1. What’s the latest development of the company in the field of auto parts?
On January 6th, 2023, the first phase of Weiling Auto Parts Anqing New Energy Auto Parts Strategic New Base (hereinafter referred to as "Weiling Anqing Base") in Midea’s new energy sector was officially put into production. It is expected that after the completion of capacity climbing in late February, it will move towards the goal of 1 million electric compressors, 1.2 million EPS steering motors and 200,000 driving motors per year. Thanks to the strong manufacturing capacity of Midea’s industry, the project was put into production within one year, and the market demand for new energy vehicles was "blowout" with "beautiful speed".
As the strategic direction of Midea Group, the new energy automobile industry has invested more than 10 years in research and development. From the development of cutting-edge technology to the establishment of Weiling Auto Parts Company in 2018, from the layout of’ three major areas’ products to the production of Anqing base, Midea’s industrial technology will become an important link in China’s new energy automobile industry chain and contribute to the rise of China’s new energy automobile industry.
According to the data of the Federation, as of November 2022, the domestic retail penetration rate of new energy vehicles has reached 36.3%. In 2023, with the acceleration of new energy and the continuous improvement of charging facilities by major traditional brands, the overall penetration rate of new energy vehicles is expected to approach 50%, and the market space is huge. The rapid completion and commissioning of the Weiling Anqing base will further enhance the productivity and delivery stability of the core components of Weiling new energy vehicles, and more calmly cope with the new round of "blowout" in demand.
The production line put into operation this time once again leads the industrial development with many highlights such as "flexible production, traceability and high degree of automation". The production line can realize the agile and rapid change of multiple products in the whole production process; Based on the two-dimensional code, the process parameters of the assembly process are accurately traced; Up to 93% of the automatic production ratio greatly improves the production efficiency and quality assurance. With the support of strong manufacturing capacity, Weiling Anqing Base is expected to reach the goal of 1 million electric compressors, 1.2 million EPS steering motors and 200,000 driving motors every year after the completion of capacity climbing in late February.
As an important carrier of Midea Group’s strategic transformation, Weiling has set up R&D centers and cooperative institutions in Shanghai, Hefei, Anhui, Shunde, Osaka, Japan and the University of Sheffield, UK, in addition to its Anqing base, which was put into operation this time, so as to continuously improve the technical capabilities of core components of China new energy vehicle enterprises. Take the first electric compressor off the assembly line as an example. This product has the characteristics of "high speed, low noise and low power consumption", and it is mainly used by mainstream electric vehicle enterprises in Ideality, Tucki and Weilai. It is worth mentioning that in order to solve the pain points that affect the decision-making of end consumers, such as "slow charging and short battery life", Weiling Auto Parts took the lead in launching the industry benchmark product-the world’s first 800V silicon carbide (SiC)12,000rpm high-speed electric compressor. In 2023, products such as 800V electric compressor with CO2 environmental protection refrigerant will also enter the mass production stage, and Weiling auto parts will make more contributions to the industry towards the era of 800V ultra-fast charging.
Weiling auto parts focus on the incremental parts in the three major fields of "thermal management, electric drive and chassis execution system" of new energy vehicles, covering five product lines: electric compressor, drive motor, EPS steering motor, electronic oil pump and electronic water pump. Relying on the advantages accumulated in R&D personnel, patents and the "Anqing+Hefei" dual production base, Weiling Auto Parts is committed to becoming the core supplier of new energy vehicle parts in the world. When green and low-carbon development becomes a global consensus, the importance of new energy is further highlighted. As a "Fortune 500" technology company, Midea’s new energy has become an important "second engine". In addition to the core components of new energy vehicles, Midea has also set up a powerful new energy industry "matrix", which has provided a strong boost for Weiling Anqing Base to build a zero-carbon factory. Midea’s new energy map covers Hekang Xinneng, Kelu Electronics and Weiling auto parts under Midea’s industrial technology. Midea’s building technology iBUILDING digital platform has developed a comprehensive energy digital management system and Meiyun Intelligent SCADA energy management platform. From power generation to electricity consumption, from energy storage to energy conservation, from homes, parks to cities, the layout of Midea’s new energy in the field of comprehensive energy management has gradually become a forest.
2. What achievements did the company make in R&D in 2022?
Recently, IFI Claims released the list of the top 250 patent leaders in the world in 2022, and Midea Group ranked seventh in the world and first in China with 64,895 valid patent families.
Guided by the leading strategy of science and technology, Midea Group has always insisted on continuous investment in core technologies, promoted the transformation and application of technological achievements, and helped accelerate the transformation to a global science and technology group. By 2022, Midea Group has laid out more than 100,000 patents in nearly 50 countries or regions around the world, and the cumulative number of patents authorized has exceeded 80,000. In 2022 alone, Midea Group applied for more than 10,000 patents worldwide. With the diversified development of Midea Group, while focusing on upgrading ToC business stock, it will realize incremental creation for ToB transformation. According to the third quarterly report in 2022, Midea’s building technology business increased by 22.65% year-on-year, and its digital innovation business increased by 37.3% year-on-year.
Focusing on the business development in the ToB field, Midea is accelerating the patent protection and reserve in the new technology field: Building Science and Technology Division, Industrial Technology Business Group and Robotics and Automation Division have applied for more than 20,000 patents, including more than 10,000 invention patents, and the patent applications are distributed in 32 countries or regions around the world; More than 10,000 patents have been effectively authorized, including more than 3,400 invention patents. The product technology covers multi-line machines, elevators, intelligent control, motors, compressors, chips, automobile parts and so on.
Based on the main axis of global breakthrough strategy, Midea Group has continuously laid out a global R&D network, continuously increased investment in scientific research and development, and laid out and invested in new cutting-edge technologies. In the past five years, the R&D expenditure has exceeded 50 billion yuan, and since 2020, the company’s annual R&D investment has exceeded 10 billion yuan. Up to now, Midea Group has 35 R&D centers in 12 countries around the world, forming a "2+4+N" global R&D network. By integrating the local resources of the R&D center, accelerating technical research and realizing localized development, the global R&D scale advantage has been established. At present, Midea has over 18,000 R&D personnel, including over 500 foreign senior experts.
Facing the future, Midea Group will strengthen technological innovation, continue to invest to form technical barriers, strengthen intellectual property protection, promote the all-round development of the five main business sectors, and empower the industry to make technological progress. At the same time, it will constantly consolidate and improve the ability of global breakthrough, and keep moving forward on the road of transformation and upgrading to a technology group driven by technological innovation.
3. I am concerned that the building technology and industrial technology business group under the company participated in the 2023 American Refrigeration Exhibition. Can you introduce it?
On February 6-8, 2023, AHR was held in Atlanta, USA. As one of the largest professional exhibitions in the field of HVAC in the world, AHR has provided product display and technical exchange opportunities for more than 1,800 enterprises in the industry.
Among them, Midea Building Technology, adhering to the concept of "leaving complexity to beauty and making users simpler", presented at the exhibition with comprehensive Air to Air and Air to Water heat pump solutions. Air to Air includes ——Atom X, the latest small multi-connected product of Midea Building Technology for the American market, which can be connected with gas stoves to bring efficient and comfortable heating experience to families. Air to Water includes M thermal Arctic Split, Swimming Pool Heat Pump, Sanitary Hot Water Heater and commercial heat pump products suitable for various commercial scenarios. Midea Building Technology’s HVAC solution integrates the functional requirements of refrigeration, heating, domestic hot water and floor heating, providing users with diversified and one-stop solutions.
As a supplier of system-level solutions for the core components of consumer appliances, GMCC gmcc and Welling Weiling, subsidiaries of Midea Industrial Technology, have made their debut with "multi-scene, full coverage" products and solutions such as American ventilator, light commercial air conditioner, window machine air conditioner, refrigerator, heat pump hot water, vehicle thermal management, etc., and helped the HVAC refrigeration market to move towards high efficiency, low noise, high reliability and green upgrade with the world-leading innovation, manufacturing and supply capabilities. For the appearance of AHREEXPO 2023, GMCC & Welling will explore more localization in the North American market, and establish a deeper "connection" with customers and consumers through "technology-product-delivery-service", and finally strive to become the world’s leading and trustworthy system-level solution provider for core components of consumer appliances.
GMCC & Welling demonstrated the products and solutions of air-conditioning compressors, refrigerator compressors, motors, heat pumps and other products with the capability of "multi-scene and full coverage" at AHR Expo 2023. Among them, R454B fixed-speed scroll compressor, ECM air-conditioning motor and AC air-conditioning motor lead the development trend of household air-conditioning in terms of "high efficiency, low noise and high reliability": R454B fixed-speed scroll compressor: operating efficiency, low noise, oil circulation rate and other parameters are in the leading position in the industry, and it can provide core power for residential or commercial air-conditioning with a capacity of 1.5-5 tons; In addition, the product uses R454B refrigerant to meet the market refrigerant policy and environmental compliance requirements.
ECM air-conditioning motor: Based on FOC vector driver, it can realize 45 dB quiet operation, and lead the DC trend of air-conditioning motor with high stability and 85% efficiency; Equipped with surge protection function of up to 6000V and electrical module with full gasket, it can provide more simplified configuration experience for customer terminal products. AC air-conditioning motor: It adopts coiled plate shell and enameled wire technology with electrical corrosion resistance, and its performance is stable and reliable; Three sizes of 42Frame, 48Frame and 56Frame are available, which fully meet the customer’s demand for differentiated configuration of the whole air conditioner; Among them, 56Frame products can also provide two kinds of drive options: variable frequency drive (VFD) and non-variable frequency drive. In the North American market, GMCC & Welling can provide customers with high-performance products, including rotary compressors for air duct machines, scroll compressor for light commercial air conditioners, R290 heat pump water heater compressors, enhanced vapor injection rotary compressors for heat pump heating, reciprocating compressors for refrigerators, window air conditioners, rotary compressors for vehicle thermal management, and rotary compressors for touring cars.
Facing the differentiated needs of customers in different application scenarios, GMCC & Welling takes the product system as the advantage, organically integrates different categories of products and technologies to form a system-level solution, and realizes the full coverage of multiple application scenarios such as household, light business, water heater and vehicle in the North American market. Taking R290 heat pump water heater compressor as an example, high efficiency, environmental protection, frequency conversion, digital intelligence, miniaturization and personalization have become the general trend of terminal product upgrading. Only providing customers with a single and high-performance heat pump compressor can no longer meet the needs of customers in the current complex market. GMCC & Welling organically combines compressor, motor, circulating pump and other components to create an overall solution of heat pump, bringing 1+1+1>3 effects to applications such as heating and water heaters. With the development of global supply chain towards multi-center and inshore, GMCC & Welling’s advantages in diversified procurement and manufacturing layout appear. GMCC & Welling relies on the advantages of core technology, innovative R&D team and strong supply chain system to arrange production and R&D centers in many places around the world to meet the decentralized, flexible and stable delivery needs of customers to the maximum extent.
For example, GMCC & Welling’s factories in Dacheng, Thailand, Baton Thani and India have been put into production and will radiate to Southeast Asia and the global market. The factories and R&D centers in Brazil and North America have also been included in the global layout plan. In order to be closer to the market and meet the needs of customers, GMCC & Welling will adhere to localized management and closely combine the cultural and economic characteristics of the local market to optimize targeted services; At the same time, we will join hands with our partners to further strengthen the pre-sales and after-sales technical support capabilities, and finally "feed back" innovative R&D and product iteration with market feedback closer to consumer demand, laying a good foundation for promoting and realizing the "global breakthrough" strategy. At present, based on the domestic market, GMCC & Welling is gradually achieving a global breakthrough. In 2022, GMCC & Welling led the global green refrigerant substitution process with over 19 years of R290 technical preparation and layout. The overall solution of heat pump further improves the high efficiency and low noise performance of heat pump products; The air-conditioning products adapted to GMCC R454B new high-efficiency compressor with environmental protection refrigerant were awarded the world’s first AHRI "high-efficiency product certification". In the future, GMCC & Welling will aim at intensive development on the premise of technological innovation and accumulation, provide the source power for the development of the global heating, ventilation and refrigeration market, adhere to the principle of "technology drives everything", and contribute to the high-quality, green and sustainable development of global household appliances and manufacturing industries.