Summary of Zongshen Power's Conference Call Company Overview - **Company**: Zongshen Power - **Year**: 2024 - **Revenue**: 10.383 billion CNY, up 29.84% YoY - **Net Profit**: 460 million CNY, up approximately 27% YoY - **Business Segments**: Two traditional main businesses and three emerging industries, all showing comprehensive growth [3][4] Core Business Performance - **Power System Segment**: Revenue reached 5.226 billion CNY, up 35% YoY; sales volume of 4.83 million units [4] - **Motor Engine Segment**: Revenue approximately 3.8 billion CNY, net profit of 153 million CNY, sales volume of 2.98 million units, up nearly 20% YoY [4][5] Emerging Industries - **New Energy Segment**: Revenue of 579 million CNY, over 300% growth YoY, net profit exceeding 40 million CNY, driven by energy storage business and acquisition of Dongguan Lishi Energy [4][5] - **Aviation Business**: Revenue of 160 million CNY, 70% growth YoY, identified as a new growth engine for the company [4] Market Dynamics - **General Power Machinery Market**: Demand primarily from North America, accounting for about 70% of revenue; emerging markets are gradually growing [6] - **Response to Tariffs**: Company has established production capacity in Vietnam to mitigate North American tariff impacts, with plans to increase investment in new energy and components in Vietnam [7][8] Strategic Outlook - **Motorcycle Engine Market**: Positive outlook with increasing share of large-displacement and mid-to-high-end products, exceeding 20% in 2024 [9] - **Future Revenue Goals**: Expected revenue growth of 50% to 100% for new energy and automotive components in 2025, with an overall target of 20% growth [4][30] Financial Metrics - **Gross Margin**: Historically fluctuating between 13% to 15%, with a slight decline expected due to strategic pricing and market conditions [13][14] - **Capital Expenditure**: Investments in new factories and production capacity, particularly in electric tools and components, with expected revenue of 2 billion CNY from new electric product factory by 2025-2026 [15] Competitive Landscape - **Industry Competition**: Increased competition in the motorcycle manufacturing sector leading to price concessions, but expected to stabilize as industry concentration increases [11][12] - **Profitability by Segment**: Mixed profitability across segments, with some underperforming areas impacting overall net profit [26][27] Future Developments - **Aviation Power Segment**: Expected to achieve breakeven in 2025, with a focus on R&D and diversification of power solutions [25] - **Low-altitude Economy**: Government support for low-altitude economy initiatives, indicating strong future growth potential [28] Inventory and Demand - **Motorcycle Industry**: Strong demand with low inventory levels, optimistic outlook for 2025 growth [29] This summary encapsulates the key points from Zongshen Power's conference call, highlighting the company's performance, market dynamics, strategic outlook, and future developments.

Core Viewpoint - The company aims to enhance its position as a leading provider of integrated power systems by focusing on traditional and emerging business sectors, including general machinery, motorcycle engines, aviation power, new energy, and high-end components, while achieving significant revenue and profit growth in 2024 [20][24]. Company Overview - The company is a specialized manufacturer of small and medium-sized power machinery products in China, engaged in R&D, manufacturing, and sales of various power systems and components [3][4]. - The main products include engines and parts, general gasoline engines, agricultural machinery, and lithium battery systems [3][4]. Business Performance - In 2024, the company achieved total revenue of 10.506 billion yuan, a year-on-year increase of 28.89%, and a net profit of 496 million yuan, up 33.51% from the previous year [20][33]. - The sales volume of general power and terminal products reached 4.8345 million units, a growth of 37.34%, with total revenue of 5.226 billion yuan, increasing by 35.33% [5][20]. Strategic Focus - The company is implementing a dual growth strategy by upgrading its fuel power business and rapidly expanding its new energy business, including electric drive systems and hydrogen energy [4][14]. - The company emphasizes digital transformation and smart manufacturing to enhance operational efficiency and product quality [21][22]. Product Development - The company has established a comprehensive R&D system with modern laboratories and testing facilities to support innovation in product development [7][8]. - The aviation power segment focuses on developing small and medium-sized aviation engines, with a product line that includes over 20 derivative products [13][10]. New Energy Initiatives - The company has built a new energy product system covering electric drive systems, energy storage, and hydrogen energy, aiming for a balanced growth between traditional and new energy sectors [14][16]. - The energy storage subsidiary has launched various products for residential and commercial applications, enhancing its market presence in Europe and North America [16][17]. High-End Components - The high-end components business has developed a complete manufacturing capability from raw materials to finished products, with a focus on automotive and new energy applications [18][19]. - The company collaborates with well-known enterprises to deliver high-quality products and services while advancing digital transformation in manufacturing [18][24].

Core Viewpoint - Zongshen Power reported strong financial performance for the fiscal year 2024, with revenue of 10.384 billion yuan, a year-on-year increase of 29.84%, and a net profit attributable to shareholders of 461 million yuan, up 27.45% [1] Financial Performance - The company achieved a net profit of 442 million yuan after deducting non-recurring items, reflecting a significant growth of 42.92% [1] - Basic earnings per share were reported at 0.40 yuan [1] - The proposed cash dividend is 2 yuan per 10 shares, totaling approximately 229 million yuan, which represents 49.64% of the net profit [2] Strategic Direction - In response to a complex external environment, the company is focusing on "ensuring growth, strengthening transformation, and creating value" as its operational guideline [1] - The strategic direction emphasizes "seeking progress while maintaining stability and innovating breakthroughs," with a focus on extending the first growth curve and creating a second growth curve through technological innovation [1] Business Development - The company is undergoing a transformation towards becoming a "digital, technological, and intelligent" integrated service provider for power systems [1] - Core business upgrades and new field layouts are driving strong resilience and innovative vitality [1] - The engine business is focusing on product structure upgrades, leading to steady sales growth [1] - The aviation power segment is overcoming technical challenges and establishing a competitive market position [1] - The new energy business has successfully developed two product systems: new energy power systems and energy storage, contributing significantly to the company's business transformation [1][2]

Core Viewpoint - Zongshen Power (001696) reported a strong financial performance for 2024, with total revenue of 10.506 billion yuan, a year-on-year increase of 28.89%, and a net profit of 461 million yuan, up 27.45% [1] Group 1: Traditional Business Performance - The traditional business of Zongshen Power showed robust growth, particularly in general machinery and motorcycle engines [2] - General machinery sales reached 4.8345 million units, a 37.34% increase, generating revenue of 5.226 billion yuan, up 35.33% [2] - Motorcycle engine sales totaled 2.9852 million units, an 18.44% increase, with revenue of 3.824 billion yuan, up 13.68% [2] Group 2: Cash Flow Management - Despite strong traditional business performance, the company faced challenges in cash flow management, with net operating cash flow decreasing by 46.1% to 325 million yuan [3] Group 3: New Energy Business Growth - Zongshen Power's new energy sector is emerging as a significant growth driver, focusing on electric drive systems, energy storage, and hydrogen energy [4] - The company has made advancements in electric drive systems for special vehicles and two-wheeled electric motorcycles, enhancing market influence [4] - The energy storage segment has launched various products for home and commercial applications, with ongoing global expansion efforts [4] Group 4: Challenges in Emerging Business Areas - Despite the promising performance in new energy, Zongshen Power faces challenges in emerging business areas, particularly in robotics and collaboration with BYD, indicating a need for stronger positioning in new technologies [5] Group 5: High-End Components and Digital Transformation - The high-end components business is progressing steadily, with collaborations with notable companies and a focus on digital transformation [6] - The company has established a casting factory that emphasizes automation and digitalization, while expanding its product range in new energy components [6] - However, further investment in smart manufacturing and digital transformation is necessary, particularly in integrating key technologies like AI and industrial big data [6]

目 录 | | | 二、资质附件……………………………………………………第 3—7 页 内部控制审计报告 天健审〔2025〕8-148 号 重庆宗申动力机械股份有限公司全体股东： 按照《企业内部控制审计指引》及中国注册会计师执业准则的相关要求，我 们审计了重庆宗申动力机械股份有限公司（以下简称宗申动力公司）2024 年 12 月 31 日的财务报告内部控制的有效性。 一、企业对内部控制的责任 范》和相关规定在所有重大方面保持了有效的财务报告内部控制。 天健会计师事务所（特殊普通合伙） 中国注册会计师： 中国·杭州 中国注册会计师： 按照《企业内部控制基本规范》《企业内部控制应用指引》以及《企业内部 控制评价指引》的规定，建立健全和有效实施内部控制，并评价其有效性是宗申 动力公司董事会的责任。 二、注册会计师的责任 我们的责任是在实施审计工作的基础上，对财务报告内部控制的有效性发表 审计意见，并对注意到的非财务报告内部控制的重大缺陷进行披露。 三、内部控制的固有局限性 内部控制具有固有局限性，存在不能防止和发现错报的可能性。此外，由于 情况的变化可能导致内部控制变得不恰当，或对控制政策和程序遵循的程度降低， 根 ...

目 录 重庆宗申动力机械股份有限公司全体股东： 我们接受委托，审计了重庆宗申动力机械股份有限公司（以下简称宗申动力 公司）2024 年度财务报表，包括 2024 年 12 月 31 日的合并及母公司资产负债表， 2024 年度的合并及母公司利润表、合并及母公司现金流量表、合并及母公司所 有者权益变动表，以及财务报表附注，并出具了审计报告。在此基础上，我们审 计了后附的宗申动力公司管理层编制的 2024 年度《非经营性资金占用及其他关 联资金往来情况汇总表》（以下简称汇总表）。 | | | 二、非经营性资金占用及其他关联资金往来情况汇总表…………第 3—6 页 三、资质附件…………………………………………………………第 7—11 页 非经营性资金占用及其他关联资金往来情况的 专项审计说明 天健审〔2025〕8-149 号 一、非经营性资金占用及其他关联资金往来情况的专项 一、对报告使用者和使用目的的限定 本报告仅供宗申动力公司年度报告披露时使用，不得用作任何其他目的。我 们同意将本报告作为宗申动力公司年度报告的必备文件，随同其他文件一起报送 并对外披露。 为了更好地理解宗申动力公司 2024 年度非经营性资金占 ...

| 一、审计报告……………………………………………………… 第 1—7 | | 页 | | --- | --- | --- | | 二、财务报表……………………………………………………… 第 8—17 | | 页 | | （一）合并资产负债表…………………………………………… 第 | 8 | 页 | | （二）母公司资产负债表………………………………………… 第 | 9 | 页 | | （三）合并利润表…………………………………………………第 | 10 | 页 | | （四）母公司利润表………………………………………………第 | 11 | 页 | | （五）合并现金流量表……………………………………………第 | 12 | 页 | | （六）母公司现金流量表…………………………………………第 | 13 | 页 | | （七）合并所有者权益变动表…………………………………第 14-15 | | 页 | | （八）母公司所有者权益变动表………………………………第 16-17 | | 页 | 三、财务报表附注……………………………………………… 第 18—143 页 四、资质附件………………………………………………… ...

2024 年度独立董事述职报告 重庆宗申动力机械股份有限公司 2024 年度独立董事述职报告 各位股东： 作为重庆宗申动力机械股份有限公司（以下简称"公司"）第十一届董事会独立董 事，本着为公司全体股东负责的精神，本人严格依照《公司法》《证券法》《深圳证券 交易所上市公司自律监管指引第1号——主板上市公司规范运作》《上市公司独立董事 管理办法》等法律法规和《公司章程》《独立董事工作制度》《独立董事年报工作制度》 《独立董事专门会议实施细则》《上市公司独立董事履职指引》的要求，在2024年度的 工作中，切实履行独立董事诚信勤勉职责和义务，通过电话、现场会晤等多种方式，积 极主动了解公司的生产经营和运行情况，积极出席公司召开的相关会议，认真审议各项 议案，对公司的重大决策等事项发表独立意见，为健全和完善上市公司法人治理结构和 提高董事会科学决策、依法运作充分发挥了独立董事及各专业委员会委员的作用，切实 维护了公司和全体股东尤其是中小股东的合法权益。现将本人2024年度履职情况报告如 下： 一、独立董事的基本情况 （一）基本情况 柴振海，男，60岁，中国国籍，无境外居留权，博士研究生，高级工程师。曾任某 部综合计划 ...

2024 年度独立董事述职报告 重庆宗申动力机械股份有限公司 2024 年度独立董事述职报告 各位股东： 作为重庆宗申动力机械股份有限公司（以下简称"公司"）第十一届董事会独立董 事，本着为公司全体股东负责的精神，本人严格依照《公司法》、《证券法》、《深圳 证券交易所上市公司自律监管指引第 1 号——主板上市公司规范运作》、《上市公司独 立董事管理办法》等法律法规和《公司章程》、《独立董事工作制度》、《独立董事年 报工作制度》、《独立董事专门会议实施细则》和《上市公司独立董事履职指引》的要 求，在 2024 年度的工作中，切实履行独立董事忠实勤勉义务，积极发挥独立董事参与 决策、监督制衡、专业咨询的作用。在履职过程中，本人通过电话、现场会晤等多种方 式，积极主动了解公司的生产经营和运行情况，积极出席公司召开的相关会议，认真审 议各项议案，对公司的重大决策等事项发表独立意见，为健全和完善上市公司法人治理 结构和提高董事会科学决策、依法规范运作积极发挥了独立董事及各专业委员会委员的 作用，切实维护了公司和全体股东尤其是中小股东的合法权益。现将本人 2024 年度履 职情况报告如下： 2024 年度独立董事述职报告 ...

2024 年度独立董事述职报告 重庆宗申动力机械股份有限公司 2024 年度独立董事述职报告 各位股东： 作为重庆宗申动力机械股份有限公司（以下简称"公司"）第十一届董事会独立董 事，本着为公司全体股东负责的精神，本人严格依照《公司法》《证券法》《深圳证券 交易所上市公司自律监管指引第1号——主板上市公司规范运作》《上市公司独立董事 管理办法》等法律法规和《公司章程》《独立董事工作制度》《独立董事年报工作制度》 《独立董事专门会议实施细则》《上市公司独立董事履职指引》的要求，在2024年度的 工作中，切实履行独立董事诚信勤勉职责和义务，通过电话、现场会晤等多种方式，积 极主动了解公司的生产经营和运行情况，积极出席公司召开的相关会议，认真审议各项 议案，对公司的重大决策等事项发表独立意见，为健全和完善上市公司法人治理结构和 提高董事会科学决策、依法运作充分发挥了独立董事及各专业委员会委员的作用，切实 维护了公司和全体股东尤其是中小股东的合法权益。现将本人2024年度履职情况报告如 下： 一、独立董事的基本情况 （一）基本情况 郑亚光，男，53岁，中国国籍，无境外居留权，硕士毕业于西南农业大学经济管理 专业会计方 ...