Dear colleagues, August 10 marks the half-year anniversary of Chunhui Intelligent Control's successful IPO on the Shenzhen Stock Exchange Growth Enterprise Market, and this year also marks the twentieth anniversary of the founding of the joint-stock company.
Twenty years of hard work and perseverance, it is precisely because all colleagues have always remembered our original mission, always practiced the “diligence and integrity” culture established by Chunhui's founder Mr. Yang Yanrong—“based on diligence, treat people with sincerity”—and the principle of courageous responsibility, always worked as a team to overcome obstacles and expand our territory, that we have come this far. For this, I sincerely thank everyone for your hard work on behalf of the board of directors! I also extend heartfelt thanks to all sectors of society for their attention and care!
Twenty years of flourishing growth, at this important moment, I would also like to address the post-listing operation principle of “harmony without uniformity”.Energy control, automotive electromechanical, heating technologyUnder the structure of three major industrial sectors, I would like to provide some explanation and clarification regarding the “re-entrepreneurship” strategy for the decade from 2021 to 2030!
Company culture:Based on diligence, treat people with sincerity! In work, be proactive; in conduct, be honest and respectful!
Vision and mission:Intelligent control & valve experts! Cooperate and share with employees, customers, and society through innovative and efficient management!
Centennial Chunhui:This dream means that the vision and breadth of managers determine the boundaries of our business growth! Establish a talent ladder program, cultivate team and organizational capabilities, aiming for high “efficiency” and strong “vitality”, to build a long-lasting enterprise that does not rely on individuals!
Values: Adhere to values of valuable and sustainable development, with professional subsidiaries (business units) under a flat organizational structure, aiming to achieve leadership in the industry; leading profitability among peers; three unique management goals with distinctive competitive capabilities! Based on a long-term business philosophy, we need to transform from traditional mechanical, processing and assembly diversified industries to intelligent control IoT and precision electromechanical related industries, and from traditional full production chain manufacturing to a flat, digital, flexible intelligent manufacturing management model!
We are already a publicly listed company, so please be sure to manage according to the spirit of the rule of law and the principle of respecting employee dignity. “The spirit of the rule of law” means managing with the awareness that “company systems and processes are more important than the boss or leaders!” and strictly implementing this at the middle and grassroots levels! A key distinction between rule of law and rule of man is that managers must strictly fulfill their duties and act under the guidance of systems and process norms. Rule of law means that every manager, regardless of authority, should first be responsible for their own duties, not just to their leaders. Managers must cultivate this spirit of rule of law and professional ethics, and be able to consciously perform supervisory and supervised functions under lawful governance, to effectively avoid company bureaucracy, inefficiency, small interest groups, and rigid stagnation.
Chunhui lean manufacturing management model(CPM, CHUNHUI Production Management, is a management model that draws on and learns from Japan's lean philosophy and the American innovation system, integrating them into management practices within the Chinese environment). Based on a long-term business perspective, we will continue to adopt the Chunhui lean manufacturing management model to achieve the strategic goal of improving management levels while also enabling technological upgrades and industrial transformation.
We should aim forHigh-qualityproducts and employees,High-efficiencyoperations and decision-making,Humanizedmanagement and environment as our goal, reducing costs, lowering inventory, decreasing accounts receivable, streamlining positions that do not create value, cutting unnecessary red tape and processes, and eliminating all unnecessary waste...
High-quality, we often say in public that Chunhui Smart Control produces two types of products: one is high-quality products for market customers, which is the foundation for the survival and development of the enterprise. The other is high-quality employees for society, which is the company's responsibility as a social organization. We firmly believe that as long as CPM is continuously implemented, high quality and low cost can be achieved.
High-efficiency, shareholders entrust funds, equipment, land, factories, etc. to the management team, but why do some enterprises thrive for generations while others are on the verge of collapse? The most critical reason lies in whether the management's operations and decisions are “efficient”! We believe that asset-light and fast turnover, lean and flexible manufacturing, being industry No.1, innovation and pioneering, teamwork, unique core competencies, growth in per capita output, return on investment, total asset turnover, delivery capability growth, and revenue growth... these are all open quantitative and qualitative indicators that reflect high efficiency!
Humanized, all employees of Chunhui Smart Control are the main body of CPM, and the goal of management is to bring outemployees'creativity and potential. Therefore, adopting humanized management and cultivating a humanized working environment can first enhance employees' work enthusiasm and initiative, and at the same time stimulate their creativity and willpower. In a humanized team, company, and society, personal goals are highly aligned with company goals, and personal interests are highly consistent with company interests and social responsibility! Therefore, humanization should be one of the purposes and goals of implementing CPM.
3x Speed Plan (X³) I believe that the two fastest ways for Chinese private enterprises to fail are: first, blindly and unrealistically pursuing large scale, thus creating a “false, big, and empty” management atmosphere; second, having too many management layers leading to bureaucracy and excessive diversification, resulting in inefficient management operations, scattered resources, slow response, and stagnation. Therefore, we will establish team spirit, self-renewal genes, and growth resilience to enhance the company'svitalitythrough a special management action plan that doubles the speed of response and improvement, doubles the intensity of collaborative innovation, and doubles the breadth of risk prevention, thereby proactively breaking the shackles of layer-by-layer innovation and various barriers to self-development! Compared with quantifiable “efficiency,” the most obvious impression of “vitality” is that it cannot be touched but can be truly felt, just like air is to humans and water is to fish. The vitality index, composed of teamwork, self-renewal, and growth resilience, in fact also belongs to the category of the company's business atmosphere, legal environment, and corporate culture background. With the accumulation of time and management experience, these will gradually evolve into the company's genes and have a positive impact on improving the company's operational efficiency and management capabilities!
Teamwork is the organizational spirit manifested by a positive and open humanized cooperative atmosphere such as team cohesion, smooth information flow, and honest communication. Teamwork first respects individual personality and specific division of labor, pays attention to and actively encourages the development of their potential and creativity; at the same time, as a team organization, it should further unify goals, integrate resources, and establish strategies and action plans through cooperation based on division of labor to form consensus. Although the spirit of teamwork in an organization cannot be quantified with specific numbers, we can indeed “see” it in three aspects of internal team cooperation: whether morale and cohesion are high, whether internal and external information flows freely, and whether communication among members is smooth!
Self-renewal It refers to the team organizational gene composed of management awareness or habits of innovation, continuous learning, and transformation and upgrading, which is the potential for team organizational development. From potential to actual capability, carrying excellent chromosomes of innovation and self-improvement means the vitality of this organizational life form is continuously enhanced, and thus the time and space of organizational life will also be constantly expanded and extended.
Growth under pressure refers to the company's management team improving profitability, growth and expansion, and optimizing personnel structure through its own growth, and more broadly, proactively preventing various risks to reduce the company's financial, legal, customer, supply chain, and social responsibility risk pressures. This self-growth ability mostly depends on the management experience of employees and teams; a fast-growing management team means enhanced management strength and the ability to resist internal and external risks.
We will continue to adhere toCPM和3Double speedAs a lever, we will proactively embrace the arrival of the irreversible new era of “digitalization, platformization, and IoT technology”!
Tiered Talent Program(Elite Team Project) is Chunhui Smart Control's self-renewal strategic system for planned, purposeful, organized, and systematic talent selection, cultivation, and appointment, aimed at the dream of “Centennial Chunhui.” We all know that employees are the most expensive resource in a company, and managers even more so, and they are also the fastest depreciating and most frequently needing replenishment. Achieving the “Centennial Chunhui” dream requires building a tiered management team, which takes years of accumulation and significant resource investment, but it may not take much effort to completely collapse it. Whether the company's goals can be achieved depends on the quality of management by managers, and also on how managers are managed. Moreover, how a company manages its employees and their work mainly depends on the management by managers and how managers are managed. The attitude of company employees primarily reflects the attitude of its management!
As managers“ character continuously improves, the company will keep developing. In other words: ”The operation of the company depends on the capacity of its managers.“ No matter how much you subjectively want to grow and improve the company, ”a crab only digs a hole according to the size of its shell," the level of enterprise development depends on the character of the operator, that is, the size of the operator's capacity! The greatest ability of a person is the ability to overcome oneself. To overcome oneself requires strong willpower. When evaluating the abilities of newcomers, the company should take willpower into account. Weak willpower, avoiding self-struggle, and always choosing comfort, such people's abilities are considered inferior. No matter how many good principles you have read or heard, it is meaningless without personal practice.
The tiered talent program is a strategy to build capabilities from individuals to teams and then to organizations. In the management cycle of rapid growth and expansion from 2021 to 2030, what restricts us from achieving our goals will not be capital, but high-quality, high-caliber managers and teams deeply versed in Chunhui's culture and strategy. It is they who build a dynamic organization, and this organizational capability will become our core unique competitive advantage. Therefore, the execution of the tiered talent program in implementation is extremely important!
As mentioned above, the breadth and vision of a leader determine the boundaries of career growth.。The elite team represented by tiered talents should become the main force to shoulder the dream of “Centennial Chunhui.” In the next decade, with innovation, expansion, acquisitions, and mergers as the main means of growth, these warriors and commanders will be the main force to conquer new territories and create greater value; they are a bridge to the other shore!
In order to continuously achieve performance growth, team development, and business expansion goals, we will next focus our management improvement efforts onCapability enhancement和Investment in innovationAbove. On one hand, we will focus onPeople and organization、Product and service、Vitality and innovationThree capabilities.
On the other hand, we will achievetechnological innovation、and investment integrationto achieve growth, development, and expansion. Although we have successfully gone public, our responsibilities and pressures have increased. We will face more shareholders and social responsibilities, and all decisions and actions must be legal, transparent, and open. Therefore, regarding how to use money, or in other words, invest, we should establish an open and cautious investment policy. Generally speaking, the targets and purposes of investment must comply with the following principles:
A.Enhanceour own competitive capabilities,These capabilities include R&D technology, manufacturing and production, sales development, and customer service. Therefore, we can invest in equipment and instruments, talent acquisition, market expansion, and lean management to improve these comparable advantages.
B.Consolidateour competitive advantages,In industries where we already have advantages, although we are leading, the gap is not large. Therefore, we will continue to make expansionary investments in R&D innovation, new markets, new regions, and new management in this field, to set higher standards and build moats, thereby widening the gap with competitors and maintaining our leading edge.
C.RelevantlyExtensionExpansion,As a function of the capital market, its greatest benefit is the ability to consolidate a leading position and expand advantageous industries through joint ventures, acquisitions, and mergers of upstream and downstream industries in the same sector. Therefore, we actively encourage extension and expansion in this manner.
D.TechnologyUpgradeExtension and expansion,Since our electromechanical industry is still relatively traditional, and the technical difficulty of control valves is also at a lower level, technological upgrading is one of our strategic priorities. We encourage investment in higher-end new technologies, new processes, and new trend areas within the industry, such as sensing IoT, control systems, and data software services.
E.Horizontal industryTransformation，When the original industry reaches a saturated state, we encourage seeking and investing in related, horizontal, emerging, sunrise, and blue ocean industries, such as environmental protection, utilities, and smart cities.
Everyone, although our strength has greatly increased after going public, we are still a small company. Please be sure to remain vigilant in times of peace, stay humble and low-key, be down-to-earth, and manage diligently with innovation and pioneering spirit. Because, in reality, there are still many shortcomings in our management. For example, our compensation system still lacks competitiveness in keeping up with the times; innovation and R&D resources of each product group remain scattered and inefficient; multi-location factories still need practical experience and accumulation; talent pipeline development and investment need a long-term perspective; local parochial thinking is still serious; we lack experience in the third type of acquisitions and mergers; our efforts in international expansion are still insufficient; the quality and vision of senior management need continuous improvement; and there is much room for improvement in information flow and execution from the top to the grassroots... These are all areas where we need to systematically improve our management in the near future.
Facing the unprecedented new challenges and new journey of 2021-2030, we should embrace an open mindset and tenacious will to strive and forge ahead for a “second entrepreneurship”! “Openness” means freedom, an infinite possibility and potential power, a state of readiness for growth; it means flexibility and inclusiveness, and the willingness to make changes for one's dreams and values! “Tenacity” is the courage to continue acting and persist in the face of pain, anxiety, fear, disappointment, and other costs for the sake of growth, while also being prepared to endure contempt, ridicule, and sarcasm from others, and having the determination and confidence to face loneliness. “Endeavor” is the faith to carry forward the pioneering spirit and corporate culture of our predecessors, to forge ahead for the dream of “a century of Chunhui,” and to advance with unyielding determination!
Twenty years have passed in the blink of an eye. Chunhui's yesterday has already been written in the history of the company's development; Chunhui's today is being created by all employees; Chunhui's tomorrow will surely be even better!
Finally, on behalf of the Board of Directors, I promise all employees that our management team is determined to firmly implement the 2021-2030 strategy and is willing to accept the supervision and suggestions of all Chunhui Smart Control employees! Once again, I would like to express my heartfelt thanks to all employees—you are our most trustworthy partners!
Zhejiang Chunhui Intelligent Control Co., Ltd.
Chairman
2021-8-6