HCD Group Highlights

During June, the general managers of HCD Group’s overseas subsidiaries DMW and DMX visited HCD Group’s headquarters and conducted a series of coordination meetings and on-site exchanges at the Shanghai and Shiyan bases, marking substantial progress in Group-led domestic and international collaborative integration. On the morning of the first day, HCD Group convened the Mexico Business Expansion and Global Collaborative Strategy Seminar, attended by Group management, heads of functional departments, and management of domestic and overseas subsidiaries. The meeting appointed Mr. Xu Xianzhong, Vice President of HCD Group, as the overall coordinator for Group-wide collaboration, with dedicated personnel drawn from each subsidiary to form a special collaborative task force covering three major areas: market and customer coordination, engineering and technology coordination, and supply chain and procurement coordination.

Subsequently, the overseas team held a dedicated coordination meeting at the Shanghai base with Mr. Xu Guosheng, General Manager of Shanghai DEMC, and his sales, project, technical and procurement teams. The two sides engaged in in-depth discussions on specific collaborative technical support, cooperation objectives and execution pathways, clarifying each party’s role in mechanical and control engineering, addressing differences between Chinese and American design standards, agreeing to establish a two-way technical training mechanism, reaching consensus on a transparent project quotation and profit-sharing mechanism, and planning exchange programs for Chinese sales, engineering and procurement personnel to Mexico. The overseas team then traveled to the Shiyan base for a full-day exchange with the Hubei DMW and Wuhan DEMC teams. Domestic and overseas teams held comprehensive discussions on core topics including business development, market conditions, procurement coordination, project support and product technology development. Mr. Yi Jiqiang, General Manager of Hubei DMW, and Mr. Cheng Wenming, General Manager of Wuhan DEMC, along with heads of various professional functions, presented in detail the manufacturing capacity advantages, product line portfolio, and digital twin and simulation capabilities of the Chinese side, while the overseas team shared insights into the North American automotive market landscape and post-acquisition capacity and resource integration. Both sides conducted thorough discussions and identified solutions to pain points including cross-border design standard discrepancies, software interoperability, and overseas project manpower allocation. Through this series of meetings, the teams from China, Mexico and the United States reached clear consensus on specific matters including customer resource sharing, joint bidding, two-way technical training, centralized material procurement, and overseas resident staffing planning.

Under HCD Group’s core operating principles of “Stable Profitability, Efficiency-Driven, and International Growth,” President Chen Ze issued key improvement requirements at HCD Group President’s Office Meeting for monthly operating review meetings of HCD Group and its subsidiaries, designating subsidiary general managers and heads of professional departments as primary responsible parties, and fully implementing a meeting management model centered on annual OKR key performance indicators. Under the new requirements, monthly operating review meetings adopt a red, yellow, green three-tier indicator control system, with red and yellow indicators serving as the primary focus of discussions and as the core lever for monthly rolling management and closed-loop control. Each meeting is required to accomplish four tasks: review of indicators and prior resolutions, three-tier risk scanning, in-depth root-cause analysis of deviations, and formulation of decisions and actionable tasks. The meeting format also mandates three rigid implementation requirements: adoption of HCD Group’s standardized new meeting template; strict control of meeting duration; and full preparation in advance, with meeting documents and operating data distributed to all attendees prior to the session. In addition, the meeting established three key principles for operating reports: be factual and avoid reporting only positive outcomes; go beyond surface-level descriptions and clearly articulate the root causes of deviations and issues; and ensure that problems are accompanied by recommended solutions—proposals that raise issues without offering suggestions will not be accepted. In terms of closed-loop management, HCD Group has instituted a full-cycle mechanism of “Pre-meeting Preparation--Clear Decision--Making During the Meeting--Post-meeting Follow-up and Tracking.”

This month, HCD Group convened its first “All-Employee Open Dialogue” session. President Chen Ze engaged in candid and in-depth exchanges with attendees on core topics including company operations, policy implementation, and front-line concerns. Chen Ze first articulated the role and core value of all managers—that all work is aimed at achieving operating budgets, and that the core value lies in supporting product and business development. He emphasized that front-line colleagues working on project sites are the firmest foundation of the company, and that back-office functional departments and management at all levels must proactively serve the front line and empower business operations, completely discarding bureaucratic and silo-based mindsets, and internalizing the principles of “solving problems for the front line and creating value for operations” as a working instinct. On management philosophy, Chen Ze unequivocally put forward the principle of “clear rewards and penalties, tolerance and correction of errors, and rewarding excellence while penalizing under performance,” and firmly rejected the passive culture of “lying flat for fear of mistakes” and “avoiding responsibility through inaction.” He emphasized that enhanced auditing and oversight are intended to regulate operations, mitigate risks, and protect doers, not to constrain initiative. Managers at all levels must have the courage to assume responsibility and provide backup for reasonable requests, and must resolutely oppose dogmatism, formalism, and rigid one-size-fits-all management, returning to the essence of management as empowerment rather than control, as support rather than restriction—so that management is both forceful and humane. In the face of industry adjustments and market pressures, Chen Ze instilled confidence in all employees with concrete data: DEMC alone holds over RMB 1.4 billion in orders in hand; the global welding equipment market maintains an annual scale of RMB 110–120 billion, a long-standing market segment; and as a listed company, HCD Group’s stronger capital reserves, more robust systems, and greater risk-resilience are sufficient to support HCD Group’s counter-cyclical breakout amidst industry consolidation. At the same time, he openly acknowledged that HCD Group’s operations faced significant pressures in the first half of the year and that some policies had become rigid and detached from reality during implementation, calling on all employees to face shortcomings squarely and implement thorough rectifications. To break down management barriers and streamline front-line feedback channels, HCD Group officially established the “All-Employee Open Dialogue” as a regular communication mechanism, supported by a full closed-loop management process of “Collection--Supervision-- Rectification-- Feedback -- Review,” ensuring that every concern receives a response and every issue is addressed. Chen Ze called on managers at all levels to shoulder responsibilities and lead by example, pledging to stand together with all colleagues, share pressures, assume risks, and overcome difficulties, guiding the organization through the industry cycle with practical action, to achieve mutual growth and long-term development for both the enterprise and its employees.

On June 17–18, the HR Department of Shanghai DEMC successfully organized a specialized training program for management titled “Team Execution and Leadership Enhancement.” General Manager Xu Guosheng illustrated the core value of execution and leadership through real cases of project delivery and cross-departmental collaboration. Ms. Hao Ying, Director of HCD Group HR Center, led participants through immersive sand-table simulations that recreated real business challenges such as goal-blockage, emergency scenarios, and team disorganization, with the following day’s session simulating a resource-constrained project-crisis scenario to guide managers in developing strategic, holistic thinking. The core theoretical curriculum over the two days was jointly developed by the company’s HR team and Dr. Chen Suxia from Shanghai Normal University’s Tianhua College, focusing on the pain points of transitioning from technical expert to manager, breaking down the six perspectives of superiors, peers, subordinates, customers, partners, and society, and introducing the GDD experience-extraction tool for group case discussions, helping technically-oriented managers move beyond pure technical thinking to build a comprehensive business mindset encompassing operations, cost, efficiency, and talent development—systematically enhancing management team capabilities from theory to practice.

June is National Safety Month. HCD Group organized a series of solid and effective safety activities around the theme “Everyone Emphasizes Safety, Everyone Knows Emergency Response – Identifying and Eliminating Risks and Hazards.”

Subsidiary Hubei DMW focused on three strategic directions—hazard management, capability enhancement, and practical drills—to build a robust safety defense. First, it conducted comprehensive hazard identification and closed-loop management: a special safety team carried out exhaustive inspections across production workshops, office areas, and dormitory/living quarters, covering critical areas including machinery operation, electrical circuits, firefighting equipment, hazardous chemical storage, work practice compliance, and utility equipment, establishing a hazard ledger with clear responsible parties and deadlines to achieve closed-loop elimination. Second, it organized company-wide safety training for all manufacturing employees and managers, integrating the characteristics of intelligent equipment production, covering job safety procedures, risk identification methods, and the hazards of operating violations, reinforced with case studies of typical accidents to firmly embed safety awareness. Third, it actively participated in the “Ankang Cup” safety skills competition organized by Maojian District, Shiyan City, engaging key manufacturing staff to learn the latest safety policies, regulations, and industry standards. Fourth, it conducted fire emergency drills simulating workshop fire scenarios, practicing the full emergency response process including alarm activation, initial fire suppression, and equipment use, effectively enhancing employees’ emergency response and self-rescue capabilities. Fifth, it continued weekly Thursday 6S workplace inspection and evaluation, publicly reporting results, implementing reward and penalty mechanisms, and promptly rectifying site issues to maintain standardized and regulated production environments.

Subsidiary Wuhan DEMC organized a fire drill focused on evacuation and fire extinguisher operation. The exercise was designed to implement the principle of “prevention first, combining prevention and firefighting,” and to enhance all personnel’s capability to respond to fire emergencies, evacuate safely, and handle initial-stage fires. The drill began with a simulated workshop fire, where participants covered their mouths and noses with wet towels, bent low, and evacuated quickly and orderly along designated routes to a safe assembly point; department heads then counted and reported personnel to confirm full evacuation. Subsequently, fire extinguisher operation drills were conducted: the safety officer demonstrated the “Lift, Pull, Aim, Squeeze” standard procedure for dry powder extinguishers, explained key techniques including wind direction assessment and aiming at the base of the flame, and participants took turns to extinguish simulated fire sources, gaining practical mastery of initial fire suppression. After the drill, the safety officer provided a summary and review, affirming the rapid response and standard operations while identifying areas for improvement in evacuation procedures, requiring each department to rectify issues, translate the drill knowledge into daily safety habits, and regularly organize routine fire safety training to continuously improve a comprehensive, participative plant-wide safety management system.

These safety activities integrated safety education, hazard rectification, and practical drills, simultaneously validating the feasibility and effectiveness of emergency response plans, effectively strengthening all employees’ safety awareness, further consolidating the safety foundation, and providing a solid safeguard for the company’s stable operations.

Achievement Reports

Subsidiary Hubei DMW successfully secured the PBS expansion and renovation project for a well-known Brand B automotive group’s final assembly line, and also won the tender for that group’s super-factory XX model assembly conveying equipment retrofit project. June also marked the close of the first half of the year, with all subsidiaries delivering outstanding results in project acceptances. Shanghai DEMC completed 12 project acceptances in June, including two final acceptances; Hubei DMW completed seven final acceptances. These steady project acceptance milestones ensured robust operating management and sound financial management for the company.

Major contract project execution progressed steadily according to plan across all subsidiaries, with numerous domestic and international projects in the stages of production support, installation, and commissioning, and the overall project delivery system operating smoothly. Notably, the engineering project undertaken by Shanghai DEMC for a globally renowned T-brand client was recognized with the “Special Safety Award” for its outstanding overall performance. Since project commencement, delivery has been efficient and stable, meeting all standards in schedule, construction quality, and safety management.

Throughout execution, the project management team consistently adhered to the philosophy of “Safety First, Strict Control, Standard Implementation.” In personnel access, it strictly enforced 100% certification for special-operations personnel and ensured all site workers completed pre-job safety training and technical safety briefings. For high-risk site operations, it implemented standardized controls for lifting, temporary electrical work, and work at height. In standardized work practices, it optimized construction techniques based on site conditions, eliminating safety hazards across three dimensions—process, equipment, and workflow. Thanks to its robust safety management, standardized on-site operations, and zero-accident record, the project stood out at the T-brand’s 2026 Annual Contractor EHS&S Workshop and received the “Special Safety Award.” This honor fully demonstrates the company’s professional and refined safety management capabilities in engineering, sets a benchmark for safety performance in client relations, and further strengthens strategic partnership credibility with the T-brand.

Technology and Innovation

In AI knowledge base development, GPU server functional iteration continued, document parsing service performance was optimized with significantly reduced processing times, and vectorization parsing of documents for GPU processing underwent ongoing testing. Product functional specifications, code files, and user manuals were being consolidated in preparation for project acceptance.

AMR technology R&D made steady progress. The AMR prototype equipped with the self-developed controller is undergoing functional optimization testing at the Wuhan plant; pallet recognition accuracy has achieved the required standard after optimization and is entering extended stability validation. Through HCD Group’s coordination meetings, clear overseas demand for AMR products has been identified, and AMR product materials are being prepared in response to this demand.

HCD Group also introduced a renewed R&D management system with comprehensive IPD process review for all R&D projects. It was mandated that all ongoing R&D projects be re-evaluated and re-reviewed following the full IPD development process—from market/sales-side requirements research, through project review, to final project approval; projects failing IPD review will be suspended, and all new projects must strictly follow the process from initiation. On the IPD platform front, Feishu IPD continues in normal use, with product line requirements management, R&D budget management module, and product release processes all launched in trial operation.

In proprietary product development, the SCADA system prototype development has been completed and pre-acceptance conducted, with detailed design refinement ongoing. APC series product prototypes are undergoing extended stability testing under load, while structural optimization and upgrades to existing APC equipment are being carried out concurrently. Modular belt product development has completed extended stability testing, and the product manual has been compiled.

Team and Talent Spotlight

The “Team Execution and Leadership Enhancement” training organized by Shanghai DEMC’s HR Department this month is an important initiative in advancing HCD Group’s “Learning Organization” development and strengthening cultural integration and team cohesion. The training effectively reinforced the management team’s collaborative mindset and sense of shared responsibility, injecting new cultural momentum into building a high-performance, highly collaborative management echelon. Talent remains the core foundation for long-term corporate development, and management capabilities are the key engine driving steady progress. Going forward, Shanghai DEMC will continue to establish a regular, tiered, long-term management empowerment system, implement tracking mechanisms for training outcomes, periodically review learning effectiveness, and continuously iterate and optimize management training content. Through systematic and sustained talent development, it will continue to forge high-quality management teams, equipped with strong management capabilities and efficient execution to respond to market changes and industry challenges, sustaining organizational vitality and building a solid talent base for long-term, high-quality, stable development.

Meanwhile, Hubei DMW maintained regular professional training and skills enhancement programs. The technical department organized training on frequency converter products, and the Municipal Employment Bureau invited professional lecturers to conduct mechanical design training for all technical staff. The manufacturing electrical team organized specialized training on electrical cabinet assembly and installation standards, as well as cable installation and usage standards. The safety supervisor participated in government-organized training sessions on “2026 Citywide Industrial Safety, Injury Prevention, and Fire Safety” and “Major Accident Hazard Identification Standards for Industrial and Trade Enterprises,” enhancing employee professional skills while supporting comprehensive operational improvement.

Overseas subsidiary DMW successfully hosted the 8th Annual CTC Golf Outing this month. The event aimed to promote team integration and cross-departmental collaboration, with enthusiastic participation from all employees, fostering mutual understanding and consensus through friendly competition, and demonstrating excellent team spirit and cooperative awareness. The event also integrated a charitable component, focusing on supporting the Taylor School District’s Family Resource Center, raising key resources for local families including educational tutoring and daily necessities, and effectively driving community engagement. The Assistant Superintendent of Taylor School District and the program liaison attended as guests, highlighting the positive outcomes of the event in deepening community partnerships. This golf outing was not only a vivid expression of the corporate team culture but also extended team spirit from the workplace to the community, achieving an organic integration of internal cohesion enhancement and external social responsibility fulfillment, adding richer meaning to the corporate culture system.

Operational Excellence Initiatives

HCD Group’s systematic reform of the monthly operating review meeting model marks a solid step forward in promoting refined operations and building a high-performance management culture. The new model deeply integrates annual OKR key indicators with the red-yellow-green three-tier control system, shifting operating analysis from high-level overview to precise problem identification and deep root-cause analysis, embodying the core logic of lean management’s “Data-driven, Precision-targeted” approach. At the institutional level, HCD Group eliminates bureaucratic overhead and formalism, substantially improving meeting decision-making efficiency and implementation rigor. In particular, the three reporting principles effectively counter the tendency to “report only good news,” making operating analysis genuinely focused on identifying and solving problems.

More importantly, HCD Group’s comprehensive closed-loop management mechanism extends lean management coverage from the decision-making level to business execution. This closed-loop system, driven by problem lists, flagged by the three-tier indicators, and aimed at continuous improvement, transforms operating review meetings from one-off information updates into an engine for spiraling organizational effectiveness. This reform not only reinforces subsidiaries’ primary operational responsibility but also extends lean improvement from the production floor to the entire management chain, providing solid management assurance for HCD Group to achieve its strategic objectives of “Stable Profitability and Efficiency-Driven” during the industry’s deep adjustment period.

Overseas subsidiary DMX recently organized a specialized technical exercise on P&F conveyor design and calculation. This systematic, practice-oriented exercise focused on key technical aspects including vertical curve design and calculation for P&F and PO conveyor systems, stop-positioning logic analysis, and total carrier count calculation, conducting comprehensive, multi-dimensional research and engineering validation. Through detailed chain-pull demand calculations, the team systematically mapped the mechanical characteristics and operating parameters of conveyor systems under various working conditions, laying a solid technical foundation for accurate design and efficient delivery of complex future projects. Through this systematic training, the team achieved significant improvements in front-end engineering analysis capability, technical judgment accuracy, and cross-disciplinary collaboration efficiency, further enhancing the company’s technical confidence and core competitiveness in the automation conveying sector, and fully preparing for higher-complexity, higher-standard international projects.

Team Culture in Action

The visit of overseas subsidiary leaders to HCD Group this month, with a series of coordination meetings and on-site exchanges at the Shanghai and Shiyan bases, marks a substantive phase in HCD Group-led global collaborative integration. This cross-border collaborative exercise is a vivid illustration of HCD Group’s team culture in a global context. From strategic coordination at HCD Group level to precise alignment across each subsidiary’s professional functions, all parties consistently prioritize the collective interest, setting aside parochialism, honing team chemistry through front-line practice, and strengthening mutual trust through tackling challenges together. By establishing cross-functional task forces, implementing a transparent quotation and profit-sharing mechanism, and planning two-way technical training and personnel exchange programs, the China-Mexico-US tripartite not only achieved efficient business coordination but also internalized the team culture principles of “shared goals, shared resources, shared capabilities” as daily collaborative norms. These synergy achievements demonstrate HCD Group’s resolute determination to drive global strategy execution through team cohesion, with the global integrated delivery system accelerating toward a more resilient and competitive international enterprise.

June—from the candid dialogue of the All-Employee Open Dialogue, to the systematic reform of operating review meetings; from the successful completion of semi-annual project acceptances, to continued progress in AI and product technology R&D; from the solid implementation of Safety Month activities, to the deepening of global collaborative strategy—every undertaking has left a tangible mark of progress. Every step taken by HCD Group in June embodies the wisdom and dedication of all colleagues. As the second half of the year commences, let us continue to uphold the operating principles of “Stable Profitability, Efficiency-Driven, and International Growth,” with closed-loop management as our safeguard and team culture as our bond, united in purpose and effort, to achieve HCD Group’s 2026 strategic goals through persistent struggle and determination!