Changchai Company, Limited Annual Report 2022 (Summary)
Stock Code: 000570, 200570 Stock Name: Changchai, Changchai-B Announcement No. 2023-005
CHANGCHAI COMPANY, LIMITED
ANNUAL REPORT 2022 (SUMMARY)
Part I Important Notes
This Summary is based on the full Annual Report of Changchai Company, Limited (together with its consolidated
subsidiaries, the “Company”, except where the context otherwise requires). In order for a full understanding of the
Company’s operating results, financial position and future development plans, investors should carefully read the
aforesaid full text, which has been disclosed together with this Summary on the media designated by the China
Securities Regulatory Commission (the “CSRC”).
All the directors of the Company attended in person the board meeting for the approval of this Report.
Independent auditor’s modified opinion:
□ Applicable √ Not applicable
Board-approved final cash and/or stock dividend plan for ordinary shareholders for the Reporting Period:
√ Applicable □ Not applicable
Bonus issue from capital reserves:
□ Yes √ No
The Board has approved a final dividend plan for ordinary shareholders as follows: based on the 705,692,507 shares,
a cash dividend of RMB0.10 (tax inclusive) per 10 shares is to be distributed to the shareholders, with no bonus
issue from either profit or capital reserves.
Board-approved final cash and/or stock dividend plan for preferred shareholders for the Reporting Period:
□ Applicable √ Not applicable
This Report and its summary have been prepared in both Chinese and English. Should there be any discrepancies or
misunderstandings between the two versions, the Chinese versions shall prevail.
Part II Key Corporate Information
1. Stock Profile
Changchai，
Stock name Stock code 000570, 200570
Changchai-B
Stock exchange for stock listing Shenzhen Stock Exchange
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Changchai Company, Limited Annual Report 2022 (Summary)
Contact information Board Secretary Securities Representative
Name He Jianjiang
123 Huaide Middle Road,
Address
Changzhou, Jiangsu, China
Fax （86）519-86630954
Tel. （86）519-68683155
Email address cchjj@changchai.com
2. Principal Activities or Products in the Reporting Period
1. Principal Operations of the Company
We mainly specialize in the R&D, manufacture and sales of diesel engines under the brand "Changchai" and
gasoline engines under the brand "Robin". Our products are mainly used in agricultural machinery, small
engineering machinery, light commercial vehicles, generator sets and shipborne machinery and other fields closely
related to people's livelihood.
In the Reporting Period, there were no major changes in the Company's core business and main products.
2. Main Products of the Company
Our main products are divided into two categories: diesel engines and gasoline engines. The details are as follows:
Main Product Application
Graphic display Product description
products features fields
Our diesel engine products include
single-cylinder diesel engines and
High power, low Agricultural
multi-cylinder engines, covering
oil consumption, machinery,
power range from 1.62kW to
low noise, construction
Diesel 117.6kW, and cylinder diameters from
compact machinery,
engine 65mm to 135mm, with one or more
structure, low generator sets,
cylinders. Besides sale in domestic
emission, good shipborne
market, our diesel engines are sold to
reliability machinery
Southeast Asia, South America, the
Middle East and Africa.
Our gasoline engines are mainly
general-purpose small gasoline
engines, covering the power range Simple structure, Agricultural
Gasoline from 1.5kW to 7.0kW. Besides sale in good reliability, machinery, small
engine domestic market, our gasoline engines easy construction
are sold to Southeast Asia, the Middle maintenance machinery
East, Europe and America, Africa,
Japan and other countries and regions.
3. Industry Review
(1) Basic information on the industry
The internal combustion engine is an important support for China's manufacturing industry security, energy security
and national defense security, and an important basic industry of national economy and national defense
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Changchai Company, Limited Annual Report 2022 (Summary)
construction. The internal combustion engine is the most power-dense, thermally efficient and widely used heat
engine power unit.
In order to implement the national overall development strategy of energy conservation, emission reduction,
transformation, and upgrading, the internal combustion engine industry and agricultural machinery industry will
strengthen independent innovation and research and development, accelerate the construction of a common basic
technology platform, optimize the construction of the upstream and downstream industry chain, implement
intelligent manufacturing, and actively carry out international exchange and cooperation to accelerate the realization
of industrial technology upgrading.
(2) Development pattern and trend of the industry
In terms of policies, at the beginning of 2023, the 20th No. 1 Document guiding the work on agriculture, rural areas,
and farmers issued by the central government demonstrated the government’s intention to attach greater importance
to agriculture and strengthen agricultural development. In a bid to do so, the government will step up efforts to
enhance agricultural science and technology and provide more equipment, drive to tackle key problems of key and
core technologies in agriculture, and make agricultural machinery more intelligent and automated. In terms of
industry concerns, the upgrade and conversion to products that meet the National Emission Standard IV raise
challenges to enterprises. At the end of 2022, the central government appropriated RMB211.5 billion of
agriculture-related transfer payment funds for 2023 in advance, including RMB14.5 billion for subsidies of
agricultural machinery procurement and application. The central government allocated substantive funds for
subsidies and implemented policies to strengthen agriculture and benefit farmers, indicating that the state will
continue to attach great importance to agricultural mechanization.
In terms of industrial development, after a ten-year golden period of development, since 2016, the entire agricultural
machinery industry has entered a period of deep adjustment that has lasted for years. Although short-term explosive
growth was seen in 2020, it went down again, entering a phase of updating existing machinery from the growth of
new machine procurement. 2022, the first year of switching to the National Emission Standard IV for Non-road
Vehicles, the agricultural machinery industry faced pressures such as the shrinking of the demand side, premature
market overdraft, participation of tycoons from other industries, and the impact of new energy market on the
traditional market. Currently, multiple segmented scenarios still require all-weather and continuous input and output,
which is an advantage of diesel engines that cannot be substituted in a short time. Furthermore, new development
opportunities have been brought about in the process of national strategic deployment and acceleration of
transformation and upgrade. Therefore, the traditional market of agricultural machinery still has a brilliant future.
China's diesel engine and gasoline engine industries present a pattern of multiple competitions. As the state adopts
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Changchai Company, Limited Annual Report 2022 (Summary)
increasingly strict environmental protection policy and the emission standards continue to upgrade, the core
technology and key parts of internal combustion engines will be rapidly developed and applied, and the research,
development, promoting and application of environmentally friendly and efficient diesel engines and gasoline
engines will become the mainstream trend, which promotes the wide use of the fuel injection system,
high-efficiency supercharger and high-efficiency after-treatment. In the new normal, the internal combustion engine
industry and agricultural machinery industry will improve the industry's capability of independent innovation,
support the whole machine development, and organize and implement green manufacturing and intelligent
manufacturing, so as to improve the overall strength of the industry. The market share of diesel and gasoline engines
is gradually concentrated in a few large-scale enterprises with technical and capital strength.
The present development trend of internal combustion engine industry is as follows: (1) energy saving and emission
reduction; (2) intelligent manufacturing; (3) lightweight. Medium- and low-end internal combustion engines with
low technical content and low added value will be gradually squeezed out of the market. The upgrade of emission
standards and the market's demand for high-end products will eliminate those small enterprises with low level of
research and development or less technology reserves.
(3) Sales of internal combustion engine industry in 2022
The total volume of the market dropped significantly due to factors such as subsidy policy change, tight supply
chain, upgrading of the National Emission Standard IV for Non-road Vehicles, and intensified existing competition.
The total sales of internal combustion engines in 2022 were 43,154,700 units, a decrease of 14.51% compared to
2021. The total sales of diesel engines for the year were 4,286,600 units, down by 29.82% year on year. Specifically,
837,200 engines for construction machinery, 1,222,300 engines for agricultural machinery, 39,700 engines for
shipborne machinery, and 311,700 engines for electricity generation were sold. The sales of gasoline internal
combustion engines were 38,856,000, a drop of 12.39% year on year.
On the whole, the internal combustion engine market showed a declining tendency for the whole year, with the
construction and agricultural machinery still showing an adjustment trend. The agricultural machinery industry
faced a major shakeout, focusing on the switching of products that meet the China IV emission standards for
non-road mobile machinery. According to the information on the subsidies of agricultural machinery procurement,
the main terminal products that need to be upgraded to meet China IV emission standards are large and medium
tractors, wheat harvesters, forage harvesters, and spray rod-type sprayers. The market paid more attention to
whether they can be adequately verified to meet China IV emission standards and whether mass production can be
realized. In the second half of 2022, the sales of large and medium tractors, wheat harvesters, and corn harvesters
peaked, showing that the traditional demand cycle was altered.
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Changchai Company, Limited Annual Report 2022 (Summary)
In terms of the segments of the internal combustion engine market, in 2022, 897,300 units of construction
machinery were sold, down by 21.00% year on year; 4,141,300 units of agricultural machinery were sold, down by
22.87% year on year; 39,700 units of shipborne machinery were sold, down by 1.18% year on year; 1,253,000 units
of generator sets were sold, down by 19.02 year on year; and 1,645,400 units of horticultural machinery were sold,
down by 34.15% year on year. Compared with last year, the year-over-year growth of all kinds of machinery was
negative.
Due to the impact of international trade and the characteristics of the enterprise scale, the internal combustion
engine industry was steady and showed a positive trend on the whole. In 2022, the total volume of imports and
exports was USD30,086 million, down by 2.47% year on year; specifically, the import volume was USD8,803
million, down by 18.63% year on year and the export volume was USD21,284 million, up by 6.27% year on year.
4. The Company's position in the market
We mainly specialize in the R&D, manufacture and sales of diesel engines under the brand "Changchai" and
gasoline engines under the brand "Robin". Up to now, we have successfully developed a number of advanced core
technologies with independent intellectual property rights. In terms of diesel engine, according to the statistics of
China Internal Combustion Engine Industry Association (CICEIA), as the largest small- and medium-sized
single-cylinder diesel engine manufacturer in the agricultural machinery industry of China, we have maintained a
high market share of single-cylinder engines, and our market share of single-cylinder diesel engines of some power
ranges has ranked first in China. For many years, in the process of achieving steady economic development of the
enterprise, we developed in a sound manner and cultivated the "Changchai" brand, a famous small diesel engine
brand of China with independent intellectual property rights.
3. Key Financial Information
(1) Key Financial Information of the Past Three Years
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
Unit: RMB
2022-over-2021
2022 2021 2020
change (%)
Operating revenue
2,182,043,095.61 2,452,430,515.60 -11.03% 2,296,464,711.24
(RMB)
Net profit attributable to
the listed company’s 76,684,796.91 103,006,232.54 -25.55% 52,432,443.05
shareholders (RMB)
Net profit attributable to -73,636,511.02 5,329,092.87 —— 25,483,147.57
the listed company’s
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Changchai Company, Limited Annual Report 2022 (Summary)
shareholders before
exceptional gains and
losses (RMB)
Net cash generated
from/used in operating 364,930,277.84 -266,323,779.30 —— 251,796,654.53
activities (RMB)
Basic earnings per share
0.1087 0.1657 -34.40% 0.0934
(RMB/share)
Diluted earnings per
0.1087 0.1657 -34.40% 0.0934
share (RMB/share)
Weighted average return
2.51% 3.86% -1.35% 2.40%
on equity (%)
Change of 31
31 December December 2022
31 December 2022 31 December 2020
2021 over 31 December
2021 (%)
Total assets (RMB) 5,219,359,853.42 4,860,382,961.26 7.39% 3,952,954,464.45
Equity attributable to the
listed company’s 3,284,710,665.90 3,077,550,018.33 6.73% 2,273,349,347.02
shareholders (RMB)
(2) Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 675,718,729.65 502,503,762.39 545,599,669.07 458,220,934.50
Net profit attributable to the
-31,087,265.83 16,491,996.22 150,405,621.57 -59,125,555.05
listed company’s shareholders
Net profit attributable to the
listed company’s shareholders
-12,317,891.45 6,508,531.38 -5,566,500.16 -62,260,650.79
before exceptional gains and
losses
Net cash generated from/used in
-47,199,474.48 -27,101,026.64 -8,250,338.30 447,481,117.26
operating activities
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs
materially from what have been disclosed in the Company’s quarterly or interim reports.
□ Yes √ No
4. Share Capital and Shareholder Information at the Period-End
(1) Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well as
Holdings of Top 10 Shareholders
Unit: share
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Changchai Company, Limited Annual Report 2022 (Summary)
Number of
Number of Number of
preferred
ordinary preferred
Number of shareholders
shareholders shareholders
ordinary with resumed
at the with
shareholder 50,886 49,998 0 voting rights at 0
month-end resumed
s at the the month-end
prior to the voting rights
period-end prior to the
disclosure of at the
disclosure of
this Report period-end
this Report
Top 10 shareholders
Sharehold Shares in pledge or
Total shares
Nature of ing Restricted frozen
Name of shareholder held at the
shareholder percentag shares held
period-end Status Shares
e
Changzhou Investment State-owned
32.26% 227,663,417 56,818,181
Group Co., Ltd legal person
Domestic
Chen Jian natural 0.71% 4,979,900
person
MORGAN STANLEY
& CO. Foreign
0.45% 3,146,392
INTERNATIONAL legal person
PLC.
Foreign
KGI ASIA LIMITED 0.44% 3,101,695
legal person
Domestic
Yang Xuee natural 0.37% 2,611,500
person
China Minsheng
Bank-Goldstate Yuanqi
Dynamic Asset
Other 0.36% 2,530,800
Allocation Mixed Type
Securities Investment
Fund
CLSA Asset
Foreign
Management 0.25% 1,780,068
legal person
Limited-Clients’ Capital
Domestic
Dai Wenping natural 0.25% 1,776,200
person
Domestic
Li Suinan natural 0.22% 1,569,100
person
Domestic
Huang Guoliang natural 0.22% 1,528,891
person
It is unknown whether there is among the top 10 public shareholders
Related or acting-in-concert parties and the top 10 unrestricted public shareholders any related parties or
among the shareholders above acting-in-concert parties as defined in the Administrative Measures
for Information Regarding Shareholding Alteration.
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Changchai Company, Limited Annual Report 2022 (Summary)
Shareholders Chen Jian and Dai Wenping held 3,320,000 and
Top 10 shareholders involved in
1,610,200 shares respectively in the Company through their margin
securities margin trading (if any)
accounts.
(2) Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
No preferred shareholders in the Reporting Period.
(3) Ownership and Control Relations between the Actual Controller and the Company
5. Outstanding Bonds at the Date when this Report Was Authorized for Issue
□ Applicable √ Not applicable
Part III Significant Events
(1) The Sixth Extraordinary Meeting of the Board of Directors in 2021 held by the Company on 28 October 2021
deliberated on and approved the Proposal on Participation in Bidding for 41.5% Equity Interests in Zhenjiang
Siyang Diesel Engine Manufacturing Co., Ltd., authorizing the Management of the Company to participate in
bidding for 41.5% equity interest in Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd. (hereinafter referred
to as "Zhenjiang Siyang") that had been put out for sale by Jiangsu Keda Assets Marketing Co., Ltd. (hereinafter,
“Keda Assets”). On 12 January 2022, Jiangsu Assets and Equity Exchange Co., Ltd. issued the Confirmation of
Transaction on the Transfer of 41.5% Equity Interests (Corresponding to Capital Contribution of RMB830,000) in
Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd. The Company won the bid for the 41.5% equity interests
in Zhenjiang Siyang at a price of RMB33,520,800.00. On 23 February 2022, the Company signed the Contract on
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Changchai Company, Limited Annual Report 2022 (Summary)
Transfer of State-owned Property Rights with Keda Assets. On 9 March 2022, Zhenjiang Siyang has completed the
relevant registration alteration formalities with the competent industrial and commercial administration. On 16 May
2022, Zhenjiang Siyang held meetings of shareholders, the Board of Directors and the Supervisory Committee to
elect and appoint new members for the Board of Directors, the Supervisory Committee and management, with the
Company taking over half of the seats in the Board of Zhenjiang Siyang. As such, Zhenjiang Siyang has been
included in the consolidated financial statements of the Company.
(2) On 25 August 2022, the Company held the Fourth Interim Meeting of the Board of Directors and the Fourth
Interim Meeting of the Supervisory Committee in 2022 and deliberated and approved the Proposal on Planning to
Participate in Capital Increase and Share Expansion and Related Transactions of Jiangsu Horizon New Energy
Technology Co., Ltd., agreeing to increase RMB75 million capital to Horizon New Energy for the subscription of
its newly registered capital of RMB18,844,200 and authorizing Shi Xinkun, the Company’s Chairman, to sign
capital increase agreements with related parties. In August 2022, Horizon New Energy and its shareholders signed
the Capital Increase Agreement of Jiangsu Horizon New Energy Technology Co., Ltd., agreeing that the registered
capital of Horizon New Energy was increased from RMB1,405,622,491 to RMB1.75 billion. In October 2022,
Horizon New Energy completed the industrial and commercial change registration procedures according to the
aforesaid capital increase agreement and obtained the new business license.
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