The Zhitong Finance App learned that on March 29, Sinotruk (03808) held a performance briefing. At the meeting, the company stated that it has continued to increase its dividend ratio for the past five years to repay investors. This year's dividend ratio has reached 50%. The company has always paid more attention to shareholder reports. In the future, the company will comprehensively consider factors such as the market environment, production and operation, cash flow, and future development capital requirements to balance the company's development and the best interests of shareholders to determine a reasonable dividend ratio for the next year. In March 2024, the company disclosed the shareholder report plan for the next three years (2024-2026). At the same time, since its listing, the company has always attached importance to market value management.

The details are as follows:

Q: Hong Kong stocks of Sinotruk and Sinotruk's profit and earnings per share are all different. Exactly what ratio are they divided? Domestic Sinotruk has depreciated values. Will inventory vehicles be discounted and promoted this year? How is it handled routinely? How is the merger between Sinotruk and Shaanxi Automobile progressing?

A: Thank you for your interest in the company.

1. Sinotruk (Hong Kong) is a red-chip company listed on the Stock Exchange. It is our controlling shareholder, with a 51% shareholding ratio. Sinotruk Hong Kong specializes in developing and manufacturing heavy trucks, medium and heavy trucks, light trucks, etc., as well as key components and assemblies such as engines, cabs, axles, frames and transmissions, as well as providing financial services. Our company is a manufacturing company listed on the main board of the Shenzhen Stock Exchange. It is mainly engaged in the manufacture and sale of auto parts for heavy trucks, heavy special purpose vehicle chassis, axles, etc. 2. According to corporate accounting standards, the company's inventory price reduction is prepared to be calculated based on the difference between inventory cost higher than its realizable net value. The company adjusts marketing strategies reasonably according to the actual situation in the market. 3. The matter is being promoted normally by Shandong Heavy Industries Group in accordance with regulatory requirements.

Q: As an industry leader, Sinotruk's performance has always been excellent. It's just that the return to shareholders is only at the middle and downstream levels in the industry. The annual dividends are also woefully small. Does the company need to reduce dividends based on major investment projects in the future? The company doesn't seem to pay attention to market value management. Every year, its turnover is far from supermarket value, and it is rare in A-shares. The five-year resolution of interindustry competition is about to expire. What actions will the company take?

A: Thank you for your interest in the company. The company has continued to increase its dividend ratio for the past five years to repay investors. This year's dividend ratio has reached 50%. The company has always paid more attention to shareholder reports. In the future, the company will comprehensively consider factors such as the market environment, production and operation, cash flow, and future development capital requirements to balance the company's development and the best interests of shareholders to determine a reasonable dividend ratio for the next year. In March 2024, the company disclosed the shareholder report plan for the next three years (2024-2026). At the same time, since its listing, the company has always attached importance to market value management.

Q: 1. What is Sinotruk's production capacity and capacity utilization rate respectively? 2. What are the types of heavy trucks of Sinotruk and their respective production capacity and gross profit margin? 3. Overseas layout situation, what are the key markets for development in 24 years, what are the main competitors, and what are their advantages?

A: Thank you for your interest in the company.

1. The production line of the company's intelligent connected (new energy) heavy truck project industrial park is a flexible line. It has “digital, automated, modular and flexible” production capacity, has world-class product process levels, and can efficiently meet the needs of customers in small batches, multiple varieties and customization. Production capacity has been fully utilized in recent years, leading the industry. 2. The company is a leading heavy vehicle manufacturer and sales enterprise under China Heavy Duty Truck Group Co., Ltd., known as the cradle of China's heavy duty vehicle industry. Currently, it has brands and series models such as “Yellow River” and “HOWO (HOWO)”, covering various categories such as tractors, trucks, dump trucks, mixers, and special purpose vehicles. The gross margin of the company's vehicle sales business in '23 was 6.45%. 3. The company relies on Sinotruk International to achieve heavy truck exports. The products have been exported to more than 110 countries and regions around the world, ranking first in the domestic heavy truck industry for more than 10 years. The company's products are mainly sold in Africa, Southeast Asia and other regions. On the basis of continuously improving product competitiveness, the company achieved rapid growth in product export sales through the group's comprehensive leading channels, customer base, market reputation, parts service network and brand influence in overseas markets.

Q: At the same time as the company's profits soared, the reason for the sharp drop in cash flow from operating activities compared to '22.

A: Thank you for your interest in the company. The main reason is an increase in the share of bank acceptance notes in the company's production and operating expenses this year.

Q: Is the company's intelligent driving developed independently or is it cooperating with other companies? Is it in a leading position compared to domestic friends and merchants? What is the specific operating model for integrated human-vehicle operation in the company's rental market?

A: Thank you for your interest in the company.

1. The company mainly relies on Sinotruk Group for research and development. Sinotruk Group is at the leading level in the industry in the fields of autonomous driving technology, intelligent vehicle control, vehicle networking technology, big data analysis of driving behavior, smart car manufacturing, smart cockpit, etc., and the self-development rate of core software and hardware has reached 100%. From the launch of the first smart heavy truck in China to mass production of L2+ class intelligent driving heavy trucks; from bicycle intelligence to intelligent fleet management to build a smart vehicle ecosystem; from completing the world's first full ship operation with an L4 driverless truck to achieving full coverage of smart transportation scenarios, Sinotruk Group has always been at the forefront of the road to intelligent commercial vehicles. 2. The second question you mentioned, please further clarify the content of your question.

Q: In 2014-2023, the company's R&D expenditure totaled about 3.5 billion yuan. What impact did R&D expenditure have on the company's sales and gross profit?

A: Thank you for your interest in the company. The company continues to increase investment in R&D, promote product upgrading, improve product quality, and meet the needs of different customer groups, thereby increasing sales and market share. The introduction of new products and technological innovation also help to increase the added value of products, enhance the competitiveness of products, and thereby increase sales prices and sales profits.

Q: What is the volume and share of the company's heavy truck exports and natural gas heavy truck sales in 2023?

A: Thank you for your interest in the company. In 2023, the company sold a total of 128,000 heavy trucks. The export business of the company's products is mainly achieved through Sinotruk International. Exports account for more than 50% of total sales in 2023. Since the launch of heavy natural gas trucks in April 2023, the proportion of heavy natural gas trucks among tractors has continued to increase. Overall, it accounts for about 60% of tractors throughout the year.

Q: The gross profit margin and net profit margin both increased markedly in Q4 in '23. What is the core reason? Will it be sustainable this year? March is coming to an end. Would you like to ask about the heavy truck industry and the company's sales volume in the first quarter?

A: Thank you for your interest in the company.

1. First, the company continues to improve product quality and product competitiveness by speeding up product optimization, upgrading and structural adjustment; second, by accurately implementing marketing strategies, deepening domestic market segments, achieving good performance in key market segments, product exports have maintained a good growth trend; third, the company continues to reduce costs and increase efficiency to help further improve profitability. The company will continue to improve the level of governance and management efficiency, comprehensively promote the digital and intelligent transformation of enterprises, improve quality and efficiency, and achieve higher quality development. 2. With the gradual recovery of the economy and the implementation of various measures to stabilize the country's growth, consumer confidence will further increase.

Q: Views on the development of the industry in 24 years

A: Thank you for your interest in the company. With the gradual recovery of the economy and the implementation of various measures to stabilize the country's growth, consumer confidence will further increase, and market expectations are expected to continue to improve in the future.

First, the daily logistics demand brought about by the size of the Chinese economy provides strong basic support for the commercial vehicle industry;

Second, the natural renewal brought about by the huge number of commercial vehicles and the gradual implementation of the “National 4” traffic restriction policy have brought replacement growth to the industry;

Third, the structural incremental opportunities for gas vehicles brought about by oil and gas price differences will continue, and demand for gas vehicles will continue to rise;

Fourth, new energy commercial vehicle technology is gradually maturing, compounding the reduction in vehicle costs, the coverage scenario continues to expand, and the scale of demand continues to rise;

Fifth, overseas demand will remain strong, and economic growth in emerging markets and developing countries will bring a steady increase in demand for commercial vehicles. Overall, demand in the commercial vehicle industry will show a restorative growth trend.

Q: The company's forecast for the export market in '24

A: Thank you for your interest in the company. Looking ahead to 2024, judging from the international situation, geopolitical tension, high interest rates, high inflation, and high debt will continue, and the world economy will still be in a low growth cycle. Heavy truck exports are expected to remain high in 2024.

On the one hand, demand in the overseas heavy truck market continues to grow, and China's heavy truck exports to the CIS countries and emerging markets in Asia, Africa, and Latin America are sustainable;

On the other hand, China's heavy trucks have been upgraded from cost-effective to high-end, enhancing competitiveness in the global market with product and supply chain advantages. The heavy truck export market is still strongly supported.

Q: What are your prospects for the gas vehicle market?

A: Thank you for your interest in the company. As the difference in oil and gas prices widens, the economic advantages of heavy natural gas trucks stand out. We are still optimistic about the heavy natural gas truck market in 2024. With the end of the heating season in the north and the drop in gas prices, heavy natural gas trucks will perform well.

Q: How many heavy trucks are exported are natural gas heavy trucks, and how many are diesel?

A: Thank you for your interest in the company. The company used Sinotruk International to export products. Currently, mainly diesel vehicles are exported.

Q: What is the technical level of your company's hydrogen energy heavy trucks and electric heavy trucks? What is the sales volume of heavy gas trucks this year?

A: Thank you for your interest in the company. With the resource advantages of the group company, the company has achieved a complete product layout in pure electricity, hydrogen fuel cell heavy trucks, etc., and has achieved sales in some application scenarios.