Alte was investigated by 31 institutions： the company’s independent products are mainly reducers and couplers (with survey questions and answers)

　　() The Record Form of Investor Relations Activities was released on July 8, and the company was investigated by 31 institutions on July 7, 2022. The types of institutions are other institutions, fund companies, securities companies and sunshine private equity institutions.

　　The main contents of investor relations activities are introduced:

　　Fu Bin, the head of Sichuan Alte, introduced the company’s business, exchanged views on the spare parts business on the spot, and led investors to visit the production line.

　　Lin Ling, secretary of the board of directors of the company, communicated with you on the overall business and development of Alte. The key issues of this survey and exchange are as follows:

　　Q: General Manager Fu Bin, the head of Sichuan Alte, introduced Sichuan Alte.

　　A: Sichuan Alte is a new energy core component R&D and manufacturing company which is controlled by Alte, Chengdu Advanced Manufacturing and Longquan Investment. The main business is mainly devoted to the design, research and development, production and sales of new energy vehicle power systems. At present, our own products are mainly reducers and couplers, and we will provide a complete set of powertrain solutions for the main engine factory. The company was established in 2016. In 2017, it won the designated reducer of Honda, and began mass production of reducers in 2018. There are two assembly lines at present. At present, there are three types of reducer and coupler customers in the company (joint venture automobile enterprises, independent automobile brands and international head Tier1).

　　Q: Why doesn’t the company do mechanical processing, but only research and development, integrated manufacturing and integration?

　　A: First, the domestic supply chain resources are in a state of surplus. Second, the company has very strong supply chain management capabilities. In fact, the process of buying parts now is not only buying parts, but also cooperating with suppliers to further improve production capacity and accuracy and improve quality concept. We don’t have a simple business relationship with the upstream and downstream of the industrial chain, but work together with them to improve the quality of our products and ensure the qualified rate of our products. In addition, from the perspective of enterprise development, we are now mainly engaged in the front-end design, development and assembly of the industrial chain, because its added value will be higher.

　　Q: There are also some all-in-one powertrain products on the market. What are the main customer types of the company’s all-in-one powertrain products?

　　A: There are indeed many all-in-one products on the market now, but in the order of 220 kilowatts, and really entering the mass production stage, there are actually very few products that can be stably supplied. 220kW is actually equivalent to the traditional 3.0t engine, so the models it carries are generally above Class B, mainly for some large cars such as SUVs. Our product is also in the research and development stage, and now it has not entered mass production. The characteristic of our product is that we are not a simple drive product, and some concepts of thermal management and domain control of the car have also been added. The highlight is that it is highly integrated and more modular, which can reduce the cost of secondary development for the main engine factory and reduce the use of chips. Judging from the current test data, the parameters of our products have certain advantages compared with the existing products on the market.

　　Q: Are all the products produced by the company self-developed?

　　A: Yes, all the products we produce are independently developed and designed, including the underlying architecture, including the upper and lower application layers. Among them, the domain control is developed by our Alte Group Company, which has a research and development team dedicated to the control field.

　　Q: The competition in the spare parts business is fierce. What are the advantages of ART in making spare parts, or what are the selling points that the company can impress customers to purchase our products?

　　A: Our company has a strict QCDS management system, and our competitiveness is reflected in Q (quality), C (cost), D (delivery period) and S (safety).

　　Q: How did the company win the designation of the international head part Tier1 German continental reducer?

　　A: At that time, mainland Germany was going to be a platform-based project. In order to find strategic partners for reducer products in the whole world, they made a relatively comprehensive evaluation system and launched a bidding in the German headquarters. Our company is one of the two enterprises invited to participate in the bidding in China after screening at different levels, and finally won the fixed point of reducer products.

　　Q: Will it be easier for us to win corporate orders after winning the fixed point in mainland Germany?

　　A: It may be a bonus, but it won’t make it easier for us to enter other car companies. Because other car companies, when evaluating companies, should consider technical strength first, and it is multidimensional. It is not a single product, but a comprehensive technical ability, including the ability of re-research, production capacity and supply strength. Existing customers are a reference of supply strength, and we still rely more on comprehensive strength to win customers.

　　Q: How is the skateboard chassis business going?

　　A: Art has been planning the skateboard chassis for a long time. Let me talk about the skateboard chassis from the strategic point of view to the details. Why does art make skateboard chassis? Based on two reasons, the first reason is that our company has been founded for 20 years. In these 20 years, we have successfully developed nearly 400 models for complete vehicles, including new energy vehicles and fuel vehicles. In the process, Alte’s chassis capacity and chassis data have been well accumulated.

　　The second reason is that we believe that in the new energy era, more intelligent and core technologies will be modularized and concentrated on the chassis. As a vehicle research and development enterprise, we caught this trend very early and laid out the chassis very early.

　　Although we all know the skateboard chassis, in fact, we think it is an iterative super chassis in the future. Such a super chassis will have the whole steering, control, domain control, intelligence, driverless and integration of energy and some controls. Our company’s several businesses about skateboarding chassis have been promoted smoothly.

　　Q: In addition to international customers, what is the progress of the company’s vehicle R&D business in China, such as technology companies or large vehicle companies that have entered the market one after another to build cars?

　　A: The company’s customer groups are evenly distributed, including international customers, joint ventures, independent brands and technology-based enterprises. The company has different solutions for different needs of different customers. For customers with high demand or increasing orders, some of us will set up subsidiaries, and some will set up business departments to provide targeted services. For large customers, the number of staff in our business department may reach several hundred.

　　Q: Can you share the company’s recruitment plan?

　　A: The company does not require a recruitment ceiling for the human resources department. We welcome more talents who are interested in vehicle research and development and related business of the company to join Alte.

　　Recently, many graduates have joined the ranks one after another.

　　Q: Is Gecko Technology, which the company participated in, currently financing?

　　A: Yes, Gecko Technology is financing Angel Wheel, and it is progressing smoothly. The project will land in Shenzhen, and the local government also attaches great importance to the project.

　　Q: The recurrence of the epidemic in the first half of the year may have a certain impact on the company’s project signing and delivery acceptance. It is better that we, as a research and development enterprise, will recover faster after the epidemic has eased. Although we can’t share specific data, can you give us a general introduction of the company’s performance in the first half of the year?

　　A: To be honest, when the epidemic was the worst in the first half of the year, I was still very worried about the company’s performance, but looking back now, Art has fully demonstrated its resilience in coping with difficulties. After the end of the first half of the year, we probably combed it. It can be said that although the performance in the first half of the year may not be too good, it will not be too bad, and investors need not worry too much.

　　Q: What is the difference between the ODM business that the company is trying to carry out and the OEM in the domestic automobile industry at present?

　　A: We still carry out ODM business based on the positioning of an independent third party, and will not be strongly bound to a certain customer, hoping to help more customers in need to develop and produce cars.

　　Q: What do you think is the market trend of ODM business? What is the proportion of fuel vehicles to complete ODM in mature markets?

　　A: Actually, we were paying attention to ODM before the company’s IPO, but the time was not ripe at that time. The acquisition of Tianjin Bojun equity is a good opportunity for the company to carry out ODM business, and we already have some interested customers. I don’t have international data at present, so it’s not easy to answer the market share of ODM, but you can see that companies like Magna have achieved relatively success in ODM.

　　In addition, China is the leader in the global new energy vehicle market, and the demand for ODM in the new energy market is not comparable to that of traditional fuel vehicles in the international market.

　　The main business of Alte Automotive Technology Co., Ltd. is the whole process research and development of new energy vehicles and fuel vehicles and other technical services related to the automobile industry. The company’s main products include V6 engines, couplers, reducers and range extenders.

　　Details of participating institutions are as follows: