Oct. – Nov. 2007 , Europe
HK000KL3
HK000KL3_Short
I、PRC Auto Industry Overview in the First 9 Months of 2007
II、DFG Business Overview in the First 9 Months of 2007
III、DFG Financial Performance in IH 2007
HK000KL3_Short
I. PRC Auto Industry Features in the First 9 Months of 2007
1. Rapid Growth of PRC Auto Industry
2. Strong Long-term Growth Potential for PRC Auto Industry
3. Production Utilization Rate of Major PRC Auto Manufacturers
4. Improving Industry Profitability
5. Rapidly Rising Local Brands Which Target at Low –Medium End Market
6、Further Expanding Auto Export Business
HK000KL3_Short
1.Rapid Growth of PRC Auto Industry
PRC Total Vehicle Sales Volume
000’ units
8,000
7,216
7,000
PRC Total PV Sales Volume1
000’ units
6,000
5,000
5,176
4,000
3,000
2,000
1,000
0
6,458
6,000
5,189
5,000
2006
4,000
3,700
1-9 2006
4,583
1-9 2007
PRC Total CV Sales Volume
3,000
000’ units
2,500
2,000
2,000
1,000
1,500
1,000
0
2006
1-9 2006
2,040
1,876
1,488
500
1-9 2007
0
China Association of Automobile Manufactures (CAAM)
2006
1-9 2006
1-9 2007
Note1：According to CAAM’s segmentation, passenger vehicles include passenger car, MPV, SUV and cross-over vehicles
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2、Strong Long-term Growth Potential for PRC Auto Industry
Rising Wealth of Chinese Consumers
11.00%
Constantly Increasing PRC Per Capita GDP
PRC GDP Growth Rate in Previous Years
Per Capita GDP
10.70%
20000
15931
14040
15000
10542 12336
9398
8622
10000 7858
5000
0
2000 2001 2002 2003 2004 2005 2006
10.00% 10.10% 9.90%
10.00%
9.10%
9.00%
8.40%
8.00%
8.30%
7.00%
2000
2001
2002
2003
2004
2005年
2006年
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3、Production Utilization Rate of Major PRC Auto Manufacturers
PV Production Utilization Rate of PRC Major Auto Manufacturers
140%
120%
114%
120%
100%
80%
69%
57%
81%
68%
90%
68%
57%
88%
78%
73%
63%
60%
77%
64%
58%
71%
45%
40%
20%
0%
PRC PV
SAIC
FAW
DFG
Changan
Guangzhou
Group
Auto
2006
1H2007
Source：CICC
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Cherry
Beijing
Brilliance
Auto
China
4、 Improving Industry Profitability
Improved Industry Overall Profitability
Mid 2007
Mid 2006
Growth/rate
Number of
Enterprises
288
249
39
Money Loss
Enterprises
60
74
-14
Major
Business
Revenue( 100
mn)
4863.76
3842.59
26.58%
Sales Profit
Margin
6.21%
4.74%
1.47%
Total Profit
(100mn)
302.06
182.19
65.79%
ROE
8.54%
6.06%
2.48%
Stabilized Industry Profitability
Downward price pressure still exists
due to such factors as manufacturers
compete for larger market share, but
irrational price cut is unlikely to happen
thanks to comparatively balanced
demand and supply situation.
We believe auto manufacturing cost
will further decline due to rising
productivity, increasing local content
ratio and improving economies of scale.
Source: CAAC
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5、Rapidly Rising Local Brands Which Target at Low-Medium End Market
Enhanced Market Position of Self-owned Brands
Market Share of Different Brands
35%
French, 4%
29%
30%
25%
22%
20%
24%
Korean, 6%
25%
American,
14%
20%
Own brand,
29%
15%
10%
5%
German, 20%
0%
2003
2004
2005
2006
market share
1H2007
Own brand
Korean
Source：CICC Auto Industry Statistics
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Japanese
French
Japanese,
German26% American
6、Further Expanding Auto Export Business
Further Expanding Auto Export Volume
Auto Export ( 0,000unit)
40
34.5
24.1
30
17.2
20
10
2
4.8
7.8
0
2002
2003
2004
2005
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2006
1H2007
II、DFG Business Overview in the first 9 months of 2007
1. DFG Group Structure
2. Stable Growth of DFG Business in the First 9 Months of 2007
3. Steady Production Capacity Expansion Plan
HK000KL3_Short
1、DFG Group Structure
Dongfeng Motor
Corporation
Public Share Holders
66.86%
33.14%
Dongfeng Motor Group
Dongfeng Motor Company Ltd
50% 50%
Dongfeng Peugeot Citroen Automobile Co.,Ltd
PSA Peugeot Citroën
50% 50%
Dongfeng Honda Automobile Co.,Ltd
Dongfeng Honda Engine Co.,Ltd
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2、Stable Growth of DFG Business in the first 9 Months of 2007
Steady Growth of Auto Sales
Steady Growth of PV Sales
600
DFG’s total sales reached 695,000 units in
the first 9 months of 2007, representing a
YoY growth of 30.5%, Among which, PV
sales grew by 33.1%, and CV sales grew by
25.8%.
000’
units
495
500
459
400
345
300
200
100
0
000’units
800
2006
751
1-9 2006
1-9 2007
Rapid Growth of CV Business
695
700
000’ units
600
300
532
256
500
236
250
400
187
200
300
150
200
100
100
50
0
2006
1-9 2006
1-92007
0
2006
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1-9 2006
1-9 2007
3、 Steady Production Capacity Expansion Plan
Steady Production Capacity Expansion Plan
Steady Growth of Local Content Ratio
000’units
DFG Production Capacity and Utilization Rate
900
1200
820
800
625
700
800
600
500
400
600
413
320
345
80.30%
80.03%
40%
20%
200
200
0
100
0%
2004
0
CV
2006
1H 2007
80%
60%
59%
400
300
2005
2006
1H2007
PV
Capacity
2008E
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91%
1000
720
100%
Turn out
Utilization
III. DFG Financial Performance in
1H2007
1. Stable Growth of Major Business
2. Steady Growth of Gross Profit
3. Ever Enhanced Profitability and Operation Capability
HK000KL3_Short
1、Stable Growth of Major Business
Sales Revenue Breakdown
Sales Revenue Growth
Million RMB
100%
35,000.00
28,809
30,000.00
25,000.00
90%
80%
23,282
70%
20,000.00
60%
15,000.00
50%
10,000.00
40%
5,000.00
30%
0.00
20%
1H2006
1H2007
1.66%
1.76%
1.55%
27.54%
28.06%
26.51%
70.81%
70.18%
71.94%
2006
1H 2006
1H 2007
10%
0%
系列1
PV
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CV
O thers
2、Steady Growth of Gross Profit
PV GP Margin
DFG Gross Profit and GP Margin
Million RMB
20.0%
10,000
20%
9,000
8,206
17.0%
8,000
7,000
17.5%
15.8%
18.9%
19.6%
18.4%
2006
1H 2006
1H 2007
10.0%
0.0%
17.3%
2005
16%
14.6%
6,096
6,000
4,991
5,000
12%
CV GP Margin
4,084
4,000
8%
3,000
2,000
4%
20.0%
0%
10.0%
1,000
0
2005
2006
G ross P rofit
1H 2006
1H 2007
12.0%
13.0%
14.8%
2005
2006
1H 2006
1H 2007
0.0%
G P M argin
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11.3%
3、Ever Enhanced Profitability and Operation Capability
Improved ROE
Improved Net Profit & NP Margin
Million RMB
30.00%
25.00%
24.50%
20.00%
2500
2000
2081
1601
1500
1000
8.00%
1945 6.80%
6.00%
3.84%
4.80%
4.31% 1114
15.00%
0
5.00%
0.00%
2005
2006
Net Profit
1H2006
2006
1H2006
Decreased Inventory Days
70
68
66
1H2007
64
62
60
58
56
54
NP Margin
68
65
65
62
59
1H2005
2005
1H2006
2006年
Inventory days
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1H2007
ROE
4.00%
0.00%
2005
16.70%
10.00%
2.00%
500
14.56%
13.12%
1H2007