HCD Group Highlights

In January 2026, HCD Group embarked on the journey of the new year with steadfast strategic focus and highly efficient operational execution. Closely aligned with its annual strategic objectives, HCD Group advanced steadily through the complex economic landscape with forward-looking vision and systematic thinking. This month, management focus was intensively concentrated on five core areas: full-cycle control of accounts receivable, deepening the practice of the independent business model, achieving substantive breakthroughs in digital transformation, forward-looking deployment in overseas markets, and precise coordination of group funds, ensuring the effective communication and execution of strategic intent.

The Supply Chain Ecosystem Conference was successfully convened, fostering consensus under the theme "United in Purpose". On January 7th, HCD Group's "United in Purpose, Striving for a Shared Future" 2026 Annual Supplier Conference was grandly held simultaneously online and offline in Shanghai and Shiyan. Approximately 150 representatives from core suppliers gathered with HCD Group's management. Chen Ze, Vice Chairman and President of HCD Group, systematically elaborated on HCD's dual-drive strategy of globalization and technological innovation, explicitly positioning suppliers as "partners in co-creating value and growing together." He emphasized that under the three principles of "Quality Bottom Line, Long-term Low Cost, and Integrity & Transparency," the Group will deepen collaboration with strategic suppliers, leverage digital tools to enhance synergy efficiency, and advocate for establishing more stable, mutually trusting, and shared-responsibility relationships with partners. This conference was not only a review of past cooperation but also a mobilization for the future, aiming to build "Group-wide Overall Competitiveness" and a resilient supply chain, setting a "United in Purpose, Striving for a Shared Future" tone for annual supply chain collaboration.

HCD Group achieved significant progress in global market expansion. HCD Group's Legal Department is leading the engagement with local overseas law firms to thoroughly address legal, tax, and corporate governance issues related to Germany, laying a solid legal and entity foundation for deeper cultivation of the European market. In North America, HCD Group's strategic layout has become clearer. In the future, Mexico will not only serve as a manufacturing and engineering center but, through HCD Group's subsidiary in the US, will form a synergistic model of 'Manufacturing in the South + Hub in the North.' This model aims to fully leverage local cost advantages to build an efficient, low-cost operational network covering major North American markets, vividly illustrating HCD Group's strategic wisdom of "Global Resources, Local Delivery".

Key Achievements

In the first month of the new year, all business units of HCD Group operated at full capacity, reporting positive news on both the market development and project delivery fronts, showing a favorable start to the new year.

Market orders continued to break through, accumulating momentum for future growth. Shanghai DEMC precisely targeted efforts in the fiercely competitive market, successfully securing two major orders in January, an additional supplementary order with the well-known new energy vehicle brand L, and a mainline project with the renowned traditional automobile OEM B, achieving a successful start towards annual targets. Its sales pipeline holds dozens of high-quality potential projects, covering leading enterprises in high-growth fields such as white body, new energy three-electric systems, and medical automation, providing ample reserves for sustained future order fulfillment. Hubei DMW continued to focus on global benchmark clients, with a series of projects for the globally renowned new energy vehicle brand T becoming a standout feature of its market expansion, and successfully securing a general assembly order from a well-known domestic new energy vehicle brand B.

Project delivery achieved remarkable results, enhancing customer recognition. Excellent project delivery is the cornerstone of winning the market. The project for the globally renowned automotive brand G, undertaken by Shanghai DEMC, was successfully completed after several months of intense efforts. Facing multiple challenges including multi-model compatible design, high-precision manufacturing of large tooling, and an extremely tight 56-day retrofit timeline, the project team led by Project Manager Chai Yunfei, through scientific progress control, precise resource allocation, and relentless dedication, ultimately delivered on time with high quality, achieving production line restart. Chai Yunfei was awarded the "Best Project Manager" title by the client. This honor not only acknowledges his personal professionalism and responsibility but also represents the highest praise for the delivery capabilities of the entire HCD project team. Overseas, the general assembly line built by Hubei DMW for the domestic renowned engineering machinery brand S's factory in Mexico has successfully entered the trial production phase. Furthermore, multiple key domestic and international projects, including the chassis line for brand B in Jinan, the conveyor line for brand T's Austin factory in the US, the general assembly retrofit for brand G in Brazil, and the project for brand G's base in Vietnam, are all progressing steadily as planned, with overall controlled project execution, reflecting the Group's increasingly mature project management system.

Technology and Innovation

Innovation is the core engine of HCD Group's development. In January, HCD Group made a series of substantive progress in AI application, R&D system transformation, and independent technological breakthroughs.

 The WMS/WCS computing power and AMR dispatching system, whose architecture was designed under the responsibility of HCD Group’s Chief Scientist Professor Wu, is actively seeking customers with product needs to participate in early-stage requirement co-creation, ensuring close alignment between R&D and market demands. The digital AI special project led by the Group IT Center is progressing steadily as planned, closely focusing on business value for scenario development. Among these, the AI Enterprise Knowledge Base project, as a key initiative, adopts a fusion technology route of "Rules + Large Language Models" in collaboration with a university research team. Currently, the UI interface design is basically complete, and testing for project summary generation and intelligent summary vocabulary consolidation is underway. Shanghai DEMC has prepared a large amount of historical data for "blind testing" to rigorously verify the model's accuracy and practicality, aiming to transform scattered project experiences into searchable, reusable organizational intelligence to empower quotation, design, and problem-solving.

To establish a market-oriented and highly synergistic R&D system, HCD Group R&D Center completed a simulated run of the entire IPD process across all R&D projects from 2025 by the end of January. Currently, the project process management system based on Feishu has been deployed, and online training and trial operation are about to be organized. This move not only focuses on standardizing product development and technology development processes but also integrates R&D strategy management and market management processes into a unified framework, marking a critical step for HCD Group's R&D management towards systematization and process-orientation.

Even more encouraging is the innovative practice from the overseas front-line. DMX (DMW in Mexico) successfully completed its first internally designed conveyor system—an improvement project involving a replacement motor installed within an encoder system to achieve turntable rotation. Although modest in scale, this project signifies a capability leap for the overseas team towards "internal design and improvement," enabling rapid adaptation and optimization for specific customer needs. This aligns perfectly with HCD Group's overseas strategic objective of "building local engineering capabilities" and serves as a vivid example of the technological innovation culture taking root globally.

Team and Talent Spotlight

HCD's value is created by every dedicated individual. In January, numerous employees and teams achieved extraordinary results in their ordinary posts, shining with professionalism, dedication, and responsibility. The New Year holiday window in January was a golden period for project teams working tirelessly on client sites to secure deliveries, with 98 HCD personnel advancing 15 projects simultaneously. The successful deliveries earned HCD Group the trust and orders of its clients.

The story of Shanghai DEMC Project Manager Chai Yunfei is the best illustration of HCD's "Customer - Centric" values, vividly interpreting excellence in delivery. In his project, he led the team to confront the quadruple challenges of "high technical density, strict manufacturing precision, extremely tight timeline, and exceptionally harsh environment." During the critical 56-day shutdown retrofit period, he acted both as the commander coordinating the overall situation and as a front-line fighter, leading the team to develop an hourly-level progress control plan and coordinating solutions for countless unforeseen technical issues. Ultimately, they completed the task perfectly amidst the summer heat, earning the client's prestigious annual "Best Project Manager" award. His story proves that excellent project management capability is a vital component of HCD's core competitiveness.

Operational Excellence Initiatives

Facing external market pressures and internal development requirements, HCD Group has designated 2026 as the "Year of Deepening Lean Management." In January, systematic improvements were launched across multiple management dimensions, with efforts focused on building a more resilient full-value-chain lean management HCD Business System (HBS).

The annual strategic decoding work led by HCD Group Human Resources Center has formed a closed loop, with full integration between strategic decoding and the OKR system. Starting from September 2025 and concluding with the completion of individual performance commitments on January 31st this year, HCD Group successfully decomposed the top-level strategy layer by layer into key tasks and measurable objectives for subsidiaries, departments, and individuals, achieving the threading through of "top-down decomposition" and "bottom-up execution." Currently, all OKRs and KPIs have been entered into the unified digital platform (HBS), aiming to realize data-driven linkage among "Strategy - Execution - Evaluation - Incentive," ensuring the entire HCD Group "focuses efforts in one direction".

Cost refinement management is getting serious. The determination of labor cost rates is a key annual battle for HCD Group's cost control. Led by the Finance Center and involving multiple departments including HR, Sales, Solution, and Project teams, repeated calculations were conducted to set the 2026 rate standards for subsidiaries. The goal is clear: rates must be true, accurate, and without omissions, and ensure consistency from quotation and budgeting to accounting. The approach of digesting cost pressure by "improving efficiency, optimizing processes, and reducing non-productive hours" itself constitutes a profound baptism of cost awareness and lean practice.

The Supplier Conference held in January marked HCD Group's entry into a new phase of "ecosystem synergy" in supply chain management, signifying upgrading in supply chain collaboration and procurement management. The Group Procurement Center clarified four objectives for 2026: "Cost Reduction & Efficiency Improvement, Supply Assurance, Collaborative Innovation, and Controllable Risks." It will advance four key strategies: promoting digitalized & transparent procurement, intelligent risk control, co-building a global network, and deepening strategic relationships. Particularly noteworthy is the倡议 (initiative) of "Going Global as a Group." Group Vice President Xu Xianzhong called on supplier partners at the conference to share information, resources, and benefits with HCD Group to jointly explore overseas markets. The Procurement Center has initiated a supplier tiered management system and signed strategic cooperation framework agreements with 7 core partners, exploring financial innovations like order factoring, aiming to build a new transparent, mutually trusting, and value-co-creating supply chain ecosystem.

Accelerated construction of full-process monitoring system of the project. To eradicate project delays and information flow blockages, the Finance Center and IT Center are jointly developing a project a full-lifecycle monitoring system of a project. This system will solidify key project milestones, enabling automatic data aggregation, overdue automatic alerts, and task automatic reminders. This will enhance the timeliness and accuracy of project management, allowing project managers and leaders at all levels to focus on problem-solving rather than information gathering. The overseas DMW&H software team, to ensure smooth future project delivery, recently efficiently carried out a series of forward-looking preparations and system optimizations: the team pre-completed the creation of all necessary functional modules within the Jira system, solidifying the digital foundation for project planning and execution; by further refining and clarifying the "Functional Requirement Submission Process,"cross-departmental goal alignment and synergy efficiency were effectively promoted; simultaneously, the product engineering team established clear work expectations and responsibility standards for all members, effectively consolidating team cohesion.

Team Culture in Action

"Fighting like a team" is not just a slogan but a behavioral code integrated into the blood of every HCD member. The many practices in January vividly interpret this cultural connotation.

When technical challenges arise on-site, engineers from the Design Center provide support online no matter how late; when procurement encounters bottlenecks, the Group Procurement Center immediately intervenes to coordinate supplier resources; when overseas projects need domestic manufacturing support, the Wuhan and Shiyan bases provide full support. From the day-and-night battle of Chai Yunfei's team in the heat to the perseverance of overseas engineers in unfamiliar environments, HCD members have demonstrated remarkable resilience and responsibility. Regardless of how tough the conditions or how tight the deadlines, meeting the delivery commitment to the client is the highest mission. This kind of collaboration that breaks down barriers with problem-solving as the sole goal embodies the "assist" and "covering positions" spirit of the team culture. Simultaneously, this fighting spirit of "never giving up until the final whistle" is the soul of the team culture, also infecting and uniting every ecosystem partner.

The Supplier Conference extended the "Team Culture" from within the enterprise to the entire value chain. The proposals from supplier representatives—"Deep Mutual Trust, Transparent Synergy" and "Value Co-creation, Responsibility Sharing" —resonate highly with HCD's "United in purpose" philosophy. HCD Group's advocacy for "Going Global as a Group" precisely treats the entire supply chain as a "joint fleet" expeditioning overseas, where each partner is an indispensable part of the fleet, sharing opportunities and weathering storms together. This ecosystem community consciousness, which transcends simple buyer-supplier relationships, is HCD's core advantage in facing future complex competitive landscapes.

The prelude of 2026 has been unveiled. Let us continue to embrace change, pioneer innovation, and journey together towards even more magnificent star-filled seas!

May 2026 become a milestone for HCD’s leapfrog development!