592
Total number of preferred shareholders with restored voting rights as of the end of the reporting period (accounts)
Prior to the date of disclosure of the annual report Last month Total number of preferred shareholders (accounts) whose voting rights have been restored
Top 10 Shareholders’ Holdings
Shareholder Name (Full name)	Increase or decrease during the reporting period	Number of shares held at period end	proportion (%)	Number of shares subject to sale restrictions	Pledge or Freeze Status		Shareholder Nature
					Shares Status	Quantity
Li Zuoyuan	1,271,083	92,722,828	40.05	91,451,745	None		Foreign natural person
Xu Nengchen		25,969,680	11.22	25,969,680	None		Foreign natural person
Li Xianfeng		12,984,840	5.61	12,984,840	None		Domestic natural person
Li Congrong		12,984,840	5.61	12,984,840	None		Foreign natural person
Xiangyang Innovation Capital Venture Investment Co., Ltd.		7,716,960	3.33	7,716,960	None		Non-state-owned legal person within the territory
Shenzhen Innovation Investment Group Co., Ltd.		4,630,320	2.00	4,630,320	None		Non-state-owned legal person within the territory
Beijing Rongding Deyuan Equity Investment Fund Partnership (Limited Partnership)		3,500,000	1.51	3,500,000	None		Non-state-owned legal person within the territory
Li Kewu		2,893,860	1.25	2,893,860	None		Domestic natural person
Chi Yuan		1,736,415	0.75	1,736,415	None		Domestic natural person
Zheng Gang	25,000	1,665,000	0.72	1,640,000	None		Domestic natural person
Explanation of the Affiliative Relationship or Concerted Action Among the Shareholders Listed Above		Shareholder Li Zuoyuan and Xu Nengchen are married; shareholder Li Zuoyuan and Li Congrong are father and daughter; and shareholder Li Zuoyuan and Li Xianfeng are father and son. Shareholders Li Zuoyuan, Xu Nengchen, Li Congrong, and Li Xianfeng have entered into a concerted action agreement and are acting in concert. Shenzhen Venture Capital holds a 26.67% equity stake in Xiangyang Innovation, making it the second-largest shareholder of Xiangyang Innovation. It is unknown whether any other shareholders are affiliated or act in concert.
Explanation of Preferred Shareholders Whose Voting Rights Have Been Restored and the Number of Shares Held		Not applicable

 

 

 

1. 2. Between the company and its controlling shareholder Diagram of Ownership and Control Relationships

 

 

1. 3. Diagram of the equity and control relationships between the company and its ultimate controlling shareholder

 

1. 4. Total number of the company’s preferred shareholders at the end of the reporting period and the top 10 Details of Major Shareholders

 

5. Corporate bonds Situation

 

• Discussion and Analysis of Operating Performance

1. Key Operating Highlights During the Reporting Period

2020 For the year, the company reported operating revenue of RMB 16,779.845 million, up 45.25% year over year; operating profit of RMB 3,542.003 million, up 20.46% year over year; and net profit of RMB 3,207.279 million, up 17.72% year over year. Net profit attributable to shareholders of the parent company was RMB 3,145.386 million, up 17.01% year over year.

 

2. guide Reasons for Suspension of Listing

 

 

3. Circumstances and Reasons for Potential Delisting

 

 

 

4. Analysis and Explanation by the Company Regarding the Reasons for and Impact of Changes to Accounting Policies and Accounting Estimates

 

( 1 ) Accounting Policy Changes Resulting from the Adoption of the New Revenue Standard

The Ministry of Finance on 2017 year 7 month 5 On [date], issued "Enterprise Accounting Standard No. ...". 14 Number — Revenue ( 2017 (Revised in [Year]) (Finance and Accounting [2017]22 No.) (hereinafter referred to as the "New Revenue Standard"). Following approval at the fifteenth meeting of the third session of the Company's Board of Directors and the twelfth meeting of the third session of the Supervisory Board, the Group, on 2020 year 1 month 1 The aforementioned new revenue standard shall be applied effective as of the date hereof.

The new revenue standard establishes a new revenue recognition model to regulate revenue arising from contracts with customers. To implement the new revenue standard, the Group has reassessed aspects such as the recognition and measurement, accounting, and presentation of revenue under major contracts. In accordance with the provisions of the new revenue standard, it has chosen to apply it only to... 2020 year 1 month 1 Adjust the cumulative effect of contracts not yet completed as of the date. The cumulative effect adjustment upon initial application is recognized at the beginning of the period of initial application (i.e., 2020 year 1 month 1 The amounts of retained earnings and other related line items in the financial statements as of (date), with no adjustments made to comparative period information.

The specific impact of applying the new revenue standard on the Group is to reclassify contract consideration received in advance from customers for the transfer of goods from the “Advances from Customers” line item to the “Contract Liabilities” line item.

① Impact on the financial statements as of January 1, 2020

Report Item	2019 year 12 month 31 Date (before change) Amount		2020 year 1 month 1 Date (after change) Amount
	Consolidated financial statements	Company Reports	Consolidated financial statements	Company Reports
Advances received	1,852,198.31	18,200.00
Contract Liabilities			1,639,704.60	16,697.25
Other current liabilities			212,493.71	1,502.75

② Impact on the financial statements as of December 31, 2020

Report Item	2020 December 31 of the year Amount under the new revenue standard		2020 December 31 of the year Amount under the old revenue standard
	Consolidated financial statements	Company Reports	Consolidated financial statements	Company Reports
Advances received			4,209,429.22	22,363.40
Contract Liabilities	3,725,158.60	19,790.62
Other current liabilities	484,270.62	2,572.78

During the reporting period, the Group had no other changes in accounting policies.

( 2 ) Change in Accounting Estimate

During the reporting period, the Group did not make any changes to its accounting estimates.

 

5. The company’s significant accounting Error Analysis and Explanation of the Reasons for the Correction and Its Impact

 

 

6. If the scope of consolidation of the financial statements has changed compared with the prior year’s financial report, the company shall provide a detailed explanation.

 

As of December 31, 2020, the Group had a total of five subsidiaries within the scope of consolidation; see Note 9, “Equity Interests in Other Entities,” to these financial statements. During the year, the number of entities included in the Group’s consolidation increased by one compared with the prior year; see Note 8, “Changes in the Scope of Consolidation,” to these financial statements.