HCD Group Highlights

As the spring breeze brings warmth and all things revive, HCD Group officially kicked off its journey towards high-quality development in the opening month of the Year of the Horse with a consensus-building Management Annual Conference and an inspiring work commencement ceremony. From strategic decoding to cultural immersion, from summary and reflection to goal setting, all HCD employees, embracing the proactive spirit of "The Momentum Lies in Our Transformation," seek opportunities amidst transformation and strive to illuminate the starry sky through dedication.

On February 9th, HCD Group successfully held its 2026 Management Annual Conference under the theme "The Momentum Lies in Our Transformation, A Sky Full of Stars," utilizing a hybrid online and offline format. All employees from HCD group and its subsidiaries participated. Management, functional departments, and business leaders from the group and each subsidiary delivered work reports. The conference systematically reviewed the achievements and shortcomings of 2025, clarifying directions for improvement in 2026. Mr. Chen Ze fully affirmed the pragmatic work reports presented by various departments, noting that each business unit has reached a consensus on operations, laying a solid foundation for the year's work. During this conference, Mr. Chen Ze delivered a keynote speech titled "Change Starts with Us, A Myriad of Stars Shine Bright." He deeply analyzed development trends in global smart manufacturing, new energy vehicles, and robotics automation, pointing out that in this period of deep industry adjustment, only proactive change and collaborative progress can help navigate through uncertainties and light up the stars. He formally proposed HCD group's three core operating principles for 2026–"Stable Profitability, Efficiency-Driven, Global Growth " – emphasizing that these are not just annual goals but the central tenets for HCD's strategic implementation.

At the Management Annual Conference, HCD group recognized outstanding individuals, teams, and departments for their exceptional performance in 2025, presenting a total of 116 awards. Among the awardees were R&D backbone who repeatedly achieved excellence in technological breakthroughs, sales pioneers who expanded market territories, engineering stalwarts who diligently worked on project fronts, and management models who pursued perfection in functional support. Their striving stories and remarkable achievements vividly illustrated the spirit of pursuing victory and collaborative success inherent in HCD's "Team Culture," serving as exemplary role models inspiring all colleagues to move forward.

On February 24th, the 8th day of the first month of Chinese New Year, HCD Group held a solemn work commencement ceremony at its Shanghai Headquarters and Shanghai DEMC Base. At 9:18 AM, Group Vice President Xu Xianzhong and Shanghai DEMC General Manager Xu Guosheng jointly lit firecrackers. The ceremony commenced amidst the sounds of firecrackers and brilliant fireworks, symbolizing a prosperous and smooth start to the new year. Following the ceremony, HCD Group President's Office convened a unique "focus-restoring meeting." Mr. Chen Ze first extended sincere gratitude and high respect to colleagues who remained dedicated at project sites during the Spring Festival. He shared his work reflections from the holiday, encouraging all members to maintain their strengths based on the foundation of 2025, focus on improving shortcomings, and strive diligently to achieve the 2026 goals. Subsequently, general managers of various subsidiaries and leaders of group functional departments shared their Spring Festival experiences and work insights, covering topics such as expanding overseas markets, deepening domestic cultivation strategies, deepening internal collaboration, the impact of AI on work and life, talent development plans, and safe and stable cash flow management. Mr. Chen Ze reiterated the annual OKRs as operational targets and affirmed "Stable Profitability, Efficiency-Driven, Global Growth" as the core operating principles, requiring managers at all levels to deeply understand and practice them. In the afternoon, each subsidiary held its own focus-restoring meetings. Led by their respective general managers, teams further unified their thinking and refined action plans, plunging into the new year's work with full vitality.

Between the strategic deployment at the annual conference and the progress of construction, on February 10th, a delegation led by Chen Yongping, Party Secretary and Executive Vice Chairman of the Maojian District Federation of Trade Unions in Shiyan City, Hubei Province, visited Hubei DMW, a HCD subsidiary, to conduct a "Spring Warmth" condolence activity. They delivered condolence supplies to front-line production employees, bringing the care and New Year blessings from the trade union organization. During the event, Chen Yongping warmly chatted with front-line staff, inquiring about their work and life. He highly affirmed their dedication and hard work contributing to the company's development, encouraging them to continue embodying professionalism and devote themselves to work with even greater passion in the new year. Xu Yingjie, Hubei DMW's Union Chairman, accompanied the delegation and expressed sincere gratitude for the district federation's long-standing care and support. This warmth from the employees' "home" organization, combined with the group's internal culture of consensus-building and vitality stimulation, collectively forms HCD's foundational spirit of putting people first and striving for excellence.

Achievement Reports

During the Spring Festival holiday, several key projects of HCD Group operated non-stop.

At Shanghai DEMC, two project sites proceeded intensively. For a project involving the door hemming & body-in-white line for a renowned domestic Client F, an 8-person team worked during the Spring Festival renovation window from February 15th to 26th. Foregoing family reunions, they are fully committed to advancing the tasks such as installing model change parts, debugging PCL & Robot programs, conducting empty cycles, automated test vehicle production, and quality optimization. Driven by their commitment to "prioritize work," they ensured daily progress met or exceeded plans, ultimately earning high praise from the client. Concurrently, for a project with domestic new energy vehicle manufacturer Client L, a team of 41 people completed the production of 5 test vehicles for the new model during the production halt from February 8th to 26th. They successfully integrated new equipment for the four doors and restored full-cycle production for the old model. Facing challenges like multiple processes, tight timelines, and manpower constraints, the team collaborated efficiently and fully completed the tasks.

Hubei DMW also saw numerous operations during the Spring Festival. Overseas, at the renovation site of a project for renowned global brand R in Brazil, operations continued without interruption. Three electrical engineers, five fitters, and five electricians remained on-site throughout the holiday, ensuring smooth progress for both renovation and production. Domestically, eight key personnel at a project site for renowned domestic brand made every effort to advancing the installation of lifting platform renovations and high-level roller beds, seizing key points and overcoming difficulties. At a site for domestic Chinese brand G, involving general assembly line conveying equipment and mixed-model line renovation for the frame line, three employees remained their posts, steadily pushed the addition of accumulating stations and cycle time optimization. At another base for the same client, a 53-person team was deployed for a model capacity expansion project, completing the installation of mechanical transfer points and electrical debugging. The bustling activity on these production lines vividly demonstrates how DMW employees interpret responsibility through dedication and stay true to their original aspirations through solid work.

Overseas, HCD's subsidiary DMW Mexico also completed the fabrication of partitions and fence panels for the Client L project in February. Using high-quality, well-balanced materials, the team demonstrated precision, superb skills, and dedication during execution, reflecting a firm commitment to quality, efficiency, and teamwork.

In market expansion, Shanghai DEMC successfully won a bid for a main line package project from renowned joint venture Client G. The Overseas Business Department was particularly active, with teams frequently visiting North American clients in the United States and Mexico to further expand into the North American market. Hubei DMW also saw strong momentum in its overseas business, successfully winning a tire assembly line project.

Technology and Innovation

The Digital Twin team from Wuhan DEMC received HCD Group-level Outstanding Team Contribution Award for its "Body-in-White Stereo Warehouse Digital Twin Project," becoming a highlight of technological innovation this month. This project, centered around millimeter-level precision modeling and real-time virtual-actual mapping technology, deeply integrates IoT technology. It constructs a virtual mirror system that replicates the physical stereo warehouse on a 1:1 scale, enabling digitalized management and intelligent optimization of the entire warehouse process and all elements. The team overcame challenges in developing lightweight modeling technology driven by target feature data, significantly reducing system size and deployment costs, making the benefits of digital twins accessible to small and medium-sized enterprises at lower costs. They also built a full-process visual management and control platform, integrating multi-source heterogeneous data to achieve efficient management with inventory accuracy reaching 99.9% and early warning of equipment failures. This innovation not only helps the group and its partners reduce operating costs but also promotes the group's deep transformation from "automation" to "intelligentization" and "digitalization," effectively implementing its digital development strategy.

The IPD R&D system is now fully operational, further standardizing product development processes. The Group R&D Center has completed the full IPD process for projects under development. The deployment phase for the Feishu project management process is complete, and the R&D strategy management process and market management process have also bee a closed loop.

Team and Talent Spotlight

The exemplary advanced models recognized during the 2025 annual awards have become role models for all employees. Among them are individuals who drive product upgrades through technological innovation, those who win client trust through project management, those who ensure project delivery through silent dedication, and those who enhance organizational efficiency through effective collaboration. Their stories are the most vivid interpretations of HCD's "Team Culture."

The Shanghai DEMC Procurement Department was honored with the "Outstanding Department" award, the highest recognition for the team's hard work throughout the year. In 2025, focusing on the core goals of "cost reduction, efficiency increase, supply assurance, chain stability, compliance control, and value empowerment," the department completed a total of 5,850 purchase orders for various materials,fully supporting the execution of 135 projects. Facing the complex situation of raw material price fluctuations and tight supply of core components, the team established a supply assurance mechanism involving "demand forecasting - advance stocking - dynamic adjustment," signing long-term agreements with core suppliers proactively. The on-time delivery rate for core materials exceeded 99.5%, and the incoming material qualification rate reached 99.8%. In terms of cost reduction and efficiency improvement, they implemented a model combining "centralized procurement + bidding comparison + strategic negotiation,"引入 25 high-quality suppliers, reducing annual procurement costs by 7% compared to the budget, and cleaning up 1.25 million yuan worth of slow-moving inventory. Furthermore, they improved the supplier life-cycle management, adding 150 qualified suppliers and eliminating 128 under-performing ones, forming a tiered supply structure. The department also strictly enforced compliance controls, ensuring every procurement transaction had a complete approval chain and compliant documentation, achieving 100% procurement compliance for the year. This team, characterized by its understanding of business, proficiency with data, collaborative spirit, and adherence to bottom lines, vividly demonstrates the transformation from "spending money on procurement" to "value-creating procurement" through their actions.

The Shanghai DEMC Automation Business Unit also garnered multiple awards. Its PLC debugging team for one project won the HCD Outstanding Team award, while the PLC debugging team for another project won the DEMC Outstanding Team award. Within the unit, one individual received the Technological Innovation Award, two received HCD Outstanding Individual awards, and five received DEMC Outstanding Individual awards. This team, with an average tenure of over five years, maintained zero turnover among core members. In 2025, they not only on boarded two industry backbones and three new graduates but also actively explored the domestic market after implementing "independent operation," securing external orders. In a project for world-renowned Client B, their work, from interpreting client standards to project planning, received high praise. The DEMC electrical debugging team was officially included in Client B's electrical whitelist, becoming part of their supplier system. Team leader Li Fashan stated that the honor belong to every engineer who strives for excellence in their role, and they will continue to forge quality through dedicated collaboration and set benchmarks through meticulous work.

The recognition of the Wuhan DEMC Digital Twin team was also noteworthy. This team, composed of technical backbones from Wuhan DEMC, overcame numerous challenges in the body-in-white stereo warehouse digital twin project, achieving multiple technological breakthroughs. They employed lightweight modeling technology based on target feature data driving, significantly reducing system size while maintaining accuracy. They built a full-process visual management and control platform, track the real-time the operational trajectory of key equipment like stackers and conveyors, achieving 99.9% inventory accuracy and early warning of equipment faults. They also achieved deep integration with enterprise systems like MES and WMS, connecting data across the entire warehouse chain, accelerating supply chain responsiveness. The team's efforts not only helped reduce operating costs for the group and partner companies but also propelled HCD Group's deep transition from "automation" to "intelligentization," effectively implementing the digital development strategy. At the annual conference, they received the Group-level Outstanding Team award on stage, earning warm applause from the audience.

Among individual awards, Li Huarong received the Group-level Gold Medal Employee Award. As a key figure in R&D management at Wuhan DEMC, she systematically sorted out the work content of product line requirements management and IPD process management. She established an end-to-end management framework from market needs to product realization, ensuring R&D projects closely align with group strategy. She developed universal templates for IPD deliverables, standardizing documentation and reducing redundant work. She also successfully implemented the online deployment of the IPD management process, enabling process visualization, progress tracking, and data accumulation. These initiatives laid a solid foundation for the standardized and efficient operation of the company's R&D system, earning her the Group-level Gold Medal Employee Award. A total of 20 individuals received Group-level Outstanding Individual awards, hailing from various functions including finance, HR, technology, project management, overseas business, manufacturing, robotics, automation, and engineering installation. Each one shines brightly in their own field, collectively contributing to HCD Group's shining starry sky.

Operational Excellence Initiatives

Centered around the three core operating principles of "Stable Profitability, Efficiency-Driven, Global Growth," HCD group has comprehensively launched lean management improvement initiatives. A series of measures, ranging from budget restructuring and cost control to accounts receivable clean-up and supply chain coordination, aim to solidify the management foundation and enhance operational efficiency.

In terms of strategic advancement, the implementation of the full-value-chain lean management HCD Business System is progressing steadily. The development of the HBS digital lean management platform is being fully promoted. HCD Group Human Resources Center has initiated the strategic decomposition process and, with support from the IT department, is continuing to perfect the platform's data module functions and the launch of data.

At the financial control level, HCD Group Finance Center is leading efforts to refine the preparation of the 2026 budget, ensuring data accuracy and authenticity. Work on calculating Rate (labor rates) is ongoing, with initial plans to be formed and uniformly applied to project quotations, internal budgets, project execution, and final accounting, achieving closed-loop control throughout the entire process. Accounts receivable management has become a key focus for collaboration between the legal and finance departments this month. The Group Legal Department is leading efforts to sort subsidiaries' customers with accounts receivable/payable overdue by more than three months, classifying them based on contract terms and payment agreements. Concurrently, the Finance Center and IT Department are leading the initiative to reflect all project progress milestones in the online system to strengthen process control.

In supply chain coordination, HCD Group Procurement Center is promoting collaborative procurement among domestic subsidiaries and between domestic and overseas sister companies. It is establishing the HCD Group-level procurement platform and creating a central procurement materials database to achieve transparent, open, and timely database management. The international supply chain system is also being simultaneously improved, promoting supplier classification management, establishing an overseas supplier database, unifying overseas procurement processes, and building a supplier evaluation and assessment system. This month coincided with the Chinese Spring Festival period. Procurement teams at DEMC and DMW carried out tasks in an orderly manner such as preparing materials for projects before the holiday, subcontracting for outsourced components, and following up on machined parts, ensuring that construction during the Spring Festival could proceed as planned.

Team Culture in Action

HCD Group's "Team Culture" shines brightly in every scene of hard work. Whether it's the silent dedication at domestic project sites or the collaborative efforts of overseas teams, it embodies the core spirit of "pursuing victory and collaborative success." A total of 49 team members from Shanghai DEMC and 77 from Hubei DMW gave up precious time with their families during the Spring Festival, working hard on project fronts. Through their dedicated, "non-stop during Spring Festival" attitude, they built a solid foundation for the smooth progress of key projects and made every effort to for a successful "start" to the new year.

Yasser, Head of DMW Mexico, shared in an internal letter: “February reminds us that success is built through teamwork, communication, and daily commitment. I was very happy to see the email from our customer appreciating the quality of work we delivered on the projects about Client O . As I have mentioned before, our reputation is built on two pillars: the quality of our work and our efficiency. We cannot afford to lose either of them. Thank you for the excellent effort-keep up the great work!”

In 2026, all HCD employees will continue to adhere to the operating principles of "Stable Profitability, Efficiency-Driven, Global Growth." With the proactive stance of "The Momentum Lies in Our Transformation" and the striving spirit of " A Sky Full of Stars," we will persistently deepen the smart manufacturing field, drive technological innovation and management upgrades, expand domestic and international markets, and strive to become an excellent enterprise with competitive advantages in both cost and technology.

We firmly believe that through the collective efforts of all partners, HCD  Group will surely usher in its own brilliant starry sky!