Section One Important Notice

1. 1. This summary of the annual report is derived from the full text of the annual report. To gain a comprehensive understanding of the company’s operating results, financial condition, and future development plans, investors should refer to www.sse.com.cn Please read the full annual report on the website.

 

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. Board Resolution The profit distribution plan or capitalization of reserves plan approved for the current reporting period

It is proposed to distribute profits based on the total share capital as of the record date for the implementation of the profit distribution plan, with a dividend of per every 10 Cash Dividends Distributed per Share 4.32 yuan (including tax), with total cash dividends distributed amounting to RMB 100,017,504.00 RMB (tax inclusive), with the remaining undistributed profits carried forward to the next fiscal year. In addition to the aforementioned cash dividends, the Company will neither issue bonus shares nor capitalize reserves to increase share capital in this profit distribution.

 

Section Two 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	Not applicable

 

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

2021 The volatility in the commercial vehicle market this year is mainly driven by demand fluctuations resulting from the transition to China VI emission standards for heavy-duty diesel vehicles. China V models have lower acquisition and operating costs than China VI models, making them more attractive to consumers. Furthermore, “ Blue-plate light truck ” Factors such as consumer hesitation driven by policy expectations and a sluggish real estate development sector have further intensified downward pressure on the commercial vehicle market. 2021 Annual commercial vehicle sales 479.3 ten thousand vehicles, down year on year 6.6% . Among them, heavy truck sales 139.5 ten thousand vehicles, a year-on-year decrease of 22.4 ten thousand vehicles, down year on year 13.8% , medium-sized truck 17.9 ten thousand vehicles, an increase year on year 2 ten thousand vehicles, with an increase of 12.3% , light truck sales 211 ten thousand vehicles, a year-on-year decrease of 8.9 ten thousand vehicles, with a decline of 4% .(Data source: First Commercial Vehicle Network)

From 2001-2021 Looking at China’s automobile sales volume and growth rate over the years, the country’s total automobile production and sales have been consecutive… 13 It has consistently ranked first globally for years and is in “ Electrification, connectivity, and intelligence ” Significant progress has been made in this area. China’s position as a major automobile-producing country has been further consolidated, and the country is moving toward becoming a leading automotive power.

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 company operates in the "automotive manufacturing" industry ( C36 “Manufacturing of automobile parts and accessories” in ) 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 “Automobile Manufacturing” ( C36 ）。

 

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

Unit: Ten thousand yuan Currency: Renminbi

	2021 year	2020 year	This year compared with last year Increase/Decrease (%)	2019 year
Total assets	369,110.167628	361,001.155478	2.25	271,902.63
Net assets attributable to shareholders of the listed company	225,343.938974	201,082.777037	12.07	109,058.85
Operating revenue	158,154.476916	167,798.45157	-5.75	115,522.04
Net profit attributable to shareholders of the listed company	24,941.233919	31,453.862708	-20.71	26,880.63
Net profit attributable to shareholders of the listed company, excluding non-recurring gains and losses	22,527.93	27,882.06	-19.20	15,925.13
Net cash flow from operating activities	63,138.262005	43,399.521492	45.48	25,561.1
Weighted Average Return on Equity (%)	11.72	18.57	A decrease of 6.85 percentage points	28.11
Basic earnings per share (RMB/share)	1.08	1.52	-28.95	1.55
Diluted Earnings Per Share (RMB/share)	1.08	1.52	-28.95	1.55

 

 

 

 

 

 

 

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	508,373,463.98	456,524,724.43	319,630,073.16	297,016,507.59
Net profit attributable to shareholders of the listed company	102,589,501.53	92,303,266.62	24,356,054.41	30,163,516.63
Net profit attributable to shareholders of the listed company, excluding non-recurring gains and losses	101,322,975.16	89,056,942.87	4,920,773.68	29,978,647.35
Net cash flow from operating activities	125,197,706.52	133,531,262.48	102,801,841.52	269,851,809.53

 

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

 

4. Shareholder Information
   1. The total number of ordinary shareholders, the total number of preferred shareholders whose voting rights have been restored, and the total number of shareholders holding shares with special voting rights as of the end of the reporting period and as of the end of the month preceding the disclosure of the annual report, together with the preceding… 10 Details of Major Shareholders

 

Unit: shares

Total number of ordinary shareholders (accounts) as of the end of the reporting period					16,494
Total number of common shareholders (accounts) as of the end of the month preceding the date of annual report disclosure					16,463
Total number of preferred shareholders with restored voting rights as of the end of the reporting period (accounts)					0
Prior to the date of disclosure of the annual report Last month Total number of preferred shareholders (accounts) whose voting rights have been restored					0
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	Pledging, marking, or freezing status		Shareholder Nature
					Shares Status	Quantity
Li Zuoyuan	1,551,600	94,274,428	40.72	94,274,428	None	0	Foreign natural person
Xu Nengchen		25,969,680	11.22	25,969,680	None	0	Foreign natural person
Li Xianfeng		12,984,840	5.61	12,984,840	None	0	Domestic natural person
Li Congrong		12,984,840	5.61	12,984,840	None	0	Foreign natural person
Xiangyang Innovation Capital Venture Investment Co., Ltd.	-1,928,780	5,788,180	2.50	0	None	0	Non-state-owned legal person within the territory
Shenzhen Innovation Investment Group Co., Ltd.		4,630,320	2.00	0	None	0	Non-state-owned legal person within the territory
Li Kewu		2,893,860	1.25	0	None	0	Domestic natural person
Wang Jiancheng	1,400,000	2,500,000	1.08	0	None	0	Domestic natural person
Chi Yuan	0	1,736,415	0.75	0	None	0	Domestic natural person
Hubei Hongtu Venture Capital Co., Ltd.		1,157,580	0.50	0	None	0	Non-state-owned legal person within the territory
Explanation of the Affiliative Relationship or Concerted Action Among the Shareholders Listed Above		Shareholder Li Zuoyuan and Xu Nengchen are spouses; 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 26.67% of the equity in Xiangyang Innovation, making it the second-largest shareholder of Xiangyang Innovation, and holds 32.29% of the equity in Hubei Hongtu, making it the largest shareholder of Hubei Hongtu. 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

 

Section Three Important Matters

1. In accordance with the principle of materiality, the company shall disclose any significant changes in its operating performance during the reporting period, as well as any events that have had or are expected to have a material impact on its operations.  

2021 For the year, the company reported operating revenue of RMB 15,815.448 million, down 5.75% year over year; operating profit of RMB 2,792.068 million, down 21.17% year over year; and net profit of RMB 2,521.969 million, down 21.37% year over year. Net profit attributable to shareholders of the parent company was RMB 2,494.123 million, a decrease of 20.71% year over year.

As of the end of 2021, the company’s total assets amounted to RMB 3.691 billion, total liabilities stood at RMB 1.424 billion, and shareholders’ equity was RMB 2.268 billion.

 

2. If, after the disclosure of the company’s annual report, there is a risk warning of delisting or a circumstance leading to termination of listing, the company shall disclose the reasons that gave rise to such risk warning or termination.