China Harmony Auto 2014 Interim Results Press Presentation September 2014

Transcription

1 China Harmony Auto 2014 Interim Results Press Presentation September 2014

2 Disclaimer This document is confidential and is being prepared for the purpose of H result presentation and supplied to you by China Harmony Auto Holding Limited (the Company") solely for your information and has not been independently verified. No representation or warranty expressed or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of any information or opinions contained herein. The information contained in this document is subject to change without notice and will not be updated to reflect material developments which may occur after the date of the presentation. None of the Company nor any of its directors, supervisors, senior officers, employees, affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. This document contains forward-looking statements. The forward-looking statements are subject to a number of unknown factors, including factors beyond the Company s control, which may cause the Company s actual results or performance to differ materially from those expressed or implied by such forward-looking statements. You should not place undue reliance on such forward-looking statements. This document or any information contained in it does not constitute any offer for sale or invitation, or solicitation of an offer, to subscribe for or purchase any securities. No part of this document shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. These materials are highly confidential and are being given solely for your information and for your use only in connection with this presentation. The information contained herein may not be copied, reproduced, redistributed or otherwise disclosed, in whole or in part, to any one person in any manner. 2

3 Contents Industry Overview Overview of Results Overview of Financial Results Business Highlights Development Strategy

4 1. Industry Overview

5 In 1H of 2014, passenger vehicles in the PRC market ranked no. 1 in the world in terms of sales volume, representing a year-on-year growth of 11.18% Sales volume of passenger vehicles in the domestic market in 2010 to 1H 2014 单位 : 辆 Unit: Vehicle H 5

6 In 1H of 2014, the luxury automobiles market in the PRC recorded a year-on-year growth of 26% Sales volume of luxury automobiles in the domestic market in 2010 to 1H 2014 Unit: 单位 : 辆 Vehicle 6

7 In 1H of 2014, the ultra-luxury automobiles market grew at a rate of 64.5%, with Maserati achieving an increase in average monthly sales volume of 100% over the corresponding period of last year. Sales volume of ultra-luxury brands in 2010 to 1H 2014 单位 : 辆 Unit: Vehicle 7

8 2. Overview of Results

9 1. Brands and Outlets Network As of the date hereof, the Group operates a total of 69 outlets, of which 40 outlets are 4S stores, 25 outlets are comprehensive after-sales stores and 4 outlets are new energy vehicle stores, covering 15 luxury and ultra-luxury brands, such as Rolls-Royce, Aston Martin, Ferrari, Maserati, BMW, Land Rover, Jaguar, Lexus, MINI, Volvo, Infiniti, Lincoln, Zinoro and Tesla. 9

10 Outlets Network Headquarter Shaanxi (3) Rolls-Royce(1) Rolls-Royce 3S(1) Comprehensive after-sales services centre(1) He nan (38) BMW(15) Lexus(3) Rolls-Royce(2) Aston Martin(2) Comprehensive after-sales services centre(13) MINI(3) Liaoning(1) Comprehensive after-sales services centre(1) Beijing(5) BMW(1) Maserati(2) New energy vehicles (1) Comprehensive after-sales services centre(1) Hubei (4) Shandong (2) BMW(1) Aston Martin(1) Comprehensive after-sales services centre(1) Jaguar/Land Rover(1) Sichuan (1) Comprehensive after-sales services centre(1) Guizhou (1) Comprehensive after-sales services centre(1) Guangdong(2) BMW(1) Comprehensive after-sales services centre(1) Sichuan Shaanxi Guizhou Hubei Beijing He nan Guangdong Fujian(1) Shandong Jiangsu Zhejiang Fujjian Liaoning Shanghai Comprehensive after-sales services centre(2) Jiangsu(5) Maserati(1) MaseratiFerrari(3) Comprehensive after-sales services centre(1) Shanghai(4) BMW(1) New energy vehicles (2) Comprehensive after-sales services centre(1) Zhejiang(2) Comprehensive after-sales services centre(1) New energy vehicles (1) 10 Lexus(1)

11 2. Steady Growth in Revenue and Profits Revenue from principal operations was RMB5.004 billion, up by 36.8% over the corresponding period of last year. In particular, revenue from sales of new vehicles was RMB4.439 billion, up by 32.8% over the corresponding period of last year; Revenue 收入 Revenue from 新车销售收入 New Car Sales (Expressed ( 人民币百万元 by ) RMB in million) 5,004 ( 人民币百万元 ) (Expressed by RMB in million) 4,439 3,659 3, H H H H 11

12 2. Steady Growth in Revenue and Profits Revenue from after-sales service business was RMB565 million, up by 79.7% over the corresponding period of last year; The adjusted net profits were RMB290 million, up by 43.4% over the corresponding period of last year. Revenue from 售后服务收入 After-sales Services Adjusted 调整后净利润 Net Profits 1 1 (Expressed ( 人民币百万元 by ) RMB in million) 565 (Expressed ( 人民币百万元 by ) RMB in million) H H H H 12

13 3. Overview of Financial Results

14 Overview of Financial Results Revenue Revenue Breakdown ( 人民币百万元 ) (Expressed by RMB in million) 5,004 9% 11% 3,659 91% 89% H H H Sales of new 新车销售 vehicles After-sales service business 售后服务 H Gross Profits & Gross Profit Margin Breakdown of Gross Profits ( 人民币百万元 ) (Expressed by RMB in million) % 45% 12.8% 10.9% 67% 55% H H H Sales of new 新车销售 vehicles After-sales 售后服务 service business H Gross profit margin 14

15 Overview of Financial Results Operating 运营利润 Profits Adjusted 调整后运营利润 Operating Profits 1 1 ( 人民币百万元 (Expressed) by RMB in million) ( 人民币百万元 (Expressed) by RMB in million) % 9.1% 9.9% 9.4% H H Operating profit margin Net 净利润 Profits H H Adjusted 调整后净利润 Net Profits 1 1 (Expressed 人民币百万元 by RMB in million) (Expressed by RMB 人民币百万元 in million) % 5.5% 5.5% 5.8% H H Net profit margin H H Note: The adjustments were mainly for excluding the interest income from a controlling shareholder in 2013 and the employee share incentive expenses for both periods 15

16 Segment Information 新车销售收入 Revenue from New Car Sales ( 人民币百万元 ) (Expressed by RMB in million) Breakdown of Gross Profits of 新车销售毛利分布 New Car Sales Gross Profits and Gross Profit Margin of 新车销售毛利及毛利率 New Car Sales ((Expressed 人民币百万元 by ) RMB in million) % 26% % 11% 89% 86% 28% H 9.4% 6.7% 72% H H 豪华 Luxury 超豪华 Ultra-luxury H H H 豪华 Luxury 超豪华 Ultra-luxury 毛利率 Gross profit margin 16

17 Segment Information 售后服务收入 Revenue from After-sales Services Breakdown of Gross 售后服务毛利分布 Profits of After-sales Services Gross Profits and Gross Profit Margin 售后服务毛利及毛利率 of After-sales Services (Expressed ( 人民币百万元 by RMB in ) million) 565 ( 人民币百万元 ) (Expressed by RMB in million) 19% % H % 19% 100% 81% 48.8% 44.0% H H After-sales services 4S 店售后 of 4S stores Comprehensive after-sales services 综合售后 H After-sales 4S services 店售后 of 4S stores Comprehensive 综合售后 after-sales services H H Gross profit margin

18 Segment Information Profits and 其他业务利润及利润率 Profit Margin of Other Businesses 1 1 Profit Breakdown 其他业务利润分布 of Other Businesses ( 人民币百万元 (Expressed) by RMB in million) % 13% 4% 10% 84% 86% 2.3% 2.3% H H Profit margin of other businesses 佣金收入 Commission income H H 厂商广告支持 Ad support from producers 其他服务 Other services 佣金收入 Commission income H 1H 厂商广告支持 Ad support from producers 其他服务 Other services Sales Management 销售管理费用及费用率 Fees and Fee 2 Rate 2 Breakdown 销售管理费用分布 of Sales Management Fees ( 人民币百万元 ) (Expressed by RMB in million) % % Salaries 工资 Depreciation and Amortisation 折旧摊销 Advertising 广告宣传 Management fees for leased 租赁物管费 properties Advisory 咨询服务费 services fee 2% 14% 3% 8% 5% 6% 17% 30% 15% Salaries 工资 Depreciation and 折旧摊销 Amortisation Advertising 广告宣传 Management fees for leased 租赁物管费 properties Advisory 咨询服务费 services fee 3% 5% 4% 4% 6% 11% 11% 16% 40% Office 办公费 expenses Office 办公费 expenses Transport 运输费 charges Banking 银行手续费 charges Others 其他 H 20141H Sales management fees income rate 注 :1 扣除利息及赔偿收入; Note: 1. Net of interest and compensation income; 2 2. 扣除非付现的折旧摊销及以股份结算的期权奖励支出 Net of non-cash depreciation and amortisation and equity-settled option incentive expenses H Transport 运输费 charges Banking 银行手续费 charges Others 其他 20141H 18

19 Working Capital Management Inventory 存货周转天数 Turnover Days Amount 存货金额 of Inventories ,239 1,527 1, H H H Trade 应收贸易款周转天数 Receivables Turnover Days Trade 应付贸易款周转天数 Payables Turnover Days H H H H H H Inventory turnover days = closing inventory balance*180/costs of sales Trade receivables turnover days = Average trade receivables balance*180/revenue Trade and bills payables turnover days = Average trade and bills payables balance*180/costs of sales 19

20 Solid Capital Structure and Strong Solvency EBITDA/ 利息支出 ( ) EBITDA/Interest expenses (x) 净债务 /EBITDA(x) Net Debt/EBITDA (x) H H H H H H 流动比率 ( ) Current ratio (x) 资产负债比率 Gearing ratio % 57.9% 57.3% 流动比率 Current = ratio 流动资产 = Current / 流动负债 assets/current liabilities 20

21 4. Business Highlights

22 In view of the fundamentals of steady growth achieved by the PRC luxury and ultraluxury automobiles markets as well as the fact that the PRC automobile market is in the period of upgrading and reforming, the Group has implemented its four business lines, namely steady development for 4S outlets, proactive development for comprehensive after-sales services, proactive development for new energy vehicles and innovative development for high-end value-added business. 22

23 (1) Stalbe Development for 4S Outlets 23

24 1. Unique Network Layout The Group has always focused on its product quality and profits rather than reckless business scale expansion. To maximize the best interests of the shareholders, the Group is committed to building up its unique brands and network layout strategies. Adhering to a strategy focuses on luxury and ultra-luxury brands; Adhering to a strategy that stresses on the deployment of the market for luxury brands in the central-western regions to establish our dominant and leading position in such certain regions, so as to ensure profits and quality; Adhering to a strategy that stresses on the deployment of the market for ultra-luxury brands in the first tier cities and economically developed eastern coastal regions, thereby gradually shaping a dominant and leading position; Adhering to the opening of outlets in the prime locations of core cities; Adhering to a strategy that stresses on high-proficient operating pattern with lower proportion of assets, and land is only used under leasing arrangement rather than acquisition. 24

25 Network Layout Headquarter Shaanxi(2) He nan(25) Beijing (3) Rolls-Royce(1) Rolls-Royce after-sales services (1) BMW(15) Lexus(3) Rolls-Royce(2) Aston Martin(2) MINI(3) BMW(1) Maserati(2) Jiangsu(4) Hubei(3) Beijing Maserati(1) Maserati/Ferrari(3) BMW(1) Aston Martin(1) Jaguar/Land Rover(1) Shaanxi He nan Shandong Jiangsu Shanghai(1) Hubei Zhejiang Shanghai BMW(1) Guangdong (1) BMW(1) Guangdong Fujiang Fujian(1) Lexus(1) 25

26 2. Stable growth in sales of new vehicles Stable growth 新车销量稳定增长 in sales of new vehicles Unit: units 7,044 9, H H 26

27 3. Strong growth in after-sales services of 4S outlets Strong growth in revenue from after-sales 4S 店售后收入快速增长 services of 4S outlets ( 人民币百万元 ) (Expressed by RMB in million) H H 27

28 4. Strong growth of automobile insurance and finance business Strong growth 佣金收入强劲增长 in commission income ( 人民币千元 ) (Expressed by RMB in thousand) 98,700 70, H H 28

29 5. Fast development of automobile after-markets business We highly value the development of our automobile aftermarkets business. The Group has specially established its after-markets business department and intensified its business development of competitive products, accessories, car retrofitting and car tuning. We acquired Goocar Preowned Automobile Company ( 谷卡二手車公司 ) and endeavored to develop our second-hand vehicle business. We are negotiating with a renowned domestic internet company to promote cooperation in building an online and offline platform for our second-hand vehicle business. 29

30 (II) Proactive Development for Comprehensive After-sales Services Comprehensive after-sales business is an innovative business launched by the Group. It is an innovative reform of after-sales maintenance service in the PRC and in line with the development trend of the PRC automobile market, which has strong competitiveness.

31 1. Innovate and Reform of After-sales Maintenance

32 1 Current Situation of Automobile Maintenance between USA and China USA China 80% 20% Comprehensive after-sales services centres 4S stores Comprehensive aftersales services centres 23% 4S stores 77% 4S stores Comprehensive after-sales services centres Source: Source: ZDC & The uptrend of comprehensive after-sales services centers represents the future development trend. It s essential to provide comprehensive maintenance services for luxury automobiles which will have stronger competiveness. 32

33 2 Current Situation of Maintenance Services Market (4S Stores) in the PRC Highest selling price Highest maintenance costs Highest price for spare parts Highest claim costs Largest investment Basic Reasons 4S store model operated under the monopoly of automobile manufacturers 33

34 3 Current Situation of Maintenance Services Market in the PRC 4S 店 stores Roadside stores 路边店 Branded chain 品牌连锁店 stores Of all out-of-warranty car owners, 62% continues to choose 4S stores, 25% chooses branded chain stores and the remaining 13% chooses roadside maintenance stores. Source: Auto After-market Research and Analysis Report 4S special maintenance stores Branded chain stores Maintenance cost Costly Cheap Cheaper Roadside maintenance stores Maintenance quality Guaranteed Guaranteed Unguaranteed Convenience Inconvenient Convenient Convenient Services Good services Good services Varied services Maintenance scope Single-brand, nationwide Multi-brands, quick service Personnel quality Good Better Bad Multi-brands, quick service 34

35 4 With the development of the PRC automobile industry becoming more market-oriented, transparent and international, as well as the adjustment of after-sales service policy and the gradual alignment with international practice, comprehensive after-sales maintenance service business will become the future development trend of the industry. To seize this opportunity, the Group has initiatively promoted its comprehensive after-sales business in the domestic market, thereby enhance our competitiveness. 35

36 2. Network Layout of Comprehensive After-sales Services Business 1 We still focus on provision of maintenance services to luxury and ultra-luxury automobiles for the following brands: 36

37 2 As of the date hereof, we have 25 outlets in operation Headquarter Henan(13) Liaoning(1) Shaanxi(1) Comprehensive after-sales services centre(13) Comprehensive after-sales services centre(1) Beijing(1) Comprehensive after-sales services centre(1) Comprehensive after-sales services centre(1) Hubei(1) Shandong(2) Comprehensive after-sales services centre(1) Sichuan(1) Beijing Liaoning Comprehensive after-sales services centre(2) Jiangsu(1) Comprehensive after-sales services centre(1) Guizhou(1) Comprehensive after-sales services centre(1) Sichuan Shaanxi Guizhou Henan Hubei Shandong Jiangsu Zhejiang Shanghai Comprehensive after-sales services centre(1) Shanghai(1) Comprehensive after-sales services centre(1) Guangdong(1) Guangdong Zhejiang(1) Comprehensive after-sales services centre(1) Comprehensive after-sales services centre(1) 37

38 Outlets Demonstration

39 Outlets Demonstration 39

40 Outlets Demonstration

41 Outlets Demonstration

42 Outlets Demonstration

43 3. Strong Growth in Yield of Comprehensive After- Sales Services Business Proportion Comprehensive of comprehensive after-sales services after-sales centre 占 services 比分布 (RMB million) % 100% 81.2% H After-sales 4S services 店售后 in 4S outlets Comprehensive 综合售后 after-sales services H 43

44 3. Strong Growth in Yield of Comprehensive After- Sales Services Business 综合 Comprehensive Rapid growth of after-sales revenue services from comprehensive centre 服务收入增长 after-sales 迅猛 services RMB 0, January February March April May June 1 月 2 月 3 月 4 月 5 月 6 月 44

45 4. Operational Model With reference to the internationally accepted practice and through practical operation, the Company has established its own operation model of Harmony Comprehensive after-sales, which comprises the following ten aspects: 45

46 Operational Model (Ten aspects) Carry out various automobile aftermarkets businesses such as quality products, insurance, finance, second-hand vehicles, decorations Multi-brand comprehensi ve maintenance model Create the brand of Harmony Less investment, lower costs and short cycle Operational Model Introduction of marketing via mobile network Superstandardized Service quality equivalent to that of 4S outlets Strategic cooperation agreements with insurers More preferential prices Higher efficiency 46

47 (1). Less investment, lower costs and shorter cycle Series A outlet Cost: RMB10 million Series B outlet Cost: RMB6 million Construction to be completed in 1-2 months Series C outlet Cost: RMB3 million Series D outlet Cost: RMB1 million One Series A 4S outlet for luxury automobiles Cost: RMB100 million 15 maintenance centers for luxury automobiles source: company information 47

48 (2). Super-standardized chain stores CI standards Accessor ies channel Price Service procedur e United Quality Technolo gy Design style 资料来源 : 公司信息 48

49 (3). Service quality equivalent to that of 4S outlets Technology Concept Equipment Team 49

50 (4). Higher efficiency Convenient geographic location Simplified procedures Strong reception capability Fast maintenance 50

51 (5). More preferential prices Maintenance center 4S outlets 51

52 (6). Multi-brands comprehensive maintenance model 52

53 (7). Nationwide strategic cooperation agreements with insurers 53

54 (8). Carrying out various automobile after-markets businesses such as quality products, insurance, finance, second-hand vehicles, decorations. (9). Introduction of mobile internet marketing - Harmony in the field of car maintenance. 54

55 (10). Build the brand of Harmony 55

56 5. Marketing Strategy To care for children left behind in poor rural and mountainous areas and to organize lectures concerning traffic safety knowledge as a positive corporate with social responsibility delivering positive power. To establish strict management system in respect of organization structure, accessories procurement, CI training, staff etiquette, operation procedure, automobile-take related stipulations and service system in Harmony s instruction manual for comprehensive after-sales service, and to investigate the implementation of the same through mystery customers. Various means including performance review are adopted to ensure united service standards to be determined for all the outlets of Harmony s comprehensive maintenance center, improving customers satisfaction while bringing them wonderful experiences. Establish call center Build standard services of Harmony 1. to carry out extensive on-air promotion via print media, TV media and network media to propagate the image of Harmony as a professional and high-end brand; 2. to approach customers through various material connections with them including customer activities, visits in persion, providing maintenance at their houses and distribution of DM single pages; 3. referral and propaganda by major high-end customers to initiate circle culture effect Commonweal -based promotion Sales of new automobiles Marketing strategies 56 Promotion via advertisement Recognition and referral Mobile network Horizontal alliances among highend customers associations To form recognition and referral by those customers who receive our services, thus to enhance our corporate image. To create a comprehensive E-commerce platform with our official website, Wechat-public, APP, etc. To conduct horizontal alliances among various high-end customer associations including united enterprises alliance, banking VIP major clients unit, membership of star hotels, fan club for ultra-luxury automobiles, golf club as well as high-end properties, so as to develop major customers resources and thereby create great recognition on Harmony among the high-end customers group.

57 6. Development Objectives Market positioning: A leading luxury automobile comprehensive maintenance service provider group in China Brand positioning: A preferred brand in the PRC market for comprehensive maintenance services of luxury automobiles Number of stores opened: To open 40 stores by the end of 2014, and 80 by the end of

58 III. Innovative High Value-end business

59 The Group is committed to develop its luxury and ultra-luxury automobiles businesses and has accumulated numerous high-end customer resources in the past decade, providing services for high-end customers in the PRC. We are consolidating and capitalizing these high-end customer resources to innovatively develop high value-added businesses. For instance, we are conducting business negotiations with Foxconn and Apple Inc., aiming to use our existing luxury and ultra-luxury automobile showroom and platform to provide our high-end customers with customized Apple products and services. Meanwhile, we are also conducting business negotiations with producers of famous wrist watch brands in Switzerland and famous luxury brands in France and Italy. We are committed to creating an ecosystem of high-end industries by capitalizing our high-end platform and customers. The expansion of these innovative high value-added businesses will become a new point of growth for our businesses and profits. 59

60 1 Tripartite Cooperation with Foxconn and Apple Inc. 60

61 2 Products in Cooperation

62 IV. Proactive New Energy Vehicle Business

63 New energy vehicle will not only be the direction of the global automobile development but also the reform of the traditional automobile industry. With the coming of such reform, the Group seized this opportunity to proactively develop its new energy vehicle business. The Group has cooperated in the field of after-sales services with Tesla, an electric vehicle company in America. Tesla conducts cooperation with CRC company in the US and with Harmony in the PRC. The Group s cooperative outlets in Beijing, Shanghai, Hangzhou, etc. have been under operation currently, whereas the construction of those branch outlets in Guangzhou, Xi an, Wuhan Nanjing, Shenyang, Qingdao, Xiamen, Kunming, etc. are in progress and will be successively put into operation. PRC Harmony USA CRC Tesla 63

64 1 Network Layout of new energy vehicles 3 outlets in operation:beijing, Shanghai, Hangzhou; 8 outlets to be commenced: Shenyang, Qingdao, Xi an, Wuhan, Guangzhou, Nanjing, Xiamen, Kunming. Beijing Liaoning Beijing Shenyang Qingdao Shandong Xi an Nanjing Shaanxi Hubei Jiangsu Zhejiang Shanghai Wuhan Shanghai Hangzhou Xiamen Yunnan Guangdong Fujian Kunming Guangzhou Distribution by provinces Distribution by cities In operation To be commenced 64

65 2 Photos of new energy vehicles outlets in operation Shanghai Beijing Hangzhou 65

66 66 Shanghai

67 67 Shanghai

68 68 Shanghai

69 Shanghai 69

70 70

71 71 Shanghai

72 Beijing 72

73 73 Beijing

74 Beijing 74

75 Beijing 75

76 Beijing 76

77 77 Beijing

78 Beijing 78

79 79 Beijing

80 80 Hangzhou

81 Hangzhou 81

82 Hangzhou 82

83 Hangzhou 83

84 84

85 4 Photos of new energy vehicles outlets to be opened Guangzhou Xi an Wuhan 85

86 Guangzhou 86

87 Xi an 87

88 88 Wuhan

89 89 Wuhan

90 5 Construction for new energy vehicles outlets Nanjing Shenyang Qingdao Xiamen Kunming 90

91 Nanjing 91

92 Shenyang 武汉 92

93 93 Qingdao

94 Kunming 昆明 94

95 6 Sales projections on Tesla for the coming three years Unit: Vehicle 95

96 V. Development Strategy

97 (I) Prudent Development Strategy for 4S Outlets (II) Proactive Development Strategy for Comprehensive After-sales Services Development Strategy (III) Innovative Development Strategy for High Valueadded Business (IV) Proactive Development Strategy for New Energy Vehicle Business

98 (I) Stable Strategy for 4S Outlets (1) Adhering to a strategy focuses on luxury and ultra-luxury brands; (2) Adhering to a strategy that stresses on the deployment of the market for luxury brands in the central-western regions to establish our dominant and leading position in such certain regions, so as to ensure profits and quality; (3) Adhering to a strategy that stresses on the deployment of the market for ultraluxury brands in the first tier cities and economically developed eastern coastal regions, thereby gradually shaping a dominant and leading position; (4) Adhering to the opening of outlets in the prime locations of core cities; (5) Adhering to a strategy that stresses on high-proficient operating pattern with lower proportion of assets, and land is only leased but not purchased. 98

99 (II) Proactive Development Strategy for Comprehensive After-sales Services (1)Innovation and reform of the automobile maintenance industry in the PRC; (2)Developing trend of the automobile maintenance industry in the PRC; (3)We have formed scaled operational model; (4)Vigorous development. 99

100 (III) Innovative Development Strategy for High Value-added Business (1)The Group has accumulated numerous high-end customer resources in the past decade; (2)The Group has consolidated these resources to innovatively develop high value-added businesses ; (3)The Group has been conducting business cooperation with Foxconn and Apple Inc. ; (4)We are conducting business negotiations with producers of famous wrist watch brands in Switzerland and of famous luxury brands in France and Italy ; (5)We are committed to creating an ecosystem of high-end industries which will become a new point of growth for our businesses and profits.

101 (IV) Proactive Development Strategy for New Energy Vehicle Business Transformation of traditional automobile industry; Future development trend of the global automobile industry; Vigorous development; A new start for our dream.. 101

102 Q&A

103 Appendix: Financial Summary

104 Summary of Income Statement (RMB 000) H H Growth Revenue 5,004,368 3,659, % Gross Profit 547, , % Other Income and Gain 196, , % Selling Costs -237, , % Administrative Expenses -50,719-45, % Operating Profit 456, , % Finance Costs -98,380-82, % Profit Before Tax 360, , % Net Profit 276, , % Net Profit Attributable to Owners of the Parent 274, , % 104

105 Summary of Balance Sheet (RMB 000) Growth Cash and Cash Equivalent 1,460,000 1,964, % Inventories 1,317,574 1,526, % Trade Receivables 61, , % Total Current Assets 6,360,835 5,741, % PPE 1,956,648 1,722, % Land Use Rights 12,897 13, % Total Non Current Assets 2,092,537 1,867, % Total Assets 8,453,372 7,609, % Bank Loans and Other Borrowings 2,988,803 2,672, % Trade and Bills Payable 1,538,372 1,363, % Total Current Liabilities 5,933,223 5,311, % Long Term Borrowings 41,840 48, % Total Non Current Liabilities 56,849 60, % Total Liabilities 5,990,072 5,371, % Equity Attributable to Owners of the Parent 2,443,308 2,220, % Total Equity 2,463,300 2,237, % 105

106 Summary of Cash Flow Statement (RMB 000) H H Growth Cash and Cash Equivalent at the Beginning of Year 783, , % Net Cash Flow from Operating Activities Net Cash Flow from Investing Activities Net Cash Flow from Financing Activities Net Increase/(Decrease) in Cash and Cash Equivalent Net Influence from Change of Exchange Rate Cash and Cash Equivalent at the End of Year 31,903 (79,571) % (211,051) (173,888) 21.4% 203,715 1,420, % 24,567 1,166, % 1, % 809,600 1,509, % 106