Zhejiang Founder Motor Co.Ltd(002196)
General manager’s work report
Dear directors
As the general manager of Zhejiang Founder Motor Co.Ltd(002196) (hereinafter referred to as “the company”), I hereby make the following report to the board of directors on the main business work of the company in 2021:
1、 Review of work in 2021
In 2021, the covid-19 pneumonia epidemic continued to spread all over the world, the economic order suffered a huge impact, the global economy was facing great uncertainty, international trade frictions continued to escalate, and in the face of the complex international economic situation, the rise of China’s commodity prices, the continuous impact of the epidemic and other adverse environments, the company actively developed various businesses around the established strategic objectives and annual business plans, Focus on increasing production capacity to meet the explosive growth demand for new energy vehicles. During the reporting period, the company has greatly improved its product innovation and manufacturing capacity of new energy driven motors, and better completed the annual set goals. In 2021, the company’s operating revenue increased by 65.47% year-on-year, of which the driving motor business increased by 188% year-on-year. However, due to the rapid rise in the prices of bulk commodities such as copper, silicon steel sheet, aluminum and rare earth, the rise of the company’s raw material costs could not be transmitted to downstream customers in the short term, and there was a large operating loss during the reporting period.
The report on the company’s business performance and main work in 2021 is as follows:
(I) main financial data:
Year on year growth of the project from 2021 to 2020 (%)
Operating income (10000 yuan) 1890768211426561 -65.47
Total profit (10000 yuan) -832.83 -6514653 98.72
Net profit attributable to the owner of the parent company (10000 yuan) 251770 -6387949 103.94
Total assets (10000 yuan) 3200013225972169 -23.21
Owner’s equity attributable to the parent company (10000 yuan): 1495086814529338 -2.90
Net assets per share (yuan) 3.00 3.10 3.23
Earnings per share (yuan) 0.05 -1.36 103.68
Return on net assets (%) 1.70 -35.68 37.38
Net cash flow from operating activities per share 0.28 0.10 180 yuan
(II) main achievements:
1. Market development and production organization of new energy driven motors
During the reporting period, the company’s new energy drive motor series products have established supporting cooperative relations with a number of Chinese traditional independent brand vehicle manufacturers, new forces of vehicle manufacturing, international Tier1 and other customers, including SAIC GM Wuling, Geely motor, Saic Motor Corporation Limited(600104) , Chery motor, bee nest transmission, Wei Ran power, Xiaopeng motor, etc. Benefiting from the good market performance of the mass-produced models Wuling Hongguang Mini EV and Xiaopeng P7 equipped with the company’s drive motor, the company’s new energy drive motor shipment in 2021 continued to rank first among the third-party independent suppliers, second only to Byd Company Limited(002594) , Tesla.
The company continued to invest in capacity construction during the reporting period. By the end of 2021, the capacity of drive motors that have been put into mass production is 700000 units / year, and is currently in full production. In order to meet the growing demand of downstream customers, the company has continuously increased capacity construction since the second half of 2021. It plans to raise funds to build a new drive motor project with an annual output of 1.8 million units. The new capacity is mainly flat wire motors.
During the reporting period, the company strengthened the construction and improvement of the supply chain and established strategic partnership with the core material suppliers TISCO, Ningbo Yunsheng Co.Ltd(600366) , Tongling Jingda, etc. to jointly carry out the application research of various new materials on the driving motor of new energy vehicles, which is conducive to the company to establish competitive advantages such as material cost in the early stage of electric machine design.
2. Product development
In 2021, the company will steadily promote the research and development of new products in combination with the market demand, continue to increase the investment in technology research and development, take the integrated driving system of new energy as the general direction, continue to practice the development concept of “technology first”, and explore new products and new projects suitable for the market by means of cooperative development between industry, University and research institutions and Chinese surgical research units. In 2021, the company (founder and Fangde Research Institute) authorized 24 patents, including 2 invention patents and 22 utility model patents, which provided strong technical support for the company’s business development. The company’s R & D expenditure in 2021 totaled 1623843 million yuan, accounting for 8.58% of the revenue. Although it has greatly affected the company’s performance in 2021, it has laid a good technical reserve and product foundation for the company’s long-term development and the realization of strategic objectives. The company has continuously invested in the new technology direction of 800V high-voltage motor, flat wire motor, oil-cooled motor and other new energy drive motors, and has obtained the 800V high-voltage motor development contract and project fixed point of a new energy vehicle head enterprise.
3. Asset disposal and revitalization
During the reporting period, the company disposed of the idle real estate of Shanghai Haineng, and the Shiliu Road plant in Lishui signed a purchase and storage agreement with the Management Committee of Lishui Economic and Technological Development Zone. The disposal of the two assets will increase the cash inflow of the company by about 470 million in 2021, which is conducive to revitalizing the company’s existing assets and optimizing the asset structure. The obtained funds will be used for the construction of new bases, the production capacity of new energy driven motors and supplement the working capital required for the company’s business development, which is conducive to the rapid development of the company’s new energy driven motor business and in line with the company’s long-term development goals.
In addition, in order to enhance the integrity of assets and business of listed companies, reduce related party transactions and facilitate the internal management and business development of the company, the company acquired 48% equity of fangdezhiqu Research Institute held by Zhongzhen transportation; Acquisition of 70% equity of starship Development Co., Ltd. At the same time, the company’s new energy vehicle drive motor business is developing well. The company believes that it is necessary to focus on the development of new energy vehicle drive motor business and does not consider the expansion of new business in the short term. Therefore, the company transferred the equity of gengshang elevator to Zhongzhen transportation. The above equity transfer is conducive to the company focusing on its main business and reducing related party transactions, which is in line with the company’s long-term strategic development and does not damage the interests of the company and all shareholders, especially small and medium-sized shareholders.
4. Internal management, long-term incentive and corporate culture construction
The company pays attention to internal management construction, standardizes corporate governance, defines the responsibilities of the management, completes internal budget management and KPI assessment management of various departments and subsidiaries, increases investment in information work, and the company’s ERP upgrade and smart digital factory project are implemented smoothly. With the development of the company, the number of personnel is increasing, the organizational structure is expanding and the management team is growing. The company continues to promote the construction of internal control management, and insists on holding a regular general manager meeting every month and a summary meeting every six months.
During the reporting period, the company launched a restricted stock incentive plan, which granted a total of 30.75 million restricted shares to directors, executives and core employees of the company, further improving the cohesion of the core team. The company will further improve, establish and improve the company’s long-term incentive and restraint mechanism, attract and retain the company’s core management, core technology and business talents, fully mobilize their enthusiasm and creativity, ensure the realization of the company’s development strategy and business objectives, and make full use of their influence as a listed company through the implementation of employee stock ownership measures and the new government talent policy, Increase the popularity of Zhejiang Founder Motor Co.Ltd(002196) brand and the construction of corporate culture to make employees feel more belonging and achievement.
5. Information disclosure and investor relations
During the reporting period, the company strictly abided by relevant laws and regulations and information disclosure of the company. The directors, supervisors and senior management of the company and the person in charge of information disclosure conscientiously implemented the obligation of information disclosure and management affairs, committed to improving the standardized operation level of information disclosure, enhancing the authenticity, accuracy, integrity and timeliness of information disclosure, improving the quality and transparency of information disclosure, and improving the internal restraint and accountability mechanism. At the same time, in the daily work, an effective way to manage the interactive communication relationship between investors through telephone, interactive and easy platforms has been established to ensure smooth and effective communication and transaction processing between the company’s minority shareholders and potential investors.
2、 Key work plan for 2022
In 2022, the company will carry out the following key work around the established strategic objectives:
1. Focus on promoting the future factory project construction of Lishui power valley. The company will focus on the new energy vehicle drive motor industry, build the future factory and form an integrated production platform of the new energy drive motor industry chain. On this basis, actively promote the construction of the project with an annual output of 1.8 million new energy drive motors, form the capacity of mass production as soon as possible, focus on the implementation of key customer projects, and realize the formal mass production of weran power, honeycomb transmission and other projects, so as to inject new growth force into Zhejiang Founder Motor Co.Ltd(002196) new energy business. At the same time, actively explore new customers, especially international customers.
2. Actively promote the construction of new production bases of intelligent controllers (including Vietnam and East China bases) to meet the capacity needs of customers. Strive to seek breakthroughs in new customers of domestic engine controllers in the “Sixth National Plan”, as well as the R & D and project implementation of hydrogen energy engine controllers.
3. All departments strictly implement the departmental budget issued by the head office, improve the company’s product pricing mechanism, further reduce the proportion of raw materials and improve the profitability of the company’s products through technological innovation, R & D and process technology improvement; Through the automation of the company, the number of employees will be reduced and the manufacturing capacity of the company will be improved in the future; The budget of the three major expenses shall be strictly implemented. The heads of each department shall focus on the implementation of each expense budget in the monthly meeting, and special reports shall be made in case of abnormalities.
4. Optimize the resource coordination efficiency of “man-machine material method environment” through the digital system, adopt the way of jointly building public cloud and private cloud, and OA collaborative workflow approval system, flybook meeting, communication, knowledge sharing and other office systems at the collaboration layer; QAD enterprise resource management system and mom manufacturing operation management system at the manufacturing level; Business layer SRM electronic supply chain system; Digital twin and DBI big data analysis system in the whole life cycle of products on the display layer; Build CPS information logistics system at the bottom (server storage virtualization deployment / equipment IOT); Build an agile, transparent and intelligent motor factory and form a standardized application architecture to provide the basis and benchmark for the promotion and replication implementation of multiple factories of the follow-up group.
5. The company will continue to improve the corporate culture, various internal management systems and human resources management system, improve the system construction of post responsibilities, assessment and incentive, training and education, form a benign competition mechanism and create a harmonious employment environment. Through equity incentives and other measures, stimulate employees’ creativity, benefit employees from the company’s development achievements, and form a competitive and creative salary system.
Zhejiang Founder Motor Co.Ltd(002196) General Manager: Niu Mingkui
April 14, 2022
