The output data provides a more accurate reflection of the company’s operational status. In January and February, the company produced 10,137 units and sold 5,226 units, while the Group produced 10,346 units and sold 9,793 units during the same period. The Group’s production and sales figures include heavy trucks (as reported by the company) as well as medium- and heavy-duty trucks. Due to the limited output of heavy-duty trucks within the group, the production volumes between the company and the Group are largely comparable. However, the sales figures differ because of variations in data collection methods: the Group uses outbound shipment data, whereas the company relies on billing records. Since heavy trucks often go through a conversion process before reaching customers—ranging from one week to a month—this leads to significant discrepancies between the two sets of data. As the company produces strictly based on orders, its output better reflects its current operational performance. Engineering orders have been a key driver behind the company’s recent production and sales growth. Following the Spring Festival this year, the company has seen an increase in dump truck orders, with approximately 80% of these coming from construction projects. Only about 20% of the orders come from the logistics sector. Historically, engineering orders accounted for around 40%, while logistics orders made up the remaining 60%. According to industry practices, construction projects typically begin within 3 to 6 months after the start of the project phase. This construction cycle is expected to drive demand for specialized vehicles, suggesting that the heavy truck industry will maintain strong performance in the second half of the year. The company's financial performance remains stable. After the implementation of three national standards on July 1, 2008, the industry experienced a sharp decline. However, the Group’s cost advantage in EGR (Exhaust Gas Recirculation) products helped it gain significant market share. From January to February 2009, the Group’s market share rose from 21% in 2008 to 34%. The Group’s production capacity was designed conservatively, with a normal annual capacity of 100,000 units. During periods of high demand, the Group often struggled to fulfill all orders, leading to a temporary drop in market share. For example, in the first half of 2008, the Group’s market share was only 18%. However, when the market entered a downturn, the Group’s production and sales fluctuations were much smaller compared to the industry average. Based on the current size of the heavy truck market, the Group operates at around 90% of its capacity, which is considered the lower limit of its utilization rate. For more insights: China National Heavy Duty Truck Breaks Monthly Sales Record for National Heavy Truck Industry

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