1. Securities code: 300432 securities abbreviation: Mianyang Fulin Precision Co.Ltd(300432) Mianyang Fulin Precision Co.Ltd(300432) investor relations activity record No.: 2022-001 investor relations activity category □ specific object research □ analyst meeting □ media interview □ performance briefing □ press conference □ roadshow activity □ on-site visit □ name of other participating units (JPMorgan online forum): J.P. Morgan, Taikang asset management Teng Yue partners, Allianz asset management, ASPEX management, BNP Paribas Asset Management, singularity asset management, Deutsche asset management, Goldman Sachs asset management, Henderson fund, Indus capital, Manulife investment, luberman, China insurance bank asset management, point72, polymer capital, Huili fund and other 17 institutional investors. Changjiang Securities Company Limited(000783) , Chunhou fund, Oriental alpha fund, Dongfanghong, Fuguo fund, Chengdu Fusen Noble-House Industrial Co.Ltd(002818) investment, founder Fubang fund, Gf Securities Co.Ltd(000776) , Guojing capital, fruit capital, Guotai Junan Securities Co.Ltd(601211) , Hua\’an fund, Huaan Securities Co.Ltd(600909) , HSBC Jinxin, Huihua wealth management, Huaneng Guicheng trust, Huarong securities, Hezheng Yisheng investment, Jinhe assets, Harvest Fund, Jiutai fund, Jianxin pension There are 49 institutional investors, including niche investment, China Southern Fund, Qingdao Changming, Sansong group, Tonghui capital, Wen’s investment, Yide assets, Yinsheng assets, Sino German securities, China Africa credit bank, CICC capital, CICC asset management, China Securities Co.Ltd(601066) , China Post Fund, etc. Time: January 13 to January 14, 2022 location: Sichuan Fulin New Energy Technology Co., Ltd. (Shehong) Receptionist of the listed company, Mr. Li Pengcheng, vice chairman and Secretary of the board of directors, Mr. Du Junbo, deputy general manager and general manager of Jiangxi sublimation, Mr. Xiang Mingming, chief engineer and director of the technical center, Mr. Liu Zhimin, deputy general manager of Jiangxi sublimation, Ms. Xu Huawei, securities representative 2. Introduction to the main contents of investor relations activities I. on-site visit to the company’s auto parts intelligent electronic control industry plant New energy lithium battery cathode material factory with an annual output of 50000 tons of lithium iron phosphate. 2、 During the introduction of the company, Mr. Li Pengcheng briefly introduced the basic situation of the company, industry opportunities, competitive advantages, strategic planning, etc. The main contents are as follows: the company’s main business is the R & D, production and sales of traditional automobile engine parts, intelligent electronic control of new energy vehicles, and lithium iron phosphate as cathode material for new energy lithium batteries. The company is a leading enterprise and invisible champion in the subdivided field of automobile engine parts in China. Its main products, precision hydraulic parts and electromagnetic drive parts, are first replaced by domestic products. Relying on the advantages of precision manufacturing, the company has accelerated the layout of intelligent electronic control systems for new energy vehicles, including thermal management system, new energy vehicle reducer and intelligent damping system. The main representative products are electronic water pump, electronic water valve, on-board reducer, gearbox solenoid valve and CDC solenoid valve. The company’s new energy lithium iron phosphate cathode material is mainly used in new energy vehicle power batteries. At present, it has made phased progress and achievements in capacity layout, technology upgrading and market position. With the improvement of the overall prosperity of the new energy lithium battery industry, the production and sales of lithium iron phosphate industry are booming. With the rapid improvement of downstream lithium battery capacity, production and sales, lithium iron phosphate is in short supply. At present, the overall effective capacity and supply of the industry are difficult to meet the needs of core customers in the short term. In the second half of 2020, the subsidiary Jiangxi Shenghua lithium iron phosphate plant with an annual output of 12000 tons was upgraded. In February 2021, the project with an annual output of 50000 tons of lithium iron phosphate was invested and built in Shehong, Sichuan. By the end of 2021, the project with an annual output of 50000 tons of lithium iron phosphate cathode material has been officially put into operation, the capacity has been released orderly and mass supply has begun. Up to now, The company has an annual production capacity of 62000 tons of lithium iron phosphate. In 2021, the board of directors and the management team of the company focused on the new energy industry track, achieved a good start in terms of capacity expansion, strategic cooperation, resource expansion and the combination of industry and finance, and laid a solid foundation for follow-up development in terms of strategic focus, organization construction and innovation driving mechanism. The company will grasp the development trend of electric and intelligent vehicles, take the new energy vehicle industry chain as the main track, accelerate the layout of intelligent electronic control industry, promote the upgrading of the company’s business from traditional precision processing to intelligent electronic control and mechatronics, actively accelerate the layout of lithium iron phosphate cathode material production capacity at the same time, and continue to promote technical iteration and product upgrading, Strengthen the in-depth cooperation with the ecological partners of the industrial chain, quickly seize the position in the new energy power market, and continuously enhance the company’s comprehensive competitive advantage. The company is committed to becoming a comprehensive supplier of new energy lithium battery cathode materials and automotive intelligent electronic control solutions with international competitiveness, and realizing the strategic goal of “intelligent control leading and iron lithium leading”. 3、 Q & a session of the meeting, main questions exchanged and company reply summary 1. What is the planning of the company’s new energy vehicle intelligent electronic control industry project? A: the company relies on the original cooperative relationship in the new energy vehicle intelligent control industry, follows the traditional 3 fuel vehicle customers\’ entry into the field of new energy vehicles, and continues to obtain the first mover advantage by means of cooperative research and development and synchronous research and development; Relying on the cooperative relationship and demand of United Electronics (UAEs), Huawei and other customers, continue to import the business of intelligent electronic control system and key components of new energy vehicles under the condition of continuous climbing increment of new energy vehicle electric drive reducer project, so as to form the advantage of system integration; At the same time, relying on the advantages of the company in the field of traditional automobile engine precision parts for many years, the company has actively expanded its business to new forces of vehicle manufacturing. The company has established a wholly-owned subsidiary Sichuan Xinzhi Thermal Control Technology Co., Ltd. on December 31, 2021 to carry out matrix management on the thermal management assembly system. In 2022, the cooperation between electronic water pump and small water pump and foreign main engine manufacturers will be strengthened; Increase the R & D and application of micro motor and electric actuator. 2. What is the capacity and output of electric drive reducers? A: the company’s on-board electric drive reducers have a capacity of 150000 sets / set per year. The construction of the second production line with an annual capacity of 180000 sets / set in phase II project has been basically completed and is being driven in small batches. It is expected that the company’s on-board electric drive reducers will have a normal mass production in the first half of 2022. At that time, the company’s annual capacity of on-board electric drive reducers will reach 330000 sets / set. 3. What is the unit price for mass production of the reducer? The single vehicle value of the on-board reducer answer: the unit price is determined according to the product design status, structure and cost price. The value of a single vehicle is the mass production price of the assembly divided by the sales price of the whole vehicle. 4. How about the development of the company’s electronic water pump business a: the company accelerated the R & D and application of electronic water pump a few years ago, launched four platforms of main water pump 200W ∽ 600W, and took the lead in testing and Application on the platform of China’s independent brand automobile enterprises. At present, the company is the first automotive main water pump supplier with mass production experience in China, and has been supplying customers in batches since 2020. 5. What are the main advantages of the company’s new energy lithium battery cathode materials? A: (1) the advantage of leading technical performance indicators. The lithium iron phosphate produced by the company has relatively leading advantages in important technical indicators and production processes such as compaction density, cycle life and gram capacity. From the perspective of cathode material switching in the market power field, the performance and technical indicators of the company’s lithium iron phosphate can meet the requirements of core customers for main models.
(2) The technical route has great possibility in cost optimization and product upgrading. The ferrous oxalate technical route has a large space in reducing the cost of raw materials. The continuous optimization of cost structure and supply chain system will continue to improve the comprehensive competitive advantage of the technical route. At the same time, the technical route has good compatibility, including better compounding and upgrading with manganese series materials. (3) The company’s years of experience and ability in precision manufacturing and lean production, as well as its understanding of the system and concept of automobile OEMs, can better meet the needs of end customers, especially the four customers of international front-line OEMs. The company’s perfect quality assurance system and excellent cost systematic management and control ability are also the long-term competitive advantages of lithium iron phosphate industry. (4) The company actively expands the strategic cooperation between the industrial chain and the supply chain, will continue to strengthen the strategic cooperation upgrading and value extension of the industrial chain, and establish an ecological collaborative and long-term stable cooperative relationship. (5) The company has the capacity and advantages of large-scale expansion and mass production. At present, the company’s annual capacity of lithium iron phosphate is 62000 tons. The production line is an automatic process from feeding to shipment, and has large-scale mass production capacity. With the accelerated production of power battery capacity of downstream customers, the company can quickly respond to and match the demand for capacity at the demand side, and further enhance its scale and comprehensive competitive advantage. 6. Differences between the company’s lithium iron phosphate technical route and the same industry answer: the company is ferrous oxalate route + solid phase method. The selection of the company’s lithium iron phosphate product technical route is mainly based on the needs of end customers, its performance index advantages and cost reduction advantages. The materials made by this technical route have high compaction density, less cycle attenuation, high mining potential, and are on the voltage platform Outstanding in thermal stability and consistency. There are many technical routes for the preparation of lithium iron phosphate cathode materials, which are different from each other, and can not be described in detail compared with the same industry. 7. How to see the technical route of lithium manganese iron phosphate? Does the company have a layout in this regard? A: lithium manganese iron phosphate products are relatively hot in the market. Sublimation also has this product R & D plan, which is planned to be launched by the end of the year. 8. Is there any subsequent capacity and resource layout plan for new energy lithium cathode materials? A: since 2020 and January September 2021, the sales revenue of lithium cathode materials of the company has rebounded rapidly driven by new customers and market demand. The company issued shares to specific objects to raise funds for the construction of 50000 tons of lithium cathode materials. It is precisely to meet the rapidly growing needs of downstream customers, expand production capacity, actively seize market share and re-establish the company’s market dominant position in the field of lithium cathode materials. In 2021, the company arranged the resource side and expanded the supply chain. The company’s lithium iron phosphate products were recognized by high-quality customers in the terminal market, and the pace of capacity layout was accelerated simultaneously. The production capacity of 50000 tons was reached in December 2021, and it is expected to reach full production in the first quarter of 2022; The 60000 ton lithium iron phosphate cathode material project with an annual output of 250000 tons planned by the company in July 2021 is under accelerated construction. Based on the needs and changes of the industrial market, the company will also optimize the regional layout of production capacity according to the needs of customers, continuously improve the effective production capacity and meet the needs of the market and customers. 9. What is the cost reduction logic of the company’s lithium iron phosphate technology route? A: the cost reduction path is mainly realized and optimized through raw materials, process upgrading and fine management. (1) In terms of raw materials, ferrous oxalate has continuous cost reduction space. Lithium dihydrogen phosphate 5 diversified lithium sources, especially the use of lithium phosphate, are of great significance for cost reduction of raw materials. The company’s cost reduction of raw materials will focus on the ecological cooperation and resource expansion in the upstream of the company. With the expansion of the company’s production capacity, the economies of scale of upstream raw materials have been further improved, opening up space for reducing the cost of raw materials. (2) From the perspective of process upgrading, with the large-scale mass production of large-scale automatic device production line, the company will further explore the cost reduction space in the aspects of manufacturing process, labor and energy saving control, and the improvement of large-scale benefits. (3) The lean production and fine management experience accumulated by the company for many years is the basis for continuous cost reduction. Cost reduction through management optimization and technological innovation is also a long-term and core competitiveness. 10. Will there be a shortage of lithium carbonate in the upstream of lithium iron phosphate and how to ensure the supply of raw materials? A: from the current industry situation, with the rapid development of new energy lithium battery industry, the upstream lithium source is in short supply and the price is rising rapidly. Since the price of the upstream lithium source will be directly transmitted to the downstream battery customers, the customers will also assist in the supply guarantee of the upstream lithium source in order to ensure the installation of the core models of the terminal and control the comprehensive material cost; The company’s participation in hengxinrong Lithium Industry Co., Ltd. has achieved preferential supply guarantee. With the further improvement of hengxinrong’s operation and the acquisition of subsequent mining rights, hengxinrong’s supply capacity for lithium carbonate and lithium phosphate will be significantly enhanced; The company will also diversify and expand upstream lithium source channels to enrich and ensure the stability of lithium source supply. 11. What is the net profit per ton of lithium iron phosphate of the company and what is the level compared with the same industry? A: under the stable production capacity state, the company should at least reach the average level of public data in the industry. From the perspective of optimizing the current supply chain system and reducing costs, the company is gradually approaching the level of excellent peers. 12. What is the progress of the company’s investment in Qinghai hengxinrong lithium industry and how to implement the subsequent capital and share increase? A: the company has completed the equity delivery of 9% equity transfer of hengxinrong and relevant industrial and commercial change registration on November 30, 2021. Subsequent matters are being promoted. If there is progress, the company will perform relevant review procedures and disclosure obligations according to the progress of the project. 13. What are the advantages of the company’s auto parts business answer: (1) with rich product lines and high market share of some products, the company is a major auto parts supplier with high influence in China. (2) Customer structure advantages. Customers are mainstream automobile engine manufacturers at home and abroad. The company has formed a market pattern dominated by the main engine market, supplemented by the after-sales market, dominated by the Chinese market and gradually broken through the foreign market. (3) R & D strength advantages, the company’s core R & D personnel and R & D expenses are increasing year by year, 6 with industry university research cooperation institutions, perfect design standards, long-term development experience and all-round patent protection. (4) With the advantages of cost control, the company accurately controls the cost through platform production, lean production management and supply chain management. 14. The company’s auto parts business accounts for a high proportion, but this market is shrinking, because electric vehicles will replace fuel vehicles, and the things in fuel vehicles will be reduced. Why can the company see the steady growth of this business? What is the growth logic? A: the general trend of the development of new energy vehicles does not mean that the era of fuel vehicles is coming to an end, and the stock market is still large, We still have incremental opportunities in the stock market. With the adjustment of the supply chain of large manufacturers of European and American auto enterprises, orders and production capacity in Europe and America have also been transferred. In the past two years, the company’s traditional parts business has increased instead of decreasing. The core competitiveness of the company is the advantage of precision manufacturing and stable customer cluster. These models designated in the early stage are available for customers
