Use of Proceeds from This Offering
The total amount of proceeds to be raised from this targeted offering shall not exceed RMB 139,400.00 million (inclusive of the principal amount). After deducting issuance expenses, the net proceeds will be used for the following projects:
| Project Name | Planned Investment (RMB million) | Planned Investment (RMB million) |
|---|---|---|
| Industrialization Project for Automotive Steer-by-Wire System | 56,230.00 | 56,230.00 |
| Industrialization Project for New-Generation Intelligent Steering Column System for Passenger Vehicles | 43,800.00 | 43,800.00 |
| Intelligent Technical Renovation Project for Automotive Electronics PPK Products | 10,000.00 | 10,000.00 |
| Project for Building R&D Capability in Steer-by-Wire and Angle Module Systems | 9,370.00 | 9,370.00 |
| Supplementing Working Capital | 20,000.00 | 20,000.00 |
| Total | 139,400.00 | 139,400.00 |
Before the proceeds from this targeted offering are received, the company may use its own funds for advance investment in the planned investment projects according to their actual progress. These advances will be reimbursed after the proceeds are received, in accordance with relevant laws and regulations. If the actual net proceeds after deducting issuance expenses are less than the total planned investment for the projects, the company will resolve the funding shortfall through its own resources.
Background of the Investment Projects for This Offering
(I) Sustained Growth of the Automotive Industry and Steady Expansion of the Steering System Market
The automotive industry is a pillar of the global economy. In 2025, global automotive production is expected to reach approximately 99.80 million vehicles, with a compound annual growth rate of 5.16% from 2020 to 2025. China, as the world's largest automotive market, is projected by the CAAM to reach 34.53 million units in production and 34.40 million units in sales in 2025, representing year-on-year growth of 10.4% and 9.4% respectively. By 2026, China's automotive sales are expected to exceed 34.75 million units. As a key automotive component, the steering system market is highly correlated with automotive production and sales. The sustained growth of the automotive industry provides a solid market foundation for the steering system industry.
(II) Co-driven by New Energy Vehicles and Intelligent Driving, Promoting Structural Upgrading of Steering Systems
New energy vehicles (NEVs) represent a significant direction for the transformation and upgrading of the global automotive industry and a strategic choice for the high-quality development of China's automotive industry. According to CAAM statistics, China's NEV sales are projected to reach 16.49 million units in 2025, a year-on-year increase of 28.2%, with a market penetration rate of 47.9%, a significant increase of 7 percentage points compared to 2024. The rapid development of NEVs has introduced new technical requirements for steering systems.
Concurrently, the continuous upgrading of intelligent driving functions demands higher response speed, control precision, and functional safety from steering systems. As intelligent driving levels advance from L2 to L3 and L4, the execution components will inevitably require steering systems to upgrade from mechanical components to electronic components to adapt to the millisecond-level response required for advanced intelligent driving.
The dual trends of NEVs and intelligent driving are synergistically driving a comprehensive upgrade of steering systems, presenting significant structural market opportunities for domestic steering system companies with technical expertise and forward-looking strategies.