Group Strategy and Global Layout

From October to early November 2025, HCD Group will enter a critical stage of annual strategic summary planning. Mr. Chen Ze, the CEO of HCD Group, personally presided over multiple high-level strategic seminars and the CEO's office meeting. At the third quarter OKR summary meeting held at the end of October 2025, all departments and subsidiaries of HCD Group comprehensively reviewed the operating results of the first three quarters. Data shows that compared to the increasingly competitive industry environment, HCD Group has achieved stable and sustainable operations in both domestic and international markets. Mr. Chen Ze emphasized in his summary that we must adhere to a problem oriented approach, seek breakthroughs from within, and build sustainable competitive advantages through systematic improvement.

HCD Group has confirmed that each subsidiary will hold a 2026 strategic seminar starting from November 2025. This meeting will focus on the following dimensions: clarifying company level strategic goals, including key indicators such as market share, technological innovation, and talent development; developing a detailed strategic implementation path by breaking down macro goals into executable and measurable departmental tasks; establishing a dynamic adjustment mechanism to ensure flexibility and adaptability in the process of strategic execution. HCD Group's Human Resources Center has initiated relevant preparations in advance, including organizing strategic decoding training, collecting preliminary plans from various departments, etc., laying a solid foundation for the smooth convening of the seminar.

HCD Group has made significant progress in expanding its global market. In the European market, HCD Group has decided to establish subsidiaries in two countries, led by Mr. Xu Xianzhong, General Manager of HCD Group's Sales Center and Vice President of Technology, to form a special working group to comprehensively evaluate key elements such as supply chain costs, tax policies, and talent resources. The working group members include professionals in finance, legal, human resources, etc. They are conducting a detailed analysis of potential site selection and expect to complete a preliminary evaluation report in the near future.

On October 24, 32 government officials, business executives, experts and scholars from 11 countries along the "the Belt and Road" gathered in Shanghai to participate in the "the Belt and Road" National High tech Industry and Innovative Development Seminar sponsored by the Ministry of Commerce of China and organized by the Shanghai Asia Pacific Economic and Information Technology Talent Training Center. They entered Shanghai DEMC, a subsidiary of HCD Group, as an important practice link of the seminar, to jointly discuss the innovation and prospects of high-tech industry and intelligent manufacturing. HCD Group attaches great importance to the visit of this training class, and Mr. Chen Ze, the CEO of HCD Group, personally arranged and deployed the reception work. Appointed by Mr. Chen Ze, the President of HCD Group, Mr. Xu Xianzhong, General Manager of Sales Center of HCD Group and the Vice President of Technology, attended the reception on behalf of HCD Group. Mr. Xu Guosheng, the General Manager of Shanghai DEMC, accompanied the whole process. Mr. Zhang Haojue, the General Manager of Shanghai DEMC Sales Center, Mr. Wang Tiancheng, the General Manager of Overseas Business Unit, Mr. Mao Shenglong, the Director of Overseas Business Unit Planning & Solutions, and others participated in the exchange. The trainees visited HCD Group’s exhibition hall and the intelligent production workshop of Shanghai DEMC. During the discussion session, Shanghai DEMC showcased the overall DEMC profile, mature product technology, and rich project experience cases. Representatives from the Shanghai International Training Center of the United Nations Institute for Training and Research, as well as the relevant departments of the Economic and Information Commission, delivered speeches respectively. The trainees of the training course conducted in-depth discussions on topics such as "DEMC's strategic layout in various sectors of the global strategy and strategic considerations in the African sector" and "the applicability and promotion path of intelligent manufacturing technology in small-scale industries", and achieved positive results.

Business Progress and Project Breakthroughs

The overseas subsidiary of HCD Group, DMW&H in the United States, has officially become a key partner of the Mississippi Department of Revenue's new distribution center. The distribution center is currently under construction in Canton, Michigan, and will be equipped with an advanced material handling system driven by the indaGO warehouse execution system under DMW&H, integrating intelligent subsystems such as storage, retrieval, picking, and sorting. After the completion of the distribution center, its operational capacity is expected to achieve a leapfrog improvement: the storage capacity will double, exceeding 800000 cases; The annual processing capacity has increased from 4 million to 8 million cases; The loading capacity has doubled. This transformative project will significantly improve operational efficiency and inject strong momentum into the long-term development of the Mississippi Department of Revenue. DMW&H will continue to share the latest progress of this key project.

The subsidiary of HCD Group, Hubei DMW, has successfully won the bid for the first phase of the G-brand automobile assembly project in the Vietnamese market, which is an important breakthrough for HCD Group in Southeast Asia. The project team is carrying out various preparatory work to ensure that the project can be launched and implemented as planned.

The AMR intelligent mobile robot project for the customer named Z of Hubei DMW is scheduled to be shipped in November, and the electrical debugging work has been deployed ahead of schedule. The project team innovatively adopted the "pre commissioning" working mode, completing most of the commissioning work before the equipment leaves the factory, effectively shortening the on-site installation cycle. And the project team has established a strict quality control system, with standard operating procedures developed for every step from standard component procurement, non-standard component design, processing, and manufacturing, to assembly, integration, and debugging.

During the "National Day" period, Shanghai DEMC carried out on-site construction on 14 projects, overcame difficulties, and achieved complete success, meeting the customer's requirements for double track and project milestones, laying a solid foundation for the successful implementation of the projects in the future. This is due to HCD group's high emphasis on the standardization and timeliness of project management, and its continuous promotion of standardized construction plans. By clarifying the management requirements for key elements such as technology, safety, quality, and resources, establish a management system that covers the entire lifecycle of the project.

Technological Innovation and Breakthroughs in Research and Development

HCD Group continues to invest in artificial intelligence and digital research and development. The AI enterprise knowledge base project has been officially launched and implemented, and cooperation has been carried out with two universities respectively. The project team has completed the requirements analysis and scheme design, and is currently working on system development and data preparation. The project aims to build an enterprise level knowledge management system that enables effective accumulation, sharing, and application of knowledge, enhancing the organization's learning ability and innovation efficiency.

Mr. Xu Xianzhong, General Manager of HCD Group Sales Center and Vice President of Technology, led the Shanghai DEMC technical team to conduct in-depth technical exchanges on "Robot 3D Scanning Development and Application" with a professional team from a well-known N-brand automotive OEM. By drawing on advanced industry experience, the team is developing 3D scanning technology with independent intellectual property rights, which is planned to be applied in multiple scenarios such as virtual debugging and quality inspection. The successful development of this technology in the future will significantly improve the efficiency and quality of engineering implementation

The Technology Center of Hubei DMW,the subsidiary of HCD Group, has optimized and upgraded the core algorithm of the AMR intelligent mobile robot control system, improving the positioning accuracy and operational stability of the equipment. The integrity of modular documents has been highly valued, and the technical center and department have collaborated to improve the document management system. By establishing standardized document templates and review processes, ensure the accuracy, completeness, and traceability of technical documents. This work not only improves the execution efficiency of the current project, but also creates conditions for knowledge accumulation and technological inheritance. In terms of improving manufacturing automation capabilities, the technology center has identified automation transformation in welding, handling, and other processes as a key research direction. Through in-depth analysis of the existing process flow, identify the key nodes of automation transformation, and develop practical and feasible implementation plans.

Wuhan DEMC, a subsidiary of HCD Group, has successfully developed a new generation of ultra-thin AMR intelligent mobile robot products, with a thickness reduction of 30% compared to traditional products and a load capacity increase of 20%. The product has entered the stage of small-scale trial production and is planned to be put into use in the project.

Employee Style and Team Building

On the basis of completing the third quarter OKR summary meeting in each subsidiary, HCD Group organized a third quarter business analysis meeting and OKR performance report meeting on October 28-29, 2025. The heads of each subsidiary and functional department comprehensively reported the work results of the first three quarters, analyzed the existing problems and shortcomings in depth, and proposed specific improvement measures. Shanghai DEMC showcased its breakthroughs in new business expansion and overseas market development; Hubei DMW highlighted the improvement achievements in project management and cost control; Wuhan DEMC shared its experience in technology research and product innovation. These tangible achievements fully demonstrate the professional capabilities and fighting spirit of each business unit of HCD Group. Mr. Chen Ze, the President of HCD Group, recognizes the work of each subsidiary and functional department in the third quarter, and hopes that each module can grasp the last quarter of 2025, align its work with the OKR strategic goals at the beginning of 2025, and strive to fully realize the strategic plan for 2025.

The Innovation Committee, led by Mr. Cheng Wenming, General Manager of Wuhan DEMC, and Ms. Hao Ying, Director of HCD Group's Human Resources Center, has carried out many effective tasks. The most eye-catching one is the product innovation suggestion solicitation activity for the entire group, with active participation from functional and professional departments. A total of more than 100 innovation suggestions were received, covering multiple fields such as industrial intelligent manufacturing and intelligent services. All departments provided suggestions and recommendations for innovative development. The Human Resources Center awarded the "Golden Idea" award to outstanding innovative proposers, creating a strong atmosphere of innovation.

Shanghai DEMC has established a Three-in-One technical system. The Technology Center of Shanghai DEMC has built a complete technological innovation system through the collaborative efforts of three teams: process planning, mechanical design, and robot simulation. The process planning team, as the starting point of the project, focuses on product process analysis and production line layout planning, ensuring that each project has technical feasibility and economic rationality from the beginning of launch. The mechanical design team adheres to the concept of "lean design" and has achieved synchronous improvement in design quality and efficiency through the application of fully parameterized 3D design and standardized module libraries. The team has also established a comprehensive design review mechanism to ensure that every design detail is fully demonstrated and optimized. The robot simulation team validates and optimizes the entire production system in a virtual environment, significantly reducing on-site debugging time and minimizing project risks through tasks such as robot trajectory verification, program simulation verification, and beat analysis optimization. The latest virtual debugging technology introduced by the team has achieved synchronous debugging of mechanical, electrical, and software systems, becoming a highlight of industry technological innovation.

Practice of Corporate Culture and Values

Mr. Chen Ze, the CEO of HCD Group, has pointed out in multiple internal meetings that creating value for customers through continuous innovation and high-quality service. The core value of "creating value for every customer with high-quality products and services" has been repeatedly emphasized and practiced. During the execution of a key project for a well-known client named B at Shanghai DEMC, the client requested a last-minute change. The project team did not simply refuse, but organized multiple departments including technical, procurement, and manufacturing to collaborate and tackle the problem, while ensuring project progress and meeting customer needs to the greatest extent possible. This professional and responsible attitude has won high praise from customers.

In the "Commitment to Community" (CTC) community volunteer activities organized by the overseas subsidiary of HCD Group, DMW&H in the United States, a series of meaningful social welfare activities were carried out, vividly demonstrating the company's social responsibility. In the collaboration project with Habitat for Humanity, CTC organizers and employees from the project engineering group participated in a two-day housing construction activity, helping low-income families in the area build safe and economical housing. Volunteers not only contributed their labor force, but also provided financial support for the project through fundraising. In support of The Open Door Store, CTC organizers and the finance group initiated a donation campaign for infant and toddler products. The employees responded positively and collected a large number of essential items such as diapers, wet wipes, baby clothing, jackets, shampoo, hats, gloves, etc. These supplies were distributed to children in the child welfare system through charitable organizations to help them get through the warm winter season. The most touching thing is the annual "Autumn Celebration" blood donation event organized by the company in collaboration with the American Red Cross. Under the organization of CTC organizers and the project delivery group, 36 employees actively participated in blood donation, of which 4 completed the "Strong Red Blood Cell" donation. These compassionate blood will be used by the Red Cross to treat patients in over 2500 hospitals across the country. In addition, CTC organizers and the company's sales, marketing, and solutions teams also held a charity lottery event, raising $3000 in donations for St. Jude Children's Research Hospital. The hospital is renowned for providing free treatment to critically ill children, and this donation will be directly used for research and prevention of childhood diseases.

Management Improvement & Process Optimization

HCD Group has listed accounts receivable management as a key special task, led by HCD Group’s Legal Center, and coordinated by multiple departments such as finance, sales, and project management. The Legal Center has comprehensively sorted and classified accounts receivable that are overdue for more than 3 months, taken differentiated measures for different types, and effectively controlled risks by establishing a "one class, one policy" mechanism. In addition, the Legal Center also focuses on customer qualification assessment to prevent payment risks from the source.

HCD Group continues to promote lean procurement management, optimizing procurement costs through centralized procurement, framework agreements, and other methods. The Procurement Center organized its subsidiaries to compile procurement contracts and material lists for 2023-2025, and systematically sorted out the situation of major suppliers and large purchases of materials. Based on detailed data analysis, the Procurement Center identifies key areas and critical links for cost optimization. The management of the subsidiary company participates in framework negotiations with major suppliers, implementing multiple negotiation strategies to effectively reduce procurement costs and optimize cost structures.

The IT Center of HCD Group continues to promote the construction and optimization of a digital management platform. In terms of human resource management system, the development of the core functions of the strategic OKR platform has been completed, and the digitization and visualization of human resource management have been preliminarily achieved. The Human Resources Center provided positive feedback after the trial and also put forward some improvement suggestions. The IT Center is currently optimizing the system based on this.

In terms of OA system, the IT Center has optimized the qualification review process for subcontracting service providers and completed the data integration between the ES system and OA system of Hubei DMW; We have developed a factoring business statistics dashboard for the financial module, which enables multidimensional data aggregation and visualization of monthly, annual, and payment details.

HCD Group attaches great importance to safety management and has released the "Guidelines for Safety Production Management of External Personnel Entering the Group's Bases" this month. On the basis of fully researching the actual situation of each base and combining with the advanced experience of similar enterprises, this guidebook has established a comprehensive safety management standard for external personnel. In terms of system implementation, the team organized a special on-site inspection, focusing on checking the implementation of labor protection equipment, standardized wearing, on-site 5S management, and other aspects. The inspection results show that the overall safety situation of each base has significantly improved compared to before, but there are still some issues such as individual personnel not wearing safety helmets. In response to these issues, the team has developed a progressive management approach of "supervision notification punishment" to ensure the effective implementation of safety requirements.