On the evening of March 29, 2018, Guangzhou Automobile Group Co., Ltd. (“GAC” or “Company”) formally released its 2017 annual report. According to the report, GAC’s performance reached new high in spite of adverse external environment. The company over-achieved its annual target. Its production and sales were respectively up to 2.017 million and 2.001 million units, with the year-on-year growth of 21.54% and 21.27%, ~18 percentage points higher than the average industrial growth, with the market share rise to 7%.Together with its joint-ventures and associated companies, GAC achieved the aggregate business revenue of RMB 339.773 billion in 2017, a year on year growth of 23.21%. GAC’s sole aggregate business revenue was RMB 71.575 billion, a year on year growth of 44.84% over the same period of the previous year; the net profit attributed to the owner of the parent company was RMB 10.786 billion, a growth of 71.53% year on year; earnings per share was RMB 1.65, a growth of 68.37% over the same period of the previous year. The Board of Directors proposed to distribute to all shareholders the final cash dividend of RMB 4.3 and 4 capital reserve increment shares for every 10 shares. The annual cash dividend assigned per 10 shares was RMB 5.3, with dividend proportion up to 35.11%. GAC was on the Fortune Global 500 for 5 consecutive years and placed on the 238th in 2017.
As a well-known vehicle manufacturer in China, GAC Group insists on taking innovation as an important driving force for future development, strives to accumulate international advanced manufacturing and management technologies, fully integrates global advantageous resources, and builds a forward development system of cross-platform and modularized architecture. To promote forward-looking technology innovation and R&D, the formal operation of the GAC (Silicon Valley) R&D center reflects GAC's development strategy of active deployment of a global R&D network and overseas R&D centers. Advanced technology has always been the basis for GAC Group to build its own brand, and it also promotes the company's development of advanced proprietary new energy brand. At present, GAC Group is accelerating the construction of a new energy vehicle plant. GAC’s Industrial Park for Intelligent and Connected New Energy Vehicle has officially started construction. Besides, GAC New Energy Automobile Company was set up to promote the development, production and sales of new energy vehicle products. In addition, the independently-developed electromechanical coupling system and power battery system were successively launched; Trumpchi New Energy Vehicles were introduced into such joint ventures as GAC Mitsubishi, GAC Toyota, GAC Fiat Chrysler, and GAC Honda; GAC won for the first time 3 projects (only 20 nationwide) for the establishment of a key research and development program for new energy vehicles awarded by the Ministry of Science and Technology. Such achievement demonstrates the continuous improvement of the value of GAC's innovations.
As the first state-holding auto group listed on both A+H share stock markets in China, GAC Group has been continuously deepening reforms, improving corporate governance, and enhancing the company's capital operation capabilities. A series of major projects and major cooperation have been successively launched. In November 2017, the successful non-public issuance of A shares worthy of RMB 15 billion provided secured funds for the company's new energy and forward-looking technology research, proprietary brand models, and other investment projects; GAC Group is actively conducting strategic cooperation with Huawei, Tencent, and iFLYTEK in the fields of cloud computing, big data, autonomous driving, and telematics. GAC Capital focuses on the company's overall development strategy and the upstream and downstream of the auto industry chain, digging deep into and investing in high-quality projects, and establishing 6 new funds throughout the year. In addition, the commencement of operation of GAC Finance has allowed the company's capital to continue to grow and the scale of settlement to expand. 131 companies within GAC Group have opened accounts here, with the rate of account opening over 80%. Overall funds management capability has been further enhanced. GAC Group has also been well recognized in the capital market and successively included in the MSCI China A-Share Index and Hang Seng China Enterprises Index.
The year 2018 will be the year of deepening the reform of state-owned assets and enterprises. GAC Group stated: “it will implement the secretary general Xi Jinping’s message for Guangdong: “To lead the nation in building a mechanism for promoting high-quality economic development, building a modern economic system, forming a new pattern of comprehensive opening up, and building a social governance pattern characterized by co-building, co-governance and co-sharing”. We will deepen the innovation and transformation of state-owned assets and enterprises, promote quality development with reforms of quality, efficiency, and driving force; by taking the market-oriented approach, we will deepen supply-side structural reforms, deepen institutional reforms, speed up innovation drive, advance the construction of GAC’s Industrial Park for Intelligent and Connected New Energy Vehicle and implement trial reforms of professional managers. We will also carry forward the strategy of prospering enterprises by talents, improve overseas strategic planning, and go all out to complete annual objectives. In 2018, we set the stretch goal of 2.3 million units of vehicle production and sales. We will emphasize “enhancing quality, efficiency and growth, motivating vitalities and reform, seeking development dynamics, building brand and creating favorable culture” and continue to secure “co-creation, co-building and co-sharing”. With more adequate dynamics and enterprising attitudes, we will create more value for customers and shareholders and work hard for a brighter future of GAC!