HK000KL3_Short

19 April 200719 April 2007HK000KL3

2006 Annual Results2006 Annual Results

HK000KL3_Short

I 、 PRC Auto Industry in 2006 I 、 PRC Auto Industry in 2006

II 、 DFG 2006 Business Overview II 、 DFG 2006 Business Overview

III 、 DFG Financial Performance in 2006III 、 DFG Financial Performance in 2006

IV 、 Outlook of DFG and PRC Auto Industry in 2007IV 、 Outlook of DFG and PRC Auto Industry in 2007

HK000KL3_Short

I. PRC Auto Industry in 2006I. PRC Auto Industry in 20061. Rapid Growth of PRC Auto Industry

2. PRC Auto Industry Position in the Global Market

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Rapid Growth of PRC Auto Industry Rapid Growth of PRC Auto Industry

5,072

5,758

7,216

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2004 2005 2006

3,271

5,1763,971

0

2,000

4,000

6,000

2004 2005 2006

PRC Total Vehicle Sales VolumePRC Total Vehicle Sales Volume

Growth rate:

25.32%

PRC Total PV Sales VolumePRC Total PV Sales Volume11

Growth rate:

30.35%

000’ units000’units

PRC Total CV Sales VolumePRC Total CV Sales Volume

2,0401,7871,801

0500

1,0001,5002,0002,500

2004 2005 2006

Growth rate:

14.16%

000’units

China Association of Automobile Manufactures (CAAM)China Association of Automobile Manufactures (CAAM)Note1Note1 ：： According to CAAM’s segmentation, passenger vehicles include passenger car, MPV, SUVAccording to CAAM’s segmentation, passenger vehicles include passenger car, MPV, SUV and and cross-over vehiclescross-over vehicles

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PRC Auto Industry Position in the Global Market

PRC Auto Industry Position in the Global Market

2001 2002 ……

2004 2005 2006

1 US

1747

US

1714

……

US 1730

US 1700

2 Japan 581

Japan

578……

Japan 585

Japan 585

China 721

3 Germany 364

Germ any 352

……China 512

China 575

4 UK 277

China

338

5 France 275

6 Italy 269

7 China 244

China Has Become the World’s 2nd China Has Become the World’s 2nd Largest Auto Consumption MarketLargest Auto Consumption Market

Steady Increase of PRC Auto Global Market Steady Increase of PRC Auto Global Market Share Share

0000’ units

4. 30%

5. 70%

7. 40%8. 10%

9. 00%

11. 00%

0. 00%

2. 00%

4. 00%

6. 00%

8. 00%

10. 00%

12. 00%

2001 2002 2003 2004 2005 2006

market share

Global Market Share of PRC Auto IndustryGlobal Market Share of PRC Auto Industry

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II. DFG Business Performance in 2006II. DFG Business Performance in 20061. Business Continued to Maintain Strong Growth Momentum

2. Sales and Market Share of DFG in Different Segments

3. Rapid Growth of PV business

4. Business Promoted by Constant Launch of New PV Models

5. Steady Production Expansion Plan

6. Continuous Rise of Local Content Ratio

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Business Continued to Maintain Strong Growth Momentum

Business Continued to Maintain Strong Growth Momentum

423

595

751

0

100

200

300

400

500

600

700

800

2004 2005 2006

177

351

495

0

100

200

300

400

500

600

2004年 2005年 2006年

In 2006,the Company’s total sales reached 751,000 units, representing a YoY growth of 26.26%, among which PV business achieved rapid development while the CV sector grew steadily.

Rapid development of PV Rapid development of PV BusinessBusiness

Steady Growth of Aggregate Steady Growth of Aggregate SalesSales

Steady growth of CV businessSteady growth of CV business

000’ units

246 244256

0

50

100

150

200

250

300

2004年 2005年 2006年

Growth rate:

26.26%

Growth

rate:

40.94%

Growth

rate: 5.1%

000’ units

000’ units

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594. 8

351. 2

297. 9

18. 8

34. 5

243. 6

210. 1

71. 7

55. 9

82. 6

33. 5

751

495

438

23. 5

33. 3

256

218

67

50

101

38

0 200 400 600 800

total

PV

sedan

MPV

SUV

CV

Truck

Heavy truck

Medi um truck

Li ght truck

Bus

2005 2006

■ 13.1% ■ 12.4%

■ 10.6% ■ 9.7%

■ 24.8% ■ 28.8%

■ 21.8% ■ 30.3%

■ 12.5% ■ 13.8%

■ 12.5% ■ 13.6%

■ 14% ■17.6%

■ 12.3% ■12.1%

■ 11.4% ■ 10.7%

■ 9.6% ■ 8.8%

■ 10.4% ■ 10.3%

000` unit

Sales and Market Share of DFG in Different Segments

Sales and Market Share of DFG in Different Segments

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Rapid Growth of PV business Rapid Growth of PV business

26,244

63,373

0

50,000

100,000

2005 2006

Dongfeng Honda Automobile Co., LtdDongfeng Honda Automobile Co., Ltd

Growth rate:

141.48%

140,399201,318

0

200,000

400,000

2005 2006

Growth rate:

43.39%

Dongfeng Pegeot Citroen Automobile Dongfeng Pegeot Citroen Automobile Co., LtdCo., Ltd PSA Peugeot Citroën

184,576230,155

0

200,000

400,000

2005 2006

DDongfeng Motor Company Ltdongfeng Motor Company Ltd

Growth rate:

24.69%

The Company’s rapid PV growth in 2006 benefited from strong PV performance of its three major JCEs.

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Business Promoted by Constant Launch of New PV Models

Business Promoted by Constant Launch of New PV Models

New Models were Well-received by the New Models were Well-received by the MarketMarket

Selection of Newly Launched PV Models Selection of Newly Launched PV Models in 2006in 2006

20062006

New 307

New TEAVA

Dongfeng Peugeot 206

Civic

C-Triomphe

车型

Sylphy

C2

Livina Geniss

Colle

ctio

n of

new

PV m

odel

sDongfeng Peugeot Citroen

On March 6th, Dongfeng Peugeot 206 was launched to the market.

On May 16, improved Dongfeng Peugeot 307 with brand new CMS technology was launched

On April 28, Dongfeng Citroen C-Triomphe rolled off the production line and on May 28, the first batch were delivered to customers.

In October, Dongfeng Citroen C2 was launched

Dongfeng Nissan

On April 20, new Teana equipped with Nissan’s new 2.0L engines was launched to the market and began to participate in the 2.0L PV sub-segment competition

On August 24th, Dongfeng Nissan Sylphy went to market

In October, brand new MPV Livina Geniss made its global debut in PRC market

Dongfeng Honda

On April 22, newly launched Honda Civic simultaneously went on sale in 81 Dongfeng Honda dealer shops with positive market response.

Mor

e ne

w m

odel

s to

be

laun

ched

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Steady Production Expansion PlanSteady Production Expansion Plan

320

425

320

625

413

820

0

100

200

300

400

500

600

700

800

900

CV PV

2005A 2006A 2008E

Comparatively High Level of Comparatively High Level of Production Utilization RateProduction Utilization Rate

Steady Production Expansion Plan

716 745

945

422.4

598.2

756.3

59%

80.30% 80.03%

01002003004005006007008009001000

2004 2005 2006

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

product i on capaci ty product i on ut i l i zat i on rate

DFG Production Capacity and Utilization RateDFG Production Capacity and Utilization Rate

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Constant Increase of Utilization RateConstant Increase of Utilization Rate

Utilization Rate of Major PV Utilization Rate of Major PV ModelsModels

55. 00%60. 00%65. 00%70. 00%75. 00%80. 00%85. 00%90. 00%

2005 2006 2007 2008

206 C2和 C- Tr i omphe TEANA TI I DA DF Honda

In 2006, localization rate of auto products manufactured by Dongfeng Honda reached 75%, and expects to reach 80% in 2007;

Localization rate of all PV models expects to increase by another 5-10% in 2007;

General Situation of DFG’s Utilization General Situation of DFG’s Utilization RateRate

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III. 2006 Financial PerformanceIII. 2006 Financial Performance

1. Steady Growth of Major Business

2. Stable Growth of Gross Profit Margin

3. Continuous Improvement of Profitability

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Steady Growth of Major BusinessSteady Growth of Major Business

Composition and Proportion of Sales RevenueComposition and Proportion of Sales RevenueIncreased Sales RevenueIncreased Sales Revenue

41, 73548, 264

0. 00

10, 000. 00

20, 000. 00

30, 000. 00

40, 000. 00

50, 000. 00

60, 000. 00

2005 2006

1系列

Million RMB

15.64%

Million RMB

27915 342191321512989

0

20000

40000

60000

2005 2006PV CV

48234482344173541735

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Stable Growth of Gross Profit Stable Growth of Gross Profit

6,096

8,206

14.6%

17.0%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2005 2006

0%

4%

8%

12%

16%

20%

GP GP Margin

15.8%18.9%

0.0%

10.0%

20.0%

2005 2006

PV Gross Profit MarginPV Gross Profit MarginDDFG Overall Gross Profit & Gross Profit FG Overall Gross Profit & Gross Profit MarginMargin

CV Gross Profit MarginCV Gross Profit Margin

11.3% 12.0%

0.0%

10.0%

20.0%

2005 2006

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Continuous Improvement of Profitability

Continuous Improvement of Profitability

16012081

3.84%

4.31%

0

1000

2000

3000

2005 2006

3.50%

4.00%

4.50%

Net Profi t NP Margi n13. 12%

14. 56%

8. 00%

13. 00%

18. 00%

2005 2006

Improved ROEImproved ROE

Increased Net Profit and NP Increased Net Profit and NP MarginMargin

EBITEBIT

EBI TI RMB Mi l l i on

2670

3030

24002500260027002800290030003100

2005

EBI T（百万元）

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IV. Growth ProspectIV. Growth Prospect1. Growth Prospect of PRC Auto Industry in

2007

2. Growth Prospect of DFG

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Growth Prospect of PRC Auto Industry in 2007

Growth Prospect of PRC Auto Industry in 2007

8,500

7,216

0

2,000

4,000

6,000

8,000

10,000

2006A 2007E

6,300

5,176

01,000

2,0003,000

4,0005,000

6,0007,000

2006年 2007年预测

PRC PV sector will maintain a fast PRC PV sector will maintain a fast development momentum, with a growth development momentum, with a growth

rate of 21.72%rate of 21.72%

AAccording to industry forecast made by ccording to industry forecast made by CAAM, PRC auto sales will continue to grow CAAM, PRC auto sales will continue to grow

by 17.8%by 17.8%

PRC CV sector will develop steadily, with PRC CV sector will develop steadily, with a growth rate of 7.85%a growth rate of 7.85%

17.8%

2,2002,040

0

500

1,000

1,500

2,000

2,500

2006 2007E

21.72%

7.85%

Source: Forcast of China Association of Automobile Manufactures (CAAM)

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Sales Arrangement of DFG in 2007Sales Arrangement of DFG in 2007

Measures to be TakenMeasures to be TakenSales TargetSales Target

PV Business ：DFG major JCEs will launch no less than 4 new PV models;Further improve localization rate and reduce cost through advancement of technology, management and central procurement, so as to improve competitive edge of our products in the market.

CV Business ： Strengthen marketing of newly launched models and safeguard competitiveness of old models so as to enhance our products’ competitiveness in their respective segment

In 2007, the Company aims to In 2007, the Company aims to achieve an aggregate sales achieve an aggregate sales of 900,000 – 950,000 units, of 900,000 – 950,000 units, with thewith the composition of PV and CV composition of PV and CV market market weights of 7:3weights of 7:3

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Thank You