Wanfeng Auto Parts Group responded to the application trend of magnesium alloy, measures to address fluctuations in raw material prices, and the layout of the low-altitude economy.

The stock price of Wanfeng Auto Wheel rose on July 8. By 11:02 a.m., Wanfeng Auto Wheel had risen by 0.25%, trading at 15.86 yuan per share.

The record of investor relations activities announced by Wanfeng Auto Wheel on July 4 showed:

Q1: Application trends of magnesium alloy components and the company's advantages

Response from Wanfeng Auto Wheel:Currently, the price of magnesium, a raw material, has fallen below that of aluminum, and its price volatility has gradually decreased. The cost-effectiveness of magnesium alloy components is gradually emerging, making them an ideal lightweight material for OEMs.

As the global leader in deep processing of lightweight magnesium alloy new materials, the company has strong competitive advantages in product simulation design, mold design, and product die-casting. Meanwhile, the company has a rich product reserve and is capable of completing the design and manufacturing of large-scale integrated magnesium alloy die-castings. Its main products involve automotive components such as powertrains, front carriers, dashboard brackets, rear hatchback inner panels, and side door inner panels. Relying on overseas advanced technologies, magnesium alloy new materials are gradually introduced into China for commercialization, and the company strives to expand its presence among domestic new energy OEMs from both customer and product perspectives.

Q2: Measures taken by the company to address the impact of raw material price fluctuations on performance

Response from Wanfeng Auto Wheel: On the one hand, the company adopts price-linked settlement for its product sales, further increasing the proportion of price-linked customers, optimizing the price-linked mechanism, and reducing the impact of settlement delays. On the other hand, it timely uses financial instruments such as hedging to lock in raw material prices, reduce operational risks, and strengthen centralized procurement management of bulk materials. Meanwhile, it strengthens inventory management of raw materials, optimizes the supplier management system, and reduces operating costs and enhances product profitability through process improvements, technological innovations, and increased automation.

Q3: Wanfeng Diamond Aircraft's positioning in the development process of China's low-altitude economy.

Response from Wanfeng Auto Wheel: Wanfeng Diamond owns the full intellectual property rights of 18 aircraft models and has globally leading R&D capabilities. Currently, it is vigorously developing fixed-wing pure electric aircraft and has clear commercialization plans in the eVTOL field. For many years, Wanfeng Diamond Aircraft has ranked among the top three global manufacturers of general aviation aircraft. Its subsidiary, Diamond Austria, serves as the chair unit of the ASTM International Committee F44 on General Aviation Aircraft, reflecting Wanfeng Diamond Aircraft's industry status and its leading role in formulating industry technical standards.

As a leading enterprise in the manufacturing sector of the industry chain, Wanfeng Diamond has introduced multiple aircraft models into China to meet increasingly diverse application scenarios. Meanwhile, it assists in the construction of the supply system and fosters the development of the domestic industry chain. Additionally, the company continuously introduces overseas general aviation aircraft development experience into China to boost the development of the domestic low-altitude economy.

Q4: What are the industrial advantages of the company in developing the low-altitude economy?

Wanfeng Auto responded: In terms of product layout, Wanfeng Aircraft has constructed a full-scenario travel matrix driven by multiple engines, including "fixed-wing aircraft + drones + vertical take-off and landing aircraft," achieving a forward-looking and comprehensive layout for the development of the low-altitude economy industry. It has become one of the relatively scarce aircraft manufacturing enterprises globally with a full-scenario layout.

In the field of fixed-wing general aviation aircraft, Wanfeng Diamond has established a mature aircraft R&D and design management system and is one of the few DOAs (Design Organization Approvals) approved by EASA (European Union Aviation Safety Agency) in Europe. In terms of industry chain layout, Wanfeng Diamond has achieved independent control over key parts and established leading independent control advantages in the design and production of core parts such as engines, aircraft fuselages, and wings. In terms of airworthiness certification, Wanfeng Diamond has the capability to meet the airworthiness demonstration standards and requirements set by civil aviation authorities for general aviation aircraft. Meanwhile, Wanfeng Diamond has advantages in safety flight records, brand awareness, and global production and sales networks.

In the fields of drones and eVTOL, Wanfeng Aircraft has advanced the critical turning point in the global eVTOL field from "technical experimentation" to "commercial scale" through restructuring and integrating Volocopter, a pioneer enterprise in the global eVTOL field. Wanfeng Aircraft will further integrate the technological advantages of Diamond fixed-wing aircraft and Volocopter in the fields of drones and eVTOL to accelerate the commercial realization of Volocopter's technological advantages.

Q5: What is the development situation of Wanfeng Diamond Aircraft in the field of electrification?

Wanfeng Auto responded: The company currently has product reserves in both pure electric and hybrid power fields. In the pure electric field, the company has vigorously developed fixed-wing pure electric aircraft and has clear commercialization plans in the eVTOL field. Among them, the eDA40 is the world's first electric aircraft with DC fast charging function that has applied for EASA/FAA Part 23 certification and has successfully conducted test flights. This model has the advantages of low cost, low noise, and zero emissions, effectively improving flight and training efficiency. In the hybrid power field, the company's HEMEP hybrid multi-engine aircraft is the world's first multi-engine hybrid aircraft. This model has the advantages of zero emissions and low noise during flight, effectively reducing greenhouse gas emissions and air pollution, and mitigating the adverse environmental impacts of air travel.

In the eVTOL field, on the one hand, the company independently develops vertical mobility solutions with aircraft as carriers through technological cooperation. On the other hand, through restructuring Volocopter's core assets, it provides multi-scenario solutions for manned and cargo transportation within 300 kilometers: (1) Urban air mobility solutions rely on Volocopter 2X and VoloCity. Both models are two-seater, manned products. Volocopter 2X is planned to complete TC certification from 2025 to 2026 and strive to secure commercial orders. The VoloCity model is a more advanced eVTOL product that meets the stricter aviation standards set by EASA (European Union Aviation Safety Agency). Its design in all aspects is at the forefront of the industry, and it is currently advancing its TC certification process with EASA; (2) The solution for intercity air mobility scenarios relies on the VoloRegion and VoloConnect models, both of which are designed as manned 4-5 seat eVTOL products with long driving ranges and high speeds. Their R&D also meets the higher standards and requirements of EASA; (3) The solution for unmanned aerial vehicle (UAV) cargo delivery scenarios relies on the VoloDrone model. UAV products developed based on eVTOL technology can carry cargo weighing up to 200 kg within a 40-kilometer range. They will be deployed in areas that are difficult to reach with traditional transportation methods and can be extended to existing land or maritime logistics infrastructure, thereby building a new supply chain and transportation network.

Q6: Following the company's acquisition of Volocopter, a pioneer in sustainable urban air mobility (UAM), what are the subsequent development plans in the low-altitude economy sector?

Wanfeng Auto Wheel responded: The company implements a globally integrated strategic operational mechanism for its general aviation aircraft manufacturing, with global management and coordination to achieve multi-site linkage and coordination of production technologies, supply chain systems, manufacturing processes, and other resources in Austria, Canada, Germany, and China. It seizes new opportunities in the domestic low-altitude economy, advancing the introduction of new models and the construction and resource integration of new domestic bases and delivery centers.

After acquiring Volocopter's core assets in March 2025, the company integrates them with the existing resources of Diamond General Aviation Aircraft, advancing business integration in the eVTOL sector. It continues to make comprehensive plans in areas such as operational management, financial management, and the commercialization of new models to achieve complementary and effective synergies in business and resource advantages, constructing an urban air mobility system that integrates "aircraft manufacturing as the business format + intelligent systems and landing facilities as the support" ecosystem.

By integrating Volocopter's cutting-edge technologies in the eVTOL sector (such as distributed electric propulsion systems and the VoloIQ aviation cloud platform) with Wanfeng's manufacturing heritage in general aviation, it has successfully built a multi-scenario product travel matrix of "fixed-wing + vertical take-off and landing aircraft + UAVs". In 2025, it will fully advance the TC certification process for special-purpose DART models, the purely electric general aviation aircraft eDA40, and some eVTOL models, and strive to bring the products to market as soon as possible.

Wanfeng Auto Wheel previously disclosed its Q1 2025 report, showing that in the first quarter of this year, the company achieved a total operating revenue of 3.567 billion yuan, up 0.75% YoY; and a net profit attributable to shareholders of 275 million yuan, up 21.29% YoY.

Wanfeng Aowei's previously disclosed 2024 annual report showed that the company positions itself in the "big transportation" sector, adhering to a "dual-engine" development strategy, and is committed to becoming a global driver of automotive metal component lightweighting and a global leader in innovative general aircraft manufacturing. In 2024, the company achieved operating revenue of 16.264 billion yuan, up 0.35% YoY, while net profit attributable to shareholders of the publicly listed firm was 653 million yuan, down 10.14% YoY.

Wanfeng Aowei's 2024 annual report revealed:

1. Lightweight Automotive Metal Components Business In 2024, the company's lightweight automotive metal components business generated revenue of 13.45 billion yuan, up 0.09% YoY, with overall stable operations. Facing a highly competitive industry environment, the company continued to optimize its customer structure, advance digital management upgrades for production lines, improve production efficiency, strengthen procurement of bulk materials and raw material inventory control, and intensify R&D in lightweight metal application technologies dominated by aluminum and magnesium alloys. Through continuous process improvements and technological innovations, the company reduced costs and enhanced efficiency, improving the sustainable operational capabilities of its overall business. Simultaneously, the company will further strengthen collaboration with core NEV customers, optimize its product mix, increase the supply of large-size wheel hubs, and expand the application of magnesium alloy large die-cast components such as instrument panel brackets in domestic high-end and NEVs. It will promote the localisation of magnesium alloy large die-cast components, establish a leading R&D institution in China's automotive parts industry, address key core technologies in lightweight materials, processes, design, and manufacturing, and achieve "localized design and agile supply" to meet the rising demand for NEVs and automotive lightweighting, actively driving industry development.

2. General Aviation Aircraft Innovative Manufacturing Business In 2024, the company's general aviation aircraft innovative manufacturing business achieved revenue of 2.814 billion yuan, up 1.62% YoY. Throughout the year, it focused on aircraft innovation and manufacturing, continuously strengthening its "R&D—licensing/technology transfer—whole aircraft manufacturing and sales—after-sales service" business model. General aviation aircraft orders remained robust, with breakthroughs in high-value-added MPP special-purpose aircraft orders. Sales operations were further optimized, production processes for high-value-added aircraft models were continuously improved, and new supply chain support was developed to overcome aircraft capacity and delivery challenges. The company also advanced R&D for new models such as eVTOL, eDA40, and the DART series. During the reporting period, the Diamond eDA40 all-electric aircraft won the 2024 German Aerokurier Best Innovative Aircraft Award, while the DA50 RG received the Platinum A' Design Award in the "Aerospace and Aircraft Design" category in Italy. In the future, with the development of the low-altitude economy, Diamond aircraft will continuously explore new application scenarios based on existing markets such as flight school training, promote the introduction of new aircraft models and the construction and resource integration of new domestic bases and delivery centers. Through a diverse range of aircraft models, it will further match and develop domestic scenarios such as private flying, short-haul transportation, and special-purpose applications. At the same time, it will intensify R&D and Type Certification (TC) acquisition for new models like electric aircraft and eVTOL, seize the new opportunities presented by the national low-altitude economy, and commit to accelerating the market layout of the low-altitude economy.

Regarding future development strategies, Wanfeng Aowei stated in its 2024 annual report:

In 2025, the company will focus on improving operational performance, aiming to increase net cash flow, prioritize digital transformation, and enhance high-quality development capabilities. It will continue to implement the "dual-engine" development strategy of automotive metal component lightweighting and general aviation aircraft innovative manufacturing, grasp industry trends, advance global industrial layout, actively promote synergistic strategies, fully drive strategic customer development, strengthen technological innovation, and strive to become a global driver of automotive metal component lightweighting and a global leader in innovative general aviation aircraft manufacturing.

1. Seize the NEV development trend and continuously optimize market and business structuresThe company's automotive metal components rely on the lightweight strategy, pursuing a differentiated development path with technological leadership. It actively seizes industry trends, optimizes market structures, and advances global industrial layout, driving company growth through technological leadership. Against the backdrop of rising NEV penetration, the company's automotive wheel business leverages its scale and technological advantages to strengthen cooperation with core NEV customers, continuously optimize market and product structures, increase the proportion of NEV support, and actively promote overseas base construction while advancing domestic smart factory development. The magnesium alloy business will enhance management team and system development, continue internal resource integration, optimize market layout, comprehensively boost strategic customer business, expand overseas markets beyond North America, promote domestic applications of mature overseas products, intensify efforts to secure domestic NEV projects, increase penetration among NEV OEMs, achieve breakthroughs in large die-casting component applications in domestic and overseas markets, and maintain its global leadership in deep-processed lightweight magnesium alloy materials.

2. Capitalize on new opportunities in the low-altitude economy and advance eVTOL model R&D and business integrationWhile promoting global airworthiness certification and actively expanding global markets, the company's general aviation industry will implement a global integrated strategic operation mechanism, strengthen divisional coordination and management, and achieve resource linkage and coordination in production technology, supply chain systems, and manufacturing processes across Austria, Canada, Germany, and China. Seize the new opportunities presented by the development of the domestic low-altitude economy, advance the introduction of new aircraft models, and the construction and resource integration of new domestic bases and delivery centers, while accelerating the certification process for Type Certificates (TC) for eVTOL, eDA40, and DART series aircraft models. The company completed the acquisition of Volocopter GmbH's core assets in March 2025 and will subsequently actively promote business integration in the eVTOL sector, making comprehensive plans in areas such as operations management and financial systems to achieve complementary advantages and effective synergies in business and resources, advance the certification process for relevant aircraft model Type Certificates (TC) and commercialization, and support the company's long-term sustainable development.

3. Accelerate the digital transformation and upgrading to improve digital management capabilities The company will continue to advance the construction of digital factories, focusing on the digital transformation and upgrading of existing factories while building new digital smart factories to consolidate the foundation of the company's digital transformation and provide guarantees for continuously improving operational efficiency, optimizing plans, enhancing quality, and reducing costs.

4. Continuously focus on core businesses and optimize the company's financial structure Guided by the development strategy driven by the "dual engines" of lightweight automotive metal components and innovative manufacturing of general aviation aircraft, the company will continuously focus on its core businesses, optimize its industrial layout and business structure, improve capital management, continuously enhance its financial structure, and boost its profitability. Meanwhile, it will actively strengthen the dissemination of its intrinsic value through various channels to create greater value for shareholders and small and medium investors.

Southwest Securities pointed out that the national strategy focuses on the new track of the low-altitude economy, with local governments accelerating policy support and resource allocation. Application scenarios such as low-altitude logistics and low-altitude tourism are taking the lead, with orders from leading producers accelerating, and the scaled development of the industry chain gradually emerging. It is recommended to pay attention to the four main lines of parts, complete aircraft, infrastructure support, and air traffic control operations. Relevant targets: 1) upstream components: INPOWER, Zonsen Power, Wolong Electric Drive Group, Zonho Communication, and United Technologies; 2) complete aircraft manufacturers: EHang, Wanfeng Auto Wheel, XPeng Motors, and Lvneng Huichong; 3) air traffic control systems: Nanjing Les Information Technology, Shenzhen Urban Transport Planning Center, Sichuan Jiuzhou Electronic Technology, and Jiangsu Transportation Research Institute; 4) supporting services: GRG Metrology & Testing, Centre Testing International Group, Weihai Guangtai, and Haite High-Tech.

Guoyuan Securities issued a research report on May 19th, recommending a "buy" rating for Wanfeng Auto Wheel. The main reasons for the rating include: 1) steady revenue growth and effective cost control; 2) steady growth in the lightweight business and rapid development in the general aviation manufacturing business; 3) acquisition of Volocopter's core assets, with the eVTOL business poised for growth. Risk warnings: macroeconomic and industry fluctuation risks, international trade barrier risks, raw material and energy price fluctuation risks, exchange rate fluctuation risks, and the risk that the opening degree of domestic general aviation airspace may fall short of expectations.