苏常柴B：2023年年度报告摘要(英文版)

Stock Code: 000570, 200570 Stock Name: Changchai, Changchai-B Announcement No. 2024-005

CHANGCHAI COMPANY, LIMITEDANNUAL REPORT 2023 (SUMMARY)

Part I Important NotesThis Summary is based on the full Annual Report of Changchai Company, Limited (together with its consolidatedsubsidiaries, the “Company”, except where the context otherwise requires). In order for a full understanding of theCompany’s operating results, financial position and future development plans, investors should carefully read theaforesaid full text, which has been disclosed together with this Summary on the media designated by the ChinaSecurities Regulatory Commission (the “CSRC”).All the directors of the Company attended in person the board meeting for the approval of this Report.Independent auditor’s modified opinion:

□ Applicable √ Not applicable

Board-approved final cash and/or stock dividend plan for ordinary shareholders for the Reporting Period:

√ Applicable □ Not applicable

Bonus issue from capital reserves:

□ Yes √ No

The Board has approved a final dividend plan for ordinary shareholders as follows: based on the 705,692,507shares, a cash dividend of RMB0.47 (tax inclusive) per 10 shares is to be distributed to the shareholders, with nobonus issue from either profit or capital reserves.Board-approved final cash and/or stock dividend plan for preferred shareholders for the Reporting Period:

□ Applicable √ Not applicable

This Report and its summary have been prepared in both Chinese and English. Should there be any discrepanciesor misunderstandings between the two versions, the Chinese versions shall prevail.

Part II Key Corporate Information

1. Stock Profile

2. Principal Activities or Products in the Reporting Period

1. Principal Operations of the Company

We mainly specialize in the R&D, manufacture and sales of diesel engines under the brand "Changchai" andgasoline engines under the brand "Robin". Our products are mainly used in agricultural machinery, smallengineering machinery, generator sets and shipborne machinery and other fields closely related to people'slivelihood.In the Reporting Period, there were no major changes in the Company's core business and main products.

2. Main Products of the Company

Our main products are divided into two categories: diesel engines and gasoline engines. The details are as follows:

3. Industry Review

(1) Basic information on the industry

The internal combustion engine is an important support for China's manufacturing industry security, energysecurity and national defense security, and an important basic industry of national economy and national defenseconstruction. The internal combustion engine is the most power-dense, thermally efficient and widely used heatengine power unit.In order to implement the national overall development strategy of energy conservation, emission reduction,transformation, and upgrading, the internal combustion engine industry and agricultural machinery industry willstrengthen independent innovation and research and development, accelerate the construction of a common basictechnology platform, optimize the construction of the upstream and downstream industry chain, implement

intelligent manufacturing, and actively carry out international exchange and cooperation to accelerate therealization of industrial technology upgrading.

(2) Development pattern and trend of the industry

In terms of policies, national regulations pertaining to internal combustion engine technology have considerablytightened, with a notable emphasis on energy conservation, emissions reduction, and reliability, thereby makingthem focal points of industrial development. The rigorous enforcement of national emission standards willexpedite the development and deployment of core technologies and crucial components within internalcombustion engines. The exploration and dissemination of efficient and clean internal combustion engine productswill drive the widespread adoption of independent-brand electronic fuel injection systems, high-efficiencysuperchargers, and advanced after-treatment solutions.In recent years, the issuance of the No. 1 Document by the central government has underscored its commitment toelevating the importance of agriculture and bolstering agricultural development. In 2024, the No. 1 Documentoutlined a "road map" to vigorously and effectively propel comprehensive rural revitalization. To stimulatedemand through industrial policies, it is imperative to enhance the research and application proficiency ofagricultural machinery and equipment, promote the innovation framework for cutting-edge agricultural machinery,vigorously address the deficiencies in agricultural machinery and equipment, bolster the information-basedcapabilities and service provision of agricultural machinery and equipment, advance the intelligence andautomation levels of agricultural machinery, reinforce the synergy between technology and reform, and intensifyefforts in core technology research and development, all of which will delineate the trajectory for agriculturalmodernization.As a result of the national policy of subsidies for the purchase of machinery, industrial development policies andthe impact of environmental regulations and requirements, overall market demand for single-cylinder dieselengines for small agricultural machinery remained low, causing intense competition. Despite the gradual increasein the use of single-cylinder engines in the non-agricultural sector, overall sales remained on a downward path.The year 2023 is the first year of upgrading the National Emission Standard III to IV, and the agriculturalmachinery industry has entered a drastic “reshuffle” period. From the point of view of the development of theindustry as a whole, the sales of low-quality products continued to weaken, and high-quality products continued totake over more market share, which promoted the sustainable development of the industry as a whole. With thefull-scale implementation of National Emission Standard IV for Non-road Vehicles and the evolving marketdynamics, the pace of development for high-end agricultural machinery products in China has accelerated. High-end and intelligent trends of agricultural machinery catalyzed a fresh wave of structural transformation within theagricultural machinery industry. The sector has entered a phase of profound adjustments propelled by optimizationand upgrading, with agricultural machinery enterprises concurrently embarking on a trajectory of high-qualitydevelopment, hastening the integration and advancement of advanced technologies encompassing energyconservation and emissions reduction, intelligent manufacturing, and the enhancement of product quality andefficiency. As new opportunities for development arise in the national strategic deployment and the acceleratedtransformation and upgrading process, the agricultural machinery market has a broad space for growth.

4. The Company's position in the market

We mainly specialize in the R&D, manufacture and sales of diesel engines under the brand "Changchai" andgasoline engines under the brand "Robin". Up to now, we have successfully developed a number of advanced coretechnologies with independent intellectual property rights. In terms of diesel engine, according to the statistics ofChina Internal Combustion Engine Industry Association (CICEIA), as the largest small- and medium-sized single-cylinder diesel engine manufacturer in the agricultural machinery industry of China, we have maintained a highmarket share of single-cylinder engines, and our market share of single-cylinder diesel engines of some powerranges has ranked first in China. For many years, in the process of achieving steady economic development of theenterprise, we developed in a sound manner and cultivated the "Changchai" brand, a famous small diesel engine

brand of China with independent intellectual property rights.

3. Key Financial Information

(1) Key Financial Information of the Past Three Years

Indicate by tick mark whether there is any retrospectively restated datum in the table below.

□ Yes √ No

Unit: RMB

(2) Key Financial Information by Quarter

Unit: RMB

Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs

materially from what have been disclosed in the Company’s quarterly or interim reports.

□ Yes √ No

4. Share Capital and Shareholder Information at the Period-End

(1) Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as wellas Holdings of Top 10 Shareholders

Unit: share

Top 10 shareholders involved in refinancing shares lending

□ Applicable √ Not applicable

Changes in top 10 shareholders compared with the prior period

√ Applicable □ Not applicable

Unit: share

(2) Number of Preferred Shareholders and Shareholdings of Top 10 of Them

□ Applicable √ Not applicable

No preferred shareholders in the Reporting Period.

(3) Ownership and Control Relations between the Actual Controller and the Company

5. Outstanding Bonds at the Date when this Report Was Authorized for Issue

□ Applicable √ Not applicable

Part III Significant Events

1. Expropriation of the Wuxing branch company’s properties on state-owned land and compensationOn 25 May 2023, the Proposal on the Intention to Sign the Agreement on the Expropriation of the Properties ofthe Wuxing Branch Company on State-owned Land in Changzhou City and the Compensation was approved atthe 17th Meeting of the Ninth Board of Directors. Later, the said matter was approved at the First ExtraordinaryGeneral Meeting of Shareholders in 2023 dated 12 June 2023. As such, the Company was agreed to sign acontract with Changzhou Zhonglou District Housing and Urban-Rural Development Bureau on theexpropriation of the Wuxing branch company’s properties on state-owned land and the compensation, with thecontractual total compensation amount being RMB117 million. On 14 June 2023, the Company signed theAgreement on the Expropriation of the Properties of the Wuxing Branch Company on State-owned Land inChangzhou City and the Compensation with Changzhou Zhonglou District Housing and Urban-RuralDevelopment Bureau, and received the first compensation payment of RMB70 million on 28 June 2023, andreceived the residual compensation payment of RMB47 million on 9 January 2024.

2. Housing expropriation on state-owned land and compensation of Sanjing BranchOn 27 October 2023, the Company held the Third Meeting of the Tenth Board of Directors, deliberating on andapproving the Proposal on Signing the Sanjing Branch's Agreement on Non-residential Housing Expropriationand Compensation in Xinbei District, Changzhou City. The matter was approved at the third extraordinarygeneral meeting on 14 November 2023, approving that the Company would sign agreement with the Housingand Urban-Rural Development Bureau of Changzhou National High-tech Industrial Development Zone and theHousing Expropriation and Compensation Service Centre of Sanjing Street, Xinbei District, Changzhou City,regarding the housing expropriation on state-owned land and compensation of the Sanjing Branch. The totalcompensation amount under the agreement was RMB99,929,900. On 29 November 2023, the Company signedthe Agreement on Non-residential Housing Expropriation and Compensation with the Housing and Urban-Rural

Development Bureau of Changzhou National High-tech Industrial Development Zone and the HousingExpropriation and Compensation Service Centre of Sanjing Street, Xinbei District, Changzhou City. TheCompany received the first compensation of RMB30 million until January 2024.

3. Acquisition of 7.5% equity held by natural person shareholders of Zhenjiang SiyangIn December 2023, the Company acquired 7.5% equity held by three natural person shareholders of its partially-owned subsidiaries Zhenjiang Siyang with RMB7.17 million. As at 31 December 2023, the Company had helda total of 49% equity in Zhenjiang Siyang and remained its largest shareholder.