WULING MOTORS HOLDINGS LIMITED ANNUAL REPORT 五菱汽車集團控股有限公司 2020 (Incorporated in Bermuda with limited liability) ANNUAL REPORT 2020 CORPORATE PROFILE Wuling Motors Holdings Limited (“Wuling Motors Holdings” or the “Company”) and its subsidiaries (collectively referred to as the “Group”) are principally engaged in the businesses of trading and manufacturing of automotive components, engines and specialized vehicles. Our Group’s corporate goal is to grasp the tremendous business opportunities arising from the rapidly growing automobile industry in China and Asia. We supply engines and automotive components to commercial-type mini-vehicles and passenger vehicles. We also manufacture and supply different types of specialized vehicles, including new energy vehicles in China. The Group’s main production facilities are located in Liuzhou, Qingdao, Chongqing, India and Indonesia. Since 2018, we have been ranked as one of the Global Top 100 Enterprises of Automotive Components Suppliers. GROUP STRUCTURE WULING MOTORS GUANGXI DRAGON HILL HOLDINGS AUTOMOBILE 00305.HK 10.81% 56.54% 60.9% 39.1% WULING INDUSTRIAL AUTOMOTIVE ENGINES AND COMPONENTS AND SPECIALIZED VEHICLES RELATED PARTS OTHER INDUSTRIAL (INCLUDING NEW SERVICES ENERGY VEHICLES) WULING MOTORS HOLDINGS LIMITED ANNUAL REPORT 2020 CONTENTS CORPORATE PROFILE GROUP STRUCTURE 2 CHAIRMAN’S STATEMENT 10 REPORT OF THE CEO 18 OPERATION REVIEW MAIN BUSINESS SEGMENTS AUTOMOTIVE COMPONENTS AND OTHER SPECIALIZED ENGINES AND INDUSTRIAL VEHICLES RELATED PARTS SERVICES (including New Energy Vehicles) 36 FINANCIAL REVIEW 42 DIRECTORS’ AND SENIOR MANAGEMENT’S BIOGRAPHIES 50 CORPORATE GOVERNANCE REPORT 70 REPORT OF THE DIRECTORS 90 INDEPENDENT AUDITOR’S REPORT 96 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 97 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 99 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 100 CONSOLIDATED STATEMENT OF CASH FLOWS 102 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CORPORATE INFORMATION WULING MOTORS HOLDINGS LIMITED ANNUAL REPORT 2020 CHAIRMAN'S STATEMENT Mr. YUAN Zhijun Chairman 2 ANNUAL REPORT 2020 WULING MOTORS HOLDINGS LIMITED CHAIRMAN’S STATEMENT PREFACE REVIEW OF MAJOR ACHIEVEMENTS IN 2020 The year 2020, being the year of decisive victory in building a moderately prosperous society in all Affected by the epidemic, the continuous decline respects and the final year of the 13th Five-Year of the automobile market, the slowdown in the Plan, was also recognized as a crucial period for production volume of key customers, the increase Wuling Motors Holdings Limited (the “Company” in short-term operating costs and so on, sale and together with its subsidiaries the “Group”) to volume of the Group dropped significantly at the make breakthroughs in the face of the new beginning of 2020, resulting in an unprecedented development situation and new strategic significant loss in the first half of the year. However, opportunities. Amid a continuous pandemic at the Group kept maintaining its strategic focus, home and abroad and the hard-hit global made efforts to make up for the loss caused by economy, the Group moved forward against the epidemic, tried to take various measures to waves and concentrated efforts to promote the seek stable growth, sought breakthroughs from pandemic prevention and control and seek the outside and increased benefits from the inside. recovery amid stability in 2020 despite the As a result, on a full year basis, loss sustained by declining automobile market and the prevailing the Group in 2020 was significantly reduced. high prices of raw materials, mainly steel. Details of the Group’s business performance in 2020 are as follows: In 2020, the Group was committed to the philosophy of new development, continuously (I) Coordinating work in a scientific way emphasized the importance of growth, and and insisting on both epidemic insisted on seeking progress and making prevention and control and production achievements while maintaining stability, in a bid resumption to achieve the annual operation objectives. During this year, the Group achieved an annual The COVID-19 outbreak in early 2020 tested revenue of RMB15,382,213,000, which represented the Group’s ability to prevent and control an increase of 8% on a year-on-year basis. Due to the pandemic and resume production. We the adverse effect from the pandemic in the first made all efforts to carry out work in two main half of 2020, in 2020, the Group suffered a net loss aspects, from which no confirmed or of RMB21,867,000, which however, had been suspected cases were reported within the substantially reduced as compared to the net loss Group, and production was resumed to of RMB166,615,000 for the year 2019, and the net facilitate stability and growth in an orderly loss of RMB294,025,000 as recorded in the first half manner. To ensure smooth resumption of of 2020. Accordingly, the Company also recorded production, we adopted precise policies a loss attributable to owners of the Company of under the effective and comprehensive RMB33,403,000 for the full year of 2020, which had guidance of government directives and also been substantially reduced as compared to public concerns. Through dynamic the full year of 2019 and the first half of 2020. adjustments and detailed assignments 3 WULING MOTORS HOLDINGS LIMITED ANNUAL REPORT 2020 CHAIRMAN’S STATEMENT covering personnel control, material backup, (II) Changing growth engine and making plant control, related party monitoring, every effort to keep the main businesses reporting mechanism and information moving forward against the trend dissemination, the Group successfully prepared and arranged for production 1. Overcoming difficulties and expanding resumption of all business modules in a the market pattern of parts and engine reasonable, orderly, solid and meticulous businesses manner, serving the needs of customers, at the same time, seized market opportunities Due to the pandemic, a reduction in and implemented various measures to the production volume of the major stabilize growth and enhance benefits customer, the issue of high customer subject to the cautious prevention and concentration and the low gross profit control of the epidemic. In addition, the margin of products, business Group fully supported and cooperated with environment for automotive the epidemic prevention and control components division was extremely measures in Guangxi. In order to satisfy the severe, especially in the first half of 2020. epidemic prevention and control needs on In order to mitigate the decline in the frontline, the Group stepped up the stabilizing the business volume, the production of a number of urgently-needed Group actively made unremitting efforts medical ambulances and medical waste in facing the challenges. We effectively transfer vehicles for various epidemic turned the downward pressure into an prevention and control actions and quickly upward momentum, continuously responded to the requirement of National VI- optimized our product and customer compliant engines to be applied in the structures, strived to expand the assembly of Xiamen Golden Dragon Bus’ external market to facilitate the business and Dongfeng Tuyi’s negative pressure expansion to other external customers, ambulances, as well as the Anhui Jianghuai such as the implementation of Great Anchi’s MPV ambulances. In order to ensure Wall Motor’s frame supply project, Beiqi production resumption and meet the Foton Motor’s rear axle project and prevention and control needs, the Group Chongqing Ruichi’s electric rear axle had developed our own proprietary face project. Meanwhile, we had stepped mask machines and began the production up efforts to complete other supporting and supply of masks for aiding frontline projects, which included the supplies of workers, government departments and sheet metal parts and front subframes suppliers with the problem of material to Great Wall Motor and Brilliance shortages. Shineray respectively. On the back of our technical capability and market trend, the Group had also actively promoted our businesses into the new energy sector. We have developed and launched production of electric drive axles for mini-commercial vehicles, light commercial vehicles and passenger vehicles, which have been recognized by our major customers and other car manufacturers such as JAC. 4 ANNUAL REPORT 2020 WULING MOTORS HOLDINGS LIMITED CHAIRMAN’S STATEMENT Benefiting from the strategic move of volume of specialized vehicles in 2020 early deployment and early maintained at 115,000. The Group development, we accelerated seized the market opportunities and technological upgrading and intelligent continuously launched new products, manufacturing for the engine business, such as vehicles for pandemic seized opportunities arising from the prevention, to open up a new market. National VI emission standards, and Our redecorated vehicle models kept achieved growth despite the economic developing and applying lithium downturn. On one hand, we batteries and related products to maintained our existing businesses and enhance our product competitiveness. developed a new generation of As to the non-road vehicles, the Group engines with a high thermal efficiency unveiled the T200 golf cart and L100 through energy conservation and sightseeing vehicle at the 2020 China — emission reduction of the 1.5-litre and ASEAN (Liuzhou) Tourism Equipment 1.8-litre under National VI-compliant Expo and secured orders of 1,263 units engines. On the other hand, efforts on the spot. Moreover, taking