Stock Code: 000581, 200581 Public Notice No: 2019-008 Short Form of the Stock: Weifu High- Tech, Su Weifu-B Weifu High-Technology Group Co., Ltd. Summary of Annual Report 2018 I. Important Notice The summary is abstract from full-text of annual report, for more details of operating results, financial condition and future development plan of the Company; investors should found in the full-text of annual report that published on media appointed by CSRC. Statement: no directors, supervisors or senior management declare the authenticity, accuracy and integrity of the report cannot be guaranteed or there is objection. Other directors attending the Meeting for annual report deliberation except for the followed Name of director absent Title for absent director Reasons for absent Attorney Zhang Xiaogeng Director Travel for business Hua Wanrong Prompt of non-standard audit opinion □ Applicable √ Not applicable Profit distribution pre-plan of common stock or capitalizing of common reserves pre-plan deliberated by the Board in the reporting period √Applicable □Not applicable Whether has capitalizing of common reserves carried out □Yes √ No The profit distribution plan that deliberated and approved by the Board is: based on total stock issued 1,008,950,570 shares, distributed 12.00 Yuan (tax included) bonus in cash for every 10-share hold by all shareholders, 0 shares bonus issued (tax included) and no capitalizing of common reserves carried out. Profit distribution pre-plan of preferred stock deliberated and approved by the Board in the reporting period □ Applicable √ Not applicable II. Company profile 1. Company Profile Short form of the stock Weifu High- Tech, Su Weifu-B Stock code 000581, 200581 Stock exchange for listing Shenzhen Stock Exchange Person/Way to contact Secretary of the Board Rep. of security affairs Name Zhou Weixing Yan Guohong Office add. No.5, Huashan Road, New District, Wuxi City No.5, Huashan Road, New District, Wuxi City Fax. 0510-80505199 0510-80505199 Tel. 0510-80505999 0510-80505999 E-mail wfjt@public1.wx.js.cn wfjt@public1.wx.js.cn 无锡威孚高科技集团股份有限公司 2018 年年度报告摘要 2. Main business or product introduction in the reporting period (i) Main business of the Company 1. The Company belongs to auto parts industry, and its main business products include diesel fuel injection system products, exhaust after-treatment system products and air management system products. 2. Main uses of the Company's products (1) The diesel fuel injection system products are widely used in different power diesel engines supporting all types of trucks, passenger cars, buses, construction machinery, marine, and generator sets. The company not only makes products matching with the main engines used at home but also exports some products to the Americas, Southeast Asia, and the Middle East. The products meet the needs of national emission standards. (2) The auto exhaust after-treatment system products: mainly support the major manufacturers of automobile, motorcycle and general machinery at home which meet the national emission standards. (3) The intake system products (supercharger): matches with most of the domestic small-bore diesel engine plants and some six-cylinder diesel engine manufacturers, and meet the needs of the light and heavy commercial vehicles and some passenger cars, and meets the national emission standards. 3. Business model of the Company The Company follows the operating philosophy of making competitive products, creating famous brands, striving for first choices, and creating value for the users, implements the business model that parent company unifies the management and subsidiaries decentralize the production. Namely, the group company is responsible for making strategic development planning and operation targets, and making the unified management, instruction and assessment for the finance, significant personnel management, core raw materials, quality control, and technology of the subsidiaries. The subsidiaries arrange production based on the order management model of market, which makes the subsidiaries keep the consistent quality with the company, helps keep abreast of customer needs and saving logistics costs, maintain the timeliness of products production and supply, and improve the company’s economic benefits. During the reporting period, the Company’s main business and business model have no significant changes. (ii) Development stage and periodic characteristics of the industry the Company involves and the Company's In the past 40 years of reform and opening up, China’s economy has shifted from a high-speed growth stage to a high-quality development stage. Although the market may continue to show unexpected changes in the future, we believe that the fundamentals of China’s healthy and stable economic development will not change, and the Chinese economy is fully capable of maintaining a reasonable growth range. At the same time, the Chinese automobile market has entered a period of steady growth since 2010, in order to solve the increasingly severe traffic jams, environmental pollution, energy conservation and consumption reduction, the automobile industry has accelerated the technology upgrades, and the automobile new energy applications are rapidly advancing, nowadays the artificial intelligence, internet of things and other technologies develop rapidly and accelerate the penetration into various fields, it has reached a consensus on the development of intelligent networked automobiles which promotes the development environment of intelligent networked automobiles to become 2 无锡威孚高科技集团股份有限公司 2018 年年度报告摘要 increasingly perfect. After 60 years of hard work, the company has become a backbone enterprise of core parts of domestic auto (power engineering), 80% products of the existing Automobile components core business are matched with the electronic control systems and electronically controlled. The company will actively respond to the national new energy and intelligent network strategy, take the Automobile components industry chain as the core and other related fields as supplements, lay out new energy auto drive technology, and promote the hydrogen fuel cell technology and intelligent network technology research and development capacity building. Market objectives: consolidate the existing business market position and take a position in the new business potential market. Technical objectives: strengthen the technical strength of the pillar business, lay out the new business frontier technology, and actively expand new areas based on the existing business. Strive to achieve the goal of becoming a leader in the auto core parts enterprises. 3. Main accounting data and financial indexes (1) Main accounting data and financial indexes for recently three years Whether it has retroactive adjustment or re-statement on previous accounting data or not □Yes √ No In RMB Changes over last 2018 2017 2016 year Operating income 8,721,674,671.18 9,017,280,159.80 -3.28% 6,422,700,399.27 Net profit attributable to shareholders of 2,396,077,415.21 2,571,339,490.04 -6.82% 1,672,224,317.05 the listed company Net profit attributable to shareholders of the listed company after deducting 2,014,800,714.20 2,322,218,596.99 -13.24% 1,435,963,836.76 non-recurring gains and losses Net cash flow arising from operating 874,381,526.63 957,697,901.07 -8.70% 527,344,364.04 activities Basic earnings per share (RMB/Share) 2.37 2.55 -7.06% 1.66 Diluted earnings per share (RMB/Share) 2.37 2.55 -7.06% 1.66 Weighted average ROE 15.48% 18.52% -3.04% 13.53% Changes over end End of 2018 End of 2017 End of 2016 of last year Total assets 20,892,041,460.30 20,231,006,224.36 3.27% 17,263,771,897.78 Net assets attributable to shareholder of 15,913,828,778.82 14,835,673,669.75 7.27% 12,927,344,292.47 listed company 3 无锡威孚高科技集团股份有限公司 2018 年年度报告摘要 (2) Quarterly main financial index In RMB 1st Q 2nd Q 3rd Q 4th Q Operating income 2,391,982,640.39 2,568,819,250.60 1,898,914,219.62 1,861,958,560.57 Net profit attributable to shareholders of 784,228,178.43 761,014,526.49 510,387,493.91 340,447,216.38 the listed company Net profit attributable to shareholders of the listed company after deducting 691,078,505.55 687,786,996.02 452,953,425.86 182,981,786.77 non-recurring gains and losses Net cash flow arising from operating 86,416,705.11 292,506,985.37 127,146,119.98 368,311,716.17 activities Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial index disclosed in the company’s quarterly report and semi-annual report □Yes √ No 4. Shares and shareholders (1) Particulars about common stock shareholders, preference shareholders with voting rights recovered and top ten shareholders In Share Total common Total common stock Total preference Total preference stock shareholders at end of shareholders with shareholders with voting shareholders in 60,946 last month before 54,791 voting rights 0 rights recovered at end 0 reporting annual report recovered at end of of last month before period-end disclosed reporting period annual report disclosed Top ten shareholders Number of shares Proportion Amount of Nature of Amount of pledged/frozen Name of Shareholders of shares restricted shareholder shares held State of held shares held Amount share Wuxi Industry Development Group Co., State-owned 20.22% 204,059,398 Ltd corporate ROBERT BOSCH GMBH Foreign corporate 14.16% 142,841,400 Hong Kong Securities Clearing Foreign corporate 4.01% 40,482,044 Company Bank of Communication – HSBC Jixin Double Core Strategy Mixed Securities Other 2.64% 26,612,573 Investment Fund BBH BOS S/A FIDELITY FD - CHINA Foreign corporate 1.78% 18,002,797 FOCUS FD Central Huijin Assets Management Co., State-owned 1.27% 12,811,200 Ltd. corporate 4 无锡威孚高科技集团股份有限公司 2018 年年度报告摘要 Zhonghai Trust Co., Ltd. - Jinhai No.9 Securities Investment Collective Fund Other 0.79% 7,931,752 Trust Agricultural Bank of China - CS 500 Other 0.62% 6,211,068 ETF FIDELITY INVMT TRT FIDELITY Foreign corporate 0.57% 5,791,618 INTL SMALL CAP FUND Basic pension fund-- 1207 portfolio Other 0.50% 5,028,007 Among the top ten shareholders, there has no associated relationship between Wuxi Industry Development Croup Co., Ltd. and other Explanation on associated relationship among the aforesaid shareholders, the first largest shareholder of the Company; and they do shareholders not belong to the person acting in concert regulated by the Management Measure of Information Disclosure on Change of Shareholding for Listed Company. Explanation on shareholders involving margin business (if Not applicable applicable) (2) Total preferred stock shareholders of the Company and shares held by top ten shareholders with preferred stock held □ Applicable √ Not applicable The Company had no shareholders with preferred stock held in the reporting. (3) Property right and controlling relationships between the actual controllers of the Company and the Company is as follows: State-owned Assets Supervision & Administration Commission of Wuxi Municipality of Jiangsu Province 100% Wuxi Industry Development Croup Co., Ltd. 20.22% Weifu High-Technology Group Co., Ltd. 5. Corporate bonds Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when annual report approved for released or fail to cash in full on due No 5 无锡威孚高科技集团股份有限公司 2018 年年度报告摘要 III. Discussion and analysis by the Management Team 1. Introduction of operation in the reporting period (i) General introduction In 2018, the macroeconomic growth rate declined. China’s automobile production and sales growth rate was lower than that estimated at the beginning of the year, the total quantity showed the first negative growth in 28 years. According to the data released by the China Association of Automobile Manufacturers, the annual production and sales volume of automobiles were 27.809 million and 28.081 million, respectively declined by 4.2% and 2.8% on a year-on-year basis, and the annual production and sales volume of passenger vehicles were respectively 23.529 million and 23.71 million, respectively declined by 5.2% and 4.1% over the same period of the previous year, while the annual production and sales volume of commercial vehicles were respectively 4.28 million and 4.371 million, respectively increased by 1.7% and 5.1% over the same period of the previous year, and the growth rate declined. Facing the complicated market environment, the company worked hard to overcome difficulties and maintain the overall stability of comprehensive economic operation. During the reporting period, the company achieved operating income of 8.722 billion yuan, a decline of 3.28% on a year-on-year basis, realized total profit of 2.602 billion yuan, a decline of 8.06% on a year-on-year basis; total assets were 20.892 billion yuan, an increase of 3.27% on a year-on-year basis; the owner’s equity attributable to the parent company was 15.914 billion yuan, an increase of 7.27% on a year-on-year basis. (ii) Main work carried out 1. Actively responded to the severe market challenges and fully guaranteed the stability of main business Under the influence of the decline in automobile market and engine market, the company responded positively, focused on the core market, continuously improved the manufacturing system, strengthened the process control capability, improved the delivery capability of leading products, improved the physical quality of key products, and ensured the total amount of main business products. The market share of fuel injection system related products and supercharger products remained relatively stable and had a certain growth throughout the year, the production and sales volume of multiple-piston pumps for fuel injection systems still exceeded 2 million units, and the sales of supercharger products increased by 10% on a year-on-year basis. Due to market fluctuations, the market share of post-processing system business has slightly declined. 2. Took advantage of information technology means to gradually establish an operation management system to further enhance the company’s operating efficiency The company continuously promoted the optimization and upgrading of management, actively sorted out the management duties, standardized and optimized the existing system processes, planned and designed the company’s financial reform and transformation, built the company’s financial sharing center, established the company’s procurement and sharing platform project, further improved the human resource management system, strengthened the security construction of the Group’s information system, thus the comprehensive management capability of the enterprise has been further improved. 6 无锡威孚高科技集团股份有限公司 2018 年年度报告摘要 3. Started the future layout, established the “double-engine-driven” strategic model of “new business becomes a long-term new engine, and traditional businesses guarantee the enterprise forward again”, and took the auto parts industry chain as the core and other related fields as supplements to further improve the R&D system, promote the research and development of platform products, quickly deploy the forward-looking projects, and actively promote the investment cooperation of new business. 2. Whether the main business had major change in the reporting period □Yes √No 3. The industries, products, or regions accounting for over 10% of the company’s operating income or operating profit √Applicable □Not applicable In RMB Increase/decrease Increase/decrease Increase/decrease Gross profit Name Operating revenue Operating cost of operating of operating cost of gross profit ratio revenue y-o-y y-o-y ratio y-o-y Auto fuel injection 5,027,966,298.51 1,469,230,901.34 29.22% -10.02% -13.82% -1.29% system Intake system 440,331,903.61 123,637,620.24 28.08% 15.69% 29.98% 3.09% Exhaust 2,794,656,676.75 335,946,193.86 12.02% 8.87% 6.73% -0.24% after-treatment system 4. Whether the characteristics of management seasonal or cyclical need special attention □ Yes √ No 5. In the reporting period, note of major changes in operating income, operating cost, total net profit attributable to common stock shareholders of listed company or composing the previous reporting period □ Applicable √ Not applicable 6. Particular about suspended and delisting □ Applicable √ Not applicable 7 Relevant items involving financial report (1) Particulars about the changes in aspect of accounting policy, estimates and calculation method compared with the financial report of last year √ Applicable □Not applicable 7 无锡威孚高科技集团股份有限公司 2018 年年度报告摘要 (1) Change of major accounting policy On June 15, 2018, the Ministry of Finance issued the Notice on Amending the Format of Financial Statements of General Enterprises in 2018 (CK No. [2018] 15), revised the financial statements format of general enterprises. According to the requirement, relevant content of the accounting policy needs to be adjusted, and the financial statement should be prepared in line with the format of financial statement for general enterprise(applicable to enterprise that have not yet implemented new financial and revenue standards). The impacts on the items and amounts related to consolidated financial statements and the parent company’s financial statements during the comparable period are as: Impact on the amount in relevant financial statement of 2017/on 31 December 2017 Changes of Amount affected (+,-) accounting policy Item Consolidate financial statement Financial statement of parent company The Company Note receivable -1,464,256,934.83 -449,209,323.02 prepared the financial statement of 2018 in line with Account receivable -1,995,577,830.90 -1,047,012,889.92 the format regulated Note receivable and account in CK No. [2018] 15, receivable 3,459,834,765.73 1,496,222,212.94 and changed the presentation of Interest receivable -2,281,979.17 -97,627.77 relevant financial statements by Other account receivable 2,281,979.17 97,627.77 retrospective method Note payable -947,976,759.10 -459,762,950.78 Account payable -2,570,956,205.83 -1,082,206,882.07 Note payable and account 3,518,932,964.93 1,541,969,832.85 payable Interest payable -401,928.43 -93,777.78 Other account payable 401,928.43 93,777.78 Long-term account payable 18,265,082.11 -- Special account payable -18,265,082.11 -- Administrative expenses -391,315,234.75 -119,083,205.53 R&D expenses 391,315,234.75 119,083,205.53 (2) Major accounting errors within reporting period that needs retrospective restatement □ Applicable √ Not applicable No major accounting errors within reporting period that needs retrospective restatement for the Company in the period. (3) Compare with last year’s financial report; explain changes in consolidation statement’s scope √Applicable □Not applicable 8 无锡威孚高科技集团股份有限公司 2018 年年度报告摘要 Way of obtained Time when equity Ratio of fund Content changed Company the equity obtained contribution Consolidate scope Nanchang Weifu Leader Auto Parts Newly 2018-3-8 100.00% increased & Components Co., Ltd. established Board of Directors of Weifu High-Technology Group Co., Ltd. 23 April 2019 9