1. Securities code: 002105 securities abbreviation: Hl Corp (Shenzhen)(002105) Hl Corp (Shenzhen)(002105) investor relations activity record No.: 2022-002 investor relations activity category ■ specific object research □ analyst meeting □ media interview □ performance presentation meeting □ press conference □ roadshow activity □ on-site visit □ others (please specify other activities in words) Name of participating unit and personnel name of Wanjia fund Wang Chenxi Guoyuan Securities Company Limited(000728) Xu Luo, Xu Yuankun, Liu Yuhang and Ma Lingjun time: January 11, 2022, 16:30-17:30 place company conference room name of receptionist of listed company Chen Liqiu main contents of investor relations activity 1 Please introduce the company. A: the full name of the company is Hl Corp (Shenzhen)(002105) . It was established in 1991, restructured in 2003 and listed on the Shenzhen Stock Exchange in January 2007. The company’s three main businesses: Bicycle parts, sports and fitness equipment and rehabilitation equipment; The chairman started his business in Taiwan in the 1970s. After more than 40 years of development, the company has accumulated relatively strong accumulation, including operation and management ability, technology, customers and R & D ability; In the past two years, due to the epidemic, the market demand for green micro travel tools has increased sharply, the company’s orders have surged, and the performance has increased significantly. The chairman was mainly engaged in the R & D, production and sales of bicycle spare parts at the beginning of his business. The company entered the sports and fitness equipment industry in 2000 and then the rehabilitation equipment industry in 2003. The company’s development goal in the next five years is that the revenue and profit of sports and fitness rehabilitation equipment and bicycle accessories account for 50:50 respectively. The company takes “creating a healthy and happy sports and leisure life for human beings” as its corporate mission, and firmly practices the business philosophy of “integrity, innovation, quality, pragmatism, implementation and win-win”. The management of the company is diligent and conscientious, goes deep beyond the industry, carries out vertical integration and horizontal development of the industry with the main business as the core, attaches importance to the continuous innovation and development, transformation and upgrading of the enterprise, actively expands and strengthens the listed company, continuously improves the profitability of the company and gives back to all shareholders of the company. In addition to fulfilling its information disclosure obligations in accordance with the law, the company has always attached importance to communication with investors. It is expected that through good communication with investors, the transparency of listed companies will be further improved, so that investors can better understand listed companies, and then affirm the investment value of listed companies. 2. Basic information of bicycle spare parts industry, market expansion, company market share and competitive barriers a: at the beginning of his entrepreneurship, the chairman focused on the R & D, production and sales of bicycle spare parts, which has accumulated more than 40 years of history; The company occupies about 20% of the world bicycle parts market-oriented system, and is in a leading position in the industry. The barrier of bicycle industry is not very obvious. The advantages of the company include: strong technical foundation, large-scale production capacity, stable and large number of customers, strong R & D ability, strong marketing team, strong ability to communicate with customers, and stable and close strategic partnership with world-famous brands and car manufacturers for decades, It has established a relatively strong strength, which can better respond to the surging demand of the market and achieve better performance growth. 3. The company’s gross profit has been increasing, the price of raw materials has risen, and the appreciation of RMB has led to the decline of the gross profit margin of many enterprises. Can it be understood that the upward trend of the gross profit margin is basically due to the price increase? A: the company has made efforts from many aspects to reduce the cost pressure of rising materials, and the price 3 adjustment is one of them. In recent years, the company has continued to carry out the automation transformation of production line equipment. After several years of investment, the production and operation efficiency has been significantly improved, and the effect of cost reduction is obvious; Moreover, due to various reasons, Taicang Xinlong, a subsidiary, has suffered losses for consecutive years. At the end of 2019, Taicang Xinlong adjusted its business strategy, stopped production and transformed into operating its own assets for rent, and the overall production capacity and orders were transferred to Tianjin Xinlong. Tianjin Xinlong’s capacity growth rate has been brought into full play. After the second quarter of 2020, Tianjin Xinlong and Taicang Xinlong have turned losses into profits; In recent years, the company’s orders have increased significantly. With the continuous improvement of output and the continuous improvement of staff’s work proficiency, the production efficiency has been further improved, and the company’s revenue has continued to grow steadily in recent years. The scale effect has reduced the fixed costs and fixed expenses of some companies. The company continues to invest in R & D and launch new processes, technologies and products, These are the reasons for the significant increase in gross profit margin. 4. How long to confirm the pricing with the customer in advance, and whether there is any plan to increase the price later. A: the company signed an agreement with the customer at the initial transaction. Both parties agreed that the price of raw materials and the exchange rate can start the price adjustment mechanism when the change reaches the proportion agreed by both parties. The finance and purchasing departments of the company shall monitor the exchange rate and raw material price changes in real time, and the business department shall respond in time in accordance with the above agreements. 5. Are there any other factors other than the impact of the epidemic for the performance growth in the first three quarters? The orders in the fourth quarter of 2021 are higher than those in 2022. A: the increase in orders in 2021 is mainly due to the demand stimulated by the epidemic. The 2022 order of the company has been arranged until the end of the year; The bicycle industry has always adopted the method of “just in time”, so customers will not place the required order quantity to the company at one time, and will continue to place orders in the future. 6. Year on year changes in price and gross profit margin in the first quarter of 2022 A: the factors that promote the growth of gross profit margin continue to play an effect. As long as the price of raw materials does not change significantly and the profit growth factors continue to release, the base 4 in the first quarter of 2022 should have been better than that in the first quarter of 2021. 7. At present, the demand side of the bicycle industry performs very well. What is the production and marketing rate of the company from the supply side and whether there is a production expansion plan in the future? A: at present, the capacity utilization rate of bicycle spare parts of the company exceeds 90%, and the company reserves a certain space in the capacity to meet the urgent order needs of customers. The company prefers to expand its production capacity by means of asset light. According to the actual order receiving situation, the company takes flexible measures to timely allocate and arrange the company’s internal equipment, plant and manpower, as well as the mutual allocation and assistance between various business divisions, so as to fully mobilize its internal production capacity. In recent years, the company has continuously updated its equipment, improved the ratio of equipment automation and intelligence, and also played a very good role. In addition, the company still has long-term and close cooperation with outsourcing manufacturers, which is a huge resource. According to the actual needs, fully mobilize the outsourcing manufacturers to join the production ranks, improve the production capacity and fully respond to the market demand. 8. Property right replacement a: the company’s Longhua plant urban renewal project signed a contract with the developer in 2013. Due to the impact of the epidemic, the government, in order to promote economic development and speed up the examination and approval, was approved in the second quarter of 2020. At present, it is in the stage of special design and examination and approval. The cooperative development conditions originally agreed between Songgang factory project company and the developer have changed greatly with the passage of time. The Company re examines the contract content and actively negotiates with the developer in the hope of obtaining better cooperation conditions. 9. Consideration on whether the property replaced in the future will be self-owned or sold answer: in the future, it will be handled and arranged according to the needs of the company and market conditions and the principle of maximizing the interests of the company.
10. Approximate amount of asset appreciation a: it is estimated that it will bring about asset appreciation of about 3 billion yuan to the company. 11. What changes has the epidemic brought to the whole bicycle industry chain, and whether the bargaining power of 5 upstream of the industry chain is increasing? A: covid-19 epidemic has stimulated a surge in the demand for bicycles and electric scooters in the world market, and the inventory of end sellers in the industry has always been maintained at a very low level, Sellers in foreign markets need to meet the surging demand of the market and maintain the safety stock level at the same time. A large amount of demand is still there, and the pace of import has not stopped. However, due to the different production capacity of each parts manufacturer, each enterprise can not meet all the parts required by the assembly plant to assemble the whole vehicle at the same time. The delivery time gap of some parts and components manufacturers is large, resulting in the disorder of the supply chain of the bicycle industry. Terminal sellers, assembly plants and parts and components suppliers are under great pressure. At this time, the production capacity is sufficient and stable, With strong operation and management ability, parts manufacturers that can quickly respond to the rapid surge of market demand can stand out. Since the fourth quarter of 2020, the prices of bulk materials in the world market have been soaring. Manufacturers are forced by huge cost pressure, and the demand transmits this pressure to the downstream sales end; Based on the price changes of bulk materials in the international market, the information is transparent and open, and the terminal sellers can better understand and accept the price adjustment of suppliers; The situation may change with the passage of time, which needs to be continuously observed. Due to the increasingly serious warming of the earth’s atmosphere and frequent extreme climate, mankind is facing increasingly severe survival challenges. Governments around the world have put forward indicators, policies and commitments for carbon neutralization, energy conservation and emission reduction, issued policy support, provided incentives for people to buy bicycles and electric vehicles, and provided assistance for the construction of additional bicycle lanes, The government’s commitment and infrastructure investment are conducive to the follow-up development of micro travel tools, bicycles and electric scooters. The Asia Pacific region has a large population base. With the economic development of the Asia Pacific region, more middle-class consumers will be derived, with higher consumption capacity and stronger awareness of environmental protection. Consumers will have a higher willingness to choose more green travel modes. The industry believes that the Asia Pacific region will be the region with the highest growth in the future, and is optimistic about the future development prospects of bicycles and electric scooters. 12. Is there any possibility of common use between the company’s parts and components, traditional bicycles and mopeds, and whether there are technical differences? A: some of the company’s bicycle parts and components are shared between traditional bicycles and electric mopeds, especially the basic electric mopeds. In addition, some parts and components specially developed for the characteristics of electric mopeds are special for electric mopeds (for example, the car has 6 holes with built-in wire holes and riser with integrated built-in wire holes), which are suitable for high-grade electric mopeds. Of course, their price / profit is higher. 13. Is there a three electricity system for electric mopeds? A: the company participated in “Wuhan tianteng power” in 2018. The company mainly focuses on the R & D, production and sales of central motor, hub motor and display of electric mopeds. 14. The company’s scooter business progress, order fullness and visibility A: the company’s scooter business will mainly supply the frame, base plate group, riser, front fork and other main components to Nanbo, a subsidiary of No. 9 company in 2021. In 2019, it cooperated with the leading European and American shared electric scooter operators to supply them with complete electric scooters. In 2020, due to the epidemic situation, the shared electric scooters stopped being put into operation, and the annual revenue of complete electric scooters decreased. In 2021, in order to meet the demand of new energy vehicles, LG, Samsung and other large foreign manufacturers focused on the production of high-capacity battery cells, The supply of small capacity battery cells required for the production of electric scooters is insufficient. If large capacity battery cells are used for electric scooters, the cost will increase by 40% – 50%. Although domestic battery cells are cheap, but the supply is also very scarce, the operation of the whole electric scooter is greatly disturbed. 15. Specific information of the top five customers a: the ranking of the top five customers in the company’s regular report is industry independent, including customers of bicycle accessories, sports and fitness equipment and rehabilitation equipment. The ranking of each period changes with the actual revenue of the current period and is not fixed. 16. How long is the period of the company’s export contract? A: the company signs a general agreement with the customer for the initial transaction. In principle, it changes once a year. The product name, specification, quantity and delivery date of the specific transaction are determined by the actual order placed by the customer. The customer will place an order at any time. The delivery period is about 45-60 days before the epidemic and 45 days or less after the epidemic. 717 does the company have a sales team in Europe, America and Asia Pacific? A: the bicycle parts business of the company has a complete and strong sales team, which is led by the business headquarters established in the parent company. Among them, special business directors are set up in China, Europe, Asia, emerging countries and other regions, and the American market is promoted by the subsidiary Xinlong of the United States, The business headquarters also has dedicated business executives who are well matched, perform their respective duties, and manage by region and market. The company has maintained close cooperation with bicycle parts customers for decades, with frequent and close communication. Although it is inconvenient to travel to visit customers during the epidemic, the established communication foundation is solid and has a good tacit understanding, which is helpful to the company’s business promotion. They can get good communication through video conference, and the business promotion is not hindered by the epidemic. Annex list (if any) no date 2022-01-11
