Group Strategy and Global Layout

In September 2025, during the third quarter summary meeting of HCD Group, the group reviewed the OKR work summary season and officially launched the 2026 strategic planning and decoding work. The group will fully implement the OKR management system at the group level, company level, and department level in January 2026. This systematic strategic project will complete a complete closed-loop from market analysis and competitive positioning to resource allocation and business management, providing important guarantees for the group to maintain strategic determination and execution in the complex and ever-changing global market environment. At recent business meetings, Mr. Chen Ze, the CEO of the HCD Group, has repeatedly emphasized the need to continuously deepen the mission of "creating value for every customer with high-quality products and services", and to promote the alignment and execution coordination of the entire group's goals through strategic decoding. Mr. Chen Ze specifically pointed out that in the context of the current deep adjustment of the global economic pattern, HCD must adhere to technology driven and value creation, take customer needs as the source of innovation, take employee growth as the cornerstone of development, and build sustainable organizational capabilities.

In terms of internationalization strategy, the group has made an important decision to comprehensively upgrade its overseas management platform to the HCD Group's overseas operation management center. This move achieves unified management and coordinated operation of the United States, Mexico, Brazil, and the European subsidiaries under construction, marking a new stage of refined operation for HCD's globalization strategy. Through centralized management, resource sharing, and standardized operations, it is expected to significantly reduce overseas operating costs and improve cross regional collaboration efficiency.

Substantial progress has been made in expanding the European market, and the establishment of the European subsidiary has entered the detailed evaluation stage. The special working group led by Mr. Xu Xianzhong, Vice President of Technology and General Manager of Sales Center of the HCD Group, is conducting in-depth analysis of key elements such as supply chain cost structure, tax preferential policies, and human resource allocation to ensure that overseas layout not only conforms to the Group's globalization strategy, but also can quickly respond to local market demand.

Business Progress and Project Breakthroughs

This month, HCD has achieved multiple key breakthroughs in various business sectors worldwide, demonstrating excellent order delivery and system integration capabilities. The domestic subsidiary has shown excellent performance in receiving payments, significantly exceeding the expected performance targets. This achievement was achieved against the backdrop of increasing economic uncertainty and fierce industry competition, fully demonstrating the resilience and competitiveness of HCD's business model.

In terms of specific contract orders, the subsidiary of the HCD Group, Hubei DMW, has undertaken the customer named T who is globally renowned electric vehicle manufacturers. The contract orders for its Berlin and US factories have entered a critical implementation stage. The Berlin factory equipment has entered a critical stage of acceptance, and the equipment undertaking team has overcome multiple challenges such as high technical standards and tight project schedules, demonstrating excellent technical strength and project management capabilities, laying a solid foundation for expanding into the European market in the future. HCD Group is competing in the South American international market, achieving a significant breakthrough in logistics and warehousing automation orders in Brazil. At the same time, overseas orders from Southeast Asia and other regions are also continuing to advance.

Shanghai Demc, a subsidiary of the HCD Group, has made significant progress in multiple new energy vehicle manufacturing projects. Among them, the customer named B is a high-end German automotive brand factory, and its robot automation production line has successfully entered the VS1 stage. During this National Day holiday, the project team stayed on duty, completed 42 car manufacturing tasks, and simultaneously promoted rhythm optimization and quality improvement work. The customer named L is a high-end brand factory of emerging domestic automobiles, and its welding and assembly robot automation production line has officially started the on-site hardware import process. The process covers intensive transformation and upgrading of 45 sets of PLC systems, 485 robots, and 128 tooling equipment, demonstrating the company's outstanding strength in complex system integration. In addition, the customer named D is a large domestic joint venture automotive company from the Fortune Global 500, and its robot automation production line has successfully achieved a 50JPH pace target in the sub assembly area.

In terms of overseas business, the performance of the HCD Group's subsidiary DMW&H in industry forums and professional conferences further strengthened its brand influence in the North American market. The company representative attended the US Parcel Forum and IFDA Solution Conference, had in-depth discussions with potential customers and suppliers, and shared automation solutions that have attracted widespread attention in the industry, creating favorable conditions for future business expansion.

Technological Innovation and Breakthroughs in Research and Development

HCD Group has always adhered to the development concept of "innovation driving the future", and has made multiple progress in the field of technology research and development this month. The AI enterprise knowledge base project, after thorough research in the early stage, plans to collaborate with university R&D teams to provide intelligent solutions for enterprise knowledge management.

In the field of robot research and development, the company has undergone internal evaluation and confirmed its technical capabilities in power and simulation testing of humanoid robots. It plans to collaborate with relevant parties for joint development. At the same time, the technical team of the solution works closely with the expert team from universities, combining AR interactive technology to create the next generation of intelligent manufacturing display and training solutions.

In terms of information security protection, the email AI protection security project has been put on the agenda. The IT department, in collaboration with external technical experts, is currently in deep communication with various email service providers regarding the security protection requirements for business email correspondence. The aim is to enhance email protection capabilities and establish effective information security barriers.

Practice of Corporate Culture and Values

The corporate culture has been deeply integrated into every aspect of HCD's management and has become the core driving force for the group's sustainable development. The cultural concept of responsibility and collaborative win-win is vividly reflected in various projects. In the implementation process of B customer's contract order, facing the challenge of repeatedly advancing customer milestones, the project team took the initiative to work overtime, re-optimized the construction plan, and ultimately completed the empty cycle acceptance ahead of schedule, winning valuable time for subsequent work. During the implementation of the D customer contract order, the project team persevered in the multi line transformation and debugging, ensuring that the restoration of old vehicle models entered the SOP stage on time. The customer named C is a large domestic joint venture automotive enterprise from the Fortune Global 500. During the implementation of the contract order for its robot automation production line, the project team overcame difficulties such as frequent alarms from old equipment and worked together with various functional modules to ensure the smooth installation and commissioning of the line.

The subsidiary of the HCD Group, DMW&H in the United States, has been awarded the honour of " Voted Best Places to Work in New Jersey" for the 12th consecutive year. This long-term and stable honor reflects HCD Group's firm commitment to building an excellent employer brand worldwide. The President of DMW&H emphasized in his acceptance speech that employee satisfaction is equally important as customer satisfaction, and only when employees receive growth and respect can they create outstanding value for customers. This concept is highly compatible with HCD Group's corporate vision of "becoming a leader in the industry, maximizing shareholder value and employee value". At the same time, DMW&H has taken new steps in the field of digital communication and launched on the Hootsuite Amplify platform. This platform provides a reflection of our brand, professional knowledge, and company dynamics, empowering global employees to participate in brand building and showcasing the value we bring to customers and society.

The special work of "problem list closed-loop management" carried out within the HCD Group has achieved significant results. Each subsidiary has actively responded and established a complete mechanism from problem collection, analysis and handling to effectiveness verification. The HCD Group has comprehensively improved from multiple dimensions such as process optimization, system protection, and training and education, reflecting a mature organizational mentality of "learning from failure and growing through improvement".

Management Improvement and Process Optimization

To enhance the overall operational efficiency and risk control capabilities of the HCD Group, a series of management changes and process optimizations have been promoted this month.

Under the leadership of the Legal Center, the special management of accounts receivable has been comprehensively promoted. By systematically sorting and classifying accounts receivable that are overdue for more than 3 months across the entire HCD Group, a "one category, one policy" management mechanism has been established, which not only improves the cash flow situation but also promotes a healthy business development model.

The supplier compliance review work has been fully launched. Based on the newly issued judicial interpretation on labor disputes, the Legal Center has collaborated with various subsidiaries to conduct a systematic investigation of the qualifications of existing suppliers, effectively controlling employment risks.

The regulation of "Guidelines for Business Collaboration within the HCD Group" has been officially released and implemented. This important institutional document clarifies the rules and incentive measures for cross subsidiary and cross regional business collaboration, and establishes a collaborative mechanism centered on customer value creation. The regulation emphasizes the collaborative requirements between overseas subsidiaries and domestic teams, and sets up a collaborative reward fund aimed at breaking down organizational barriers and unleashing collaborative value.

The approval process for fund payments has been significantly optimized. The finance center has taken the lead in revising the regulation of "Guidelines for Fund Payment Approval Work", optimizing the payment control mechanism with multiple levels of approval and two-way verification. At the same time, the IT department has upgraded the security protection capabilities of the email system, opened security functions such as remote login reminders and new device verification, and taken multiple measures to help improve the group's fund security management level.

The independent operation mechanism is fully implemented in the three major business departments of Shanghai Demc, Automation Unit, Robotics Unit, and Engineering Installation Unit. By clarifying business responsibilities, delegating management authority, and optimizing accounting mechanisms, the operational vitality of grassroots organizations can be effectively stimulated. The three pilot departments have gained greater autonomy in personnel appointment, salary distribution, and other aspects, while assuming corresponding business responsibilities. This management mechanism of "accounting management and accountability to individuals" has brought positive changes, and employees' sense of ownership and management awareness has significantly increased.

In terms of safety management, Shanghai Demc underwent a pre-holiday safety inspection in Jiading Industrial Zone and received high praise from the inspection team. The inspection team specially praised the company's excellent practices in fire protection facility management, safety prevention and control, which fully affirms HCD Group's long-term adherence to the concept of "Safety First".

Employee Style and Team Building

In this fruitful autumn of September, many touching stories of fighters and outstanding teams have emerged in the HCD family. During the National Day holiday, Shanghai Demc had 14 on-site construction projects nationwide, with a total of 148 people voluntarily giving up their vacations and sticking to the front line of work to ensure project delivery commitments to customers. Among them are construction teams that work continuously to ensure equipment is delivered on time, control engineers who are still debugging programs late at night, project managers who are busy coordinating resources on various project sites, and functional teams that work together in the face of difficulties. It is the hard work of these employees that ensures the smooth progress of key customer projects.

The engineering leadership team of DMW located in America, a overseas subsidiary of the group, held a team building event on the Princess River cruise ship in Detroit, showcasing another side of HCD Group's global management. Against the backdrop of beautiful river scenery and city skyline, team members freely discuss their work insights, share management experiences, review lessons learned, and plan team development. In a relaxed and pleasant atmosphere, they deepen consensus, strengthen understanding and trust.