1. The company's 2013 results:

In 2013, the company earned 2.59 billion yuan in operating income, an increase of 0.5% over the same period last year, and a gross profit margin of 19.7%, down 0.4% from the same period last year. In 2013, the profit attributable to company owners was 270 million yuan, down 6.6 per cent from a year earlier. The basic profit per share was 0.222 yuan, compared with 0.309 yuan in the same period last year. No dividends will be paid during the period.

2. The proportion of all kinds of income:

The company's income mainly comes from three parts, namely, gasoline engine, diesel engine and engine parts and services. In 2013, gasoline engines accounted for 81.4% of the company's revenue; total revenue was 2.1 billion yuan, up 2.2% from a year earlier. At the same time, the proportion from diesel engines was 15.0%, and the total income was 390 million yuan, down 17.3% from the same period last year.

3. Gross profit margin of itemized business:

In 2013, the company's gross profit margin fell, due to an increase in the proportion of small engine with lower gross margin and varying degrees of decline in the gross margin of itemized products. From the engine business sub-product data, 2013 gross profit margin has been reduced to varying degrees. Among them, the gross profit margin of products less than 1.6L was 12.9%, compared with 13.8% in the same period last year; the gross profit margin of engine products with displacement of 1.6-2.0L was 20.5%, down 0.7 percentage points from the same period last year; and the gross profit margin of products with emissions of 2.0-2.5L was 21.9%, down 0.5 percentage points from the same period last year. The gross profit margin of products with displacement of 2.5-3.0L is 38.9%, compared with 40.2% for the same period in 2012.

4. 2014 Business guidelines:

The company plans to produce 285000 engines in 2014, of which 275000 are for the traditional engine business and 10, 000 for BMW to assemble the N20. The 10,000 units of the N20 are mainly contributed in the second half of the year. It is expected to reach 30, 000 to 40, 000 or higher next year. The connecting rod is also being made, with an estimated quantity of 1 million sets this year, and other spare parts are also being actively discussed. In the past two years, the company may see more acquisitions, mergers and internal restructuring, perhaps 1-2 years later, after the embryonic form of the business, profit growth will be very good.

5. The price of engine N20:

At present, the price of the N20 engine is still under negotiation, which should be between 28,000 and 30,000. Profits can not be said, but the company can make money, how much is not clear. Because it involves economic scale, bargaining between the two sides, freight and other issues need to be solved. The company can guarantee that it is profitable, and as the volume increases, the profit can also increase.

6. BMW 275000 engine planning:

It should be noted that the number of 275000 engines planned for 2014 is a conservative estimate. The proportion of automobile and diesel is 85% and 15% respectively. The company hopes to raise its gross profit margin this year, and one of the reasons for the drop in 2013 was the acquisition of brilliance's engine plant, which mainly makes small-engine engines with low gross margins. In addition, the company produces the best engines in China with the lowest manufacturing costs, while brilliance's engines acquired by the company are more expensive and need to be integrated by the company in order to reduce costs. The company hopes to stabilize the gross profit margin and improve the quality this year.

7. The future development direction of the company:

The company has received one of the engine's five key parts businesses, connecting rods, which can have 1 million sets this year. Other parts business also includes crankshafts, which need to be done step by step by management. Companies all make engine parts for BMW. In the future, the company's industrial chain will not only make money on the assembly of BMW engines, but also hope to make money on the manufacture and production of BMW spare parts. In this way, it will not only make a profit for shareholders, but also improve their own technical ability and understanding of the engine business. After the listing, the company has not only relied on that part of the assets at the time of listing, the company has been carrying forward and improving the quality of assets. The company will continue to make the next generation of products, develop XE engines, strengthen cooperation with BMW and increase business exchanges between the two sides.

8. Technology R & D investment plan:

Technology upgrading is a topic that every engine factory must face, and the company has begun to work in this area. At present, the national emission regulations, engine performance and other requirements have been issued, the company must meet the regulatory requirements. In terms of cooperation with BMW, we will strive to carry other models in the future. in addition, new customers and new technologies (such as turbocharging, lightweight, etc.) are actively under the guidance of the company's business model. With regard to the development of BMW engine parts, because the company has N20 experience, it will have a foundation in the development of other BMW parts in the later stage.

In addition, after the company goes public and BMW holds a steering committee every month to discuss a series of issues ranging from assembling BMW engines to key parts, to non-BMW parts, XE brand technology upgrading, next-generation brand engine mix and technical parameter formulation, next-generation XE brand engine manufacturing and combined production, and so on, which will be discussed at the steering committee.

9. New business capital expenditure:

The capital expenditure budget for 2014 is 800 million, of which 300 million has been paid, followed by 300 million for capacity expansion, 100 million for technical renovation and 100 million for R & D centers. At present, the company mainly uses the income of operating cash flow in terms of payment. if it is not enough, the company will solve the capital problem by discussing with the bank. The management added that the capital expenditure of 800 million yuan is the basic expenditure, the company may have some projects to do, and if the project is successful, then more capital expenditure will be needed. If necessary, the company will consider financing from banks and other channels, basically will not consider issuing new shares.

10. Reduce accounts receivable as much as possible:

Most of the company's accounts receivable in 2013 are from brilliance, and Mr. Wu, as a director of brilliance, will also urge this amount. But brilliance, as a major shareholder of the company, will not fail to pay its subsidiaries, and it is almost impossible for these receivables to become bad debts.