Core Viewpoint - Dongfeng Motor Group Co., Ltd. reported a total revenue of RMB 106.197 billion for 2024, a 6.9% increase from RMB 99.383 billion in 2023, driven by growth in passenger vehicle sales, particularly in self-owned and new energy vehicles [1] Financial Performance - Total revenue for 2024: RMB 106.197 billion, up 6.9% from RMB 99.383 billion in 2023 [1] - Gross profit reached RMB 13.585 billion, a 38.2% increase from the previous year, with gross margin rising from 9.9% in 2023 to 12.8% in 2024 [4] - The company achieved a profit attributable to equity holders of RMB 0.58 billion, recovering from a loss of RMB 38.87 billion in the previous year [4] - The debt-to-asset ratio remained stable at 52.4%, indicating a healthy financial position [4] - Operating cash flow increased by 88.0%, with the operating cash ratio improving by 7.1 percentage points to 16.4% [4] Sales Performance - Total sales volume for 2024 was 1.8959 million units, a decline of 9.2% year-on-year [4] - Joint venture sales fell by 9.2%, with Dongfeng Nissan's sales down 12.7% to 631,200 units and Dongfeng Honda's sales down 29.2% to 428,200 units [4] - Self-owned vehicle sales, however, grew by 26.4% to 438,900 units, with high-end new energy brand Lantu achieving a 59.3% increase in sales to 80,100 units [4] Strategic Initiatives - The company plans to double its investment in new energy research and development, with over 60% of R&D focused on new energy and 80% on passenger vehicles [5] - By 2025, multiple new models and technologies will be launched across various brands, including Lantu's introduction of four or more new or updated models [5] - Dongfeng Nissan is set to launch five new energy models, including the first pure electric vehicle, Nissan N7 [6] - The company aims to achieve a total sales target of 3 million units in 2025, with 500,000 units planned for overseas export [6] Corporate Restructuring - There is no confirmed announcement regarding the restructuring between Dongfeng Motor and Changan Automobile, despite market speculation [7]

Group 1 - Dongfeng Group reported a revenue of 106.197 billion yuan for the fiscal year 2024, an increase of 6.86% year-on-year, with a net profit attributable to shareholders of 58 million yuan, reversing a loss of 3.887 billion yuan from the previous year [1] - The company sold approximately 1.8959 million vehicles during the period, a decrease of 9.2% year-on-year, while sales of self-owned passenger vehicles increased by 26.4% to 438,900 units, with a gross margin improvement of 8.4 percentage points [1] - New energy vehicle sales reached approximately 394,600 units, a year-on-year increase of 13.4%, with the proportion of new energy sales in total sales rising by 4.1 percentage points [1] Group 2 - Dongfeng's new energy vehicle segment is gaining momentum, with the launch of 7 new and 2 updated self-owned passenger car models, and 7 commercial vehicle models throughout the year [2] - The Dongfeng Lantu brand achieved over 10,000 units in sales for four consecutive months, with the Dreamer model becoming the top seller in the new energy MPV market [2] - The company has made significant advancements in smart technology, with a 77% adoption rate of L2+ level autonomous driving in self-owned passenger vehicles and the launch of the industry’s first self-controlled high-performance automotive-grade MCU chip [3]

Financial Performance - Total revenue for the year ended December 31, 2024, was RMB 106,197 million, an increase of 6% from RMB 99,383 million in 2023[5] - Gross profit for the same period was RMB 13,585 million, up 38% from RMB 9,833 million in 2023[5] - The net loss for the year was RMB 1,222 million, significantly improved from a net loss of RMB 6,703 million in 2023[5] - Basic and diluted loss per share for the year was RMB 0.70, compared to a loss of RMB 45.66 per share in the previous year[5] - Other income for the year was RMB 7,016 million, an increase of 68% from RMB 4,161 million in 2023[5] - The company reported a significant reduction in financial asset impairment losses, down to RMB 631 million from RMB 1,144 million in 2023[5] - The company reported a significant increase in revenue, with total sales reaching 8.6 billion RMB, reflecting a growth of 16% year-over-year[17] - The company achieved a net profit of 1.17 billion currency units, with earnings per share at 5.07 currency units, marking a 14% increase compared to the previous year[13] - The company reported a total vehicle sales of approximately 1.8959 million units, a decrease of 9.2% year-on-year[67] - The company reported a net loss of RMB 7,193 million for the year, with significant contributions from the commercial vehicle and passenger vehicle segments[43] Assets and Liabilities - Total assets decreased to RMB 325,052 million from RMB 336,430 million in 2023[9] - Current liabilities increased to RMB 143,007 million from RMB 137,341 million in 2023[9] - Non-current liabilities decreased to RMB 27,248 million from RMB 38,373 million in 2023[10] - Total equity decreased from 160,716 million to 154,797 million, a decline of approximately 3.7%[11] - Total liabilities and equity decreased from 336,430 million to 325,052 million, reflecting a reduction of about 3.4%[11] - The total issued share capital slightly decreased from 8,302 million to 8,253 million[11] - Retained earnings remained relatively stable, decreasing from 117,762 million to 117,189 million[11] - Total assets for the company amounted to RMB 336,430 million, with liabilities totaling RMB 175,714 million[43] Market and User Growth - User base reached 19.8 million, representing a 99% market penetration among targeted demographics[13] - The company plans to expand its market presence by targeting an additional 5 million users in the next fiscal year[13] - The user base expanded to 3.3 million active users, marking a 14% increase compared to the previous year[16] - The penetration rate of new energy vehicles reached 40.9%, with sales of new energy vehicles increasing by 13.4% year-on-year[66] - The company aims for its self-owned brand passenger vehicles to account for 70% of total sales in the future[84] Strategic Initiatives - The company is investing 250 million currency units in research and development for new technologies[13] - A strategic acquisition is in progress, which is anticipated to enhance the company's market share by 10%[13] - The company plans to launch three new electric vehicle models in the upcoming fiscal year, aiming to capture a larger market share[18] - The company plans to focus on three transitions: new energy, intelligence, and internationalization, to enhance business and employee development[85] - The company is currently analyzing the impact of IFRS 18 on its financial statement presentation and disclosures[29] Financial Reporting Standards - The group has adopted new and revised International Financial Reporting Standards (IFRS) for the current year's financial statements, including IFRS 16 and IAS 1[22] - The group has reassessed its liability terms and conditions as of January 1, 2023, and January 1, 2024, concluding that the classification of liabilities as current or non-current remains unchanged[25] - The amendments to IFRS 7 and IFRS 9 clarify the characteristics of supplier financing arrangements, requiring additional disclosures to help users understand their impact on liabilities and cash flow[24] - The group does not have any supplier financing arrangements, thus the amendments do not affect its financial position or performance[25] - The company is not eligible to adopt IFRS 19 as it is a publicly listed entity, although some subsidiaries are considering its application[31] Corporate Governance - The board of directors emphasizes high standards of corporate governance to enhance shareholder value and confidence, fully complying with applicable governance codes[121] - The company is in the process of completing the board rotation procedure, which was due by September 24, 2023, but has not yet been finalized[122] - The chairman and CEO roles are held by different individuals, with Yang Qing serving as chairman since November 2, 2023, and Zhou Zhiping appointed as CEO on June 21, 2024[123] - The annual general meeting for the fiscal year ending December 31, 2024, is scheduled for June 20, 2025[125] Capital Expenditures and Investments - Capital expenditures for the year totaled RMB 17,765 million, reflecting ongoing investments in property, plant, and equipment[41] - The company is investing 1.2 billion RMB in research and development for new technologies and sustainable practices[17] - The company has completed the acquisition of a local parts supplier, which is expected to enhance supply chain efficiency and reduce costs[18] - The company received government grants and subsidies amounting to RMB 3,266 million in 2024, significantly higher than RMB 1,163 million in 2023[48] Operational Efficiency - The company reported a significant increase in operational efficiency, reducing costs by 5% year-over-year[13] - The gross margin improved to 22%, up from 20% in the previous year, due to better cost management and pricing strategies[17] - The company reported a significant interest income of RMB 1,002 million, primarily from the automotive finance segment[40] - The financial services segment generated revenue of RMB 1,523 million, contributing to the overall income stream[40]

Sales Performance - In the first half of 2024, Dongfeng Group sold approximately 966,100 vehicles, representing a year-on-year increase of 2.2%[3] - Sales of self-owned passenger vehicles reached 188,000 units, up 19.9% year-on-year, with a gross margin increase of 4.7 percentage points[3] - New energy vehicle sales amounted to 153,600 units, a year-on-year increase of 28.5%, accounting for 35.2% of total sales, up 3.3 percentage points from the previous year[3] - The overseas export volume reached 93,000 units, marking a year-on-year increase of 14.8%, achieving the best historical level[3] - Dongfeng Motor Group produced approximately 951,000 vehicles and sold about 966,000 vehicles in the first half of 2024, achieving a market share of approximately 6.9% in the domestic market[8] - The commercial vehicle segment produced 178,730 units and sold 191,355 units, with a market share of 9.3%, while the passenger vehicle segment produced 771,927 units and sold 774,782 units, with a market share of 6.5%[9] - The overall automotive industry in China saw a sales increase of 6.1% year-on-year, with total sales reaching 14.047 million vehicles in the first half of 2024[10] - The penetration rate of new energy vehicles reached 35.25%, indicating a significant growth in this segment[10] Financial Performance - The group achieved a revenue of 51.145 billion yuan and a net profit attributable to shareholders of 684 million yuan in the first half of 2024[3] - The company's revenue for the first half of 2024 was approximately RMB 51.145 billion, an increase of about 12.1% compared to RMB 45.640 billion in the same period last year[34][35] - Passenger vehicle sales revenue reached approximately RMB 21.556 billion, a significant increase of about 35.93% from RMB 15.858 billion year-on-year[36] - Commercial vehicle sales revenue was approximately RMB 26.166 billion, reflecting a growth of about 2.87% from RMB 25.436 billion in the previous year[37] - The net profit attributable to shareholders for the first half of 2024 was approximately RMB 0.684 billion, a decrease of about RMB 0.630 billion from RMB 1.314 billion year-on-year, with a net profit margin of 1.3%[55] - The gross profit margin for the first half of 2024 was 11.6%, higher than the same period last year[33] - The total sales cost for the first half of 2024 was approximately RMB 45.209 billion, an increase of about RMB 4.733 billion or 11.7% compared to the same period last year[46] - Gross profit for the first half of 2024 was approximately RMB 5.936 billion, an increase of about RMB 0.772 billion or 15.0% year-on-year, with a gross margin of 11.6%[46] Research and Development - Dongfeng Group is focusing on core technologies, advancing R&D in next-generation platforms, solid-state batteries, and hydrogen fuel cells[4] - The company continues to invest in research and development in strategic areas such as new energy, digitization, and smart technologies, with R&D expenses increasing[51] - Research costs for the six months ended June 30, 2024, amounted to RMB 2,205 million, an increase from RMB 2,001 million in the same period of 2023, reflecting a growth of approximately 10.2%[94] Operational Strategy - The company is actively restructuring its operations to enhance the integration of its passenger vehicle, commercial vehicle, and parts businesses[5] - The company plans to continue optimizing its cost structure and improving profitability while accelerating its transformation and upgrading efforts[5] - Dongfeng Motor Group plans to enhance its marketing capabilities and accelerate the development of new energy vehicles to ensure high-quality growth[10] - The company is focusing on optimizing its layout and structural adjustments to support rapid development in new energy and overseas markets[10] Governance and Compliance - Dongfeng Motor Group's independent non-executive directors ensure compliance with governance standards, enhancing transparency and accountability[14] - The company is in the process of adjusting its board of directors to ensure continuity in senior management and governance effectiveness[12] - The board of directors maintained a 100% attendance rate for all members during the board meetings held in the reporting period[17] - The audit and risk management committee reviewed and discussed the interim results and report for the six months ending June 30, 2024[18] - The internal control system was deemed effective, covering governance, operations, investments, finance, and administration[21] Financial Position - The asset-liability ratio stood at 51.0%, indicating a stable financial structure[3] - Total assets as of June 30, 2024, were approximately RMB 323.370 billion, a decrease of about RMB 13.060 billion or 3.9% from RMB 336.430 billion at the end of the previous year[56] - Total liabilities as of June 30, 2024, were approximately RMB 164.83 billion, a decrease of about RMB 10.88 billion or 6.19% from the end of the previous year[57] - Total equity as of June 30, 2024, was RMB 158.54 billion, down RMB 2.18 billion or 1.36% compared to the end of the previous year[58] Cash Flow and Investments - Net cash outflow from operating activities was RMB 0.49 billion, with a pre-tax profit of approximately RMB 1.21 billion[59] - Net cash outflow from investment activities was RMB 8.25 billion, primarily due to cash payments for property, plant, and equipment amounting to RMB 1.87 billion[60] - Net cash outflow from financing activities was RMB 3.12 billion, with cash inflow from bank loans of RMB 1.80 billion[60] - As of June 30, 2024, cash and cash equivalents amounted to RMB 60.56 billion, a decrease of RMB 11.89 billion from the previous year-end[60] Shareholder Information - The company declared an interim dividend of RMB 0.05 per share for the year 2024, compared to no dividend for the six months ending June 30, 2023[22] - The major shareholders included Dongfeng Motor Group Co., Ltd. holding 69.80% of the total issued share capital[27] - The company repurchased a total of 27,490,000 H-shares by June 30, 2024, with a total cost of approximately HKD 77,881,733[30][31] Related Party Transactions - The total purchases from related parties for automotive parts and raw materials amounted to RMB 6,927 million for the six months ended June 30, 2024, compared to RMB 6,679 million in the same period of 2023, reflecting an increase of approximately 3.7%[112] - The company reported sales of automotive parts and raw materials to related parties totaling RMB 681 million for the six months ended June 30, 2024, down from RMB 1,122 million in the previous year[114] - The company incurred service payments to related parties amounting to RMB 1,101 million for the six months ended June 30, 2024, compared to RMB 658 million in the same period of 2023, indicating a rise of approximately 67.3%[117] Joint Ventures and Associates - For the six months ended June 30, 2024, the revenue from joint ventures and associates increased to RMB 375 million, up from RMB 332 million in the same period of 2023, representing a growth of approximately 12.9%[120] - The revenue from joint ventures alone was RMB 294 million, compared to RMB 279 million in the previous year, indicating a growth of about 5.4%[120] - The total revenue from joint ventures and associates for the six months ended June 30, 2024, was RMB 99 million, up from RMB 93 million in the previous year, showing an increase of approximately 6.5%[122]

Dividend Eligibility - The register of members will be closed from September 16, 2024, to September 23, 2024, for interim dividend eligibility[1] - H shares shareholders must submit transfer documents by 4:30 p.m. on September 13, 2024, to qualify for the interim dividend[1]

Revenue and Profitability - Revenue for the six months ended June 30, 2024, was RMB 51,145 million, an increase of 12.8% compared to RMB 45,640 million for the same period in 2023[2]. - The net profit attributable to equity holders of the parent company decreased to RMB 684 million, down 48% from RMB 1,314 million in the previous year[2]. - Basic and diluted earnings per share for the period were RMB 8.27, compared to RMB 15.30 in the same period last year[2]. - The company reported a pre-tax profit of RMB 129 million, down from RMB 308 million in the previous year, indicating a decline of 58%[2]. - The company reported a total profit of RMB 684 million for the period, with a total comprehensive income of RMB (1,059) million, reflecting a significant change in other comprehensive income[10]. - The company reported a pre-tax profit of RMB 684 million for the six months ended June 30, 2024, down from RMB 1,314 million in the same period of 2023, indicating a decline of 48.0%[36]. - For the first half of 2024, the group's net profit attributable to shareholders was approximately RMB 684 million, a decrease of about RMB 630 million compared to the same period last year, with a net profit margin of 1.3%, down from 2.9%[78]. Assets and Liabilities - Total assets as of June 30, 2024, were RMB 323,370 million, a decrease from RMB 336,430 million at the end of 2023[5]. - Non-current assets increased to RMB 156,419 million from RMB 154,794 million, indicating a slight growth in long-term investments[5]. - Total current liabilities amounted to RMB 131,984 million as of June 30, 2024, a decrease from RMB 137,340 million on December 31, 2023, representing a reduction of approximately 3.3%[7]. - Non-current liabilities totaled RMB 32,848 million, a decrease from RMB 38,374 million, reflecting a reduction of approximately 14.3%[8]. - The total equity attributable to equity holders of the parent company was RMB 152,354 million, down from RMB 153,883 million, representing a decrease of about 1.0%[8]. - The total assets minus current liabilities stood at RMB 191,386 million, down from RMB 199,090 million, indicating a decline of about 3.4%[7]. - Total liabilities as of June 30, 2024, were RMB 175,714 million, up from RMB 171,069 million as of December 31, 2023[20]. - Total assets as of June 30, 2024, were approximately RMB 323.37 billion, a decrease of about RMB 13.06 billion or 3.9% from the end of the previous year[79]. - Total liabilities were approximately RMB 164.83 billion, a decrease of about RMB 10.88 billion or 6.19% from the end of the previous year[81]. Cash Flow - For the six months ended June 30, 2024, the net cash flow from operating activities was RMB (494) million, a significant decrease from RMB 7,413 million in the same period of 2023[7]. - The net cash flow used in investing activities was RMB (8,254) million, compared to RMB 3,573 million generated in the same period of 2023[7]. - The cash flow from financing activities resulted in a net outflow of RMB (3,124) million, contrasting with a net inflow of RMB 335 million in the previous year[7]. - The company experienced a net decrease in cash and cash equivalents of RMB (11,872) million, compared to a decrease of RMB (3,505) million in the previous year[7]. - The group's cash and cash equivalents net outflow was RMB 11.87 billion for the first half of 2024, a decrease of RMB 8.37 billion compared to the same period in 2023[83]. Sales and Market Performance - The group sold approximately 966,100 vehicles in the first half of 2024, a year-on-year increase of 2.2%, with self-owned passenger vehicles sales rising by 19.9%[51]. - Commercial vehicle sales contributed RMB 26,066 million, while passenger vehicle sales increased significantly to RMB 21,492 million from RMB 15,750 million year-on-year[26]. - Dongfeng's commercial vehicle sales reached 191,355 units, with a market share of 9.3%, while truck sales accounted for 183,384 units, achieving an 11.9% market share[57]. - The group's new energy vehicle sales reached 154,000 units, a year-on-year increase of 28.5%, with new energy vehicles accounting for 3.3 percentage points more of total sales[61]. - In the first half of 2024, the automotive industry sales grew by 6.1%, with new energy vehicles and overseas exports being the main growth drivers, increasing by 32% and 30.5% respectively[50]. Research and Development - Research costs increased to RMB 2,205 million from RMB 2,001 million, showing a rise of 10.2%[31]. - The company is focusing on key technologies such as next-generation skateboard chassis, solid-state batteries, and hydrogen fuel cells, enhancing its R&D capabilities and establishing global innovation centers[54]. Strategic Initiatives - The company plans to accelerate the electrification transformation of its joint ventures, with initiatives like the "H+ Lingxi" dual-brand strategy for Dongfeng Honda and the "New Struggle 100 Action Plan" for Dongfeng Nissan[54]. - Dongfeng's strategic restructuring includes the establishment of dedicated operational committees for passenger vehicles, commercial vehicles, and parts, aimed at optimizing resource allocation and enhancing brand development[53]. Other Financial Metrics - The gross profit margin for self-owned passenger vehicles increased by 4.7 percentage points compared to the same period last year[51]. - The company's total liabilities and equity decreased by approximately 3.9% from the previous period, highlighting a trend of contraction in financial position[8]. - The share of profits and losses from joint ventures decreased to approximately RMB 753 million, down about 46.3% year-on-year, influenced by declining market share in the non-luxury joint venture segment[75]. - The group’s automotive finance business revenue was approximately RMB 2.865 billion, a decrease of about 16.57% compared to the previous year[65].

Vehicle Sales Performance - Total vehicle sales in 2023 were approximately 2.0882 million units, a decrease of 15.3% year-on-year[6] - Sales of self-owned brand passenger vehicles were 347,400 units, down 30.2% year-on-year[6] - Commercial vehicle sales reached approximately 343,400 units, an increase of 10.3% year-on-year[6] - New energy vehicle sales accounted for approximately 348,000 units, representing a 2.7 percentage point increase in the company's total sales[6] - The high-end brand Lantu achieved sales of over 50,000 units, a year-on-year increase of 159.1%[6] - Overseas export sales reached 169,100 units, a year-on-year increase of 14.3%, setting a historical record[6] - Sales from January to February 2024 were 331,000 units, a year-on-year increase of 26.2%[8] - Dongfeng Motor Group aims to sell 2.7 million vehicles in 2024, a 29% increase from 2023, with passenger vehicle sales target at 2.28 million units (30% growth) and commercial vehicle sales target at 420,000 units (22% growth)[17] Financial Performance - The company achieved sales revenue of 99.315 billion yuan, with a net loss attributable to shareholders of 3.996 billion yuan[6] - The company's cash reserves exceeded 100 billion yuan by the end of 2023[6] - The asset-liability ratio was 51.7%, with operating cash flow increasing by 1.991 billion yuan year-on-year[6] - Total revenue for 2023 was RMB 99.315 billion, an increase of 7.2% year-on-year, primarily driven by Dongfeng Commercial Vehicle, Dongfeng Liuzhou Motor, and Voyah[78] - Commercial vehicle revenue increased by 28.1% year-on-year to RMB 49.538 billion, while passenger vehicle revenue decreased by 8.96% to RMB 42.543 billion[80][81] - Automotive financial business revenue decreased by 4.5% year-on-year to RMB 6.151 billion due to reduced loan scale and interest rates[82] - Gross profit increased by 7.2% year-on-year to RMB 9.466 billion, with a gross margin of 9.5%, driven by improved profitability in self-owned passenger vehicles and NEV businesses[83] - Shareholder attributable loss was RMB 39.96 billion in 2023, compared to a profit of RMB 102.65 billion in 2022, with a net profit margin of -4.0% and a return on equity of -2.6%[93] Production Capacity and R&D - Dongfeng Motor Group's total vehicle production capacity reached 3.98 million units by the end of 2023, an increase of 140,000 units compared to 2022, with passenger vehicle capacity at 3.36 million units and commercial vehicle capacity at 620,000 units[13] - The company's capital expenditure in 2023 was RMB 12.487 billion, a 32% increase year-over-year, driven by investments in new energy vehicle projects and R&D[16] - The company produced and sold 34 new energy passenger vehicle models and 9 new energy commercial vehicle models by the end of 2023[12] - The company's R&D expenditure and intangible asset purchases in 2023 amounted to RMB 3.711 billion, while fixed assets and other expenditures totaled RMB 8.776 billion[16] Market and Industry Trends - China's GDP grew by 5.2% year-on-year in 2023, with total vehicle production and sales reaching 30.16 million and 30.09 million units, up 11.6% and 12.0% respectively, setting a new historical high[76] - New energy vehicle (NEV) production and sales reached 9.587 million and 9.495 million units, up 35.8% and 37.9% respectively, with a market share of 31.6%, an increase of 5.9 percentage points year-on-year[76] - The company's total sales in 2023 were approximately 2.0882 million units, a year-on-year decrease of 15.3%, with sales revenue of RMB 99.315 billion and a gross margin of 9.5%[77] - Commercial vehicle sales increased by 10.3% year-on-year to 343,400 units, driven by macroeconomic recovery and favorable policies[77] - NEV sales reached 348,000 units, accounting for 2.7 percentage points more of the company's total sales, with the high-end brand Voyah achieving sales of 50,000 units, up 159.1% year-on-year[77] Corporate Governance and Leadership - Yang Qing, Executive Director, Chairman, and President, has extensive experience in the automotive industry, having held various leadership roles since 1988[100] - You Zheng, Executive Director and Vice President, holds a Master's in Business Administration and has significant experience in product planning and project management[101] - Zong Qingsheng, Independent Non-Executive Director, has a strong background in international business and investment management, with over 30 years of experience[102] - Leung Wai Lap, Independent Non-Executive Director, is a seasoned accountant with extensive experience in corporate restructuring and IPOs[103] - Hu Yiguang, Independent Non-Executive Director, is a senior partner at a leading law firm and has served as a legal advisor to major state-owned enterprises[104] - He Wei, Chairman of the Supervisory Board, has a Master's in Business Administration and extensive experience in corporate governance and human resources[105] - Jin Jun, Employee Supervisor, has a strong background in mechanical engineering and has held various leadership roles within the company[106] - Bao Hongxiang, Supervisor, has a Master's in Business Administration and extensive experience in financial oversight and auditing[107] - Feng Changjun, Vice President, has extensive experience in finance and management, having served in various leadership roles since 2001[108] - Li Jun, Board Secretary, has a strong background in automotive industry management, with roles at Dongfeng Motor Corporation and Shenlong Automobile[109] - Liao Xianzhi, Joint Company Secretary, has over 26 years of experience in accounting, financial management, and operations within the company[110] - Yuan Yingxin, Joint Company Secretary, brings over 25 years of corporate service experience, specializing in providing services to listed companies and multinational corporations[111] Financial Statements and Audits - The company's financial statements for 2023 were prepared in compliance with listing rules, company regulations, and international accounting standards, with no issues found in the financial management system[116] - The company's related-party transactions were conducted at fair market prices and conditions, with no harm to the company or shareholder interests[116] - The company's consolidated financial statements for 2023 were prepared in accordance with International Financial Reporting Standards (IFRS) and reflect a true and fair view of the financial position and performance[173] - The company's financial statements disclosed warranty provisions in detail, including accounting estimates, judgments, and related notes[176] - The company recorded an impairment provision of RMB 318 million for property, plant, and equipment (PP&E) and intangible assets for the year ended December 31, 2023[177] - The carrying value of PP&E and intangible assets as of December 31, 2023, was RMB 34,952 million[177] - The domestic automotive market's intense competition led to a decline in total sales and losses, resulting in impairment indicators for PP&E and intangible assets[177] - The company estimated the recoverable amount based on the value in use of cash-generating units, involving future cash flow projections and discount rate assumptions[177] - The impairment assessment is considered a key audit matter due to the sensitivity of assumptions to future market or economic conditions[177] Shareholder and Investor Relations - The company's controlling shareholder, Dongfeng Motor Group Co., Ltd., holds approximately 72.6% of the company's shares, with the remaining 27.4% held by public shareholders[121] - The company ensures equal treatment of all shareholders and protects their legal rights, with strict adherence to legal requirements for shareholder meetings[122] - Shareholders holding 10% or more of voting shares can request the board to convene an extraordinary general meeting or class meeting, and can convene the meeting themselves if the board fails to do so within 30 days[122] - Shareholders holding 5% or more of voting shares can propose new resolutions at the annual general meeting[123] - The company actively communicates with investors through analyst meetings, press conferences, non-deal roadshows, and reverse roadshows[124] - The company discloses monthly securities transaction reports as required by the Hong Kong Stock Exchange and quarterly reports for its ultra-short-term financing bonds as required by the China Interbank Market Dealers Association[124] Risk Management and Internal Controls - The company has established a comprehensive risk management and internal control system, including financial, operational, and compliance controls[167] - The company conducted a self-evaluation of internal control effectiveness, covering key areas such as safety management, quality control, and financial management[168] - No major risk events occurred during the reporting period, and the company focused on integrating risk management with business operations[168] - The internal audit function emphasized communication with external auditors and focused on decision-making processes, accounting information quality, and economic responsibility[168] - The Audit and Risk Management Committee, composed entirely of independent non-executive directors, is responsible for reviewing financial reports and overseeing external auditors[154] - The Audit and Risk Management Committee held three meetings in 2023, reviewing key matters including the 2022 financial status report and the 2023 interim financial report[156] - The company's Audit and Risk Management Committee is responsible for evaluating and determining the nature and extent of risks the company is willing to accept in achieving its strategic objectives[155] - The Audit and Risk Management Committee ensures the internal audit function has sufficient resources and appropriate status within the company[155] - The Audit and Risk Management Committee reviews the company's financial controls, risk management, and internal control systems[155] - The Audit and Risk Management Committee ensures fair and independent investigation of concerns raised by employees or other stakeholders regarding financial reporting or internal controls[155] - The Audit and Risk Management Committee coordinates communication between internal and external auditors to ensure their work is aligned[155] Corporate Social Responsibility and Sustainability - The company's total donations for 2023 amounted to approximately RMB 11 million[22] - The company emphasizes the importance of maintaining a balance between shareholder, employee, and societal interests while focusing on environmental protection and public welfare[170] - Female employees account for approximately 18.22% of the total workforce, reflecting the company's ongoing efforts to achieve gender diversity[149] Joint Ventures and Partnerships - The company received a total of approximately RMB 2.349 billion in dividends from its joint ventures in 2023[19] - The company's joint ventures have no specific dividend policy, but dividends are typically declared when distributable profits are available[19] - Joint ventures and their subsidiaries, joint ventures, and associated enterprises of Dongfeng Motor Group purchased auto parts and production equipment from joint venture partners, with a total payment of RMB 43.196 billion as of December 31, 2023[70] - Dongfeng Honda Auto Parts Co., Ltd. continues to sell auto parts to Honda Trading (China) Co., Ltd. and Honda Motor (China) Investment Co., Ltd. as of December 31, 2023[71] - Dongfeng Honda Engine Co., Ltd. sold engines and related auto parts to GAC Honda Automobile Co., Ltd. for a total consideration of RMB 118 million in 2023[73] - Joint ventures and their subsidiaries paid a total of RMB 4.44 billion for technology licenses and technical support to their joint venture partners as of December 31, 2023[75] - The pricing principle for technology licenses and technical support between joint ventures and their partners is based on fair compensation for R&D costs, with costs evenly amortized over the operating period[75] - GAC Honda Automobile Co., Ltd. is required to purchase engines and related auto parts exclusively from Dongfeng Honda Engine Co., Ltd. during the joint venture period[72] - The investment return ratio for GAC Honda Automobile Co., Ltd. and Dongfeng Honda Engine Co., Ltd. is maintained based on their initial investment amounts of USD 139.94 million and USD 60.06 million, respectively[72] - Technology license and technical support agreements are negotiated under fair commercial terms and are governed by umbrella agreements[74] - Dongfeng Honda Engine Co., Ltd. was established to manufacture engines and related auto parts for GAC Honda Automobile Co., Ltd., a major joint venture of Honda in China[72] - The sales of auto parts by Dongfeng Honda Auto Parts Co., Ltd. to Honda Trading (China) Co., Ltd. are considered continuous connected transactions[71] - The terms for technology licenses and technical support are determined based on the expected lifespan of the vehicle models[74] Financial Transactions and Agreements - The company's total share capital as of December 31, 2023, was RMB 8,302,252,000, divided into 8,302,252,000 ordinary shares with a par value of RMB 1 each[22] - The company repurchased a total of 313.092 million H shares on the Hong Kong Stock Exchange in 2023[23] - The company's top five customers accounted for no more than 30% of its total revenue in 2023[22] - The company's H share repurchase program was authorized at the annual general meeting on June 20, 2023, to maintain investment value and market reputation[23] - The company's total reserves and equity changes for 2023 are detailed in the audited financial statements[21] - The company's largest shareholder, Dongfeng Motor Group Co., Ltd., holds 100% of the domestic shares and 10.10% of the H shares[26] - The company's board recommended no profit distribution for 2023, subject to approval at the annual general meeting on June 21, 2024[21] - The company has a total of 112,706 full-time employees as of December 31, 2023, with manufacturing workers accounting for 58.07% (65,475 employees) and engineering technicians making up 16.56% (18,667 employees)[36] - The company's five highest-paid individuals are detailed in the audited financial statements, with specific figures provided in Note 9[35] - The company's public shareholders hold more than 25% of the total issued share capital as of the annual report date[39] - The company has a trademark licensing agreement with Dongfeng Motor Group Co., Ltd., which allows the use of certain trademarks for product sales and commercial activities, with the agreement automatically renewing every ten years[40] - The company has made contributions to social security funds, including basic pension, supplementary pension, medical insurance, unemployment insurance, and housing provident funds, through accounts under Dongfeng Motor Group Co., Ltd.[42] - The annual transaction ceiling for automotive parts sales to Dongfeng Motor Group Co., Ltd. and its subsidiaries in 2023 is approximately RMB 1.5 billion, with actual payments amounting to RMB 351 million by the end of 2023[44] - The annual transaction ceiling for automotive parts procurement from Dongfeng Motor Group Co., Ltd. and its subsidiaries in 2023 is approximately RMB 580 million, with actual payments amounting to RMB 106 million by the end of 2023[46] - The annual transaction ceiling for logistics services from Dongfeng Motor Group Co., Ltd. and its subsidiaries in 2023 is approximately RMB 8 billion, with actual payments amounting to RMB 5.375 billion by the end of 2023[48] - The annual transaction ceiling for automotive inspection services from Dongfeng Motor Group Co., Ltd. and its subsidiaries in 2023 is approximately RMB 1 billion, with actual payments amounting to RMB 572 million by the end of 2023[50] - Dongfeng Motor Group has set an annual loan limit of RMB 1.5 billion for Dongfeng Motor Group Co., Ltd. and its subsidiaries for 2023[52] - As of December 31, 2023, the loan balance from Dongfeng Motor Group Co., Ltd. and its subsidiaries to Dongfeng Motor Group was approximately RMB 0[52] - The maximum deposit amount for Dongfeng Motor Group in Dongfeng Nissan Auto Finance Co., Ltd. for 2023 is set at RMB 3.0 billion[54] - As of December 31, 2023, the deposit balance of Dongfeng Motor Group in Dongfeng Nissan Auto Finance Co., Ltd. was approximately RMB 0[54] - The lease agreement between Dongfeng Motor Group and Dongfeng Motor Group Co., Ltd. has a term of three years, from January 4, 2023, to December 31, 2025[55] - The rental payment under the lease agreement is to be made semi-annually, with a penalty rate of 5% per day for late payments[55] - The net value of the right-of-use assets from leasing by Dongfeng Motor Group to Dongfeng Motor Group Co., Ltd. for 2023 is capped at RMB 1.5 billion[56] - As of December 31, 2023, the net value of the right-of-use assets from leasing by Dongfeng Motor Group (excluding Dongfeng Motor Co., Ltd.) to Dongfeng Motor Group Co., Ltd. was RMB 1.027 billion[56] - The net value of the right-of-use assets generated from the land lease between Dongfeng Motor Co., Ltd. and Dongfeng Motor Group Co., Ltd. is RMB 485 million as of December 31, 2023[57] - The total amount paid by Dongfeng Motor Group to Dongfeng Hongtai for mutual procurement of vehicles and auto parts is RMB 2.272 billion and RMB 383 million respectively as of December 31, 2023[59] - The annual upper limit for vehicle sales transactions between Dongfeng Motor Group and Dongfeng Nissan Finance Lease Co., Ltd. is RMB 1.00 billion for 2023, with actual purchases amounting to RMB 0.00 billion as of December 31, 2023[61] - The annual upper limit for auto parts procurement from Dongfeng Motor Group Co., Ltd. and its subsidiaries is RMB 100 million for 2023, with actual payments amounting to RMB 41.223 million as of December 31, 2023[63] - Dongfeng Motor Group and its subsidiaries provided entrusted loans to Dongfeng Nissan Finance Leasing Co., Ltd. with an annual limit of RMB 2.8 billion, but the actual amount provided as of December 31, 2023, was RMB 0.00 billion[65] - Dongfeng Motor Group signed a total vehicle and chassis sales agreement with Dongfeng Motor Group Co., Ltd., with an annual transaction limit of RMB 1.5 billion for 202

Financial Performance - Dongfeng Motor Group reported a revenue of RMB 99,315 million for the year ended December 31, 2023, representing an increase of 7.1% compared to RMB 92,663 million in 2022[4]. - The gross profit for the year was RMB 9,466 million, up from RMB 8,827 million in the previous year, indicating a gross margin improvement[4]. - The net loss for the year was RMB 6,813 million, a significant decline from a profit of RMB 9,313 million in 2022, reflecting a year-over-year decrease of 173%[4]. - The company reported a net loss of RMB 3,996 million for the year 2023, compared to a profit of RMB 10,265 million in 2022, indicating a significant shift in financial performance[10]. - The total comprehensive income for the year 2023 was RMB 448 million, a stark contrast to the total comprehensive income of RMB 8,391 million in 2022, reflecting a decrease of approximately 94.7%[10]. - The company’s basic and diluted loss per share for the year was RMB (46.94) compared to earnings of RMB 119.14 per share in 2022[4]. - The group reported a total segment loss of RMB 7,343 million, with commercial vehicles and passenger vehicles incurring losses of RMB 4,107 million and RMB 6,565 million respectively[37]. - The group recorded a pre-tax loss of RMB 6,385 million for the year, with a net loss of RMB 6,813 million after tax expenses of RMB 428 million[37]. - The net loss attributable to shareholders was approximately RMB 3.996 billion, a decrease of about RMB 14.26 billion from a profit of RMB 10.265 billion in the previous year, resulting in a net profit margin of -4.0%[100]. Assets and Liabilities - The company's total assets as of December 31, 2023, were RMB 330,678 million, slightly up from RMB 330,036 million in 2022[9]. - The total liabilities increased to RMB 171,069 million from RMB 164,500 million, with interest-bearing borrowings rising to RMB 30,977 million[9]. - The company’s total assets as of December 31, 2023, were RMB 159,609 million, down from RMB 165,536 million in 2022, indicating a decrease of about 3.6%[10]. - The company’s cash and bank deposits rose to RMB 79,297 million, compared to RMB 68,046 million in the previous year, indicating improved liquidity[7]. - The group’s total assets at the end of 2023 were approximately RMB 330.68 billion, an increase of about RMB 642 million from RMB 330.04 billion at the end of the previous year[101]. - Total liabilities increased to approximately RMB 171.07 billion, up by about RMB 6.57 billion from RMB 164.50 billion at the end of the previous year, representing a growth of 4.0%[103]. Equity and Dividends - For the year ended December 31, 2023, the total equity attributable to equity holders of the parent was RMB 152,787 million, a decrease from RMB 155,852 million in 2022, representing a decline of approximately 2.0%[10]. - The company declared and paid a final dividend of RMB 2,560 million for the year 2023, compared to RMB 2,585 million in 2022, reflecting a slight decrease in dividend distribution[10]. - The group did not recommend a final dividend for the year ending December 31, 2023[108]. - The company did not declare any final dividend for 2023, contrasting with a dividend of RMB 2,577 million in 2022[51]. Operational Highlights - In 2023, the company sold approximately 2.0882 million vehicles, a year-on-year decrease of 15.3%[61]. - The sales of self-owned brand passenger vehicles reached 347,400 units, down 30.2% year-on-year, while commercial vehicle sales increased by 10.3% to approximately 343,400 units[61]. - The sales volume of new energy vehicles reached approximately 348,000 units, with a year-on-year increase, and the proportion of new energy vehicles in total sales increased by 2.7 percentage points[79]. - The high-end brand, Lantu, sold over 50,000 units, marking a year-on-year growth of 159.1%[61]. - The company achieved a historical high in export sales, reaching 169,100 units, a year-on-year increase of 14.3%[61]. - The company has established a complete brand layout, including luxury electric off-road brand Dongfeng Mengshi, which has sold over 1,000 units since its launch[62]. - The company expects to sell 2.7 million vehicles in 2024, representing a growth of approximately 29% compared to 2023[73]. - The company has 6,027 sales outlets covering all 31 provinces as of December 31, 2023[70]. Investment and Expenditures - Capital expenditures for the year totaled RMB 9,699 million, with RMB 5,963 million allocated to property, plant, and equipment[38]. - In 2023, Dongfeng Motor Group achieved actual capital expenditures of RMB 12.487 billion, a year-on-year increase of RMB 2.995 billion, or 32%[72]. - The company’s capital expenditures totaled RMB 4,168 million in 2023, with RMB 2,144 million allocated to passenger vehicles and RMB 839 million to commercial vehicles[41]. - The company’s research and development costs increased to RMB 4,571 million in 2023 from RMB 4,393 million in 2022, reflecting ongoing investment in innovation[44]. Market and Competitive Position - The company plans to focus on new product development and market expansion strategies to improve future performance[3]. - The company plans to strengthen its mid-term business goals and enhance its competitive position in the new energy vehicle market[64]. - The market share of new energy vehicles reached 31.6%, an increase of 5.9 percentage points compared to the previous year[76]. Accounting Standards and Compliance - The group has adopted new and revised standards effective from January 1, 2023, including IFRS 17 on insurance contracts and amendments to IAS 1, IAS 8, and IAS 12, which have no significant impact on the financial statements[2][20][22]. - The amendments to IAS 12 clarify the treatment of deferred tax assets and liabilities related to temporary differences arising from specific transactions, with no significant impact on the group's consolidated financial statements[22][23]. - The group has not yet applied the newly issued but not yet effective revised IFRS standards, intending to adopt them when they become applicable[25][29]. - The revisions to IFRS 10 and IAS 28 address inconsistencies in the treatment of asset transfers between investors and their associates or joint ventures, requiring full recognition of gains or losses when the transaction constitutes a business[29][30]. - The amendments to IFRS 16 clarify the requirements for measuring lease liabilities in sale and leaseback transactions, effective from January 1, 2024, with no significant expected impact on the group's financial statements[29][30].

Core Viewpoint - Dongfeng Group announced a share transfer agreement where Dongfeng Changxing will acquire 100% equity of Chuangge Financing Leasing Co., Ltd. from its controlling shareholder Dongfeng Motor Company for RMB 1.122 billion, enhancing its business structure and value chain [1]. Group 1 - The share transfer is set to be completed on January 29, 2024, after trading hours [1]. - Following the transfer, Chuangge Financing Leasing will become an indirect non-wholly-owned subsidiary of Dongfeng Changxing [1]. - The integration of the target company is expected to promote unified brand management and develop after-sales services such as insurance, maintenance, energy supply, financing, and used car sales [1]. Group 2 - The transaction aims to extend the value chain and facilitate high-quality development across the entire industry chain [1].

Sales Performance - In the first half of 2023, the company sold approximately 945,500 vehicles, a year-on-year decrease of 23.4%[3] - The sales of self-owned passenger vehicles reached 156,800 units, down 30.9% year-on-year[3] - The sales volume of new energy vehicles was approximately 119,600 units, accounting for an increase of 2.2 percentage points in the overall sales[3] - The overseas export business achieved a sales volume of 81,200 units, marking a year-on-year growth of 28.1%[3] - The high-end brand "Lantu" saw a sales increase of 118.5% year-on-year[3] - The company's passenger vehicle sales decreased by approximately 23.4% year-on-year to about 769,700 units, while commercial vehicle sales increased by approximately 0.7% to about 175,800 units[28] - The sales of new energy passenger vehicles were approximately 108,000 units, with a year-on-year decline of about 7.8%[28] Financial Performance - The company achieved a sales revenue of 45.677 billion yuan, with a net profit attributable to shareholders of 1.27 billion yuan, resulting in a net profit margin of 2.8%[3] - The company reported a strong performance in the commercial vehicle sector, particularly in trucks, which are crucial for its overall sales strategy[9] - The overall revenue for the first half of 2023 was approximately RMB 45.68 billion, an increase of approximately 2.9% from RMB 44.40 billion in the same period last year[29] - The company’s revenue from passenger vehicles was approximately RMB 16.11 billion, a decrease of approximately 19.1% compared to RMB 19.91 billion in the same period last year[30][31] - The commercial vehicle segment saw a revenue increase of approximately 22.7%, reaching about RMB 25.53 billion, compared to RMB 20.81 billion in the previous year[30][32] - The automotive finance segment reported a revenue of approximately RMB 3.11 billion, a decline of approximately 3.4% from RMB 3.22 billion in the same period last year[33] - The net profit attributable to shareholders for the first half of 2023 was approximately RMB 1.27 billion, a decrease of about RMB 4.23 billion or 76.9% compared to RMB 5.50 billion in the same period last year[46] Research and Development - The company’s R&D investment in new energy increased by 49.2% year-on-year, reflecting a strong commitment to technological advancement[3] - Research and development expenditure for the first half of 2023 was approximately RMB 3.46 billion, an increase of about RMB 0.39 billion or 12.62% compared to RMB 3.07 billion in the same period last year, with RMB 1.56 billion allocated to new energy research and development, an increase of 49.3%[42] Corporate Governance and Management - The company is implementing a significant management restructuring to enhance the integration of its self-owned passenger vehicle business[5] - Dongfeng Motor Group is committed to enhancing corporate governance and transparency, adhering to relevant regulations and guidelines[11] - The board of directors held three meetings in the first half of 2023 to discuss key matters including the 2023 investment plan and financial reports[14] - The board of directors held meetings with a participation rate of 100% from several members, indicating strong engagement in governance[18] - The audit and risk management committee consists of three independent non-executive directors, ensuring oversight of financial reporting and risk management[17] Assets and Liabilities - The company’s asset-liability ratio was 47.8%, a decrease of 2.0 percentage points compared to the previous year[3] - Total assets as of the first half of 2023 were approximately RMB 316.71 billion, a decrease of about RMB 13.33 billion or 4.0% from approximately RMB 330.04 billion at the end of the previous year[47] - Total liabilities as of June 30, 2023, were approximately RMB 151.475 billion, a decrease of about RMB 13.025 billion or 7.92% from the end of the previous year[48] - Total equity as of June 30, 2023, was RMB 165.236 billion, a decrease of RMB 0.3 billion or 0.18% from the end of the previous year, with equity attributable to shareholders increasing by RMB 0.752 billion[49] Cash Flow and Financing - Net cash outflow from operating activities was RMB 7.954 billion, primarily due to a decrease in loan issuance by the financial business, which increased cash flow by RMB 11.734 billion[50] - Net cash inflow from investment activities was RMB 4.107 billion, mainly from increased dividends received totaling RMB 7.312 billion[50] - Net cash inflow from financing activities was RMB 0.125 billion, reflecting an increase in bank borrowings of RMB 12.140 billion[51] - The company plans to issue new shares, not exceeding 20% of the existing domestic and H shares, to support its capital structure adjustments[15] Shareholder Information - The company did not recommend the distribution of an interim dividend for the six months ending June 30, 2023[21] - The majority of the shareholding is held by domestic shares, accounting for approximately 67.52% of the total issued shares[21] - The company’s share repurchase authorization was approved at the annual general meeting held on June 20, 2023, reflecting confidence in future development[25] - The company repurchased a total of 61,900,000 H shares during the six months ending June 30, 2023, with the highest purchase price being HKD 4.55 and the lowest being HKD 3.31[25] Market Outlook - The company anticipates continued economic recovery in the second half of 2023, driven by positive policy effects and strong consumer demand for automobiles[10] - Dongfeng Motor Group is focusing on the development of new energy vehicles and expanding its market presence, which is expected to contribute to stable growth in the automotive market[10] - The company is focusing on a "three-year action plan for transformation and upgrading" to accelerate its new energy strategy amid significant market challenges[28]