On December 9, 2022, the Samudy Holdings 2023 Strategy Conference was grandly held in the first-floor lecture hall of Building J. Senior executives including Mr. Li Peiliang, Chairman of Samudy Holdings; Mr. Weng Jianxiang, Chief Executive Officer; Mr. Li Liangyao, Director; Mr. Yu Yaozong, Group CFO; Mr. Lu Gongshan, General Manager of Samudy Precision Tool; Mr. Yan Zhanshen, General Manager of Samudy Jingchuang; Mr. Fang Chenglin, Group Director of Human Resources; Mr. Weng Jianji, Manager of the Facilities Planning Department; and Mr. Huang Hui, Operations Director of Samudy Precision Tool, attended the Strategy Conference. Department heads and employee representatives were also present, and the meeting was connected live throughout with colleagues from the East China Business Unit, Huizhou Business Unit, Samudy Yagao and the Vietnam Business Unit, who gathered together to look ahead to Samudy Holdings' strategy and development for the new year.
Mr. Li Peiliang, Chairman of Samudy Holdings, first expressed, on behalf of the Board of Directors, gratitude to all Samudy people for the achievements made over the past year in improving corporate management and boosting sales performance, and then proposed Samudy Holdings' 2023 group development strategy of "Fully and Accurately Implement Samudy Culture, Pool Our Wisdom to Drive Development." Mr. Li pointed out that, as the ancient saying goes, "At thirty one stands firm, at forty one is no longer perplexed." If Samudy's formal listing on the capital market in 2013 marked its independence on the international stage, then today, as it approaches its fortieth anniversary, it should be clear-minded and unconfused about what to do and how to do it. The Group's splendid achievements today are inseparable from the pioneering efforts and hard work of Samudy entrepreneurs, and are closely tied to the Samudy culture that all Samudy people have pragmatically cultivated, continuously validated, accumulated and refined over decades. The future is full of crises and opportunities; as long as the Samudy culture is fully, accurately and thoroughly implemented, the Group will surely overcome difficulties and win.
Mr. Li mentioned thatfully and accurately implementing the Samudy culture requires action on the following two points. First,deepen the management philosophy, namely the dual-track, three-tier, three-transformation (233) approach, and clearly define the governance roles and responsibilities of the three tiers, so as to achieve strength without rigidity.The first tier is the Group, which formulates systems and processes around one core principle, such as corporate culture systems, strategy, finance and internal audit. The second tier is the plant, which formulates systems and processes flexibly according to local conditions, such as business, organizational structure, and salaries and benefits. The third tier is the department, which formulates systems and processes in an agile and practical manner, such as production, technology and process flows. The governance roles and responsibilities of the three tiers should be re-clarified, with each tier in its proper place, driving simplification of systems and processes from top to bottom on the principle of efficiency. Communication should be effective, matters should be addressed directly, and meetings reduced. Second,strengthen the business philosophy of developing and improving together, so as to forge a strong chain of closely interlinked links. One hand stays firmly with customers, resolving their concerns; the other stays firmly with suppliers, working together to meet customers' needs.
Pooling our wisdom to drive development requiresextending the Samudy value chain to catch up with the five-year plan. Different businesses have different purposes, different roles and different management priorities: the purpose of seed businesses is to win in the future, with the key indicator being budget control, focusing on milestone results, and the management priority being freedom to explore and bold action; the purpose of growth businesses is product iteration and sound development, with key indicators being sales, gross profit and net profit, and the management priority being focused attention and careful nurturing; the purpose of core businesses is to generate nourishment and consolidate the base, with key indicators being sales, gross profit, net profit, receivables, payables and per-capita VAR, and the management priority being to give full play to the autonomy of business units without each going its own way.
In 2023, we mustimplement the Samudy culture and clearly delineate the governance roles and responsibilities of the three tiers, delegate authority in an orderly manner, and enable Samudy to accelerate its catch-up with the five-year plan and embrace new opportunities and challenges.
Afterwards, Mr. Weng Jianxiang, Chief Executive Officer, explained the Group's 2023 business development guidelines. First, Mr. Weng reaffirmed thatSamudy's overall business development approach and goal remains to advance toward becoming an expert in efficient mold operations and injection molding technology, ultimately becoming a world-leading one-stop injection molding solution supplier; Samudy's medium-term business target (2021-2025) is to "double the Group's business in five years."Due to various reasons, the 2021-2022 performance fell short of expectations to some extent. Aside from objective factors such as the COVID-19 pandemic and the China-US trade war, the company also reviewed some management issues that emerged over the past few years, and will narrow the gap with the five-year plan through the 2023 strategic layout and business growth.
In response to the Group's 2023 strategy of "fully and accurately implementing the Samudy culture and pooling our wisdom to drive development," Mr. Weng proposed thatthe Group's strategic development approach for 2023 be "stabilize the core, promote growth, and nurture seeds": that is, refine the management of the three-tier businesses to achieve clear goals and precise investment; promote the growth of existing growth businesses to drive overall Group growth; and improve the management of key elephant customers in the core business to enhance operating efficiency.
Mr. Weng mentioned that the company has long adhered to a three-tier business development approach, dividing its business intocore businesses, growth businesses and seed businesses. The core businesses of the injection molding plant (TKP) are high-efficiency injection molding, particularly in consumer electronics, specialty injection molding, HCT, as well as the East China 1 and Huizhou segment businesses. Through groundwork laid over the past few years, MDT, Samudy Yagao LSR, the Vietnam business that officially started production last year, and the East China 2 business that requires greater investment are all growth businesses. Seed businesses include printed antennas, assembly of finished products, and e-cigarette finished products. The core businesses of the mold plant (TKM) are standard molds, and precision health care, industrial and automotive businesses. Growth businesses are medical and packaging businesses. Seed businesses are specialized technologies for standard molds and specific precision products such as pipette tips and syringes for the medical sector, as well as extensions of the value chain such as automation and comprehensive solutions.
The development directions and work priorities of the three-tier businesses differ: core businesses are the main source of profit, so their advantages must be consolidated and operating efficiency emphasized; growth businesses are the source of future profit, so competitive advantages must be created and sales growth emphasized; seed businesses can create future opportunities and are exploratory in nature, so milestone results should be emphasized. Different businesses require different resources, processes, structures, cultures, incentives and management directions.
In addition, Mr. Weng also proposed the following seven work priorities. First,strategic management: establish a strategy management committee to promote the Group's strategic development and execution; the two plants should improve their strategy execution and management mechanisms to strengthen strategic execution capability. Second,three-tier business: establish a three-tier business management model and review operational targets, resource allocation, incentive policies and management processes. Third, Industry 4.0: further deepenIndustry 4.0, promote data analytics and application, and streamline management processes; move toward a "Lighthouse Factory" and explore the possibility of obtaining certification. Fourth,overseas sales: improve and activate the overseas sales network. Fifth,TKP/TKM synergies: synergy between the two plants in business and resources, and the role of TKM's precision marketing department in the medical/packaging injection molding business. Sixth,supply chain management: improve the systematic and strategic nature of the Group's supply chain management to support the company's business development strategy. Seventh,agile organization and OKR: roll out OKR and apply it to strategic management work; promote agile project teams and apply them to various management improvement projects.
Afterwards, heads of TKM, TKP, TKA, the Internal Audit Department, the External Affairs Management Department/Labor Union, the Facilities Planning Department and other departments shared the 2023 strategies and key priorities of their respective modules, breaking down goals and coordinating with one another to support the achievement of the Group's 2023 strategy. Through the step-by-step breakdown of the strategy, everyone gained a deeper understanding of Samudy's 2023 strategy and key priorities.
Finally, regarding the COVID-19 pandemic, Mr. Li called for "not expecting never to be infected, but hoping to be infected as late as possible, and preferably as few times as possible". The next two to three months may be the peak period of infections among the population. When the first large-scale wave reaches its peak, the infection rate in the population may reach around 70%-80%, after which it will gradually subside to a stable period. We have endured for three years; we hope everyone can endure for two more months. Once the Spring Festival infection peak passes and the transmission rate declines, Samudy can reopen safely. In the meantime, we hope all Samudy people will take good protective measures and act as the first person responsible for their own health.
Next year will mark Samudy's fortieth birthday, and the implementation of the Group's 2023 strategy carries heavy responsibilities. For all employees to participate in strategy implementation, the Samudy culture must be accurately implemented, the governance roles and responsibilities of the three tiers must be clarified, and refined management of the three-tier businesses must be strengthened, so as to seize opportunities and forge ahead bravely. May time never age us and our original aspirations remain unchanged; may Samudy's tomorrow be even more brilliant!
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