Jihua Group Corporation Limited(601718) : development strategy and planning outline of the 14th five year plan

Jihua Group Corporation Limited(601718) “14th five year plan” development strategy and planning outline

(20212025)

Important content tips:

This plan is a long-term reflection on the future development based on the realistic basis of the company’s development and the existing external environment. The development objectives and development measures involved in this plan are forward-looking statements and do not constitute the company’s substantive commitment to investors. According to the analysis of internal and external macro and micro conditions, the company may make appropriate adjustments to the plan to better realize high-quality development and draw the attention of investors. 1、 Guiding ideology

Guided by Xi Jinping the thought of socialism with Chinese characteristics in a new era, obeying and serving the overall situation of the party and the country, Comprehensively Strengthening the party’s leadership and Party building, adhering to the general tone of seeking progress while maintaining stability, adhering to the new development concept, emancipating the mind, reform and innovation, highlighting quality first, giving priority to benefits, consolidating the foundation, strengthening the foundation and abiding by innovation, and constantly enhancing the company’s competitiveness, innovation, control, influence and risk resistance. 2、 Overall strategy description

During the 14th Five Year Plan period, the company will adhere to the overall development strategy of “1235”. Firmly implement the mission of “protecting the army, responding to emergencies and serving the people”, and adhere to one orientation – to build a first-class light industry military civilian support system builder with distinctive military civilian integration characteristics and core capabilities of military and police support and emergency protection; Grasp the “two” keys – prospering enterprises through science and technology and strengthening enterprises through brand; Layout “3” major businesses and build “443” business structure – consolidate basic businesses, expand strategic businesses and layout new business forms; Realize five upgrades – industrial upgrading, product upgrading, management upgrading, equipment upgrading and service upgrading.

The company will adhere to strengthening the chain, supplementing the chain and extending the chain, focus on unified R & D, unified marketing and unified production, comprehensively promote the whole system process reengineering, realize industrial upgrading, product optimization and structural reengineering, build China’s largest manufacturer of protective products, protective materials and functional material products, and become the leader of China’s occupational wear industry chain and emergency materials industry chain.

1. Adhere to the “1” orientation: create a first-class light industry military civilian support system builder with distinctive military civilian integration characteristics and core capabilities of military and police support and emergency protection.

(1) Firmly implement the mission and purpose of “protecting the army, responding to emergencies and serving the people”, build the main force of central enterprises with the characteristics of protecting the army and responding to emergencies, commit to building the main force serving national defense, the vanguard of emergency risk handling and the pillar of people’s livelihood, and earnestly fulfill the political, social and economic responsibilities of enterprises.

(2) We are committed to improving the modernization level of China’s military materiel equipment, increasing investment in R & D of military materiel equipment, maintaining and consolidating the position of core supplier of military materiel, striving to provide products and services that exceed customers’ expectations, and effectively guarantee and lead the needs of military and police bedding and equipment.

(3) Third, actively participate in the construction of the national emergency support system, expand the application fields of key materials and core technologies, serve the unified dress department and national key industries, and become the preferred service provider for emergency protection and line matching tooling.

(4) Strive to acquire and maintain control of equipment, technology and talents related to military and police support, emergency protection and equipment industry, accelerate the construction of a large industrial platform coordinated with industrial chain, innovation chain, capital chain, data chain and talent chain, and form the advantage of war and draw conversion.

(5) Strengthen the digestion and absorption of achievements, maintain the technical leadership in the performance indicators and universality of military, police and emergency special products, focus on meeting the functional, protective and personalized needs, focus on military and civilian compatible products, and expand the foreign trade market of civil products.

2. Grasp the “2” keys: invigorating enterprises through science and technology and strengthening enterprises through brand.

(1) To build an open scientific and technological innovation system as the starting point, adhere to the revitalization of enterprises through science and technology. First, adhere to “unified R & D”, unify two-level R & D resources, increase investment in scientific and technological R & D year by year, and gradually build China’s most influential integrated one-stop R & D platform for military and police support and emergency protection. Second, focus on the application research of functional and protective new materials and cultivate core competitive advantages with the extension of functional new material industry chain and the support of high-level R & D institutions. Third, strengthen the construction of national and provincial key laboratories and strengthen the comprehensive capabilities of R & D, inspection, testing and certification. Fourth, improve the incentive policy for scientific and technological talents, improve the incentive system for scientific research projects, and increase the incentive for scientific research talents.

(2) To inherit the Quartermaster gene and red culture as the goal, adhere to the brand to strengthen the enterprise. First, focus on the needs of professional wear users, meet the diversified needs of users by building intelligent manufacturing and flexible production capacity, and build an efficient intelligent flexible manufacturing enterprise of professional wear, with the goal of building the first brand of professional wear in China. Second, seize the opportunity of the construction of the national emergency support system, vigorously promote the brand of “Jihua protection”, shape the connotation and characteristics of high-quality, reliable, functional and protective, and aim to build “Jihua protection” into the first brand in the field of emergency protection. Third, continue to promote the construction of “one brand” system, improve the parent-child brand structure and brand management and operation structure, and build Jihua advantageous brand cluster. Fourth, take root in the century old military culture, give play to the purest Quartermaster lineage and red gene advantages, gradually realize the omni-channel operation of e-commerce platform, and expand the influence of “Jihua” brand on the online and C-end market.

3. Layout “3” business: build “443” business structure.

Focusing on the strategy of serving the country, focusing on the main business owners’ responsibilities, promoting the concentration of state-owned capital in key areas, starting from the strategic origin of military and police support, closely adhering to the functional and protective requirements, and reconstructing the all factor large industrial platform through endogenous growth and extension expansion, so as to form a multi-level business layout.

(1) Consolidate basic business. The basic business includes military and police quilt clothing, line matching tooling, professional shoes and boots and traditional textile printing and dyeing business, which is the pillar industry of the company. During the 14th Five Year Plan period, we should further consolidate the stock market position, develop new products with comfort and functional elements, and strive to improve market share and profit contribution.

(2) Expand strategic business. Including Quartermaster Equipment, emergency protection, special new materials and rubber products, which are the focus of cultivation and development and the main source of profit of the company during the 14th Five Year Plan period. Firmly grasp the success factors such as core technology, key materials and qualification performance, take advantage of the development opportunities of national individual equipment construction and emergency protection system construction, aim at military and police equipment, individual protection, emergency rescue, industrial protection and other equipment fields, extend from clothing to equipment, emergency and protection fields, and become the main R & D supplier in military and police support and emergency fields.

(3) Layout new business forms. The new business type mainly refers to the transformation of business model, focusing on promoting online b-end and C-end markets, overseas markets and other service businesses (such as high-end customization), forming an important support for the company’s business performance. Meet the diversified needs of customers and expand the backward service field; Vigorously develop e-commerce brands and channels, and actively expand the overseas military supplies market. The goal is that by the end of the 14th five year plan, the e-commerce business will form a scale and industry influence, and the company will become a major supplier of military supplies.

4. Realize “Five” upgrades: industrial upgrading, product upgrading, management upgrading, equipment upgrading and service upgrading. Further focus on industry, strengthen the main business, adhere to professional division of labor, intensive production and differentiated control, actively promote reform, innovation, optimization and adjustment, and further improve the business ability and brand image. By the end of the 14th five year plan, realize: (1) industrial upgrading: adhere to strengthening the chain, supplementing the chain and extending the chain, strengthen the applied research and development under the scenes of military and police protection and industrial protection, complete the construction and upgrading of polymer rubber industry, high-performance bulletproof protective material industry and special textile new material industry, and cultivate a number of “specialized and special new” enterprises.

(2) Product upgrading: upgrade from traditional quilt to military and police equipment and emergency protection market, and from consumer goods to intermediate industrial products, so as to realize the market jump from offline to online, from b-end to C-end, and from China to foreign countries, increase the proportion of medium and high-end products and increase the gross profit margin of products.

(3) Management upgrading: strengthen the management concept of taking operation as the center and customer orientation, adhere to the classified management principles of professional operation, intensive management and differentiated control, and fully promote the restructuring of the company with the focus on the centralized control of “unified marketing, unified production and unified R & D”. Comprehensively promote lean management and information construction, realize business interoperability and data sharing, and improve the company’s intensive control and intelligent management level.

(4) Equipment upgrading: complete intelligent manufacturing with core enterprises as the main body, build large-scale flexible and professional production lines, realize intensive and personalized production, and create efficient production and manufacturing capacity.

(5) Service upgrade: fully grasp the “modular” supply and procurement trend, take customer demand as the guide, give full play to the company’s advantages of multi industry collaboration and overall R & D and design, provide customers with an overall solution from R & D – production – Sales – after-sales – reserve, improve the supporting support and system service capacity, and highlight international characteristics.

3、 Safeguard measures

1. Deepen the reform of system and mechanism

We will implement the three-year action plan for the reform of state-owned enterprises. In accordance with the requirements of “improving governance, strengthening incentives, highlighting the main business and improving efficiency”, we will adhere to the principle of “implementing policies according to local conditions, implementing policies according to industries, being independent when appropriate, participating when appropriate, not engaging in matchmaking, full coverage and no timetable”. We will actively and steadily deepen the mixed reform and deepen the reform of the three systems with the special reforms of “science and technology reform”, “double hundred” and “little giant” as the pilot, Improve the market-oriented operation mechanism, establish a medium and long-term incentive and restraint mechanism, stimulate vitality and improve efficiency.

2. Improve the market-oriented operation system

Accelerate the improvement of the market-oriented operation system, strengthen the operation and management measures led by the market, continue to deepen the reform of the three systems, always adhere to the principle of “incremental creation”, improve the market-oriented selection, employment and distribution mechanism, including improving the wage benefit linkage mechanism, improving the differentiated salary mechanism, comprehensively practicing the tenure system and contractual management of managers, and exploring the medium and long-term incentive and restraint mechanism.

3. Accelerate digital transformation

Adhere to benchmarking world-class, continue to promote lean management, focus on intelligent manufacturing, promote digital transformation, and build smart enterprises and smart factories. Complete the informatization construction in an all-round way, form the interconnection and data sharing of digital R & D, intelligent production, intelligent supply chain and digital decision-making, and effectively support the operation and management decision-making of enterprises; In combination with information construction, we will comprehensively implement high-level substitution and upgrading of modern, intelligent and digital technology and production equipment. Continue to promote lean management and realize the transformation from lean site to lean production and finally to lean group.

4. Prevent and resolve risks

Enhance core competitiveness and prevent and control business risks. Strengthen industrial operation research and optimize marketing strategy. Through “unified marketing”, concentrate advantageous resources to seize orders, strengthen internal enterprise coordination, and continuously improve service quality and brand image. Promote the governance of enterprises according to law, improve the legal compliance management organization system, improve the professional management level of legal compliance, and strengthen the legal compliance review of major matters; Strengthen the construction of internal control system and improve the audit supervision system; Strengthen epidemic prevention and control and safety and environmental protection to ensure that no major risks occur.

5. Strengthen the party’s leadership

Adhere to strengthening the party’s overall leadership, ensure the implementation of the decisions and arrangements of the party and the state, integrate the party’s leadership into all links of corporate governance, and give full play to the role of Party organizations in guiding, managing the overall situation and promoting implementation. Adhere to the construction of strong grass-roots party organizations, and build a dynamic party construction organization system; Enrich the party building system with Jihua characteristics, tell the story of Jihua, and carry forward the “four special” spirit, “model worker culture” and “craftsman spirit” of military Quartermaster enterprises; Strengthen the construction of Party style and clean government, strengthen the awareness of discipline and rules, strengthen patrol work, resolutely resist the “four ethos”, create a clean and positive atmosphere, and establish a “pragmatic, responsible and enterprising” style.

Jihua Group Corporation Limited(601718) board of directors April 27, 2002

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