Changchai Company Limited Annual Report 2021 (Summary)

Stock Code: 000570 200570 Stock Name: Changchai Changchai-B Announcement No. 2022-014

CHANGCHAI COMPANY LIMITED

ANNUAL REPORT 2021 (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 705692507 shares

a cash dividend of RMB0.26 (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

1Changchai Company Limited Annual Report 2021 (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

construction 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 Application

Graphic display Product description Product features

products 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 117.6kW

low noise construction

Diesel and cylinder diameters from 65mm to

compact machinery

engine 135mm with one or more cylinders.structure low generator sets

Besides sale in domestic market our

emission good shipborne

diesel engines are sold to Southeast

reliability machinery

Asia South America the Middle East

and Africa.Our gasoline engines are mainly

general-purpose small gasoline

engines covering the power range Agricultural

Simple structure

Gasoline from 1.5kW to 7.0kW. Besides sale in machinery small

good reliability

engine domestic market our gasoline engines construction

easy maintenance

are sold to Southeast Asia the Middle machinery

East Europe and America Africa

Japan and other countries and regions.

3. Major Business Models

(1) R&D model

We have established an innovative technology management system for internal combustion engine based on market

demand and forward-looking technologies. Prior to the new products or new technologies development the

2Changchai Company Limited Annual Report 2021 (Summary)

marketing department first conducts market assessment and customer research and then initiates a project

according to the forecasted market demand; the technology center conducts development according to the project

materials and collects feedback information from the market and customers in real time during the development

process to ensure technology leadership and product suitability.

(2) Purchasing model

We adopt the "purchase-to-order" purchasing model. The ERP system converts the sales orders the sales plan

developed by the sales department and the production plan drawn up by the production department into the demand

of parts needed and the purchasing department organizes the purchase according to such demand. Meanwhile the

purchasing department makes a plan to guide parts procurement according to the sales department's sales plan and

provide it to the supplier and urge the supplier to prepare for the goods.

(3) Production model

We adopt the "make-to-order" production management model. The sales department makes sales plans for different

stages according to the orders in hand sales data in previous years market demand judgment and feedback of

existing customers' purchasing intentions. The Company's production department makes the production plan

according to the sales orders displayed in the ERP system the sales plan made by the sales department and the

reserve inventory demand and organizes the production task in strict accordance with the plan. During the

production process the quality assurance department arranges regular inspection to ensure the product quality.

(4) Sale model

We adopt the sales model of "direct selling + distribution" i.e. the direct selling model for the main engine factory

and the distribution model for the individual circulation market represented by farmers and overseas market.

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 "Changchai 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.

5. Key Performance Drivers

3Changchai Company Limited Annual Report 2021 (Summary)

(1) National policy driver

In recent years various departments of the state have introduced a series of preferential policies to encourage the

development of internal combustion engine industry. In terms of agricultural machinery the central government has

taken solving the problems relating to "agriculture rural areas and farmers" as the top priority of the work of the

Party and the government and issued a series of policies to benefit farmers creating a good atmosphere for

promoting the development of agriculture and economy and society in rural areas; in terms of construction

machinery the strategy of "western development" the "eight vertical and eight horizontal" high-speed railway

network plan and the policy of "new rural construction" have all created a good policy environment for the

application of internal combustion engine in downstream construction machinery.

(2) Industrial chain synergy empowers the sustainable development of the Company

We have built our own casting manufacturing and processing plants to meet the use requirements of some diesel

engine parts. In terms of production and quality we have formed a significant synergy with its own internal

combustion engine assembly team. Our casting manufacturing team and internal combustion engine assembly team

work together to form a mutually reinforcing positive feedback loop to assist the Company in integrating the

internal combustion engine industry chain and building differentiated industry barriers. In terms of collaborative

production the reduction of external purchase is of great significance for the Company to reduce process flow

reduce intermediate loss improve production efficiency shorten delivery time and increase purchasing bargaining

power. In terms of quality coordination the self-built foundry can improve our quality control of parts to improve

the yield and reliability of internal combustion engines.

(3) Stable and efficient R&D team

We have experienced technical management team and perfect technical support team. Our key technical personnel

and R&D management personnel have been engaged in internal combustion engine R&D design production and

manufacturing for a long time. With profound professional knowledge and rich practical experience they can make

strong forward-looking and scientific judgment in the market direction and technical route. Also we have

established an effective training mechanism to foster talented persons for the follow-up R&D.

(4) Well-known brand with many well-known customers

The Company formerly known as Changzhou Diesel Engine Factory is a national industrial enterprise with a

history of a hundred years and one of the earliest professional internal combustion engine manufacturers in China.Our diesel and gasoline engines as power sources of agricultural machinery construction machinery and

commercial vehicles show excellent performance in power range reliability power per litre noise control and

emission standards and have been recognized by customers. We maintained a long-term partnership with major

4Changchai Company Limited Annual Report 2021 (Summary)

customers with cumulative partnership time exceeding 15 years. Many main engine plant customers of the

Company are well-known enterprises in the agricultural machinery industry with their market shares being at the

forefront of the market.

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

Change of 31

31 December 31 December December 2021 31 December

2021 2020 over 31 December 2019

2020(%)

3488820324.6

Total assets 4860382961.26 3952954464.45 22.96%

0

Equity attributable to the

2110892767.5

listed company’s 3077550018.33 2273349347.02 35.38%

8

shareholders

2021-over-2020

202120202019

change (%)

2045820801.1

Operating revenue 2452430515.60 2296464711.24 6.79%

0

Net profit attributable to the

listed company’s 103006232.54 52432443.05 96.46% 24966526.85

shareholders

Net profit attributable to the

listed company’s

5329092.8725483147.57-79.09%14405485.64

shareholders before

exceptional gains and losses

Net cash generated

from/used in operating -266323779.30 251796654.53 -- -20325189.56

activities

Basic earnings per share

0.16570.093477.41%0.0445

(RMB/share)

Diluted earnings per share

0.16570.093477.41%0.0445

(RMB/share)

Weighted average return on

3.86%2.40%1.46%1.21%

equity (%)

(2) Key Financial Information by Quarter

Unit: RMB

Q1 Q2 Q3 Q4

Operating revenue 774218489.69 722951966.11 484183670.58 471076389.22

5Changchai Company Limited Annual Report 2021 (Summary)

Net profit attributable to the listed

24571254.83104617810.77-23478352.18-2704480.88

company’s shareholders

Net profit attributable to the listed

company’s shareholders before 23604960.00 3555454.58 -9073885.20 -12757436.51

exceptional gains and losses

Net cash generated from/used in

774218489.69722951966.11484183670.58471076389.22

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

Number of

Number of Number of

preferred

ordinary preferred

Number of shareholders

shareholders shareholders

ordinary with resumed

at the with

shareholder 49947 53650 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

Shareholdin Total shares Shares in pledge or

Nature of Restricted

Name of shareholder g held at the frozen

shareholder shares held

percentage period-end Status Shares

Changzhou

State-owned

Investment Group 32.26% 227663417 56818181

corporation

Co. Ltd

Nuode Fund-

Huazhang Tiandi

Media Investment

Co. Ltd.-Nuode Other 1.61% 11363636 11363636

Fund Pujiang No.64

Single Asset

Management Plan

China National Gold

Group Asset State-owned

1.51%1068181810681818

Management Co. corporation

Ltd.Domestic

Chen Beiwen 1.03% 7272727 7272727

individual

6Changchai Company Limited Annual Report 2021 (Summary)

Enjoy(Ningbo)Asset

Management

L.P.-Enjoy

Other 0.97% 6818181 6818181

Yingshanhong No.9

Private Securities

Investment Fund

Foreign

UBS AG 0.66% 4631555 3409090

corporation

Changzhou

Transportation

Construction State-owned

0.65%45954544545454

Investment corporation

Development Co.Ltd.Domestic

Yao Jianquan 0.64% 4545454 4545454

individual

Domestic

Sun Meichun 0.64% 4545454 4545454

individual

Jiangxi Jintou

Domestic

Industrial

non-state-own 0.64% 4545454 4545454

Development Co.ed corporation

Ltd.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.Top 10 shareholders involved in

Not

securities margin trading (if any)

(2) Number of Preferred Shareholders and Shareholdings of Top 10 of Them

□ Applicable √ Not applicable

No preferred shareholders in the Reporting Period.

7Changchai Company Limited Annual Report 2021 (Summary)

(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. Accomplishment of non-public offering of shares

On 17 December 2020 the Company received the Reply concerning the Approval of the Non-public Offering of

Shares of Changchai Company Limited (ZJXK [2020] No. 3374) from the China Securities Regulatory

Commission which approved the non-public offering of up to 168412297 shares of the Company. The Company's

offered 144318181 RMB ordinary shares (A shares) in a non-public manner. The issuing price was RMB4.40 per

share total amount raised was RMB634999936.40 and the net amount actually raised was RMB620665733.97

after deducting various issuance expenses. The new shares issued in a non-public manner were listed on the

Shenzhen Stock Exchange on 5 July 2021. Except for the shares subscribed by the Investment Group the restriction

has been lifted on 5 January 2022. For details please refer to the Report on Non-public Offering by Changchai

Company Limited and Listing Bulletin disclosed by the Company on www.cninfo.com.cn on 1 July 2021.

2. Participating in the Public Listed Transfer of 41.5% Equity Interests in Zhenjiang Siyang Diesel Engine

Manufacturing Co. Ltd.The Sixth Interim Meeting of the Board of Directors in 2021 held by the Company on 28 October 2021 deliberated

on and approved the Proposal on Participating in the Public Listed Transfer of 41.5% Equity Interests in Zhenjiang

Siyang Diesel Engine Manufacturing Co. Ltd. authorizing the Management of the Company to participate in the

bidding of the public listed transfer by Jiangsu University of Science and Technology Assets Management Co. Ltd.(hereinafter referred to as "Science University Assets") of its 41.5% equity interest in Zhenjiang Siyang Diesel

Engine Manufacturing Co. Ltd. (hereinafter referred to as "Zhenjiang Siyang"). On 12 January 2022 Zhenjiang

Siyang Diesel Engine Manufacturing Co. Ltd. issued the Confirmation of Transaction on the Transfer of 41.5%

8Changchai Company Limited Annual Report 2021 (Summary)

Equity Interest (Corresponding to Capital Contribution of RMB830000).The Company won the 41.5% equity

interest in Zhenjiang Siyang at a price of RMB33520800.00. On 23 February 2022 the Company signed the

Contract on Transfer of State-owned Property Rights with Science University Assets. On 9 March 2022 Zhenjiang

Siyang has completed the relevant registration alteration formalities with the competent industrial and commercial

administration.

9