I. Overview In 2017, the company's management layer adhered to the decision-making of the board of directors, adhered to the business philosophy of "reputation, efficiency, quality, execution", guided by the market, implemented innovation-driven innovation, improved the innovative development system for production, education and research, and vigorously promoted the fundraising. Investment in project construction, improvement of industrial layout, continuous optimization of internal management, and promotion of transformation and upgrading of new materials industry. During the reporting period, the company achieved operating income of 1,532,773,223.28 yuan, an increase of 58.93%; net profit attributable to shareholders of the parent company was 230,945,985.08 yuan, an increase of 67.88%. The company's economic benefits have been steadily improved, and its profitability and sustainable development capabilities have been further enhanced.
The key work of the company is as follows:
(I) Promoting the construction of gem-quality diamonds in an orderly manner Accelerating project construction is an effective means for the company to deepen the main business of superhard materials, optimize business structure, and improve quality and efficiency. During the reporting period, the company strengthened its results-oriented project management policy according to production targets and business plans, vigorously promoted the construction of gem-quality diamond projects, implemented key job responsibility systems, and established and implemented leadership-led weekly duty and supervision. The investigation mechanism will strengthen the whole process management of investment projects, strictly promote project construction, and improve the level of investment management. As of the end of the reporting period, the raised funds have invested 1.309 billion yuan, the first phase of the project has been completed, and the first phase of the installation has been put in place; the construction of some of the workshops in the second phase has been completed.
(II) Taking the opportunity of relocation to accelerate industrial integration The company took the opportunity of relocation of the original factory and made every effort to link project construction, technological innovation and upgrading, and realize the company's regional development strategy. During the reporting period, the company set up a relocation command team to be responsible for the overall organization, equipment relocation and personnel resettlement of the plant area according to the relocation project plan, and formulated a series of overall efficient disassembly and assembly measures, logistics transportation and operation processes to ensure efficient relocation of the relocation work. Steady implementation. Nearly 1,200 trips completed the dismantling and transportation of machines and equipment in the original production plant area, and the buildings and structures on the ground in the original factory area are currently being cleaned up. The company will further plan the industrial layout, optimize the integration of Zhengzhou, Jiaozuo, Shangqiu, Luoyang and other production base resources, and vigorously develop new materials and products such as large single crystal diamond and diamond single crystal around the development direction of the enterprise, and accelerate industrial integration and product layout.
(3) Expanding the gem-quality diamond market and strengthening the consumption-side layout company attaches great importance to the expansion of the application of large-crystal single-crystal diamond products, and expands into the emerging industries and consumption-side on the basis of deep-cultivation of traditional industrial applications, fully exploiting the value of large-crystal single-crystal diamond products, based on The gem-quality diamond project has been steadily put into production, actively exploring the "Internet + Diamond Jewelry Open Platform" business model, and through the introduction of design teams and brands through self-created, strategic cooperation and mergers and acquisitions, accelerate the comprehensiveness of the company's products in the consumer market. layout. During the reporting period, Huajing Brand – “Mutika†Jewelry Experience Center opened in Zhengzhou High-tech Enterprise Accelerator Industrial Park; the company cooperated with Ariel Jewelry (formerly Dali Jewelry) to establish a brand experience store in Zhengdong New District of Zhengzhou. In order to better promote brand building, the company set up a "brand center" in the Twin Towers of Zhengzhou Landmark Greenland Center, established a new generation of fashionable luxury jewellery brand B&R, and handed in the semi-finished association of Shenzhen Jewelry Chief Designers Association to give full play to the resource advantages of all parties. Helping to foster the development of the diamond industry.
(4) Deeply implement innovation drive, increase R&D and technical cooperation, and tap the industry's new kinetic energy company to implement the innovation-driven development strategy in depth, to improve product quality as the core, and focus on the research and technology accumulation of “diamond basic performance and functional applicationâ€. Continue to increase R&D investment and technical cooperation.
1. During the reporting period, the company cooperated with the Optoelectronics Research Institute of the Chinese Academy of Sciences and signed a cooperation framework agreement. Through the joint construction of the "Hujing Diamond Laser Application Engineering Center", the resources were integrated to form complementary advantages of technology, products and channel resources. Improve the use of diamond materials in the fields of optics, semiconductors, and new energy.
2. During the reporting period, the company successively established production, technology research and development, talent training cooperation relations with Jilin University, Zhengzhou University and Zhengzhou Aviation Industry Management College, and hired many industry experts to serve as senior consultants to promote technology through intellectual cooperation. Industrialization of results will further enhance the company's core competitiveness.
3. During the reporting period, the company added 50 new patents, including 9 invention patents; the company participated in the formulation of two national standards, “Superhard Abrasive Particle Size Inspection†and “Super Hard Abrasive Impact Toughness Determination Methodâ€, and 2017 Implementation began on May 1st.
(V) Strengthening the target and performance management, and improving the company's management and control capabilities During the reporting period, the company continued to optimize internal control on the one hand, and promoted goal-oriented planning control and planning through regular and irregular meetings and general manager's office meetings. Performance management of operations, process control, management innovation, and efficiency monitoring, based on the business model of "business unit + administrative management and service system", implements the target responsibility operation mechanism for each business unit. The company has organized and revised the "Performance Supervision System", "Performance Management Procedures" and "Financial Budget Implementation Rules" and other documents, improved the seal management regulations, and strengthened the standardized management of business cost control and financial planning. At the same time, by inviting experts from the industry to give special lectures, we will carry out multi-angle and multi-dimensional training for the actual needs of employees at all levels, and establish a more precise organization management and talent management system. On the other hand, improve the internal control system of investment projects and optimize the operation process, promote technological upgrading and lean management, and strengthen the technical skills of production system technical management team and quality management team on the basis of strengthening the upgrading and improvement of numerical control equipment and improving the work flow. And the training level of management level, holding a system skill contest, to stimulate employee kinetic energy.
(VI) Strengthening the building of party organizations and creating a harmonious corporate culture Enterprise organization and cultural construction are important contents for the survival and development of the company. The company organically integrates party building into the company's various management and corporate culture shaping, solidly carries out party organization construction, gives full play to the party's leading role in enterprise development, continues to inherit Huajing corporate culture, and promotes the company's sustained and healthy coordinated development. In June 2017, after the company’s party branch research and report to the higher party working committee approved, the party branch of the company’s party branch was adjusted from the original two party branches to ten; through the organization of the study of the spirit of the 19th National Congress, etc. A number of special party class trainings, condense ideological consensus, promote the spirit of labor model and craftsmanship, promote the "two studies and one work" study and education, organize charitable donations and employee walks, and integrate the "one carat loyalty is greater than unlimited" creed. In the activities of knowledge and skill training, quality development training, etc., enhance the team awareness and team cohesion of employees.
Second, the core competitiveness analysis 1, core technology and R & D system advantages The company focuses on the super-hard materials industry, adhere to innovation-driven, market-oriented, to enhance product quality as the core, continue to increase R & D investment and technological innovation, through technology The organic combination of R&D and production technology, perfecting the technological innovation system of deep integration of production, teaching and research, accelerating the application of technology and products, and striving to create a collaborative innovation platform to promote the company's products to the emerging industries and consumption fields.
By the end of 2017, the company had obtained 312 authorized patents, including 34 invention patents, and 50 new authorized patents in 2017, including 9 invention patents.
In 2017, nine new invention patents were listed as follows: The two national standards for the “Superhard Abrasive Particle Size Inspection†and “Super Hard Abrasive Impact Toughness Measurement Method†formulated by the company were implemented on May 1, 2017.
2, stable and efficient management team and talent advantage The company adheres to the "one carat loyalty is greater than unlimited" corporate creed, has a value convergence, high loyalty, strong sense of responsibility, stable unity, young and efficient team, since its establishment, the core management team There have been no major changes to key technicians. Through the implementation of equity incentives and performance appraisal mechanisms, the company has created a working atmosphere with high enthusiasm, many development opportunities, strong cultural identity and endeavor, and fully mobilized the management team's subjective initiative and creativity to form a harmonious and good corporate culture.
3. Advantages of the industrial chain The company makes full use of the superior resources of all parties, accelerates the technological innovation of the enterprise, promotes the optimization and integration of the new material industry and the rapid and healthy development through industrial transformation and upgrading and intelligent transformation. Taking the opportunity of relocation, the company settled in Zhengzhou New Material Industrial Park; in July 2017, it entered the largest industrial base of diamond products in the country, and the company has formed Zhengzhou, Jiaozuo, Shangqiu and Luoyang industrialization bases. In the field of super-hard materials, the company has formed an industrial chain covering graphite minerals, raw and auxiliary materials, synthetic diamonds, diamond micro-powders, etc. In the field of super-hard materials, the company has diamond wire saws, diamond grinding wheels and other products; Large single crystal, as the first enterprise in China to realize large-scale production of large single crystal diamond, the company continued to promote the construction of gem-quality diamond projects, actively expand the gem-quality diamond market, increase the promotion and guidance of diamond culture, and create customized, light and fashionable fashion. Jewelry, flexible, inclusive and open attitude to layout fashion and consumer industries.
III. Prospects for the future development of the company (I) Industry pattern and trend 1. Superhard materials and new materials are the basis and precursor of the new technology revolution, and are emerging for providing high-efficiency, high-precision, energy-saving and environmentally friendly materials and tools for various fields of the national economy. The industry supports the development of modern industry and the advancement of high technology. It is a national key development industry during the 13th Five-Year Plan period. With excellent mechanical, thermal, optical, acoustic and electrical properties, synthetic diamond enjoys the praise of "king of materials" and is a key product of China's strategic emerging industries. Under the background of China's economic transformation and upgrading, with the deepening of the supply-side structural reform, a new round of scientific and technological revolution and industrial transformation has formed a historic convergence with China's accelerated transformation of economic development mode, helping China implement the innovation-driven strategy and comprehensively promote it. Made in China 2025", it provides a great opportunity for China to realize the transformation of superhard materials and products from big countries to powerful countries. According to the "China Abrasives Industry Yearbook 2017", the output of synthetic diamonds in 2016 was 13.6 billion carats, down 12.98% from the same period of last year, mainly due to the industrial transformation and upgrading, the production of sheet-like single crystals for gem-quality single crystals and tools continued to increase. The unit price of diamond has increased, and the effect of structural adjustment has initially appeared. In the steady development of the super-hard materials industry, the super-hard materials industry actively grasps the two lifelines of innovation and quality, accelerates transformation and upgrading, and the unique product advantages of each enterprise are more obvious. The product quality foundation is more stable, the industry division of labor is further refined, and super hard. Materials products are further moving towards precision machining. At the same time, due to innovation drive and consumption upgrade, the application field of new materials is expanding, the service transformation trend is obvious, the pace of integration and reorganization of new materials is accelerating, and super-hard materials are developing towards composites and products.
In order to implement the "13th Five-Year Plan for the Development of Strategic Emerging Industries in the Country", synthetic diamond, as the basic material for the development of the national economy, was included in the "Guidance Catalogue for Key Products and Services for Strategic Emerging Industries." In June 2016, the “Zhengzhou City National Economic and Social Development Thirteenth Five-Year Plan Outline†issued by the Zhengzhou Municipal People’s Government pointed out that the informatization and industrial development should be accelerated, and efforts should be made to foster the development of high-tech industries and emerging industries. Strive to develop high-quality diamond, cubic boron nitride, grinding tools, precision tools and other products industry by 2020, promote the construction of new material industry base in Fuyang City, and build the world's "diamond capital". The output value of new materials industry will strive to reach 500. 100 million yuan. On October 16, 2017 and January 19, 2018, the People's Government of Henan Province and Zhengzhou City respectively issued the “Henan Province New Material Industry Transformation and Upgrading Action Plan (2017-2020)†and “Zhengzhou New Material Industry Transformation and Upgrading Actionâ€. Plan (2017~2020), proposes to accelerate the promotion of the super-hard material industry base with Zhengzhou New Material Industrial Park as the core, and rely on Huajing and other enterprises to accelerate the industrialization of gem-quality large single crystal; relying on Huajing micro-drill Such enterprises will increase the production scale of nano-scale micro-powder and comprehensively promote the development of super-hard materials in the direction of high speed, high efficiency and green. As a national key product of strategic emerging industries, and as a key area in the “New Material Industry Transformation and Upgrading Action Plan†in Henan Province and Zhengzhou City, synthetic diamond is bound to usher in a breakthrough development.
The company actively seized this favorable opportunity, focused on the two main lines of industrial upgrading and consumption upgrading, increased R&D investment, and carried out technical exchanges and cooperation with leading domestic and foreign industry leading enterprises and research institutes to improve the company's collaborative innovation system for production, education and research. Research and application of basic performance and functional performance of super-hard materials, actively explore and practice the application and promotion of intelligent manufacturing concepts and technologies in the super-hard materials industry, develop new products, new production capacity, reserve new technologies, and further consolidate the leading industry Position, boosting the super-hard materials industry to accelerate the start.
2. Cultivating diamonds The emergence of diamonds has brought about the reconstruction of diamond value. In 2015, the global sales of diamond jewelry reached US$79 billion. As the world's second largest diamond consumer, the total retail sales of diamond jewelry in China is about US$11.85 billion. 15% of total global diamond consumption. According to the statistics of China Jewelry and Jade Jewelry Industry Association, the total sales volume of China's jewelry industry continues to grow at a high speed. By 2020, the annual sales volume of the industry is expected to reach 800 billion yuan. Each segment has huge market space; with the development of China's economy The rise of the "Millennial Generation" young consumer groups and the change of consumption concept, the diamond jewelry consumption culture has gradually become an important part of the jewelry market, and is being accepted by more and more consumers. The consumption of diamond jewelry has shown rapid growth in China. trend. Under the overall trend of consumption upgrading, fashion consumption needs to be redefined. Consumers change from "promotion of self" to "pleasure of self", from "showing self" to "personality display", and fashion consumption presents individuality, diversity and emotion ( Such as life experience needs such as wisdom, technology, green, environmental protection, etc., personalized products and intelligent jewelry and other consumption has shown rapid development. At the same time, with the introduction of national grading standards, testing technology follow-up, and trade openness to provide a more standardized platform for synthetic diamonds, the jewellery industry is also looking at and accepting synthetic diamonds in a more inclusive and rational manner, cultivating diamonds with Green, pure, technology, and cost-effective will usher in a broader market space.
As a crystallization of human wisdom, cultivating diamonds is a product of green, intelligent and subversive technological innovation. As a diamond pioneer in China's laboratories, the company cultivates diamonds with excellent attributes: highest hardness, perfect fire color and stable performance. It brings new blood to the jewelry consumption field with its advantages in technology, capital and scale. To provide consumers with the most beautiful personalized fashion consumption and product experience, to create a diamond fashion living space, leading the new trend of diversified diamond fashion lifestyle.
(II) In the future of the company's development strategy, the company will be based on the main business of super-hard materials, market-oriented, with technological innovation and management innovation as the driving force, quality as the guarantee, brand building as the guide, comprehensive and in-depth implementation of traditional product specialization, The new products are horizontally and diversified, adhering to the business philosophy of "industry-based, capital-based". Through industrial management and capital operation, we will further promote management upgrade, resource integration, brand promotion and marketing network upgrade to new industries and fashion consumption. Extend, accelerate the application of super-hard materials in new energy, energy conservation and environmental protection, intelligent manufacturing, electronic appliances, medical and military, etc., and promote the strategic layout of new material industry platform and fashion diamond ecosystem, and strive to become a super-hard material solution. Provider and fashion diamond development and design leader.
(III) Business Plan for 2018 In 2018, the company focused on the development strategy and the business strategy formulated by the board of directors, facing the industrial and fashion consumption fields, and insisting on the sixteen characters of "making enterprises according to law, building enterprises with technology, developing enterprises with technology, and strengthening enterprises with talents". The policy is based on the main business of super-hard materials, market-oriented, adhering to technological innovation and management innovation, using traditional applications as a platform, cutting-edge applications as landmarks, accelerating the integration of industrial resources, improving the new material industry platform, and comprehensively improving the company's management level. Realize the company's rapid and sustainable development.
1. Attach great importance to fundraising projects and achieve company expansion and efficiency
2018 is a key year for the implementation of the company's fundraising projects. The company will accelerate the construction progress of gem-quality diamond projects, carry out high-performance and lean production management, promote the construction of intelligent production systems, and strengthen the gem-level integration of intelligent manufacturing and Internet. The layout of diamond intelligent projects will fully implement the construction of high-efficiency, high-quality and safe production culture.
At the same time, strictly manage the storage, use and management of raised funds, improve the efficiency of capital utilization, promote the smooth implementation of fundraising projects, and effectively utilize the effectiveness of raised funds.
2. Expanding the research of new diamond application fields, cultivating new profit growth points with the development of super-hard materials in the fields of acoustic and optoelectronic heat, new energy and the implementation of the company's innovation-driven strategy. The company adheres to the specialization of traditional products, and the horizontal and vertical diversification of new products. Development plan. In 2018, the company will increase research in the field of application of diamond functional properties, focusing on the research and technical reserves of diamond in acoustic and optoelectronic heat. The company cooperates with industry experts and strategic cooperative research institutes such as the Optoelectronics Research Institute of the Chinese Academy of Sciences, Jilin University, Zhengzhou University, etc., focusing on creating superior product quality through technological innovation and management improvement, digging deep into the application potential of new materials, and realizing the synergy of technology, talents and resources. Complementing, accelerating the transformation of scientific research results, promoting the industrialization of diamond in new energy fields such as superconducting thin films, semiconductors and capacitors, exploring the application of nano-diamond film cutters, and cultivating new profit growth points.
3. Endogenous extension, perfect cultivation of diamond consumption layout The company actively grasps the good development opportunities of industrial upgrading and consumption upgrading, and cultivates diamonds as the core and precise positioning to increase brand matrix construction, product design and development, multi-channel business development, etc. The business model focuses on improving consumer awareness of the cultivation of diamonds and corporate brand awareness.
While improving the endogenous growth of the business, we will make full use of the capital market platform, accelerate the industrial layout through various investment methods such as acquisition and restructuring, industrial funds, and actively explore the fashion consumption diamond jewelry brands and cultural creativity with certain scale and brand influence at home and abroad. Industry and design and channel resources, acquisition of fashion industry consumption midstream, layout consumption downstream, mining channels and target value. Through endogenous accumulation and extensional development, deep integration and coordinated development, comprehensively cultivate the field of diamond consumption, provide consumers with fashion to cultivate diamond consumption and product experience, create high-competitive products with national brand imprint and fashion cultivation diamond ecosystem .
4. Comprehensively strengthen internal management and improve scientific management system With the expansion of the company's business and scale, the product structure and customer system are further enriched, and the company's management system, technology research and development, human resources and quality control systems are continuously improved. In order to meet the company's expanding development needs, the company increased the investment, research and development and application of information systems, integrated management tools such as OA and Kingdee EAS, implemented comprehensive target management, established and improved management process standards, and improved integrated mobile office. The system improves the standardization, effectiveness and system of process execution, and comprehensively promotes the internal control system management system such as strategic operation, business plan, budget management, performance appraisal and process control, optimizes the rational allocation of resources, and improves the level of system management.
5. Improve the human resources management system and improve the incentive assessment mechanism Human resources are the core resources for enterprise development. The company continues to adhere to the people-oriented, through the continuous increase of human resources construction, open up the talent growth channel, establish a sound talent training mechanism and results and goals-oriented incentives and performance appraisal mechanism to create a strong talent. In 2018, the company will focus on the following tasks:
(1) Continue to increase the human resources construction company to focus on the introduction of human resources, and to introduce grassroots, middle-level, high-end and top-level talents to expand the scale of human resources, and to provide top-level academicians and doctors to serve as technical consultants of the company to make up the top level. Structure; Introduce four major systems of technology R&D, marketing, quality control, and brand planning to recruit military talents; introduce high-skilled and excellent management talents with rich practical experience and innovative reform awareness, strengthen company management; continue to strengthen the talent team construction, and Domestic 985, 211 colleges and universities cooperation, the introduction of industry, industry outstanding graduates, independent training, the implementation of a one-year incubation period, to create a unique talent with Huajing brand, to enrich the grassroots management and technical team. Based on the sound talent team, the company explores the establishment of a cross-industry and cross-regional expert database system based on the industrial chain layout, which brings wisdom and wisdom to lay a solid foundation for the company's and industry's sustained and rapid development.
(2) Continuously strengthen the selection and training of talents, and improve the channel for talent growth. The company focuses on strengthening the multi-level training system and building a high-quality backbone team. Based on job management, professional technology and skill operation, based on job responsibilities, with the aim of improving professional ability and based on performance appraisal, a scientific, rational and unified talent growth channel is formed to enhance employees' work skills and overall quality. Constructing the talent selection and training mechanism of Huajing, mobilizing the enthusiasm, initiative and creativity of employees, providing human and intellectual security for the rapid and rapid development of enterprises, meeting the self-development needs of employees, and enhancing the cohesiveness and competitiveness of enterprises. Achieve the dual goals of organizational strategy development and talent development.
(3) Optimize the talent structure and continue to establish results- and goal-oriented incentives and performance appraisal mechanisms. The company's results- and goal-oriented incentive and performance appraisal mechanisms ensure that goals, pressures, and work responsibilities are fully and effectively implemented. Encourage employees' enthusiasm and creativity, improve work efficiency, optimize staffing, enhance the internal motivation of human resources allocation, further optimize the structure of human resources, make incentives and constraints match, and harmonize responsibility, rights and interests.
The realization depends on various factors such as changes in market conditions and the level of efforts of the management team. There are great uncertainties that do not constitute a substantial commitment of the company to investors. Investors are advised to pay attention to investment risks.
(IV) Risks that the company may face 1. Macroeconomic fluctuations and market risks China's economy is still complicated in deepening reform and economic restructuring, and economic development has entered a new normal. The company's products are widely used in construction, building materials, machinery, petroleum, aerospace and other industrial fields, and are in the field of jewelry, jewelry, handicrafts and other consumer areas. The industry and product market in which the company is located are affected to some extent by the growth rate of the national macro economy and the industry. For example, the future economic fluctuations or the market environment in which the company is located may change, or may not respond quickly to changes in the market situation. Reducing the company's growth rate has a negative impact on the company's profitability.
To this end, the company grasps the development trend of the industry and strengthens forward-looking planning. First, increase market development efforts, adopt traditional product specialization, new product horizontal vertical diversification strategy, optimize product structure, deepen the application of products in industry and consumption, improve the collaborative innovation system for production, education and research, and increase scientific research efforts. Actively explore and practice the application and promotion of intelligent manufacturing concepts and technologies in the industry, focus on the development of high value-added products, and foster new profit growth points. Secondly, the company actively deploys new formats and new channels, expands business layout through mergers and acquisitions, industrial funds, etc., minimizing the impact of macroeconomic changes on the company's business and future development.
2. The risk of bad debts in accounts receivable With the expansion of the company's business, the expansion of business scale and the continuous enrichment of products, in order to increase the cultivation of new markets and the promotion of product applications, the company adopts different products, markets and key customers. Different credit policies have resulted in a relatively high proportion of accounts receivable. Although the company has established a clear sales and assessment policy for business personnel, the increase in the company's accounts receivable may reduce the company's capital turnover rate and operational efficiency. If the accounts receivable cannot be recovered in time, the company's asset quality will be The financial situation has an adverse impact and there are liquidity and bad debt risks.
In this regard, the company will further improve and refine the management of accounts receivable, strictly implement the relevant management system for accounts receivable, strengthen the credit management of customers, strengthen contract review, carefully assess the benefits and risks of the business, and strengthen the process of contract execution. Dynamic management and monitoring of accounts receivable; Secondly, the company increased the collection of revenues, included accounts receivable into the evaluation indicators of business personnel, and implemented the management of accounts receivable amount in each office area, effectively controlling The total amount of receivables; Finally, the company implements reasonable bad debt provision for accounts receivable, and formulates disposal measures for accounts receivable with a long age, and reduces the risk of bad debts of accounts receivable.
3. Implementation risk of fund-raising investment projects The implementation of fund-raising investment projects will have a positive impact on the company's development strategy, expansion of business scale and improvement of performance levels, and will be of great significance to enhance the company's core competitiveness. Although the company has conducted detailed market research and strict feasibility analysis on this fundraising project. However, in the course of project implementation, if the industry's technological progress, industrial policies and market changes in the future, the project progress is not up to expectations, and the supporting facilities and services cannot meet the demand, which may affect the construction progress of the fundraising project or the project revenue is less than expected.
In this regard, the company attaches great importance to the construction process of fundraising projects, organizes the establishment of project construction headquarters, and coordinate the linkages of various functional departments to strengthen the management and supervision of fundraising projects. During the reporting period, the company organized special meetings and on-site offices to improve the quality of project implementation and speed up project implementation. At the same time, during the implementation of the project, the company pays close attention to the market, actively grasps the national policy and commercial opportunities of synthetic diamonds, on the other hand, strengthens product technology and process innovation, enhances the application of independent innovation results, and increases market expansion. And marketing efforts to enhance brand image and influence, reduce the risk of investment project implementation.
4. The risk of strategic transformation is lower than expected In recent years, the company continued to optimize product structure and strategic transformation according to the industry and its own development status, consolidate the super-hard material industry chain based on key products, actively grasp the good opportunities of new material development, and promote the company. The application of products in emerging industrial and consumer markets reshapes the Huajing brand. However, the development of new markets, the establishment of brands and the recognition of consumers need cycles. The organization of platforms and new business models requires certain investment and layout. If the company's strategic transformation and product structure optimization and upgrading are not up to expectations, it will miss the consumption and emerging. Good opportunities in the industrial market have slowed the pace of rapid development of the company.
In this regard, in the field of consumption, the company fully explores the value of large single crystal diamond products, actively explores the "Internet + Diamond Jewelry Open Platform" business model, and through its own, strategic cooperation and mergers and acquisitions, through deepening the domestic market, communication and expansion of the international market Continue to enrich the brand connotation, continue to promote high-quality diamond culture, make full use of international and domestic high-quality processing and sales channels and other advantageous resources, strengthen multi-channel cross-border communication within the industry, organize participation in international and domestic jewelry and diamond exhibitions, and related diamond design institutes. The jeweler negotiates and cooperates to accelerate the internationalization process and accelerate the overall layout of the company's products in the consumer market. On the other hand, the company expands into the emerging industrial field on the basis of deep cultivation of traditional industrial applications, and builds a new material industry platform. Accelerate the technological innovation of new materials enterprises, jointly promote industrial upgrading, intelligent transformation, and promote the integration and development of new materials industry.
5. Technology Innovation Risk Technology innovation is the source of the company's development. It is the decisive factor for enhancing core competitiveness, achieving leap-forward development and achieving sustainable growth. Since its establishment, the company has always adhered to independent innovation. After years of technical accumulation, the company's raw and auxiliary materials, production equipment and production processes are at the leading level in the industry, forming a technical system with independent intellectual property rights, and achieved fruitful scientific and technological achievements. Wide recognition of the market. With the rapid development of science and technology and changes in the business environment, in the future business operations, if the company cannot maintain its continuous technological innovation capability, it cannot timely upgrade its technology, continue to develop products suitable for market demand, or will face product competition. The risk of declining power and customer awareness will adversely affect the company's future operations.
To this end, the company strengthens the top-level research and development strategy design, adheres to the innovation drive, and continuously enhances the company's innovation capability through the combination of endogenous technology research and development and extension cooperation. On the one hand, the company continues to increase R & D investment and technological innovation, through the organic combination of technology research and development and production processes, improve R & D innovation system, optimize the allocation of resource elements, upgrade product quality, enhance product added value, and promote the company's products to high-end industries On the other hand, the company strengthens the strategic sharing mechanism and the construction of new material industry platforms, actively cooperates with the government, enterprises, research institutes, etc., and improves the technological innovation system of industry, university and research, and promotes the industrialization of scientific and technological achievements. .
6. Risk of major asset restructuring In order to speed up the cultivation of diamonds on the consumer side, the company intends to acquire Henan Jinlifu Jewelry Co., Ltd., Shenzhen Jinlifu Diamond Co., Ltd. and Tibet Zhongyijin held by the counterparty by issuing shares and paying cash. The controlling shareholdings of Technology Co., Ltd. and Shenzhen Dahe Yubao Wenchuang Industry Co., Ltd. Up to now, the company and the restructuring related parties and independent financial advisors, auditing, evaluation, law firms and other intermediaries are actively promoting the restructuring work, the audit and evaluation work involved in major asset restructuring is still in progress, and the preparation of related materials is also In an orderly manner, the parties to the transaction are still negotiating and negotiating on the details of the transaction. In view of the fact that the matter is still uncertain and needs to be approved, filed or registered for implementation, there is uncertainty in this major asset restructuring.
To this end, on the one hand, the company and intermediaries strengthen the auditing and verification of the target companies, prudently audit and evaluate the target company; on the other hand, the company plans and coordinates the business systems, management models and corporate culture in advance according to the strategic development plan of both parties. Actively communicate and negotiate with the target shareholders and management, and actively promote the major asset restructuring work with relevant parties, and strive to integrate with superior resources as soon as possible to achieve rapid and healthy development of the company.
7. Environmental Management Risks With the transformation of China's economic growth model and the full implementation of the sustainable development strategy, a series of environmental protection policies, laws and regulations have been implemented, and environmental standards have become more stringent. At the same time, for the gradual measures of urban smog weather, Beijing-Tianjin-Hebei "2+26" channel urban air treatment and other environmental governance work, manufacturing enterprises may face the requirement to reduce production, limit production or stop production. The company adheres to the production concept of green, environmental protection and ecology, strictly implements environmental impact assessment, ensures the project construction and technical transformation and environmental reporting facilities to advance simultaneously, and the infrastructure construction of various supporting environmental protection facilities is in place. If the national environmental protection policy is further upgraded and the environmental protection standards are further strict, the company does not pay attention to strengthening environmental awareness, which may affect the company's normal production and operation.
To this end, on the one hand, the company will continue to leverage its capital and technological advantages to develop green, environmentally-friendly and high value-added products, promote clean and intelligent production, further optimize the super-hard materials product chain, and at the same time increase environmental protection technology transformation and environmental management. Strengthen on-site management and control of each workshop to improve the recycling level of resources in the plant. On the other hand, improve the environmental management risk pre-judgment mechanism, pre-arrange production adjustment for uncertain matters, and minimize the company's losses. In response to the promulgation and implementation of the new environmental protection policy, comprehensive and in-depth training and promotion of management and factory management personnel, strengthening safety and environmental education, improving environmental awareness among all employees, and further enhancing the company's environmental protection level
The key work of the company is as follows:
(I) Promoting the construction of gem-quality diamonds in an orderly manner Accelerating project construction is an effective means for the company to deepen the main business of superhard materials, optimize business structure, and improve quality and efficiency. During the reporting period, the company strengthened its results-oriented project management policy according to production targets and business plans, vigorously promoted the construction of gem-quality diamond projects, implemented key job responsibility systems, and established and implemented leadership-led weekly duty and supervision. The investigation mechanism will strengthen the whole process management of investment projects, strictly promote project construction, and improve the level of investment management. As of the end of the reporting period, the raised funds have invested 1.309 billion yuan, the first phase of the project has been completed, and the first phase of the installation has been put in place; the construction of some of the workshops in the second phase has been completed.
(II) Taking the opportunity of relocation to accelerate industrial integration The company took the opportunity of relocation of the original factory and made every effort to link project construction, technological innovation and upgrading, and realize the company's regional development strategy. During the reporting period, the company set up a relocation command team to be responsible for the overall organization, equipment relocation and personnel resettlement of the plant area according to the relocation project plan, and formulated a series of overall efficient disassembly and assembly measures, logistics transportation and operation processes to ensure efficient relocation of the relocation work. Steady implementation. Nearly 1,200 trips completed the dismantling and transportation of machines and equipment in the original production plant area, and the buildings and structures on the ground in the original factory area are currently being cleaned up. The company will further plan the industrial layout, optimize the integration of Zhengzhou, Jiaozuo, Shangqiu, Luoyang and other production base resources, and vigorously develop new materials and products such as large single crystal diamond and diamond single crystal around the development direction of the enterprise, and accelerate industrial integration and product layout.
(3) Expanding the gem-quality diamond market and strengthening the consumption-side layout company attaches great importance to the expansion of the application of large-crystal single-crystal diamond products, and expands into the emerging industries and consumption-side on the basis of deep-cultivation of traditional industrial applications, fully exploiting the value of large-crystal single-crystal diamond products, based on The gem-quality diamond project has been steadily put into production, actively exploring the "Internet + Diamond Jewelry Open Platform" business model, and through the introduction of design teams and brands through self-created, strategic cooperation and mergers and acquisitions, accelerate the comprehensiveness of the company's products in the consumer market. layout. During the reporting period, Huajing Brand – “Mutika†Jewelry Experience Center opened in Zhengzhou High-tech Enterprise Accelerator Industrial Park; the company cooperated with Ariel Jewelry (formerly Dali Jewelry) to establish a brand experience store in Zhengdong New District of Zhengzhou. In order to better promote brand building, the company set up a "brand center" in the Twin Towers of Zhengzhou Landmark Greenland Center, established a new generation of fashionable luxury jewellery brand B&R, and handed in the semi-finished association of Shenzhen Jewelry Chief Designers Association to give full play to the resource advantages of all parties. Helping to foster the development of the diamond industry.
(4) Deeply implement innovation drive, increase R&D and technical cooperation, and tap the industry's new kinetic energy company to implement the innovation-driven development strategy in depth, to improve product quality as the core, and focus on the research and technology accumulation of “diamond basic performance and functional applicationâ€. Continue to increase R&D investment and technical cooperation.
1. During the reporting period, the company cooperated with the Optoelectronics Research Institute of the Chinese Academy of Sciences and signed a cooperation framework agreement. Through the joint construction of the "Hujing Diamond Laser Application Engineering Center", the resources were integrated to form complementary advantages of technology, products and channel resources. Improve the use of diamond materials in the fields of optics, semiconductors, and new energy.
2. During the reporting period, the company successively established production, technology research and development, talent training cooperation relations with Jilin University, Zhengzhou University and Zhengzhou Aviation Industry Management College, and hired many industry experts to serve as senior consultants to promote technology through intellectual cooperation. Industrialization of results will further enhance the company's core competitiveness.
3. During the reporting period, the company added 50 new patents, including 9 invention patents; the company participated in the formulation of two national standards, “Superhard Abrasive Particle Size Inspection†and “Super Hard Abrasive Impact Toughness Determination Methodâ€, and 2017 Implementation began on May 1st.
(V) Strengthening the target and performance management, and improving the company's management and control capabilities During the reporting period, the company continued to optimize internal control on the one hand, and promoted goal-oriented planning control and planning through regular and irregular meetings and general manager's office meetings. Performance management of operations, process control, management innovation, and efficiency monitoring, based on the business model of "business unit + administrative management and service system", implements the target responsibility operation mechanism for each business unit. The company has organized and revised the "Performance Supervision System", "Performance Management Procedures" and "Financial Budget Implementation Rules" and other documents, improved the seal management regulations, and strengthened the standardized management of business cost control and financial planning. At the same time, by inviting experts from the industry to give special lectures, we will carry out multi-angle and multi-dimensional training for the actual needs of employees at all levels, and establish a more precise organization management and talent management system. On the other hand, improve the internal control system of investment projects and optimize the operation process, promote technological upgrading and lean management, and strengthen the technical skills of production system technical management team and quality management team on the basis of strengthening the upgrading and improvement of numerical control equipment and improving the work flow. And the training level of management level, holding a system skill contest, to stimulate employee kinetic energy.
(VI) Strengthening the building of party organizations and creating a harmonious corporate culture Enterprise organization and cultural construction are important contents for the survival and development of the company. The company organically integrates party building into the company's various management and corporate culture shaping, solidly carries out party organization construction, gives full play to the party's leading role in enterprise development, continues to inherit Huajing corporate culture, and promotes the company's sustained and healthy coordinated development. In June 2017, after the company’s party branch research and report to the higher party working committee approved, the party branch of the company’s party branch was adjusted from the original two party branches to ten; through the organization of the study of the spirit of the 19th National Congress, etc. A number of special party class trainings, condense ideological consensus, promote the spirit of labor model and craftsmanship, promote the "two studies and one work" study and education, organize charitable donations and employee walks, and integrate the "one carat loyalty is greater than unlimited" creed. In the activities of knowledge and skill training, quality development training, etc., enhance the team awareness and team cohesion of employees.
Second, the core competitiveness analysis 1, core technology and R & D system advantages The company focuses on the super-hard materials industry, adhere to innovation-driven, market-oriented, to enhance product quality as the core, continue to increase R & D investment and technological innovation, through technology The organic combination of R&D and production technology, perfecting the technological innovation system of deep integration of production, teaching and research, accelerating the application of technology and products, and striving to create a collaborative innovation platform to promote the company's products to the emerging industries and consumption fields.
By the end of 2017, the company had obtained 312 authorized patents, including 34 invention patents, and 50 new authorized patents in 2017, including 9 invention patents.
In 2017, nine new invention patents were listed as follows: The two national standards for the “Superhard Abrasive Particle Size Inspection†and “Super Hard Abrasive Impact Toughness Measurement Method†formulated by the company were implemented on May 1, 2017.
2, stable and efficient management team and talent advantage The company adheres to the "one carat loyalty is greater than unlimited" corporate creed, has a value convergence, high loyalty, strong sense of responsibility, stable unity, young and efficient team, since its establishment, the core management team There have been no major changes to key technicians. Through the implementation of equity incentives and performance appraisal mechanisms, the company has created a working atmosphere with high enthusiasm, many development opportunities, strong cultural identity and endeavor, and fully mobilized the management team's subjective initiative and creativity to form a harmonious and good corporate culture.
3. Advantages of the industrial chain The company makes full use of the superior resources of all parties, accelerates the technological innovation of the enterprise, promotes the optimization and integration of the new material industry and the rapid and healthy development through industrial transformation and upgrading and intelligent transformation. Taking the opportunity of relocation, the company settled in Zhengzhou New Material Industrial Park; in July 2017, it entered the largest industrial base of diamond products in the country, and the company has formed Zhengzhou, Jiaozuo, Shangqiu and Luoyang industrialization bases. In the field of super-hard materials, the company has formed an industrial chain covering graphite minerals, raw and auxiliary materials, synthetic diamonds, diamond micro-powders, etc. In the field of super-hard materials, the company has diamond wire saws, diamond grinding wheels and other products; Large single crystal, as the first enterprise in China to realize large-scale production of large single crystal diamond, the company continued to promote the construction of gem-quality diamond projects, actively expand the gem-quality diamond market, increase the promotion and guidance of diamond culture, and create customized, light and fashionable fashion. Jewelry, flexible, inclusive and open attitude to layout fashion and consumer industries.
III. Prospects for the future development of the company (I) Industry pattern and trend 1. Superhard materials and new materials are the basis and precursor of the new technology revolution, and are emerging for providing high-efficiency, high-precision, energy-saving and environmentally friendly materials and tools for various fields of the national economy. The industry supports the development of modern industry and the advancement of high technology. It is a national key development industry during the 13th Five-Year Plan period. With excellent mechanical, thermal, optical, acoustic and electrical properties, synthetic diamond enjoys the praise of "king of materials" and is a key product of China's strategic emerging industries. Under the background of China's economic transformation and upgrading, with the deepening of the supply-side structural reform, a new round of scientific and technological revolution and industrial transformation has formed a historic convergence with China's accelerated transformation of economic development mode, helping China implement the innovation-driven strategy and comprehensively promote it. Made in China 2025", it provides a great opportunity for China to realize the transformation of superhard materials and products from big countries to powerful countries. According to the "China Abrasives Industry Yearbook 2017", the output of synthetic diamonds in 2016 was 13.6 billion carats, down 12.98% from the same period of last year, mainly due to the industrial transformation and upgrading, the production of sheet-like single crystals for gem-quality single crystals and tools continued to increase. The unit price of diamond has increased, and the effect of structural adjustment has initially appeared. In the steady development of the super-hard materials industry, the super-hard materials industry actively grasps the two lifelines of innovation and quality, accelerates transformation and upgrading, and the unique product advantages of each enterprise are more obvious. The product quality foundation is more stable, the industry division of labor is further refined, and super hard. Materials products are further moving towards precision machining. At the same time, due to innovation drive and consumption upgrade, the application field of new materials is expanding, the service transformation trend is obvious, the pace of integration and reorganization of new materials is accelerating, and super-hard materials are developing towards composites and products.
In order to implement the "13th Five-Year Plan for the Development of Strategic Emerging Industries in the Country", synthetic diamond, as the basic material for the development of the national economy, was included in the "Guidance Catalogue for Key Products and Services for Strategic Emerging Industries." In June 2016, the “Zhengzhou City National Economic and Social Development Thirteenth Five-Year Plan Outline†issued by the Zhengzhou Municipal People’s Government pointed out that the informatization and industrial development should be accelerated, and efforts should be made to foster the development of high-tech industries and emerging industries. Strive to develop high-quality diamond, cubic boron nitride, grinding tools, precision tools and other products industry by 2020, promote the construction of new material industry base in Fuyang City, and build the world's "diamond capital". The output value of new materials industry will strive to reach 500. 100 million yuan. On October 16, 2017 and January 19, 2018, the People's Government of Henan Province and Zhengzhou City respectively issued the “Henan Province New Material Industry Transformation and Upgrading Action Plan (2017-2020)†and “Zhengzhou New Material Industry Transformation and Upgrading Actionâ€. Plan (2017~2020), proposes to accelerate the promotion of the super-hard material industry base with Zhengzhou New Material Industrial Park as the core, and rely on Huajing and other enterprises to accelerate the industrialization of gem-quality large single crystal; relying on Huajing micro-drill Such enterprises will increase the production scale of nano-scale micro-powder and comprehensively promote the development of super-hard materials in the direction of high speed, high efficiency and green. As a national key product of strategic emerging industries, and as a key area in the “New Material Industry Transformation and Upgrading Action Plan†in Henan Province and Zhengzhou City, synthetic diamond is bound to usher in a breakthrough development.
The company actively seized this favorable opportunity, focused on the two main lines of industrial upgrading and consumption upgrading, increased R&D investment, and carried out technical exchanges and cooperation with leading domestic and foreign industry leading enterprises and research institutes to improve the company's collaborative innovation system for production, education and research. Research and application of basic performance and functional performance of super-hard materials, actively explore and practice the application and promotion of intelligent manufacturing concepts and technologies in the super-hard materials industry, develop new products, new production capacity, reserve new technologies, and further consolidate the leading industry Position, boosting the super-hard materials industry to accelerate the start.
2. Cultivating diamonds The emergence of diamonds has brought about the reconstruction of diamond value. In 2015, the global sales of diamond jewelry reached US$79 billion. As the world's second largest diamond consumer, the total retail sales of diamond jewelry in China is about US$11.85 billion. 15% of total global diamond consumption. According to the statistics of China Jewelry and Jade Jewelry Industry Association, the total sales volume of China's jewelry industry continues to grow at a high speed. By 2020, the annual sales volume of the industry is expected to reach 800 billion yuan. Each segment has huge market space; with the development of China's economy The rise of the "Millennial Generation" young consumer groups and the change of consumption concept, the diamond jewelry consumption culture has gradually become an important part of the jewelry market, and is being accepted by more and more consumers. The consumption of diamond jewelry has shown rapid growth in China. trend. Under the overall trend of consumption upgrading, fashion consumption needs to be redefined. Consumers change from "promotion of self" to "pleasure of self", from "showing self" to "personality display", and fashion consumption presents individuality, diversity and emotion ( Such as life experience needs such as wisdom, technology, green, environmental protection, etc., personalized products and intelligent jewelry and other consumption has shown rapid development. At the same time, with the introduction of national grading standards, testing technology follow-up, and trade openness to provide a more standardized platform for synthetic diamonds, the jewellery industry is also looking at and accepting synthetic diamonds in a more inclusive and rational manner, cultivating diamonds with Green, pure, technology, and cost-effective will usher in a broader market space.
As a crystallization of human wisdom, cultivating diamonds is a product of green, intelligent and subversive technological innovation. As a diamond pioneer in China's laboratories, the company cultivates diamonds with excellent attributes: highest hardness, perfect fire color and stable performance. It brings new blood to the jewelry consumption field with its advantages in technology, capital and scale. To provide consumers with the most beautiful personalized fashion consumption and product experience, to create a diamond fashion living space, leading the new trend of diversified diamond fashion lifestyle.
(II) In the future of the company's development strategy, the company will be based on the main business of super-hard materials, market-oriented, with technological innovation and management innovation as the driving force, quality as the guarantee, brand building as the guide, comprehensive and in-depth implementation of traditional product specialization, The new products are horizontally and diversified, adhering to the business philosophy of "industry-based, capital-based". Through industrial management and capital operation, we will further promote management upgrade, resource integration, brand promotion and marketing network upgrade to new industries and fashion consumption. Extend, accelerate the application of super-hard materials in new energy, energy conservation and environmental protection, intelligent manufacturing, electronic appliances, medical and military, etc., and promote the strategic layout of new material industry platform and fashion diamond ecosystem, and strive to become a super-hard material solution. Provider and fashion diamond development and design leader.
(III) Business Plan for 2018 In 2018, the company focused on the development strategy and the business strategy formulated by the board of directors, facing the industrial and fashion consumption fields, and insisting on the sixteen characters of "making enterprises according to law, building enterprises with technology, developing enterprises with technology, and strengthening enterprises with talents". The policy is based on the main business of super-hard materials, market-oriented, adhering to technological innovation and management innovation, using traditional applications as a platform, cutting-edge applications as landmarks, accelerating the integration of industrial resources, improving the new material industry platform, and comprehensively improving the company's management level. Realize the company's rapid and sustainable development.
1. Attach great importance to fundraising projects and achieve company expansion and efficiency
2018 is a key year for the implementation of the company's fundraising projects. The company will accelerate the construction progress of gem-quality diamond projects, carry out high-performance and lean production management, promote the construction of intelligent production systems, and strengthen the gem-level integration of intelligent manufacturing and Internet. The layout of diamond intelligent projects will fully implement the construction of high-efficiency, high-quality and safe production culture.
At the same time, strictly manage the storage, use and management of raised funds, improve the efficiency of capital utilization, promote the smooth implementation of fundraising projects, and effectively utilize the effectiveness of raised funds.
2. Expanding the research of new diamond application fields, cultivating new profit growth points with the development of super-hard materials in the fields of acoustic and optoelectronic heat, new energy and the implementation of the company's innovation-driven strategy. The company adheres to the specialization of traditional products, and the horizontal and vertical diversification of new products. Development plan. In 2018, the company will increase research in the field of application of diamond functional properties, focusing on the research and technical reserves of diamond in acoustic and optoelectronic heat. The company cooperates with industry experts and strategic cooperative research institutes such as the Optoelectronics Research Institute of the Chinese Academy of Sciences, Jilin University, Zhengzhou University, etc., focusing on creating superior product quality through technological innovation and management improvement, digging deep into the application potential of new materials, and realizing the synergy of technology, talents and resources. Complementing, accelerating the transformation of scientific research results, promoting the industrialization of diamond in new energy fields such as superconducting thin films, semiconductors and capacitors, exploring the application of nano-diamond film cutters, and cultivating new profit growth points.
3. Endogenous extension, perfect cultivation of diamond consumption layout The company actively grasps the good development opportunities of industrial upgrading and consumption upgrading, and cultivates diamonds as the core and precise positioning to increase brand matrix construction, product design and development, multi-channel business development, etc. The business model focuses on improving consumer awareness of the cultivation of diamonds and corporate brand awareness.
While improving the endogenous growth of the business, we will make full use of the capital market platform, accelerate the industrial layout through various investment methods such as acquisition and restructuring, industrial funds, and actively explore the fashion consumption diamond jewelry brands and cultural creativity with certain scale and brand influence at home and abroad. Industry and design and channel resources, acquisition of fashion industry consumption midstream, layout consumption downstream, mining channels and target value. Through endogenous accumulation and extensional development, deep integration and coordinated development, comprehensively cultivate the field of diamond consumption, provide consumers with fashion to cultivate diamond consumption and product experience, create high-competitive products with national brand imprint and fashion cultivation diamond ecosystem .
4. Comprehensively strengthen internal management and improve scientific management system With the expansion of the company's business and scale, the product structure and customer system are further enriched, and the company's management system, technology research and development, human resources and quality control systems are continuously improved. In order to meet the company's expanding development needs, the company increased the investment, research and development and application of information systems, integrated management tools such as OA and Kingdee EAS, implemented comprehensive target management, established and improved management process standards, and improved integrated mobile office. The system improves the standardization, effectiveness and system of process execution, and comprehensively promotes the internal control system management system such as strategic operation, business plan, budget management, performance appraisal and process control, optimizes the rational allocation of resources, and improves the level of system management.
5. Improve the human resources management system and improve the incentive assessment mechanism Human resources are the core resources for enterprise development. The company continues to adhere to the people-oriented, through the continuous increase of human resources construction, open up the talent growth channel, establish a sound talent training mechanism and results and goals-oriented incentives and performance appraisal mechanism to create a strong talent. In 2018, the company will focus on the following tasks:
(1) Continue to increase the human resources construction company to focus on the introduction of human resources, and to introduce grassroots, middle-level, high-end and top-level talents to expand the scale of human resources, and to provide top-level academicians and doctors to serve as technical consultants of the company to make up the top level. Structure; Introduce four major systems of technology R&D, marketing, quality control, and brand planning to recruit military talents; introduce high-skilled and excellent management talents with rich practical experience and innovative reform awareness, strengthen company management; continue to strengthen the talent team construction, and Domestic 985, 211 colleges and universities cooperation, the introduction of industry, industry outstanding graduates, independent training, the implementation of a one-year incubation period, to create a unique talent with Huajing brand, to enrich the grassroots management and technical team. Based on the sound talent team, the company explores the establishment of a cross-industry and cross-regional expert database system based on the industrial chain layout, which brings wisdom and wisdom to lay a solid foundation for the company's and industry's sustained and rapid development.
(2) Continuously strengthen the selection and training of talents, and improve the channel for talent growth. The company focuses on strengthening the multi-level training system and building a high-quality backbone team. Based on job management, professional technology and skill operation, based on job responsibilities, with the aim of improving professional ability and based on performance appraisal, a scientific, rational and unified talent growth channel is formed to enhance employees' work skills and overall quality. Constructing the talent selection and training mechanism of Huajing, mobilizing the enthusiasm, initiative and creativity of employees, providing human and intellectual security for the rapid and rapid development of enterprises, meeting the self-development needs of employees, and enhancing the cohesiveness and competitiveness of enterprises. Achieve the dual goals of organizational strategy development and talent development.
(3) Optimize the talent structure and continue to establish results- and goal-oriented incentives and performance appraisal mechanisms. The company's results- and goal-oriented incentive and performance appraisal mechanisms ensure that goals, pressures, and work responsibilities are fully and effectively implemented. Encourage employees' enthusiasm and creativity, improve work efficiency, optimize staffing, enhance the internal motivation of human resources allocation, further optimize the structure of human resources, make incentives and constraints match, and harmonize responsibility, rights and interests.
The realization depends on various factors such as changes in market conditions and the level of efforts of the management team. There are great uncertainties that do not constitute a substantial commitment of the company to investors. Investors are advised to pay attention to investment risks.
(IV) Risks that the company may face 1. Macroeconomic fluctuations and market risks China's economy is still complicated in deepening reform and economic restructuring, and economic development has entered a new normal. The company's products are widely used in construction, building materials, machinery, petroleum, aerospace and other industrial fields, and are in the field of jewelry, jewelry, handicrafts and other consumer areas. The industry and product market in which the company is located are affected to some extent by the growth rate of the national macro economy and the industry. For example, the future economic fluctuations or the market environment in which the company is located may change, or may not respond quickly to changes in the market situation. Reducing the company's growth rate has a negative impact on the company's profitability.
To this end, the company grasps the development trend of the industry and strengthens forward-looking planning. First, increase market development efforts, adopt traditional product specialization, new product horizontal vertical diversification strategy, optimize product structure, deepen the application of products in industry and consumption, improve the collaborative innovation system for production, education and research, and increase scientific research efforts. Actively explore and practice the application and promotion of intelligent manufacturing concepts and technologies in the industry, focus on the development of high value-added products, and foster new profit growth points. Secondly, the company actively deploys new formats and new channels, expands business layout through mergers and acquisitions, industrial funds, etc., minimizing the impact of macroeconomic changes on the company's business and future development.
2. The risk of bad debts in accounts receivable With the expansion of the company's business, the expansion of business scale and the continuous enrichment of products, in order to increase the cultivation of new markets and the promotion of product applications, the company adopts different products, markets and key customers. Different credit policies have resulted in a relatively high proportion of accounts receivable. Although the company has established a clear sales and assessment policy for business personnel, the increase in the company's accounts receivable may reduce the company's capital turnover rate and operational efficiency. If the accounts receivable cannot be recovered in time, the company's asset quality will be The financial situation has an adverse impact and there are liquidity and bad debt risks.
In this regard, the company will further improve and refine the management of accounts receivable, strictly implement the relevant management system for accounts receivable, strengthen the credit management of customers, strengthen contract review, carefully assess the benefits and risks of the business, and strengthen the process of contract execution. Dynamic management and monitoring of accounts receivable; Secondly, the company increased the collection of revenues, included accounts receivable into the evaluation indicators of business personnel, and implemented the management of accounts receivable amount in each office area, effectively controlling The total amount of receivables; Finally, the company implements reasonable bad debt provision for accounts receivable, and formulates disposal measures for accounts receivable with a long age, and reduces the risk of bad debts of accounts receivable.
3. Implementation risk of fund-raising investment projects The implementation of fund-raising investment projects will have a positive impact on the company's development strategy, expansion of business scale and improvement of performance levels, and will be of great significance to enhance the company's core competitiveness. Although the company has conducted detailed market research and strict feasibility analysis on this fundraising project. However, in the course of project implementation, if the industry's technological progress, industrial policies and market changes in the future, the project progress is not up to expectations, and the supporting facilities and services cannot meet the demand, which may affect the construction progress of the fundraising project or the project revenue is less than expected.
In this regard, the company attaches great importance to the construction process of fundraising projects, organizes the establishment of project construction headquarters, and coordinate the linkages of various functional departments to strengthen the management and supervision of fundraising projects. During the reporting period, the company organized special meetings and on-site offices to improve the quality of project implementation and speed up project implementation. At the same time, during the implementation of the project, the company pays close attention to the market, actively grasps the national policy and commercial opportunities of synthetic diamonds, on the other hand, strengthens product technology and process innovation, enhances the application of independent innovation results, and increases market expansion. And marketing efforts to enhance brand image and influence, reduce the risk of investment project implementation.
4. The risk of strategic transformation is lower than expected In recent years, the company continued to optimize product structure and strategic transformation according to the industry and its own development status, consolidate the super-hard material industry chain based on key products, actively grasp the good opportunities of new material development, and promote the company. The application of products in emerging industrial and consumer markets reshapes the Huajing brand. However, the development of new markets, the establishment of brands and the recognition of consumers need cycles. The organization of platforms and new business models requires certain investment and layout. If the company's strategic transformation and product structure optimization and upgrading are not up to expectations, it will miss the consumption and emerging. Good opportunities in the industrial market have slowed the pace of rapid development of the company.
In this regard, in the field of consumption, the company fully explores the value of large single crystal diamond products, actively explores the "Internet + Diamond Jewelry Open Platform" business model, and through its own, strategic cooperation and mergers and acquisitions, through deepening the domestic market, communication and expansion of the international market Continue to enrich the brand connotation, continue to promote high-quality diamond culture, make full use of international and domestic high-quality processing and sales channels and other advantageous resources, strengthen multi-channel cross-border communication within the industry, organize participation in international and domestic jewelry and diamond exhibitions, and related diamond design institutes. The jeweler negotiates and cooperates to accelerate the internationalization process and accelerate the overall layout of the company's products in the consumer market. On the other hand, the company expands into the emerging industrial field on the basis of deep cultivation of traditional industrial applications, and builds a new material industry platform. Accelerate the technological innovation of new materials enterprises, jointly promote industrial upgrading, intelligent transformation, and promote the integration and development of new materials industry.
5. Technology Innovation Risk Technology innovation is the source of the company's development. It is the decisive factor for enhancing core competitiveness, achieving leap-forward development and achieving sustainable growth. Since its establishment, the company has always adhered to independent innovation. After years of technical accumulation, the company's raw and auxiliary materials, production equipment and production processes are at the leading level in the industry, forming a technical system with independent intellectual property rights, and achieved fruitful scientific and technological achievements. Wide recognition of the market. With the rapid development of science and technology and changes in the business environment, in the future business operations, if the company cannot maintain its continuous technological innovation capability, it cannot timely upgrade its technology, continue to develop products suitable for market demand, or will face product competition. The risk of declining power and customer awareness will adversely affect the company's future operations.
To this end, the company strengthens the top-level research and development strategy design, adheres to the innovation drive, and continuously enhances the company's innovation capability through the combination of endogenous technology research and development and extension cooperation. On the one hand, the company continues to increase R & D investment and technological innovation, through the organic combination of technology research and development and production processes, improve R & D innovation system, optimize the allocation of resource elements, upgrade product quality, enhance product added value, and promote the company's products to high-end industries On the other hand, the company strengthens the strategic sharing mechanism and the construction of new material industry platforms, actively cooperates with the government, enterprises, research institutes, etc., and improves the technological innovation system of industry, university and research, and promotes the industrialization of scientific and technological achievements. .
6. Risk of major asset restructuring In order to speed up the cultivation of diamonds on the consumer side, the company intends to acquire Henan Jinlifu Jewelry Co., Ltd., Shenzhen Jinlifu Diamond Co., Ltd. and Tibet Zhongyijin held by the counterparty by issuing shares and paying cash. The controlling shareholdings of Technology Co., Ltd. and Shenzhen Dahe Yubao Wenchuang Industry Co., Ltd. Up to now, the company and the restructuring related parties and independent financial advisors, auditing, evaluation, law firms and other intermediaries are actively promoting the restructuring work, the audit and evaluation work involved in major asset restructuring is still in progress, and the preparation of related materials is also In an orderly manner, the parties to the transaction are still negotiating and negotiating on the details of the transaction. In view of the fact that the matter is still uncertain and needs to be approved, filed or registered for implementation, there is uncertainty in this major asset restructuring.
To this end, on the one hand, the company and intermediaries strengthen the auditing and verification of the target companies, prudently audit and evaluate the target company; on the other hand, the company plans and coordinates the business systems, management models and corporate culture in advance according to the strategic development plan of both parties. Actively communicate and negotiate with the target shareholders and management, and actively promote the major asset restructuring work with relevant parties, and strive to integrate with superior resources as soon as possible to achieve rapid and healthy development of the company.
7. Environmental Management Risks With the transformation of China's economic growth model and the full implementation of the sustainable development strategy, a series of environmental protection policies, laws and regulations have been implemented, and environmental standards have become more stringent. At the same time, for the gradual measures of urban smog weather, Beijing-Tianjin-Hebei "2+26" channel urban air treatment and other environmental governance work, manufacturing enterprises may face the requirement to reduce production, limit production or stop production. The company adheres to the production concept of green, environmental protection and ecology, strictly implements environmental impact assessment, ensures the project construction and technical transformation and environmental reporting facilities to advance simultaneously, and the infrastructure construction of various supporting environmental protection facilities is in place. If the national environmental protection policy is further upgraded and the environmental protection standards are further strict, the company does not pay attention to strengthening environmental awareness, which may affect the company's normal production and operation.
To this end, on the one hand, the company will continue to leverage its capital and technological advantages to develop green, environmentally-friendly and high value-added products, promote clean and intelligent production, further optimize the super-hard materials product chain, and at the same time increase environmental protection technology transformation and environmental management. Strengthen on-site management and control of each workshop to improve the recycling level of resources in the plant. On the other hand, improve the environmental management risk pre-judgment mechanism, pre-arrange production adjustment for uncertain matters, and minimize the company's losses. In response to the promulgation and implementation of the new environmental protection policy, comprehensive and in-depth training and promotion of management and factory management personnel, strengthening safety and environmental education, improving environmental awareness among all employees, and further enhancing the company's environmental protection level
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