Changchai Company Limited Annual Report 2023 (Summary)

Stock Code: 000570 200570 Stock Name: Changchai Changchai-B Announcement No. 2024-005

CHANGCHAI COMPANY LIMITED

ANNUAL REPORT 2023 (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 RMB0.47 (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 Shenzhen Stock Exchange

1Changchai Company Limited Annual Report 2023 (Summary)

listing

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 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

produc Graphic display Product description

features fields

ts

Our diesel engine products include

single-cylinder diesel engines and High power low Agricultural

multi-cylinder engines covering oil consumption machinery

power range from 3kW to 129kW low noise construction

Diesel

and cylinder diameters from 65mm compact machinery

engine

to 135mm. Besides sale in domestic structure low generator sets

market our diesel engines are sold emission good shipborne

to Southeast Asia South America reliability machinery

the Middle East and Africa.Our gasoline engines are mainly

general-purpose small gasoline

engines covering the power range Agricultural

Simple structure

Gasolin from 1.5kW to 9.0kW. Besides sale machinery

good reliability

e in domestic market our gasoline small

easy

engine engines are sold to Southeast Asia construction

maintenance

the Middle East Europe and machinery

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

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

2Changchai Company Limited Annual Report 2023 (Summary)

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 national regulations pertaining to internal combustion engine technology have considerably

tightened with a notable emphasis on energy conservation emissions reduction and reliability thereby making

them focal points of industrial development. The rigorous enforcement of national emission standards will

expedite the development and deployment of core technologies and crucial components within internal

combustion engines. The exploration and dissemination of efficient and clean internal combustion engine products

will drive the widespread adoption of independent-brand electronic fuel injection systems high-efficiency

superchargers and advanced after-treatment solutions.In recent years the issuance of the No. 1 Document by the central government has underscored its commitment to

elevating the importance of agriculture and bolstering agricultural development. In 2024 the No. 1 Document

outlined a "road map" to vigorously and effectively propel comprehensive rural revitalization. To stimulate

demand through industrial policies it is imperative to enhance the research and application proficiency of

agricultural machinery and equipment promote the innovation framework for cutting-edge agricultural machinery

vigorously address the deficiencies in agricultural machinery and equipment bolster the information-based

capabilities and service provision of agricultural machinery and equipment advance the intelligence and

automation levels of agricultural machinery reinforce the synergy between technology and reform and intensify

efforts in core technology research and development all of which will delineate the trajectory for agricultural

modernization.As a result of the national policy of subsidies for the purchase of machinery industrial development policies and

the impact of environmental regulations and requirements overall market demand for single-cylinder diesel

engines for small agricultural machinery remained low causing intense competition. Despite the gradual increase

in the use of single-cylinder engines in the non-agricultural sector overall sales remained on a downward path.The year 2023 is the first year of upgrading the National Emission Standard III to IV and the agricultural

machinery industry has entered a drastic “reshuffle” period. From the point of view of the development of the

industry as a whole the sales of low-quality products continued to weaken and high-quality products continued to

take over more market share which promoted the sustainable development of the industry as a whole. With the

full-scale implementation of National Emission Standard IV for Non-road Vehicles and the evolving market

dynamics the pace of development for high-end agricultural machinery products in China has accelerated. High-

end and intelligent trends of agricultural machinery catalyzed a fresh wave of structural transformation within the

agricultural machinery industry. The sector has entered a phase of profound adjustments propelled by optimization

and upgrading with agricultural machinery enterprises concurrently embarking on a trajectory of high-quality

development hastening the integration and advancement of advanced technologies encompassing energy

conservation and emissions reduction intelligent manufacturing and the enhancement of product quality and

efficiency. As new opportunities for development arise in the national strategic deployment and the accelerated

transformation and upgrading process the agricultural machinery market has a broad space for growth.

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

3Changchai Company Limited Annual Report 2023 (Summary)

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

Change of

31

31 December December 31 December

31 December 2023

2022 2023 over 31 2021

December

2022(%)

Total assets (RMB) 5159394958.92 5219359853.42 -1.15% 4860382961.26

Equity attributable to the listed

3398946911.233284710665.903.48%3077550018.33

company’s shareholders (RMB)

2023-over-

2023 2022 2022 change 2021

(%)

Operating revenue (RMB) 2155698787.49 2182043095.61 -1.21% 2452430515.60

Net profit attributable to the

listed company’s shareholders 108495607.05 76684796.91 41.48% 103006232.54

(RMB)

Net profit attributable to the

listed company’s shareholders

-47466184.54-73636511.02——5329092.87

before exceptional gains and

losses (RMB)

Net cash generated from/used in

137189827.35364930277.84-62.41%-266323779.30

operating activities (RMB)

Basic earnings per share

0.15370.108741.40%0.1657

(RMB/share)

Diluted earnings per share

0.15370.108741.40%0.1657

(RMB/share)

Weighted average return on

3.19%2.51%0.68%3.86%

equity (%)

(2) Key Financial Information by Quarter

Unit: RMB

Q1 Q2 Q3 Q4

Operating revenue 703102297.70 647415342.15 458557165.00 346623982.64

Net profit attributable to the listed

23934592.54108002732.1224931699.23-48373416.84

company’s shareholders

Net profit attributable to the listed

company’s shareholders before 1107543.07 4718000.91 -16029859.81 -37261868.71

exceptional gains and losses

Net cash generated from/used in

-71086048.66-33710768.09-109331432.55351318076.65

operating activities

Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs

4Changchai Company Limited Annual Report 2023 (Summary)

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

Number ordinary preferred

preferred

of sharehold shareholde

shareholders with

ordinary ers at the rs with

resumed voting

sharehold 58653 month- 56686 resumed 0 0

rights at the month-

ers at the end prior voting

end prior to the

period- to the rights at

disclosure of this

end disclosure the period-

Report

of this end

Report

Top 10 shareholders (exclusive of shares lent in refinancing)

Sharehold Shares in pledge

Name of

Nature of ing Total shares held at Restricted marked or frozen

sharehold

shareholder percentag the period-end shares held

er Status Shares

e

Changzho

u

State-owned

Investme 32.26% 227663417 56818181 N/A 0

legal person

nt Group

Co. Ltd

Domestic

Chen Jian natural 0.49% 3478600 0 N/A 0

person

KGI

ASIA Foreign legal

0.44% 3101695 0 N/A 0

LIMITE person

D

Domestic

Wu

natural 0.35% 2442200 0 N/A 0

Chunhua

person

China

Internatio

nal

State-owned

Capital 0.27% 1921527 0 N/A 0

legal person

Corporati

on

Limited

Domestic

Lu Zhang natural 0.26% 1836643 0 N/A 0

person

Domestic

Li Suinan natural 0.23% 1593800 0 N/A 0

person

Zhang Domestic 0.22% 1556700 0 N/A 0

5Changchai Company Limited Annual Report 2023 (Summary)

Wenbing natural

person

Domestic

Huang

natural 0.22% 1528891 0 N/A 0

Guoliang

person

Huatai

State-owned

Securities 0.21% 1509155 0 N/A 0

legal person

Co. Ltd.It is unknown whether there is among the top 10 public shareholders and the top

Related or acting-in-

10 unrestricted public shareholders any related parties or acting-in-concert parties

concert parties among the

as defined in the Administrative Measures for Information Regarding

shareholders above

Shareholding Alteration.Top 10 shareholders

Shareholders Chen Jian and Wu Chunhua held 2952800 and 2442200 shares

involved in securities

respectively in the Company through their margin accounts.margin trading (if any)

Top 10 shareholders involved in refinancing shares lending

□ Applicable √ Not applicable

Changes in top 10 shareholders compared with the prior period

√ Applicable □ Not applicable

Unit: share

Changes in top 10 shareholders compared with the end of the prior period

Shares in the common

Shares lent in

Newly added account and credit account refinancing and not yet

or existing plus shares lent in returned at the period-

from top 10 refinancing and not yet

Full name of shareholder end

shareholders in returned at the period-end

the Reporting As % of As % of

Period Total total share Total shares total share

shares

capital capital

Wu Chunhua Newly added 0 0.00% 2442200 0.35%

China International Capital

Newly added 0 0.00% 1921527 0.27%

Corporation Limited

Lu Zhang Newly added 0 0.00% 1836643 0.26%

Zhang Wenbing Newly added 0 0.00% 1556700 0.22%

Huatai Securities Co. Ltd. Newly added 0 0.00% 1509155 0.21%

MORGAN STANLEY & CO.Exiting 0 0.00% 694573 0.10%

INTERNATIONAL PLC.Yang Xuee Exiting 0 0.00% 0 0.00%

China Minsheng Bank-Goldstate

Yuanqi Dynamic Asset Allocation

Exiting 0 0.00% 0 0.00%

Mixed Type Securities Investment

Fund

CLSA Asset Management Limited-

Exiting 0 0.00% 938641 0.13%

Clients’ Capital

Dai Wenping Exiting 0 0.00% 0 0.00%

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

□ Applicable √ Not applicable

6Changchai Company Limited Annual Report 2023 (Summary)

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. Expropriation of the Wuxing branch company’s properties on state-owned land and compensation

On 25 May 2023 the Proposal on the Intention to Sign the Agreement on the Expropriation of the Properties of

the Wuxing Branch Company on State-owned Land in Changzhou City and the Compensation was approved at

the 17th Meeting of the Ninth Board of Directors. Later the said matter was approved at the First Extraordinary

General Meeting of Shareholders in 2023 dated 12 June 2023. As such the Company was agreed to sign a

contract with Changzhou Zhonglou District Housing and Urban-Rural Development Bureau on the

expropriation of the Wuxing branch company’s properties on state-owned land and the compensation with the

contractual total compensation amount being RMB117 million. On 14 June 2023 the Company signed the

Agreement on the Expropriation of the Properties of the Wuxing Branch Company on State-owned Land in

Changzhou City and the Compensation with Changzhou Zhonglou District Housing and Urban-Rural

Development Bureau and received the first compensation payment of RMB70 million on 28 June 2023 and

received the residual compensation payment of RMB47 million on 9 January 2024.

2. Housing expropriation on state-owned land and compensation of Sanjing Branch

On 27 October 2023 the Company held the Third Meeting of the Tenth Board of Directors deliberating on and

approving the Proposal on Signing the Sanjing Branch's Agreement on Non-residential Housing Expropriation

and Compensation in Xinbei District Changzhou City. The matter was approved at the third extraordinary

general meeting on 14 November 2023 approving that the Company would sign agreement with the Housing

and Urban-Rural Development Bureau of Changzhou National High-tech Industrial Development Zone and the

Housing Expropriation and Compensation Service Centre of Sanjing Street Xinbei District Changzhou City

regarding the housing expropriation on state-owned land and compensation of the Sanjing Branch. The total

compensation amount under the agreement was RMB99929900. On 29 November 2023 the Company signed

the Agreement on Non-residential Housing Expropriation and Compensation with the Housing and Urban-Rural

7Changchai Company Limited Annual Report 2023 (Summary)

Development Bureau of Changzhou National High-tech Industrial Development Zone and the Housing

Expropriation and Compensation Service Centre of Sanjing Street Xinbei District Changzhou City. The

Company received the first compensation of RMB30 million until January 2024.

3. Acquisition of 7.5% equity held by natural person shareholders of Zhenjiang Siyang

In December 2023 the Company acquired 7.5% equity held by three natural person shareholders of its partially-

owned subsidiaries Zhenjiang Siyang with RMB7.17 million. As at 31 December 2023 the Company had held

a total of 49% equity in Zhenjiang Siyang and remained its largest shareholder.

8