Huawei Technologies was investigated by 14 institutions： on the whole, the top five customers of the company are BYD, Geely, FAW Dongji, Nanyang Xijia and Great Wall, and from the stabilizer bar custo

　　() The Record Form of Investor Relations Activities was released on February 22nd, and the company was investigated by 14 institutions on February 22nd, 2024. The types of institutions are insurance companies, others, fund companies and securities companies. The main contents of investor relations activities are introduced:

　　Q: How is the company’s recent operation?

　　A: The company has disclosed the annual performance forecast for 2023, and the company’s operation is in good condition. Please pay attention to the subsequent 2023 annual report for specific operating data.

　　Q: What is the company’s customer structure? What are the key customers to develop in the past two years?

　　A: On the whole, the top five customers of the company are (), Geely, FAW East Machinist, Nanyang Xijia and Great Wall. From the stabilizer bar customers, the top three customers are Geely, BYD and Changan. In 2024, the company’s development of customers is on the one hand the self-increment of old customers such as BYD, Changan and Chery, and on the other hand the new development of foreign capital, joint ventures and new power brands.

　　Q: What is the company’s product planning layout and release rhythm?

　　A: The company’s production capacity is being released at the normal pace. The spring end released about 30% of the production capacity last year, while the stabilizer end has been built at a faster pace due to urgent demand. Two production lines have been launched last year, and four more production lines are expected to be launched this year.

　　Q: What is the production capacity of valves and special-shaped springs?

　　A: The production capacity construction of valves and special-shaped springs is continuous, and the production capacity has increased compared with the past. At present, the company’s focus is still on suspension springs and stabilizer bars. After the subsequent production capacity and demand of suspension springs and stabilizer bars are balanced, other categories will be further expanded.

　　Q: What is the change trend of gross profit margin of springs and stabilizer bars?

　　A: The gross profit margin of the spring is similar to that in the past. The stabilizer is in the early stage of R&D investment, which involves a long development cycle and high R&D expenses, which also leads to its insignificant gross profit margin. However, the stabilizer bar has been mass-produced, and the income of stabilizer bar is on the rise, and the increment and growth rate are very fast, and it will continue to grow. Under the influence of economies of scale, the gross profit margin will gradually move closer to the spring.

　　Q: In the field of industrial robots, what is the unit price of the company’s products?

　　A: The supporting part of the industrial robot company is around a group of 1000 yuan.

　　Q: What is the opportunity for the company to support the industrial robot field?

　　A: The company’s support for industrial robots can be traced back to several years ago. On the one hand, the company is actively exploring non-automotive fields, on the other hand, the other side also has the intention of cooperation. It took a long period from qualification certification to product testing and debugging, and it was not until recent years that mass production began. The springs supplied by the company on industrial robots are mainly installed in the balance cylinder, which is equivalent to the function of a lever, which can reduce the demand for motors and power, and there are also some small springs.

　　Q: What is the proportion of BYD and Geely?

　　A: In BYD, the company’s suspension springs account for about 70%, and the stabilizer bar is in the climbing stage, currently accounting for more than 10%. In Geely, because there are two ways to supply suspension springs, the proportion of suspension springs is similar to that of BYD, and the stabilizer bar is around 30%.

　　Q: At present, BYD Company accounts for a relatively high proportion. Will the company continue to increase this proportion?

　　A: The company is also adjusting its strategy internally. In the past two years, the fastest development of the company is the automobile industry. However, our philosophy is not to excessively concentrate a product in an industrial chain, just like the concept of not putting eggs in the same basket. It is necessary to spread risks to make the whole industrial structure safer and make the fluctuation of a certain customer or an industry relatively weakened.

　　Q: Will the company have capital expenditure in the future?

　　A: The company will have an investment plan in the future, which will be disclosed in time.

　　Q: What is the supply mode of suspension springs?

　　Answer: The front spring is generally supplied by the shock absorber factories such as FAW Dongji, Wandu and Nanyang Xijia, and the rear spring is generally directly supplied to the main engine factory, which is mainly determined by the type of shock absorber equipped with the vehicle model.

　　Q: The raw material of the company’s products is steel. Does the price fluctuation of steel have a great influence on the company?

　　A: There are two kinds of purchasing modes at the steel mill end, one is the price-locked purchasing mode, and the other is the floating purchasing mode. If the subsequent steel price rises, the company will increase the volume in the locked-price procurement mode, and if the subsequent steel price falls, the company will increase the volume in the floating procurement mode.

　　Q: Is there any development of non-car-end springs in the future?

　　A: The company has always had the spring business of non-automobile plate, such as rail transit, electrical energy and so on. At present, this part is relatively small.

　　Q: What are the main competitive advantages of the company?

　　A: The company can take root in this field, mainly because of our independent research and development of materials, with many years of technical accumulation and precipitation. Through cooperation with domestic spring steel enterprises, the company will carry out the heat treatment process of spring steel after the steel mill provides the masterbatch, thus improving the performance of materials. It has a unique competitive advantage in the market to meet the requirements of high performance and light weight of automobile springs.

　　Q: Where is the company’s future performance increment?

　　A: The stabilizer bar will still be the incremental point in 2024.

　　Q: Is there a difference in the manufacturing process between the spring and the stabilizer bar?

　　Answer: Both the spring and the stabilizer belong to the functional parts of the automobile chassis, and the materials used are basically spring steel. The underlying technology has certain commonality logically. Spring and stabilizer are similar in main processes, such as molding, heat treatment, shot blasting, surface coating and so on, and the process logic is very similar.

　　Q: What is the bicycle value of spring and stabilizer bar?

　　A: A car needs four suspension springs. The price of a traditional fuel car is between 130 and 200 yuan. The front and rear stabilizer bars need to be used in a car. The price of a traditional fuel car is between 120-160 yuan. Compared with the traditional car, the new energy car’s kerb quality is increased, so the bicycle value is increased by 20-30%.

　　Q: Will downstream manufacturers consider making their own springs?

　　A: There have been precedents. Some manufacturers made their own springs, but in actual production, they found that the input and output were not equal. Later, they stopped making their own springs and chose to use them outside.

　　Details of participating institutions are as follows: