The business review of the 2022 annual board of directors of Kede CNC is as follows:

　　I. Discussion and analysis of business conditions

In 2022, the company around the annual business objectives, relying on the advantages of the whole industrial chain and product technology, continued to strive to open up the market, increase production capacity, break through the influence of various unfavorable factors, and maintained a good momentum of steady growth. The income from main business, net profit after deducting non-recurring gains and losses, new orders and output all increased rapidly. The net profit attributable to owners of the parent company decreased slightly year-on-year due to the higher government subsidies included in non-recurring income in the same period of last year.

(a) the main business situation

In 2022, the company’s operating income was 315 million yuan, a year-on-year increase of 24.39%; The net profit attributable to shareholders of listed companies was 60,453,800 yuan, a decrease of 17.04% compared with the same period of last year. The main reason for the decrease in net profit was the high amount of government subsidies included in the current non-recurring gains in 2021, which had a great impact on the current net profit growth (specifically, the impact of non-recurring gains and losses on net profit in 2022 was about 22,264,600 yuan, and the impact of non-recurring gains and losses on net profit in 2021 was about 22,264,600 yuan). The net profit after deducting non-recurring gains and losses was 38,189,100 yuan, a year-on-year increase of 45.12%; Gross profit margin of main business is 42.40%; The output of the whole machine was 230 units, up 45.57% year-on-year; During the reporting period, new orders increased by 30% year-on-year.

(2) New breakthroughs have been made in market expansion.

The company insists on import substitution as the core, and on the basis of deepening cooperation with original customers and deepening and strengthening the aerospace field, it strives to open up new fields, new customers and other industrial fields. In 2022, the company made new progress in overseas orders, new energy vehicles, energy, knives, machinery and equipment.

1. Breakthrough growth was achieved in overseas market sales.

In 2022, the company expanded overseas sales channels, opened European and Asian markets, and exported five-axis CNC machine tools, and the export orders increased rapidly. In 2022, the company’s export order products include five-axis vertical machining center, five-axis horizontal machining center, five-axis horizontal milling and turning compound machining center and many other products.

2. Vigorously promote the expansion of new customers.

In 2022, the company actively explored new customers in various fields, and made new progress in energy, tools, automobiles and other fields in addition to adding many new customers in typical military and military supporting fields.

The automobile field is an important downstream industry of machine tools, which is closely related to the machine tool industry. With the rising situation of new energy vehicles, the machine tool industry will usher in new opportunities. Through the comprehensive distribution and direct sales, the company has effectively expanded many customers in the automotive field. Business expansion has been achieved in the processing fields of new energy vehicles such as battery motor housings, bogies, front and rear axles and transmission housings.

The upgrading and transformation of the energy field provides further application potential for five-axis machine tools, such as the processing of core components such as compressors, pumps and gears in wind power and water conservancy industries, and the processing of shaft components related to high-pressure injection in oil production wells. The company has expanded high-quality customers in the energy field in many regions of China and reached a long-term cooperative partnership.

Tool industry is the basic industry in machinery manufacturing industry and major technical fields. Because the materials of CNC tools are generally cemented carbide, high-performance high-speed steel and superhard materials, grinding has become the mainstream processing technology of CNC tools. The company’s five-axis tool grinding center with high grinding rigidity and high stability can be used to process all kinds of cutters with high precision and complex shapes, such as milling cutters, drills, reamers and taps. In 2022, the company expanded many new partners in this field on the basis of strengthening cooperation with important partners in the original key tool field.

With the overall rapid development of domestic high-end manufacturing industry, the demand for five-axis CNC machine tools is increasing day by day, and there is a shortage of related professionals. By introducing high-end five-axis CNC machine tools and establishing training bases, domestic colleges and universities learn core technologies and cultivate professionals by combining systematic courses with practical experience. As a five-axis machine tool manufacturer with the whole industrial chain, the company has many years of cooperation experience with universities. During the reporting period, the company provided many universities with a variety of equipment, such as a five-axis vertical machining center and a horizontal milling and turning compound machining center, which helped to cultivate high-tech talents in the field of numerical control, helped universities to have a deeper understanding of five-axis numerical control programming and system operation, as well as core technologies such as machine tool structure design, motorized spindle and direct-drive turntable. At the same time, the operation training of five-axis CNC machine tools of Kede CNC brand was advanced to universities, which was the brand.

3. Continue to deepen the cooperation with existing customers.

During the reporting period, the company continued to deepen its cooperation with its original customers, and constantly improved its personalized service level and solution ability, which was recognized by more customers. In 2022, the repurchase rate of high-end CNC machine tools added by the company was about 40%.

4. New products continue to be favored by the market.

During the reporting period, the company launched four new products: KTM120 five-axis horizontal boring and milling machine compound machining center, Dechuang series KCX1200TM five-axis horizontal milling machine compound machining center, Dechuang series DMC50 five-axis vertical machining center and KBTG1000 high-speed blade tip grinding machining center.

KTM120 Five-axis Linkage Horizontal Boring and Milling Machine Compound Machining Center marked the Austrian WFL products, and the sales unit price was high. As soon as it was launched, it reached a cooperation with an aircraft landing gear manufacturer to achieve sales. Aircraft landing gear is one of the most difficult parts in the aviation field, and the same type of processing equipment in China depends on imports. This product will have a broader market space in the field of large aircraft in the future. Dechuang series KCX1200TM five-axis horizontal milling compound machining center can meet the processing needs of parts in medical, new energy vehicles, molds, wind power, aerospace and other industries. The first product is to sign a sales contract with a company in the field of nuclear equipment, which is used for processing parts such as opening and closing nuts of nuclear equipment. Dechuang series DMC50 five-axis vertical machining center is suitable for high-efficiency and high-precision machining of parts in aerospace, cutting tools, precision molds, medical devices, new energy vehicles and other industries. KBTG1000 high-speed blade tip grinding center, this product is mainly used for grinding the rotor blade tips of aero-engines and marine engines, focusing on the requirements of efficient and high-precision automatic machining of integral impellers and bladed disks (axial flow) of aero-engines.

As of the publication date of this report, all the above new products have formed batch orders in aviation, aerospace, nuclear power of warships, automobiles and overseas markets.

(3) R&D projects and technological achievements

During the reporting period, the company continued to invest in research and development, with a total investment of 114,378,100 yuan, accounting for 36.26% of the operating income. The company has hosted or participated in 7 national-level projects, and received 41.32 million yuan from the central government, 1 provincial-level project, and 600,000 yuan from the central government to guide local scientific and technological development. The new project involves the development of high-speed bridge five-axis gantry machining center, five-axis horizontal milling compound machining center and other equipment, as well as the performance improvement and engineering application verification of key functional components such as turntable, swing head and motorized spindle.

The advantages of the company are comprehensive product layout, high degree of self-control and continuous innovation. During the reporting period, the company completed the development of four new products and put them on the market, including KTM120 five-axis horizontal boring and milling machine compound machining center, Dechuang series KCX1200TM five-axis horizontal milling machine compound machining center, Dechuang series DMC50 five-axis vertical machining center, KBTG1000 high-speed blade tip grinding machining center, in which the high-speed blade tip grinding machining center is a new special machine based on the original four general models and two special models.

During the reporting period, the company added 55 authorized patents, including 7 international invention patents and 6 domestic invention patents. By December 31st, 2022, the company and its holding subsidiaries had 251 authorized patents, including 93 domestic invention patents, 13 international invention patents, 139 utility model patents and 6 design patents. There are 60 software copyrights and 3 works copyrights. The company has participated in the formulation of 24 national standards and 10 industry and group standards.

(IV) Production capacity construction progressed smoothly.

During the reporting period, with the company’s self-made five-axis machining center and the introduction of horizontal plus flexible manufacturing line, gantry production line, horizontal machining center and gantry machining center, the machining ability of functional parts was further improved. The whole machine production capacity of the company has steadily increased. In 2022, the whole machine production reached 230 sets (including multi-model and multi-specification products such as five-axis vertical machining center, horizontal machining center, gantry machining center, horizontal milling and turning compound machining center and five-axis tool grinding center), with a year-on-year increase of 45.57%.

(V) Financing situation

During the reporting period, the company initiated and completed the issuance of RMB ordinary shares (A shares) to specific targets in 2022, with 2,457,757 non-public shares, which were issued to National Manufacturing Transformation and Upgrading Fund Co., Ltd. and Guotai Junan Securities Co., Ltd., raising a total of RMB 159,999,980.70, and the newly added shares were registered and settled in China Securities on July 29, 2022.

This issuance has injected capital into the company to realize the rapid development and expanded application of domestic high-end equipment, and further accelerate the construction of production capacity, which will help to provide more "Made in China" high-end equipment for aviation, aerospace, military industry, energy, automobiles, knives and many other fields.

II. Description of the main business, business model, industry situation and research and development of the company during the reporting period:

(a) the main business, main products or services.

1. Main business

The company has always been committed to the technical breakthrough, design innovation, fine manufacturing and standard formulation of five-axis CNC machine tools, high-grade CNC systems and key functional components, and has formed the core technology with independent intellectual property rights, which has the ability to achieve the company’s important established strategic goal of "import substitution". The company’s main business is five-axis CNC machine tools, high-grade CNC systems, key functional components and flexible automation production lines. The company’s main products include serialized five-axis vertical (including turning milling), five-axis horizontal (including turning milling), five-axis horizontal milling compound, five-axis gantry four general machining centers, five-axis tool grinding, five-axis blade grinding center and high-speed blade grinding center, as well as high-end CNC systems serving high-end CNC machine tools, servo drives, serialized motors, serialized sensing products, motorized spindles, milling heads, turntables and other key functional components.

On the basis of comprehensive product layout, in addition to the high-end KD series built for the military field, the company has developed a cost-effective Dechuang series for the processing requirements of the civil field to meet the needs of diversified customers. At the same time, the company provides flexible automatic production line business, that is, taking high-end CNC machine tools as the core, integrating fixture and tool scheme, matching with automatic logistics system, warehousing system, etc., relying on computer control and combining various production modes, flexible and automatic production of various products can be realized. It has the characteristics of high equipment utilization rate, strong product adaptability, high product quality and high production efficiency.

For a long time, China’s high-end five-axis CNC machine tools have relied heavily on imports. The main reason is that its development needs first-class precision machine tool design and manufacturing technology, and it can only be realized by close cooperation with cutting-edge CNC technology. It is extremely difficult to develop core technologies and form industrialization capabilities. Different from traditional CNC machine tools, the company’s five-axis CNC machine tools have the advantage of supporting the machining ability of complex spatial features, making it easier to realize multi-process compound machining and having higher machining efficiency and accuracy. Through years of technical research and accumulation, the company has formed core technical capabilities such as high-grade CNC system technology, universal and special five-axis CNC machine tool technology, direct-drive functional parts technology, high-performance servo drive system technology, high-performance sensing and detection technology, high-performance high/low-speed torque motor technology and high-performance motorized spindle motor technology.

The company’s five-axis CNC machine tool products mainly serve the processing and manufacturing of complex and precise parts in the fields of aviation, aerospace, military industry and so on, and are the necessary way to process turbine machinery parts such as impellers, bladed disks and blades. In addition, there are many successful cases in civil industries such as core parts of power generation equipment, cemented carbide tools, petroleum industry, precision molds, and automobile parts manufacturing. The CNC system and key functional components such as torque motor, spindle motor, servo motor, motorized spindle, laser interferometer, laser tool setting instrument, encoder, turntable, milling machine, etc. developed by the company belong to the core key components of high-end CNC machine tools, which directly determine the function, performance, reliability and profitability of high-end CNC machine tools. In recent years, high-grade CNC systems and key functional components have been sold separately.

Pre-sales technical service and after-sales maintenance service are also important competitive advantages of the company. Through pre-sales technical support, the company customizes a complete set of processing technology schemes, trial processing and turnkey projects for users to promote sales orders and establish stable, close and long-term cooperative relations with customers. The company’s after-sales service support benefits from the company’s high autonomy rate and localization advantage, which has faster response speed and lower service cost than the transnational after-sales service of international CNC machine tool enterprises. Pre-sales and after-sales personnel have mastered the most advanced market information, grasped the development trend of the industry, collected new directions, new processes and product improvement opinions and fed them back to the R&D system in time, forming a closed-loop control of the company’s product quality and realizing a benign iterative upgrade of the products. It is predicted that the supporting businesses such as pre-sales and after-sales services will also enter a period of rapid growth in the future, which can contribute more benefits to the company.

2. Main products and services

The company’s main products are high-end CNC system products with independent intellectual property rights and core technologies, high-end CNC machine tools and key functional components, which can realize the research and development and manufacturing of various types of products in high-end equipment manufacturing in aviation, aerospace, weapons and civil fields, with independent and controllable core technologies and strong "import substitution" ability.

(1) High-grade CNC system products

High-end CNC system is the control core of high-end CNC machine tools. Among them, GNC series high-end CNC system has achieved several iterations of GNC60/61/62, and GDU series servo driver has achieved several iterations of GDU/GDUA/GDUB/GDUC, reaching the same level of advanced foreign products. At the same time, the products are open and adaptable, which is an important core component of the company’s high-end CNC machine tools. The high-end CNC system independently developed by the company, because of its excellent design framework and rich functions, provides strong support for the application of various types of high-end CNC machine tools and the development of new products. The ability to independently develop high-end CNC systems is also an important strategic layout direction of many foreign high-end CNC machine tool development enterprises.

(2) High-end CNC machine tools

The company’s high-end CNC machine tools include four general machining centers (five-axis vertical, five-axis horizontal, five-axis horizontal milling and turning compound, five-axis gantry machining center) and three special machining centers (five-axis tool grinding center, five-axis blade machine and high-speed blade tip grinding center), totaling seven series of machining center products. In terms of product layout, there are both high-end KD series for the military field and cost-effective Dechuang series for the civilian field. The product line covers most high-end CNC machine tools with processing types and sizes in the field of high-end CNC machine tools, and the performance of the products is basically the same as that of advanced foreign products, so it can meet the processing needs of multi-type and multi-size components in most high-end manufacturing industries such as aviation, aerospace, weapons, energy and automobiles.

(3) Key functional components

The company’s key functional parts products include serialized motors, serialized sensing products, motorized spindles, milling heads, turntables, etc. The key functional parts products have been fully applied to various types of high-end CNC machine tools products of the company. Thanks to a large amount of technical accumulation of independent research and development of key functional components, the adaptability and response speed of collaborative research and development between high-end CNC machine tool products and key functional components are obvious, which provides strong support for the company’s products to quickly respond to market demand, and can also serve aviation, aerospace, military industry, mechanical equipment, robots, automation and other fields as independent products.

(4) Flexible automatic production line

In order to meet users’ demand for high-quality development of manufacturing such as improving production efficiency, automation and flexibility, the company provides users with a complete solution of flexible automatic production line, which covers a complete turnkey production line including high-end machine tools, fixtures, cutters, process plans, logistics systems, storage systems and production control systems. The solution has a high localization rate and can be applied to aerospace, automobiles, mechanical processing and many other fields to realize the flexibility of parts from blank to finished products.

Schematic diagram of flexible automatic production line To sum up, the company’s main products have independent intellectual property rights and core technologies, and can realize the research and development and manufacturing of various types of products in high-end equipment manufacturing such as aviation and aerospace, from high-end CNC systems and key functional components to high-end CNC machine tools, with independent control and strong "import substitution" ability. The company’s main products are rich in specifications and comprehensive in layout, and have distinctive characteristics in the domestic high-end machine tool manufacturing field, forming a large number of successful cases of processing key parts of high-end equipment represented by "the jewel in the industrial crown" aero engines, which have been well received by users.

(II) Main business models

1. Purchasing mode

The company’s procurement mode mainly includes two links: procurement strategy formulation and supplier management. The company implements planned procurement according to the production and R&D plan. The specific mode is as follows:

(1) Multi-price comparison and bargaining: The company selects suppliers within the scope of the Qualified Suppliers List to conduct multi-price comparison and bargaining to ensure the highest cost performance and reasonable procurement cost of purchased materials. By strengthening the continuous tracking and in-depth analysis of the main raw material markets such as metal and nonmetal materials, parts and products, electronic components, etc., the company makes purchasing plans according to the production and R&D plans, and adjusts the purchasing scale during the peak and trough periods, so as to minimize the possible adverse impact of raw material price fluctuations.

(2) Centralized procurement and strategic cooperation: for products with long delivery cycle, the company adopts a centralized procurement strategy, and the procurement of such materials is the responsibility of the company’s materials department; For important suppliers, the company adopts strategic cooperation to ensure the timely supply and stable quality of main raw materials.

The main procurement process of the company’s raw materials is as follows:

2. Production mode

The company’s products are characterized by the customization function on the general platform, so as to meet the individual needs of different customers. Therefore, the company generally adopts the production mode of "fixing production by sales", based on the order contract, carries out product design and development according to the needs of users, formulates the process route, and organizes production in combination with the delivery plan and production capacity. For the standard components, based on market forecast and historical order trend in the same period, moderate pre-production will be carried out.

In terms of production organization, the company generally follows the principle of "fixing production by sales and keeping reasonable inventory of standard components", and according to the sales plan and actual sales situation, formulates the production plan and issues it to the production workshop to organize production. For highly customized products, because different users have different requirements on product configuration, performance, parameters, etc., the company will deliver the customized requirements to the R&D center for design and development. After both parties reach an agreement, they will sign a sales contract for stocking and production.

In terms of production operations: the production department strictly implements the process control requirements determined by the design department and the production technology center, and implements the production plan. The Quality Management Department sets up key control points according to product performance requirements and related processes, and formulates control items and target values, and supervises production operators to strictly implement process requirements and operation instructions.

The company entrusts some non-core processes and non-core parts to external units for processing and production, and the external processing expenses account for a low proportion of the current main cost. External processing price is mainly based on processing difficulty, processing cost and other factors, and is determined through price comparison and negotiation.

3. Sales model

At present, the company mainly focuses on direct sales, supplemented by distribution.

(1) Direct selling mode

First of all, the company combines its own technical characteristics and advantages, fully investigates the market demand, carries out user industry analysis, deepens the understanding of high-end user needs through cooperation with leading user enterprises and scientific research institutes, accurately defines products, cooperates with users to carry out process verification, rapidly iterates and accelerates product maturity, gradually forms application demonstrations, expands and forms excellent cases, expands good influence in target industries, forms influence radiation on leading enterprises and their supporting enterprises, and accelerates the formation of good user reputation in the market; Secondly, in recent years, the company has actively participated in various professional exhibitions at home and abroad, such as China International CNC Machine Tool Exhibition (CIMT), China CNC Machine Tool Exhibition (CCMT), China International Industry Fair (CIIF), Taiwan, China Machine Tool Exhibition (TMBA), Russian International Machine Tool Exhibition (METALLOOBRABOTKA), Chongqing Lijia Exhibition, Qingdao International Machine Tool Exhibition, CIE Industry Expo, Shenzhen Greater Bay Area Expo, etc., and concentrated on releasing new products and technologies and displaying a large number of application cases. At the same time, the company actively publishes papers or new product information in authoritative magazines in related industries to expand the company’s influence in the industry; And expand business through new media to enhance the company’s brand awareness.

At present, the direct selling market is divided into East China, North China, Northwest China, South China, Southwest China, Central China and Northeast China according to their market maturity, and each region has a regional sales director.

The direct selling model is supported by the pre-sales technical ability, and promotes sales by customizing a complete set of processing solutions and turnkey projects for users. Pre-sales technology department makes process plan and sample trial production for users, and the company’s process technology output ability greatly enhances customer stickiness and promotes the completion of documents. In addition to effectively promoting sales, we also have the most advanced market information, truly understand the needs of users, grasp the development trend, new direction and new technology of the industry, and give timely feedback to the company’s R&D system, so as to promote product technology upgrading.

At the same time, the company established a training system to serve users through multi-channel training mode, which solved the phenomenon of "five-axis technology is difficult to get started" and "high-grade machine tools are not used well".

The company’s pre-sales technical service model is the core competitiveness of the company’s sales, which has obvious advantages compared with foreign manufacturers in the domestic market.

(2) Distribution mode

At present, the company’s distribution mode is mainly based on reporting projects and buyout mode. The distributor’s main role is to obtain users’ needs and report the project to the company’s sales department; After obtaining the information, coordinate the pre-sales support personnel to follow up the project and carry out scheme design, trial processing and other links; Authorized dealers to bid, and the company provides technical support; Companies sign contracts with distributors, and distributors sign contracts with end users. The company gives priority to the dealers who have the sales experience of well-known foreign five-axis machine tool brands and are proficient in the user’s industry technology.

The main sales processes of the company’s main products are as follows:

4. R&D mode

The company has a sound research and development system to support the company’s overall product research and development and product life cycle management. At the whole company level, research institutes, design institutes, production technology departments, marketing departments, materials departments, production and quality departments constitute a complete product development process. The marketing department put forward the product development demand, and the research institute and design institute completed the project establishment, product R&D design, process development and opened up the trial production and testing process of products. The production and quality departments are involved in the technical preparation of new product production from the process development stage to ensure that the production technical data of products are smoothly transferred to the production system. The materials department cooperates with product development and is responsible for the procurement of various raw materials and equipment.

The company’s new product development project management is divided into four stages: project establishment, design, trial production and project completion. After the product is mass-produced, the R&D department will also assist the production department to continuously improve the mass-produced products.

The company formulates control procedures for new product design and development, clearly defines the process of new product development and design management, and defines the work processes such as project initiation stage, design stage, trial production stage and project completion stage. Process monitoring is accompanied by the whole process to ensure project management progress and work quality, effectively control research and development costs, ensure that products can meet the project objectives and relevant requirements of customers, and at the same time ensure that products meet the requirements of environmental and occupational health and safety management systems and the provisions of relevant laws and regulations.

(3) the industry situation

1. The development stage, basic characteristics and main technical threshold of the industry.

The company is a high-tech enterprise engaged in the design, research and development, production, sales and service of five-axis CNC machine tools and their key functional components, and high-end CNC systems. It is one of the few innovative enterprises in China that independently master high-end CNC systems and high-end CNC machine tools. According to the National Economic Industry Classification (GB/T4754-2017), the company’s industry is "C342 Metal Processing Machinery Manufacturing"; According to the Guiding Catalogue of Key Products and Services of Strategic Emerging Industries (revised in 2016), the company’s main products conform to "2.1 Intelligent Manufacturing Equipment Industry 2.1.4 Intelligent Processing Equipment" in the catalogue.

Five-axis CNC machine tool is a kind of machine tool with high technology content and high precision, which is specially used for machining complex curved surfaces. It has the advantages of wide application range, fine machining quality and high working efficiency, and is considered to be the most important machining tool for machining key components in aerospace, shipbuilding, precision instruments, power generation and other industries. According to the data released by QYResearch, the global five-axis CNC machine tool market sales will reach US$ 6.755 billion in 2020, and will increase year by year thereafter. It is estimated that it will reach US$ 13.835 billion in 2027, with a compound growth rate of about 10.79% from 2020 to 2027. In 2020, the domestic five-axis CNC machine tool market will be 665 million US dollars, accounting for 9.85% of the global market, and it is expected to reach 1.589 billion US dollars by 2027, when its share in the global market will reach 11.49%, with a compound growth rate of 13.25% from 2020 to 2027, which is higher than the global market.

The development of five-axis CNC machine tools needs strong precision machine tool design and manufacturing technology, and it can only be realized by close cooperation with cutting-edge CNC technology, so it is extremely difficult to develop and industrialize products. The development of five-axis CNC machine tools in China started late. At present, there are few domestic enterprises that can independently develop and produce, and the supply of domestic products is difficult to meet the domestic market demand. The domestic market is mainly occupied by multinational companies with hundreds of years of machine tool production experience in developed industrial countries such as Germany, Japan and the United States. However, in recent years, a number of five-axis CNC machine tool enterprises, including companies, have emerged in China, and their products have gradually been recognized by the market, gradually forming an import substitution trend.

2. Analysis of the industry position of the company and its changes.

The company is one of the few innovative enterprises in China with dual R&D systems for high-end CNC systems and high-end CNC machine tools. Through years of continuous R&D and innovation, it has formed the product layout of high-end CNC system products, high-end CNC machine tools and key functional components with independent intellectual property rights and core technologies. It can realize the R&D and manufacturing of various types of products in aviation, aerospace and other high-end equipment manufacturing, with independent and controllable core technologies and strong "import substitution" ability. The company’s main products are rich in specifications and comprehensive in layout, and have distinctive characteristics in the domestic high-end machine tool manufacturing field.

On the one hand, international advanced high-end machine tool enterprises, such as Haas, Otaru, Madzak, Fanuc, Demaji, and Fidia, have continuously extended their own technology chains and industrial chains, adopted personalized numerical control systems and some key functional components independently developed, and some enterprises have also sold them to the outside world. This business model not only ensures the safety and controllability of products, but also has higher market core competitiveness. The development model of the whole industrial chain, the whole talent chain and the whole technology chain established by the company can promote the continuous iterative improvement of the company’s own product technology and lay a solid foundation for the company’s products to benchmark international advanced products. At the same time, it can guarantee the technical safety of the company’s own products and the safety of the national high-end equipment industry, and make contributions to solving some "stuck neck" problems in the field of high-end equipment.

On the other hand, the localization rate of domestic high-end machine tools is less than 10%, and there is huge room for import substitution. However, the number of domestic enterprises engaged in high-end machine tools and their production and sales volume are still far from those of developed countries, and high-end CNC systems and key functional components are still mainly imported. With the rapid development of domestic high-end equipment, the demand for domestic CNC systems and key functional components is constantly increasing. The company can provide domestic enterprises with mature high-end CNC systems and key functional components, and at the same time meet all kinds of customization needs. The company can form strategic cooperation with domestic machine tool manufacturers, provide high-quality domestic CNC systems and key functional components solutions for domestic equipment, break foreign technology monopoly and promote innovation and promotion of domestic machine tool industry.

The company has presided over or undertaken 29 major national science and technology projects and 17 other national and local R&D projects. The company has participated in the formulation of 24 national standards and 10 industry and group standards. Authorized 93 domestic invention patents and 13 international invention patents. The five-axis CNC machine tools, high-grade CNC systems and key functional components independently developed by the company are the first sets in China, which have played a leading role in the breakthrough of CNC core technology in the field of high-end CNC machine tools in China and played a core role in realizing the strategic goal of "import substitution" of the company.

According to the data of China Machine Tool Industry Yearbook in 2021, there are 45 enterprises producing machining center products in the annual report of China machine tool industry in 2020, including Jinan No.2 Machine Tool, Shenyang Machine Tool, () and other large domestic state-owned enterprises and comparable listed companies (), Haitian Seiko, Guosheng Zhike, etc. The counted enterprises basically cover most domestic key and large machining center manufacturing enterprises in the industry.

From the perspective of the sales volume of the association statistics, the proportion of five-axis vertical machining centers sold by the company in 2020 is 13.62%; From the perspective of sales amount, the proportion of five-axis vertical machining centers sold by the company is 22.24%. No matter from the perspective of sales volume or sales amount, the market share of the five-axis vertical machining center sold by the company is at a high level.

3. The development of new technologies, (), new formats and new models during the reporting period and the future development trend.

According to Foresight Industry Research Institute’s Report on Market Demand Forecast and Investment Strategic Planning of CNC Machine Tool Industry in China, it is predicted that the market scale of CNC machine tools in China will grow steadily and rapidly in the future, reaching 572.8 billion yuan by 2024.

Forecast of China CNC Machine Tool Market Scale from 2019 to 2024

1) The promotion and popularization of new technology-five-axis linkage machining technology is the future development direction of the industry.

It is necessary to process complex curved surfaces in industry. Many key parts in ships, airplanes, rockets, satellites and spaceships have certain particularities and processing difficulties, which cannot be met by traditional processing methods. Only by using five-axis linkage, high-speed and high-precision CNC machine tools can the processing requirements be met.

With the trend of automobile lightweight, the traditional parts composed of multiple parts are integrated into a single part, and the processing characteristics of parts are changed from plane to space. At present, the major international suppliers of automobile parts processing equipment, including rabo, Madzak and Demaji, use a large number of five-axis machine tools to set up production lines.

2) New format-demand transformation from single machine tool that only completes a single process to flexible manufacturing unit that completes multiple processes.

Flexible manufacturing unit (FMU) is a manufacturing unit composed of single or multiple five-axis machining centers or compound machining centers and small automatic logistics devices to meet the requirements of efficient processing of multi-variety and small batch parts.

With the intensification of competition and rising costs of downstream production enterprises, especially the sharp rise of labor production costs and the increasingly frequent shortage of labor, more unmanned or less humanized manufacturing systems have begun to appear, and downstream customers’ demand for flexible manufacturing units that respond quickly to the processing market with multiple varieties and small batches will rise. Flexible manufacturing unit will appear as a complete set of equipment of "CNC machine tool+small logistics device (industrial robot, automatic pallet library, truss manipulator, etc.)", which will solve the pain point of the sharp rise of labor production cost in time and realize unmanned or less people.

3) New mode-from single product sales to intelligent manufacturing system integration scheme.

For a long time, most CNC machine tool enterprises in China only focus on producing machine tool products in a certain field, and do not have the ability to provide solutions for automated production lines. In recent years, downstream enterprises have put forward new demands for machine tool suppliers, and tend to cooperate with suppliers who have complete equipment production capacity, provide complete solutions or undertake more complex engineering general contracting projects and automation system transformation capabilities. Intelligent manufacturing system integrators with "turnkey" engineering capability of automated, flexible and intelligent production lines will be able to meet customers’ personalized, customized and differentiated production needs, thus improving customer stickiness. In addition, the encouragement of national and local policies for the construction of automated production lines in manufacturing industry will certainly promote the transformation of intelligent manufacturing equipment suppliers into intelligent manufacturing system integration solution providers.

(IV) Core technologies and R&D progress

1. Core technologies and their advanced features and changes during the reporting period.

The company has mastered the core technology of independent research and development of the main products, five-axis CNC machine tools, high-grade CNC systems and key functional components. Relying on the complete talent chain, technology chain and industrial chain, under the support of continuous high-intensity independent innovation, a number of key core technologies leading domestically and advanced internationally have been formed and mastered. It mainly includes high-grade CNC system technology, universal five-axis CNC machine tool technology, special five-axis CNC machine tool technology, direct-drive functional component technology, high-performance servo drive system technology, high-performance sensing and detection technology, high-performance low-speed torque motor technology, high-performance high-speed torque motor technology, high-performance motorized spindle motor technology, etc., which realizes the effective transformation of technical achievements. The function, control accuracy and processing efficiency of the product have reached the international advanced level. Mastering independent and controllable core technologies has played a core role in the company’s strategic goal of "import substitution".

During the reporting period, on the basis of the original four general technology platforms and two special technology platforms, the company continued to deepen research and development. In order to promote the high-speed and high-quality development of aviation industry, improve the performance of domestic aero-engines, and realize the machining of rotor blade tips of aero-engines by using domestic industrial parent machines, the company successfully launched the technical platform of high-speed blade tip grinding center to form a special plane for high-speed blade tip grinding machining center. Focusing on the common models and high-end CNC system technology in the core technology field, the company has added 7 internationally authorized invention patents and 2 domestically authorized invention patents, mainly aiming at the technical iteration of five-axis horizontal machining center, five-axis turning milling center and GNC6X series CNC system.

Realize multi-directional improvement and promotion in basic common technology;

1. A breakthrough has been made in the installation process of super-high excess cone expansion sleeve for high-speed motor rotor applied to the motorized spindle of CNC machine tools, and the process verification has been successfully completed;

2. The torque motor used for the spindle of CNC machine tools is designed for lifting, and the torque coefficient of three models has been improved by 1.5-2 times, which can effectively reduce the power consumption of machine tools;

3. Further develop advanced measurement cycle function, additional function and adaptive processing detection function suitable for various models;

4. Upgrade the hardware platform of CNC system controller, greatly improve the system computing power and communication efficiency, and enrich the types of communication access;

5. Provide process support for special machine tools such as tip grinding, tooth scraping and multi-channel linkage, provide the process package of fine and excellent curved surface, improve the machining accuracy and efficiency of five axes, expand the access ability of peripheral equipment such as tool setting instrument, and enrich the shaft debugging function;

6. Develop a new generation of servo current loop software and hardware technology, which reduces the terminal control vibration and servo error, and then improves the surface processing quality of the workpiece;

7. In the position feedback link, the sine and cosine signal subdivision algorithm is upgraded, which effectively reduces the motor speed fluctuation and improves the spindle processing effect;

8. A new trajectory optimization and speed planning algorithm is designed to further improve the machining performance of high-speed and high-precision surfaces, meet the machining requirements of complex surfaces, give full play to the mechanical properties of machine tools, and finish the machining of complex surfaces with high efficiency and high quality.

The continuous optimization and improvement of core technologies have fully consolidated the company’s technological advantages and further enhanced the market competitiveness of products.

2. R&D achievements obtained during the reporting period

(1) Intellectual property rights acquired during the reporting period

By December 31st, 2022, the company and its holding subsidiaries had owned 251 patents, including 106 invention patents (including 13 international invention patents and 93 domestic invention patents), 139 utility model patents and 6 design patents, 60 computer software copyrights, 57 trademarks and 3 works copyrights. There are 226 patents under application, including 87 international invention patents, 132 domestic invention patents and 7 utility model patents.

During the reporting period, the company granted 55 new patents, including 7 international invention patents, 6 domestic invention patents and 42 utility model patents. There are 90 new patents, including 65 international invention patents, 18 domestic invention patents and 7 utility model patents.

(2) Awards won during the reporting period

In February 2022, the company’s independent and controllable platform-based high-grade horizontal five-axis machining center won the award of "2021′ Kechuang China’ list-key technology to break through shortcomings in equipment manufacturing field" issued by China Association for Science and Technology; In October 2022, the project "Development and Application of Serialized High Power Density, High Efficiency, High Performance and High Reliability Servo Drive Device" was selected by Dalian Science and Technology Bureau as the first prize of Dalian Science and Technology Progress Award in 2022; In October 2022, KMC600SU, a high-dynamic five-axis vertical machining center, was selected as "Top Ten Product Quality" by cmtba. In November 2022, the company was awarded the "Mechanical Industry Quality Award" by China Machinery Industry Quality Management Association; In November 2022, the company’s project "Key Technologies and Applications of Digital Workshop Interconnection Based on Information Model" was selected as the third prize of Science and Technology Progress Award by China Instrumentation Society; In November 2022, the company’s R&D team was awarded the title of "Excellent Innovation Team in Mechanical Industry" by China Machinery Industry Federation; In December 2022, the company was recognized as the provincial enterprise technology center in 2022 by the Liaoning Provincial Department of Industry and Information Technology.

(3) Research and development of new products during the reporting period

During the reporting period, on the basis of the original four general technical platforms and two special technical platforms, the company continued to deepen research and development, and successfully launched the third special technical platform-the high-speed blade tip grinding center technical platform. The equipment of high-speed blade tip grinding center has the characteristics of "high", "fine" and "sharp" in technical level compared with Spanish Danobate products. The introduction of this series of products will help to promote the high-speed and high-quality development of aviation industry, improve the performance of domestic aero-engines, realize the grinding of rotor blade tips of aero-engines and marine engines, and fill the domestic gap. At the same time, three new products were successfully developed and put on the market to achieve sales. Including KD series KTM120 five-axis horizontal boring and milling machine compound machining center, Dechuang series KCX1200TM five-axis horizontal milling machine compound machining center and Dechuang series DMC50 five-axis vertical machining center. New products quickly get market response and realize sales. For aviation, aerospace, weapons, energy, ships, automobiles, mechanical equipment, medical equipment and other industries, large-scale shaft and special-shaped rotary parts are processed efficiently. Typical customers are customers who process key parts such as aircraft landing gear, nuclear equipment and missile body.

3. Table of R&D Investment Reasons for the significant changes in the total R&D investment compared with the previous year

During the reporting period, R&D investment increased by 47.44% compared with the same period of last year, mainly because the company undertook more national R&D projects, and many projects entered the stage of high R&D investment during the reporting period.

4. Research projects

The situation shows that there is none.

5. R&D personnel

6. Other notes:

Iii. Analysis of core competitiveness during the reporting period

(A) analysis of core competitiveness

1, adhere to independent innovation, continuous technology accumulation

The company attaches great importance to the research and development of innovative technologies and adheres to the development strategy of independent and controllable core technologies. By December 31st, 2022, the company had 106 authorized invention patents (including 93 domestic invention patents and 13 international invention patents), 139 utility model patents, 6 design patents, 60 software copyrights, 57 trademarks and 3 works copyrights. He has undertaken 29 national science and technology major projects "High-grade CNC machine tools and basic manufacturing equipment" and 17 other national and local R&D projects; The company has participated in the formulation of 24 national standards and 10 industry and group standards. The core technologies and patents mastered by the company and the continuous improvement of independent innovation ability are one of the keys to the company’s core competitiveness.

During the reporting period, on the basis of the original four general technical platforms and two special technical platforms, the company continued to deepen research and development, and successfully launched the third special technical platform-the high-speed blade tip grinding center technical platform. The equipment of high-speed blade tip grinding center has the characteristics of "high", "fine" and "sharp" in technical level compared with Spanish Danobate products. The introduction of this series of products will help to promote the high-speed and high-quality development of aviation industry, improve the performance of domestic aero-engines, realize the grinding of rotor blade tips of aero-engines and marine engines, and fill the gaps in China. At the same time, the company introduced three new products, including KTM120 five-axis horizontal boring and milling machine compound machining center of KD series, KCX1200TM five-axis horizontal milling machine compound machining center of Dechuang series and DMC50 five-axis vertical machining center of Dechuang series. The continuous introduction and iteration of new products make the company maintain a strong market competitiveness.

2. The core key functional components are self-controllable, and high-end machine tools can be replaced by imports.

The company has a complete talent chain, technology chain and industrial chain. The autonomy rate of the main product five-axis CNC machine tools reaches 85%, and it has mastered the core key technologies of high-grade CNC systems, key functional components and the whole industrial chain of five-axis CNC machine tools. Products are widely used in aviation, aerospace, weapons, ships, automobiles, molds, energy, machinery and equipment, electronics and other industrial fields to achieve import substitution. The GNC series high-grade numerical control system independently developed by the company is benchmarked against Siemens 840D. The report issued by China Machine Tool Supervision and Monitoring Center shows that the GNC series high-grade numerical control system of Kede CNC can reach 95.85% of Siemens 840D in function. The company’s self-developed and self-made key functional components are comprehensive in product types and rich in specifications, including torque motors, spindle motors, servo motors, motorized spindles, turntables, milling heads, laser interferometers, laser tool alignment instruments, wireless probes, laser rulers, encoders and so on. Functional parts products have been matched with the company’s self-produced five-axis CNC machine tools in batches, and batch independent sales have been realized.

3. Double R&D system of high-end CNC system and high-end CNC machine tool, and more efficient iterative promotion.

The company is one of the few innovative enterprises with high-end CNC system and high-end CNC machine tool dual R&D system in China, and one of the few high-tech enterprises based on comprehensive and independent innovation technology system in China at present. It can plan and design machine tool structure, optimize machine tool configuration elements, and customize functional components and functional development for machine tool host according to user’s technological requirements. With the support of dual R&D system, the company’s five-axis CNC machine tools, its key functional components and high-grade CNC system have achieved rapid iterative improvement in function, performance and reliability from the market end to the R&D end.

4. Pre-sales technology and after-sales service have obvious advantages and provide professional solutions.

With the multi-disciplinary and multi-professional pre-sales technical team, the company can tailor a complete set of high-end manufacturing and processing solutions for users in aviation, aerospace, weapons, ships, automobiles, molds, energy, mechanical equipment, electronics and other industries, provide them with flexible and diverse five-axis CNC machine tools, open the functions of high-end CNC systems to customers to the greatest extent, support personalized configuration adjustment, and realize the optimal use of the company’s products. In the after-sales service stage, in view of the technical problems encountered by customers in actual processing and manufacturing, the company can provide quick response and cost-controlled after-sales solutions to meet customers’ multi-level needs. Efficient pre-sale, in-sale and after-sale market service ability is one of the important factors affecting the company’s market profitability.

5. Facing the future manufacturing development needs, provide a complete production line turnkey scheme.

Thanks to the high localization rate and autonomy rate, relying on the complete talent chain, technology chain and industrial chain foundation, combined with the application accumulation of deep cooperation among users in many fields, the company has the turnkey engineering ability of flexible production line, which can meet the personalized, customized and differentiated production needs of customers. Solve the downstream customers’ demand for multi-variety and small batch processing, solve the pain point of the sharp rise in labor production costs, and realize unmanned or less people. With the further accumulation and promotion of the company’s flexible production line business, it will provide complete domestic production line solutions for users in more fields in the future, reduce the difficulty of the transformation and upgrading of users’ manufacturing industry, help users quickly realize the transformation and upgrading of their manufacturing capabilities, and create higher profits for users.

6. In-depth cooperation among key users in many fields and application demonstration to promote market growth.

The company has established four general machining centers and three special machining center technology platforms, which can realize the rapid application verification of high-grade CNC systems and key functional components. At the same time, the company has established a cooperation mode of "co-innovation, co-promotion and co-benefit" with key enterprises in aviation, aerospace, automobile, cutting tools, energy, ships, weapons and other industries. With the support of the national science and technology major project "High-grade CNC machine tools and basic manufacturing equipment" and other platforms, the company’s products have been verified in the processing and manufacturing of key parts of key users in various fields, which not only realizes the rapid verification and upgrading of products, but also plays an application demonstration role in the user industry.

7. Innovative team advantages

In the process of independent innovation, the company has built and precipitated a multi-level, multi-disciplinary and multi-disciplinary team of innovative talents, and established an innovative technical team headed by general manager Chen Hu. At the end of the reporting period, there were 186 R&D teams, with professionals covering R&D, design, manufacturing, assembly, testing and other fields of high-end equipment at home and abroad. Chen Hu, the general manager, graduated from the Department of Precision Instruments and Mechanics in Tsinghua University with a doctorate degree. He served as the leader of the working group of the national fieldbus standard alliance for numerical control systems, enjoyed the special allowance of the State Council, and was selected as the young and middle-aged scientific and technological innovation leader in the "Ten Thousand Talents Program" of the Central Organization Department and the Ministry of Science and Technology. Dr. Chen Hu is a senior expert in China’s CNC system and CNC machine tool industry. He has been engaged in the research and development of high-end CNC systems and high-end CNC machine tools for a long time, and led the company’s technical team to conquer all kinds of high-end five-axis CNC machine tools and their key functional components and high-end CNC systems, and established a complete CNC technology chain and industry that attracted the attention of the industry.

8. Brand advantage

The company is a national high-tech enterprise, awarded the title of "Little Giant" by the Ministry of Industry and Information Technology, and recognized as the provincial enterprise technology center in 2022 by the Liaoning Provincial Department of Industry and Information Technology. High-end CNC machine tools have won the Chun Yan Prize in machine tool industry for many times, and the products of KMC800U five-axis linkage vertical machining center have entered the "Supply Catalogue of Domestic High-end CNC Machine Tools in Military Industry", and KMC600SU high-dynamic five-axis linkage vertical machining center has been selected as "Top Ten Product Quality" by cmtba. The project "Five-axis high-quality and high-efficiency precision machining complete process and manufacturing system for aerospace complex components and its demonstration application" won the first prize of scientific and technological progress in China machinery industry, and the project "Key technologies, standards and applications of open CNC system" won the first prize of scientific and technological progress in Liaoning province. The project "Development and application of serialized high power density, high efficiency, high performance and high reliability servo drive device" was selected by Dalian Science and Technology Bureau as the first prize of Dalian Science and Technology Award in 2022, and the project "Key technologies and applications of digital workshop interconnection based on information model" was awarded by China. The company’s products and services have won a good market reputation in key industries such as aviation, aerospace and weapons. The company has established a complete talent chain, technology chain and industrial chain, which has enabled the company to have stronger continuous innovation ability. The mode of "co-innovation, co-promotion and co-benefit" established by the company and users has enabled the company to have better market response ability.The company will continue to provide users with complete domestic high-end manufacturing solutions, constantly promote the application of high-end CNC systems and key functional components in other machine tool enterprises in the machine tool industry, and strive to build the company into a leading enterprise at home and abroad in the field of high-end manufacturing.

(II) Events that have seriously affected the core competitiveness of the company during the reporting period, impact analysis and countermeasures.

Fourth, risk factors

(A) Not yet profitable risk

(2) Risk of sharp decline in performance or loss

(C) core competitiveness risks

At present, the company’s main business products continue to be developed in aerospace, automobile, machinery, mold and other fields, and the demand for the company’s products varies in different fields. If the company can’t quickly adapt to the process differentiation demand in different fields, quickly carry out technical iterative upgrading, enrich the varieties of five-axis CNC machine tools, provide differentiated five-axis CNC machine tools that meet the processing needs in different fields, and provide users with the best processing scheme, it will face adverse effects such as the products can’t adapt to the new market demand, resulting in slower revenue growth.

(4) Operational risks

1, the risk of increased competition

For a long time, the domestic market of five-axis CNC machine tools with the highest technology content is mainly occupied by multinational companies with hundreds of years of machine tool production experience in developed industrial countries such as Germany, Japan and the United States. Domestic independent production capacity is concentrated in the low-end market, and there are very few China enterprises that can independently develop five-axis CNC machine tools.

In recent years, due to the realistic demand of China’s aerospace engine, marine propeller, heavy generator rotor and other strategic equipment industries for high-end CNC machine tools, the state has continuously increased its support for the high-end CNC machine tool industry, and the technical level of China’s high-end CNC machine tool industry has been continuously improved. The performance and function of five-axis CNC machine tools produced by a few excellent domestic manufacturers can meet the needs of import substitution. The gradual rise of high-end CNC machine tool manufacturers in China may attract the attention of competitors and intensify competition. Coupled with the rapid growth of China’s high-end CNC machine tool market and the increasing awareness of the importance of import substitution, it will attract more potential entrants. Therefore, the company faces the risk of intensified market competition.

2. The risk that large foreign-funded enterprises still occupy the main market share in high-end segments.

Most of the large foreign-funded enterprises in the industry are large enterprises integrating upstream functional components and CNC system production, whole machine manufacturing and product sales. Based on the accumulation of industrial countries in architecture design, processing technology, industrial scale and talent echelon for hundreds of years, the reliability and accuracy of its high-end industrial products have obvious advantages over China’s emerging technology enterprises. Therefore, in the field of five-axis CNC machine tools, CNC systems and key functional components with high technical difficulty, downstream users in China still mainly choose foreign advanced products under the condition of free import, resulting in the products of large foreign-funded enterprises still occupying the main market share in the segmentation field.

3. Risks of upstream raw material procurement

The key functional parts of the company are mainly produced independently, and the external procurement is mainly standard parts, but the parts such as guide rails, lead screws and bearings are still mainly purchased externally. In the future, if the international trade friction intensifies, technical protection is strengthened or the demand of competitors increases, the parts such as guide rails, lead screws and bearings will face the risk of sharp price increase or prolonged supply cycle, which will adversely affect the company’s production and operation.

(V) Financial risks

1. Risk of fluctuation of gross profit margin

During the reporting period, the company’s main users were the aerospace industry, and its customization requirements for high-end CNC machine tools were higher in terms of processing accuracy and processing efficiency, and its gross profit margin was relatively high. With the gradual acceleration of the company’s marketization process, the company’s products are expanding into many fields such as precision molds, automobiles, clean energy and construction machinery. Due to the differences in customized configuration of high-end CNC machine tools used by different industries and users, the gross profit margin of related products will also be different, and the change of downstream customer structure may make the overall gross profit margin of the company fluctuate. Moreover, in order to meet the downstream market demand, industry competitors are also investing in or increasing the research and development and production of five-axis CNC machine tools. If the market competition intensifies in the future, the national policy is adjusted or the company fails to maintain the leading position in products, and the selling price of products and the purchasing price of raw materials are adversely changed, the company’s gross profit margin is also at risk of decline.

2. The risk of bad debts caused by the increase in the balance of accounts receivable.

The company has made provision for bad debts for accounts receivable according to the accounting standards. The company’s accounts receivable scale increases with the growth of operating income. If the economic situation worsens or customers have major operational difficulties, the company will face the risk of difficulties in collecting accounts receivable.

(VI) Industry risks

As an important part of intelligent equipment manufacturing industry, high-grade CNC machine tools are strategic industries for national economic and social development. The state has issued a series of encouragement policies to support and promote the development of China’s high-end CNC machine tools and basic equipment manufacturing industry, and enhance industrial innovation ability and international competitiveness. With China’s military modernization and the transformation and upgrading of manufacturing industry, the demand for independent control of core technologies is increasingly urgent, and the country’s industrial policy continues to increase. If the support of relevant national industrial policies is weakened in the future, it will have a negative impact on the company’s development.

(VII) Macro-environmental risks

The company’s downstream customers are mainly military enterprises that process aero-engines and missile engines, as well as civil manufacturing enterprises in the fields of precision molds, automobiles, clean energy, domestic commercial aircraft and construction machinery. The development of industries where downstream customers are located is highly correlated with the macroeconomic cycle. The adjustment of macroeconomic policies and its periodic fluctuations will have a great impact on the structural upgrading of downstream industries, as well as the operating conditions of end customers, capital turnover speed and fixed assets investment decisions, thus affecting the demand for high-end CNC machine tools.

If the macroeconomic growth rate continues to decline in the future and the downstream industries are depressed for a long time, it may exceed the company’s ability to cope through customer structure adjustment and internal tapping, which will have a great adverse impact on the company’s operation for a period of time.

(8) Risks related to depositary receipts

(9) Other major risks.

V. Discussion and analysis of the company’s future development

(A) the industry pattern and trends

1. For a long time, domestic CNC machine tools have been in a situation of "low-end civil war, mid-end competition and high-end failure", and the high-end market has been occupied by foreign brands.

Developed countries and regions have a long history in the industry of advanced manufacturing equipment such as high-end CNC machine tools, and related enterprises have accumulated advantages in technology, brand and capital, and have the first-Mover advantage, occupying the high-end market. The domestic market of five-axis CNC machine tools with the highest technology content is mainly occupied by multinational companies with hundreds of years of machine tool production experience in developed industrial countries such as Germany, Japan and the United States. The domestic independent production capacity is concentrated in the low-end market, and there are very few China enterprises that can independently develop five-axis CNC machine tools. According to the Outline of the Development of Machinery Industry in the 14th Five-Year Plan, at present, the self-sufficiency rate of high-end CNC machine tools in China is less than 10%, which basically depends on imports. Therefore, the main competitors of China’s five-axis CNC machine tool enterprises represented by the company are mainly international manufacturers.

2. China is a big machine tool consumer, attracting a large number of international brand CNC machine tool enterprises to stay in the China market.

China has become the most important machine tool consumption market in the world. According to the data of German Machine Tool Manufacturers Association (VDW), the consumption of machine tools in Chinese mainland in 2021 was 23.6 billion euros, up 27% year-on-year, accounting for about 34% of the global market. However, on the whole, China’s machine tool industry presents the development characteristics of "big but not strong", and the field of high-end CNC machine tools is still a weak link with strong import dependence.

According to the data of cmtba, in 2022, the import volume of metal processing machine tools in China reached US$ 6.6 billion, of which the total amount of imported machining centers was US$ 2.37 billion. The average price of imported machining centers increased significantly year-on-year, the proportion of imported high-end machining centers increased, and there was huge room for domestic substitution.

In April 2022, Nippon Denso (which owns Mitsubishi Heavy Industries, OKK and other machine tool enterprises) expanded its factory area in Pinghu, Zhejiang Province from the original planned 60,000 square meters to 200,000 square meters to produce gear processing machine tools. At the same time, Demajisen Seiki invested 100 million US dollars to build Pinghu factory, with an estimated annual output of 2,200 machining centers. In the same year, Demajisen Seiki opened Tianjin Green Factory and Shanghai Medical Device Technology Center. In June, 2022, German Wheeler Xile Machine Tool (Qingdao) Company laid the foundation stone for the new Jimo factory covering an area of 73,000 square meters, and it is estimated that it will achieve the production of 300 five-axis and horizontal processing machine tools. In July 2022, the foundation stone was laid for the second phase factory of German (SW) Esway Machine Tool Co., Ltd., and China will become the largest overseas R&D and manufacturing base in the world, with an annual production capacity of about 350 machining centers. Thus, the continuous investment of foreign-funded enterprises in China market shows the high prosperity and development space of domestic five-axis machine tool industry.

3. China machine tool industry is transforming into a high-end field.

Five-axis CNC technology is one of the important standards to measure the manufacturing ability and technical level of complex precision parts in a country. Five-axis CNC machine tool is the only means to solve the cutting of key industrial products such as aerospace and aero-engine impeller, impeller, blade and marine propeller. From the Batumi List after World War II to the Wassenaar Agreement after the Cold War, the developed countries in the west have always adopted the five-axis CNC system and five-axis CNC machine tools as strategic materials to implement the export license system, and imposed strict technical blockade and export restrictions on many countries, including China.

After decades of development, the domestic CNC machine tool industry has been developing independently and drawing on foreign experience. From scratch, it has grown continuously, resulting in such established enterprises as Shenyang Machine Tool (000410.SZ) and Qinchuan Machine Tool (000837.SZ), which are in the forefront of the world, as well as a number of core design technologies and manufacturing processes such as Kede CNC, which can provide high performance for their own dedicated application fields and product types.

In recent years, with the help of favorable market conditions such as the transformation of China’s manufacturing industry, the rising demand for high-end CNC machine tools, and the huge import substitution space, such emerging manufacturers have made great efforts to develop their own products and technical level, enhanced their financial strength through public financing and other means, achieved remarkable development, and rapidly increased their market share.

4. The rapid development of high-end manufacturing industry has brought new development opportunities for domestic high-end machine tools.

At present, China is in an important stage of transformation from a manufacturing power to a manufacturing power. The intelligent manufacturing equipment industry is the basic guarantee for the adjustment and upgrading of the entire economic structure and the leading industry for the transformation and upgrading of the national economy. In the new round of industrial upgrading, high-end manufacturing industry will gradually replace simple manufacturing industry, and manufacturing industry will gradually change from labor-intensive industry to technology-intensive industry. This transformation and upgrading will also promote the technological upgrading of the intelligent manufacturing equipment industry, which will greatly increase the market demand of middle and high-end CNC machine tools. High-end CNC machine tools are mainly used in aviation, aerospace, nuclear, electronics, ships, weapons, energy, automobiles, molds, knives and other key industries, especially aviation, aerospace and military industries. The demand for localization is urgent, the stock needs to be updated urgently, and the market growth is expected.

Taking the aviation industry as an example, high-end CNC machine tools mainly serve the processing of key parts of military aircraft and civil aircraft. In the civil aircraft market, Comac China has launched three classes of passenger aircraft, namely ARJ21, C919 and CR929. On December 9, 2022, Comac China delivered the world’s first C919 large passenger plane to China Eastern Airlines, marking a new milestone in the development of large aircraft. According to the "2022 Shanghai Science and Technology Progress Report" issued by the Shanghai, China Municipal Science and Technology Commission, "by the end of 2022, the C919 large passenger aircraft had received 1,035 orders from 32 customers; In December 2022, the ARJ21 new regional aircraft was delivered to the first overseas customer, Indonesian Lingya Airlines. ARJ21 received 690 orders from 25 customers and delivered a total of 100 aircraft to 9 domestic and foreign customers. " According to the Market Forecast Annual Report of Comac China (2022-2041) issued by Comac China, with the steady rise of China’s economy, China’s civil aviation industry will enter a period of development quality improvement and pattern expansion. By 2041, the fleet size of China will reach 10,007, accounting for 21.1% of the global passenger aircraft fleet. China aviation market will become the largest single aviation market in the world.

According to the report on the draft government budget released by the National People’s Congress on March 5, 2023, China’s military budget in 2023 was 1,553.7 billion yuan, up 7.2% year-on-year, and the increase rate was 0.1 percentage point higher than that in 2022. It was also the third consecutive year since 2021 that China’s military budget rose slightly, and the situation of strengthening the army was urgent. At present, the international environment is deteriorating, regional conflicts and confrontation between great powers are escalating, and it is reasonable and urgent to speed up national defense investment. China’s military industry is still in the stage of compensatory development. The aerospace and military industries, represented by missiles, rockets and satellites, have entered the stage of rapid expansion of production, and high-end CNC machine tools have played a strong support and guarantee role in aviation, aerospace and military industries.

In addition to the urgent demand for five-axis CNC machine tools in key industries such as aviation, aerospace and military industry, with the transformation of automobile to lightweight and integration, "one-piece die casting" forms a variety of special-shaped components, which provides more opportunities for five-axis CNC machine tools in finishing. The processing of battery, motor housing, reducer housing, bogie, front and rear axle and other parts of new energy vehicles has become a new growth point of five-axis machine tools. According to the latest data from China Association of Automobile Manufacturers, in 2022, the production and sales of new energy vehicles reached 7.058 million and 6.887 million respectively, up by 96.9% and 93.4% year-on-year, and the market share reached 25.6%. With the continuous expansion of the new energy automobile industry, the integrated processing equipment and automatic production line of automobile parts will usher in more development opportunities. At the same time, due to insufficient overseas supply and greatly enhanced export competitiveness of China automobile enterprises, automobile exports exceeded 3 million vehicles in 2022, up 54.4% year-on-year, effectively boosting the overall growth of the industry.

Tool is a tool used for cutting in mechanical manufacturing, and it is the basic industry in mechanical manufacturing and major technical fields, accounting for about 90% of the whole mechanical processing workload, which directly determines the production level of mechanical manufacturing. According to the data of cmtba, China Customs and Forward-looking Industry Research Institute, in 2022, the tool export value was 23.187 billion yuan, up 2.98% year-on-year; The import value of cutting tools was 9.732 billion yuan, down 8.47% year-on-year. The export value is obviously greater than the import value, and the dependence on imports continues to decline. The continuous increase of China’s tool export shows that domestic tool products occupy an important position in the world tool market. China needs to import more than 1,000 five-axis tool grinders every year, and the company’s five-axis tool grinding center is one of the few equipment in China that can grind complex tools such as ball end mill and corrugated knives, and has a good market prospect.

5. Support of national industrial policies

As an important part of equipment manufacturing industry, CNC machine tools have become one of the important material bases of national industrial modernization. Our government has always attached great importance to the development of CNC machine tool industry and its sub-sectors, and has successively issued a series of relevant policies to guide industry participants to increase R&D investment, strengthen innovation awareness, break through technical bottlenecks, improve the effective supply of common technologies and high-end products, and meet the market demand in downstream areas.

On May 8, 2015, the State Council officially issued "Made in China 2025", which became the action program for guiding the adjustment of industrial structure and upgrading of manufacturing industry, and then implementing the strategy of building a strong country. High-end equipment is the foundation of manufacturing transformation. In order to promote the transformation and upgrading of manufacturing industry, the Chinese government has vigorously promoted the development of high-end equipment industry and issued a series of industrial policies. In 2018, the Bureau of Statistics issued the Classification of Strategic Emerging Industries (2018), which listed metal cutting machine tools, metal forming machine tools, machine tool control systems, machine tool functional parts and accessories as "intelligent manufacturing equipment industry" in the "high-end equipment manufacturing industry". In November 2019, thirteen ministries and commissions, including the Ministry of Industry and Information Technology and the National Development and Reform Commission, jointly issued the "Special Action Plan for Improving the Design Capability of Manufacturing Industry (2019-2022)", clearly pointing out that in the field of high-end CNC machine tools, it is necessary to achieve a breakthrough in original design, strengthen the key design of high-end equipment manufacturing industry, and focus on breaking through the system development platform and servo mechanism design. In March, 2021, the Fourth Session of the 13th National People’s Congress voted to pass the 14th Five-Year Plan for National Economic and Social Development in People’s Republic of China (PRC) and the Outline of Long-term Goals in 2035. The Outline emphasizes promoting the optimization and upgrading of manufacturing industry, deeply implementing intelligent manufacturing and green manufacturing projects, developing a new service-oriented manufacturing model, promoting the high-end intelligent greening of manufacturing industry, cultivating advanced manufacturing clusters, and promoting the innovative development of high-end CNC machine tools and other industries.

Therefore, the new round of industrial structure adjustment and upgrading is bound to replace the traditional manufacturing industry with advanced manufacturing industry. This transformation and upgrading will greatly increase the update demand of high-performance CNC machine tools as one of the industrial mother machines. The State Council’s Opinions of the State Council on Accelerating the Revitalization of Equipment Manufacturing Industry, High-grade CNC Machine Tools and Basic Manufacturing Equipment, and China Machinery Industry Federation’s Outline for the Development of Machinery Industry in the Tenth Five-Year Plan all provide strong policy support for the development of high-grade CNC machine tool industry represented by five-axis CNC machine tools.

(II) Company development strategy

As a technology-intensive enterprise, the company adheres to the development strategy of independent and controllable core technology. Adhere to the technology platform route, and customize the design with common technology to maximize the product value. By establishing a management system in line with the company’s strategic objectives, improving the company’s organizational structure with modern enterprise management system and corporate governance structure, providing customers with high-quality products and services with technological innovation, and rationally expanding the production scale by using the capital market, the company’s comprehensive competitiveness and sustainable development ability will be continuously improved to meet the diversified and personalized needs of different users and continue to create value for customers.

Based on the existing four universal five-axis technology platforms and three special plane series, the company will integrate special processing and efficient processing technology, improve the high-low product series, and complete the national layout of R&D, production, service and talents. On the basis of maintaining the market advantages of small and medium-sized aero-engines, missile engines, high-precision inertial navigation and missile body parts, we will increase the market share of key parts processing equipment such as large engines and aircraft structural parts; In view of the demand for processing equipment in the fields of automobiles, molds, knives, mechanical equipment and energy, the company gradually exerted its strength to expand its share in the civilian products market; Pay attention to the emerging market demand in electric vehicles, motion control and other fields, and realize the sales extension of key functional components, so as to become a new kinetic energy for high-speed income growth; Improve the complete solution ability of automated production line to meet the market business needs. Independent incubation of special motors, new sensors and other products in a timely manner, exploring new areas of the company’s growth.

1. Technical strategy

(1) adhere to the technology platform.

Focusing on four general five-axis technology platforms (vertical plus, horizontal plus, gantry and horizontal milling car) and three special five-axis technology platforms (tool grinding, blade machine and high-speed blade tip grinding), the company has carried out technology extension, adhered to the technology platform route, and gradually integrated external resources while relying on its own technology accumulation. Focus on modularization and standardization of unit technology, so as to facilitate the reuse of core technology, on the one hand, achieve the effect of maximizing value, on the other hand, it is easy to expand the application of technology to other fields to realize the independent evolution and development of unit technology.

(2) Attach importance to engineering ability

Guide the research and development direction with the market technical demand, promote the engineering and commercialization of scientific research results by using the technology platform, and form various products that meet the market demand; Engineering capabilities, including market research and demand analysis, product definition, performance optimization iteration, etc., are built as core competitiveness different from universities and other research forces.

(3) Establish the concept of open innovation.

Establish an "open, integrated, inclusive and innovative" corporate culture, build a socialized R&D platform with R&D as the core, promote the integration with technical resources around the industry, and improve the overall integration of products. Deeply cultivate institutions and personnel at all levels in the user industry to grasp the development trend of the industry and seize market opportunities; Recruit and train professionals in various industries, build a professional self-operation team, and realize independent accounting in manufacturing, marketing and other institutions.

2. Business strategy

(1) Internal business strategy

First, master the core research and development capabilities. Resolutely guide the research and development direction with market demand, and make use of platform advantages and technology accumulation advantages to achieve rapid engineering and rapid iteration.

Second, build a professional manufacturing system. Improve production planning ability, supply chain management ability and quality control ability; Form a complete, clear and controllable production management system, from functional components to the whole machine, form a vertical line management mechanism, and have the ability to expand and copy or support their own production capacity at any time.

Third, the implementation of human resources strategy. Excavate all kinds of outstanding talents and set up specialized teams (sales, technology and production) for specific industries; Improve the equity incentive and performance appraisal system, and realize the common growth of talents and companies through shareholding platforms.

(2) foreign business strategy

The company will strengthen its core pre-sales and after-sales capabilities. Improve the pre-sales plan ability and service ability, and issue pre-sales plans to drive relevant R&D and production work; Improve after-sales ability, improve response speed and problem solving efficiency. In addition, the company will strengthen the export standards, and solve the problem of the company’s current insufficient production capacity by integrating outsourcing resources and low-matching series of cooperative production.

3. Product strategy

The company will take the brand value of Kede CNC as the core, focus on the national strategic policy support, and take five-axis CNC machine tools as the carrier to build the brand value of Kede CNC and establish a good reputation in the industry; A complete system from providing five-axis complete machine equipment to providing flexible units and then to flexible production lines. Gradually complete the systematic layout of functional components, and master the independent research ability of core functional components such as CNC system, motor and motorized spindle, sensor and turntable. Further expand the professional radiation of components, based on the reputation of machine tools, expand the application fields of components, and promote the application from machine tools to aerospace, aviation, automobiles, mechanical equipment and other fields. In terms of product layout, it will be dominated by high-low distribution and differentiated structure. High-end models will bring high added value and high profits, and ordinary mass production models will ensure the liquidity of enterprises.

(3) Business plan

1. Actively expand the business scale and complete the construction of fundraising projects.

In order to meet the needs of the company’s development strategy, according to the company’s actual situation, actively explore and study the company’s new business and new customer expansion work, adhere to import substitution as the core, develop and improve other industrial fields on the basis of deepening and strengthening the aerospace field, give full play to the advantages of the whole industrial chain, full technology chain and full talent chain, and gain a foothold in the market with efficient solutions, cost-effective products and high reliability. Combined with the actual situation of obtaining investment funds, we will complete the construction of investment projects, rapidly increase production capacity and respond to market demand.

2. Continue to introduce scientific and technological talents and enhance technical reserves.

On the basis of existing personnel, the company will introduce all kinds of technical talents as needed, optimize the talent structure, attract high-end talents, and provide sufficient technical talent reserves for the subsequent development of the company. In terms of technology development, the company will optimize and improve the existing technology, develop the technology of high-end CNC machine tools and related core functional components with its own intellectual property rights according to the ever-developing demand trend, and actively explore cooperation with universities at home and abroad to maintain technological leadership.

3. Improve management ability and ensure product quality.

With the expansion of the company’s production scale, especially the future fundraising projects will be put into production and operation, which will put forward higher requirements for the company’s management ability. In the future, the company will complete the improvement of the whole process management software of processing and manufacturing, improve the existing management efficiency, realize the whole process visual target management of the project, ensure the traceability of the whole processing and manufacturing process, and better guarantee the quality control of equipment.

Liu Changting, male, graduated from Shanghai Second Military Medical University. He has successively served as a resident, attending physician, deputy chief physician, associate professor, chief physician, professor and doctoral supervisor in the respiratory department of the South Building of the General Hospital of the People’s Liberation Army, and has been the chief scientist of the 973 Project. The earliest systematic research on space biomedicine in China has made important contributions to the development of space biomedicine in China. He is a pioneer and founder in the field of space medical microbiology in China.

1 Profile of people

Liu Changting, male, from Lu ‘an City, Anhui Province, has worked in the PLA General Hospital since he graduated from the Second Military Medical University in August 1978. He is currently honorary director, chief physician, professor and doctoral supervisor of the Respiratory Department of the South Building of the PLA General Hospital, member of the Inspection Committee of the PLA General Hospital, member of the Standing Committee of the Science and Technology Committee of the PLA General Hospital, director of the Space Biomedical Laboratory, civilian level I, technical level II, and chief scientist of the National Key Basic Research and Development Plan (973 Plan).

Professor Liu Changting has long worked in the front line of health care and clinic. In medical treatment, he always takes "don’t let patients and themselves regret" as his motto. In his 38 years of clinical work, he has never missed diagnosis and misdiagnosis. He is approachable and strict with himself, and regards fame and fortune as light as water and his career as heavy as a mountain. Medical ethics is the soul of the doctor, and it is his standard to do first-class work, create first-class performance and pursue first-class level and realm. Through long-term medical practice and a lot of clinical work, a set of diagnosis and treatment programs for chronic obstructive pulmonary disease, lung cancer, lung infection, pleural disease, pulmonary critical illness and other diseases have been formed. In health care, he always maintains the spirit of "loyalty and dedication, seeking truth and being pragmatic, harmonious and innovative, and bravely climbing the peak", showing the noble realm of a loyal health care expert. As the backbone of health care, he often organizes consultations and rescues for critically ill and difficult patients inside and outside the hospital, with meticulous diagnosis and treatment thinking, reasonable treatment plan and good treatment effect, which is highly praised by colleagues and health care objects.

Since assuming the post of director in January, 2008, the leading team has won the advanced collective of the Health Care Committee of the Central Military Commission, the excellent Party branch of the hospital for many times, the advanced department of post skills training, the innovative advanced collective of the hospital, the best unit of the hospital’s medical performance award, and the advanced unit of the hospital’s grassroots construction. At first, a sub-specialty of respiratory diseases for the elderly was established in China, and the construction of laboratory, ventilator room, lung function room, blood gas analysis room and bronchoscope room was strengthened, and a space biomedical laboratory was established. The first batch became the "research department" of the PLA General Hospital; Put forward ten concepts of team culture in respiratory department of South Building; Put forward ten rules of clinical scientific service in respiratory department of South Building; Establish and improve the incentive mechanism of departments; Composed the song of respiratory science in the south building; Held more than 20 national and Beijing academic conferences on respiratory diseases of the elderly; During his tenure as department director, the patient satisfaction rate was 99.86%. In 2013, the subject evaluation was the first in the clinical department of Nanlou. Experts believe that the department he led is leading in China and is the leader of respiratory diseases in the elderly in China.

2 social service

He is a member of the Standing Committee of the Scientific Committee of the General Hospital of the People’s Liberation Army, a member of the Inspection Committee of the Hospital, a deputy head of the Respiratory Department of the Chinese Geriatric Medical Association, a member of the Standing Committee of the Respiratory Branch of the Chinese Geriatric Medical Research Association, a deputy director of the respiratory and critical illness expert committee of the Chinese Geriatric Medical Association, an expert in the planning of China’s space station, a director of the China Aerospace Society, and an executive deputy director of the aerospace medical engineering and space biology professional committee of the Chinese Aerospace Society; Standing editorial board and editorial board of more than 20 magazines at home and abroad.

3 academic achievements

The earliest systematic research on space biomedicine in China has made important contributions to the development of space biomedicine in China. He is a pioneer and founder in the field of space medical microbiology in China. Presided over the research on the variation law of space microorganisms and new strategies for prevention and control of important infectious diseases, presided over the research on microbial corrosion mechanism in space environment and presided over the research on space biopharmaceuticals; Presided over the research on the influence of microgravity on human body and the biological effect of weightlessness, presided over the research on the influence of microgravity on human body, and presided over the basic research on the protection of weightlessness on human body. Aiming at the microbial protection of space environment, the influence and mechanism of space environment on microorganisms were comprehensively and systematically studied, and the theory of molecular effect of space microorganisms was put forward, which opened up a new field of clinical microorganisms in space medical protection.

Over the years, Liu Changting has always followed the forefront of medical science and technology development at home and abroad, carried out extensive clinical and scientific research work in combination with practice, persisted in in in-depth research and exploration, and constantly achieved new results. In 1997, he led the team to take the lead in conducting space biomedical research in China; In 2006, the first domestic seminar on space biomedical research and application was organized; In 2007, he led the establishment of the Space Biology Committee of the Chinese Academy of Astronautics (in 2009, he merged with the Space Medical Engineering Committee of the Chinese Academy of Astronautics to form the Space Medical Engineering and Space Biology Committee of the Chinese Academy of Astronautics); In 2008, he took the lead in editing the monograph "Research and Exploration of Space Life Science" in China, and later edited the first "Basic and Applied Research of Space Microbes" in China. Breakthrough progress has been made in the biological effect of weightlessness, the influence of space environment on microorganisms and its application research, and many innovative and practical achievements have been obtained, and remarkable application results have been achieved in the comprehensive interdisciplinary field of manned space flight. He has undertaken and completed 27 national and provincial-level projects with the first person in charge; A total of 276 papers were published by the first author or correspondent; Twenty-five strains of microbial variation species were named after LCT(Liu Chang Ting), and their whole genome sequences have been included in the NCBI database of the United States. With the first person to complete, he won 23 national invention patents and 2 utility model and design patents; Editor-in-chief of 10 monographs (1 was rated as the "Eleventh Five-Year Plan" national key book);The first finisher won the second prize of national scientific and technological progress, the first prize of Beijing scientific and technological progress and the first prize of the whole army; Won five first and second prizes (ranking 1, 1, 1, 2 and 3) for scientific and technological progress and medical achievements at provincial and ministerial levels.

Professor Liu Changting has trained more than 40 postdoctoral, doctoral and master’s students, among whom 4 students have grown into department administrative directors and chief physicians, and 17 students are deputy chief physicians. More than 40 masters, doctors and postdoctoral students have been trained; Among them, 3 postdoctoral fellows received the support of China Postdoctoral Science Fund, 1 postdoctoral fellow received the third-class post allowance of the whole army, 2 were rated as Beijing science and technology stars, and 1 was rated as one of the top 100 talents in the hospital. Won the national education department doctoral academic newcomer award, national scholarship, top ten outstanding young people of Nankai University, first-class scholarship for outstanding doctoral students of Nankai University, top ten medical students of Nankai University, and Zhou Enlai Scholarship; One student was awarded an excellent master’s degree in Beijing; Three papers were rated as excellent papers by PLA Medical College, and many graduate students entered the top three hospitals such as Peking Union Medical College Hospital with excellent results.

Get honor

Won the second-class merit of the Central Military Commission, the second-class merit of the General Logistics Department and the third-class merit of the PLA General Hospital. Individuals who have won the silver star of science and technology of the General Logistics Department and the advanced individuals of the Central Health Care Committee enjoy special government allowance, post allowance of the General Logistics Department and post allowance of outstanding professionals of the whole army.

The picture shows that workers are processing mugwort in a mugwort processing poverty alleviation workshop in Tongbai County. source map

　　A common "weed" has turned into a "golden grass" to get rid of poverty and become rich, in the hometown of medical saints — — Nanyang, Henan, is nothing new. This very common "wild grass" growing all over the mountains is called wormwood.

　　According to statistics, the planting area of wormwood in Nanyang City exceeds 240,000 mu, and four wormwood industrial parks have been built, with 1,529 registered enterprises and annual sales of 8 billion yuan. It has become the largest wormwood processing base and wormwood leaf distribution center in China, with a national market share of 70%. It has driven more than 100,000 farmers to benefit from planting, harvesting, processing and sales, including more than 31,000 poor people. The whole wormwood industry has shown a vigorous vitality and has become one of the excellent projects for poverty alleviation and development in local rural areas.

　　Wormwood turns into a "golden leaf"

　　In the eyes of many agricultural technicians and growers, wormwood with its own green ecological "attribute" is the "best partner" to develop poverty alleviation industries. The planting area of wormwood is large and farmers are enthusiastic about planting. To this end, Nanyang City has also established the Ai Industry Association and introduced measures to encourage the development of the Ai industry. According to the principles of farmers’ voluntariness, interest linkage and mutual benefit, all localities have guided the establishment of professional cooperatives and cooperative associations of Ai Cao to cultivate large-scale Ai Cao growers, and "Ai Nong" has embarked on the road to prosperity because of the "Ai Xiang".

　　"The national wormwood looks at Wanai, and Wanai is best counted as Tongbai." Yin Zhehua, a poor household in Xiongzhai Village, Maoji Town, Tongbai County, talked about wormwood. Yin Zhehua not only planted wormwood, but also used his spare time to work in a nearby wormwood processing factory. It can be said that it was with "Ai" wealth that he ran towards a well-off society. "My husband died early, and there are two children at home. In the past few years, the days have been tight, and it is common to go to the construction site to do heavy work. Since I built the wormwood precision poverty alleviation employment base at my doorstep, I no longer go to the construction site to work. Now I grow wormwood myself and go to the factory to process moxa sticks. My work is much easier and I earn a lot of money in one month. " Yin Zhehua said happily.

　　Nanyang is rich in traditional Chinese medicine culture. In Zhang Zhongjing’s Treatise on Febrile Diseases, there are 6 prescriptions using wormwood, and in Synopsis of the Golden Chamber, there are more than 20 prescriptions using wormwood. Every Dragon Boat Festival, sachets fluttering in the streets and lanes are living advertisements of wormwood products. With the improvement of people’s living standards, the demand for health is more and more urgent. As a pure natural product, wormwood is favored, and wormwood industry has become the most distinctive sunrise industry and the most dynamic industry to enrich the people in Nanyang.

　　Today, the planting area of Dengzhou and Tongbai under the jurisdiction of Nanyang City has reached more than 40,000 mu, and the planting areas of Tanghe, Sheqi, Nanzhao, Wolong and Wancheng are all over 10,000 mu. In Nanyang, like Yin Zhehua, more and more poor households have found a way to get rich by planting and processing wormwood.

　　The data shows that at present, there are more than 160 varieties of wormwood products developed in Nanyang City, which are exported to 56 countries and regions along the "Belt and Road" with an output value of more than 20 billion yuan. Since 2017, two consecutive national wormwood industry conferences have been held in Nanyang.

　　Lengthening the industrial chain of enriching the people

　　In Xinzhuang Village, Tongzhaipu Town, tanghe county, the sign of "wormwood industry poverty alleviation base" is particularly eye-catching. This is the 3000-mu high-quality wormwood planting base of Nanyang Daai Ecological Agriculture Development Co., Ltd.. "We adopt ‘ Company+cooperative+poor households ’ The model provides poor households with one-stop services such as planting and technology, and signs a recycling agreement, which has achieved remarkable results in promoting local economic development and increasing farmers’ income. " The person in charge of the company introduced.

　　Planting "Ai" will increase income, and "Ai" will lift you out of poverty. "I participated in the whole process from planting and weeding to harvesting, drying and leaf stalk separation in the later stage. I didn’t expect that this wormwood can bring me more than 1,000 yuan a month. Really exciting! " Speaking of wormwood, Yu-fu Li, a poor household who works in Nanyang Daai Ecological Agriculture Company, smiles.

　　In the Ai products processing workshop of Jintiandi Agricultural Excellent Products Cooperative in Hongniwan Town, Wancheng District, the express boxes piled up in mountains attracted the attention of reporters. "Many shops in Taobao and JD.COM buy goods from us!" The person in charge of the cooperative proudly said, "The store sends the buyer’s information after receiving the order. I send the goods directly to all parts of the country in the factory, and the store has zero inventory, which also shortens the logistics chain, which is a win-win situation!"

　　In recent years, with the expansion of market demand, the purchase price of wormwood has increased year by year, and farmers have begun to plant high-quality wormwood. The wormwood industry featuring wormwood processing and moxibustion medical care has shown an increasingly prosperous momentum. According to the statistics of Nanyang wormwood Industry Association, at present, the average annual benefit of wormwood per mu can reach 3000 yuan, and the economic income of local farmers has been greatly improved by planting wormwood.

　　Taking wormwood as the starting point, participating in the "precise poverty alleviation" project to help poor households get rid of poverty and increase their income is just a microcosm of the rapid development of wormwood industry in Nanyang City. According to reports, Nanyang City is actively cultivating and expanding the wormwood industry, processing value-added, lengthening the chain, registering the "Wanai" trademark, and launching the brand, so that the wormwood industry can play the maximum benefit in industrial poverty alleviation.

　　Policy escort and steady income increase

　　Wormwood is a unique and rich resource of traditional Chinese medicine in China, and it is also a healthy tourism resource with great potential. In recent years, Nanyang Municipal Party Committee and Municipal Government have made the development of wormwood industry as the key content of the city’s big health industry, and successively issued Nanyang Life and Health Industry Action Plan (2015-2020), Nanyang 13th Five-Year Plan for Chinese Medicine Development, Zhang Zhongjing’s Major Special Implementation Plan for Health City, and Nanyang National Comprehensive Reform Experimental Zone Construction Implementation Plan and related supporting measures to build wormwood industrial park and vigorously support it.

　　Located in Qiaotou Town, Sheqi County, the wormwood planted by Nanyang Luying wormwood Biological Products Co., Ltd. is growing vigorously. The production and processing enterprises of mugwort products, led by Luying mugwort biological products company, have discovered the characteristics of high cashmere content and high volatile oil content of authentic mugwort in Nanyang, and developed nearly 100 kinds of products, such as traditional mugwort, smokeless mugwort, mugwort, mugwort granules, mugwort essential oil series and mini moxibustion series. The products are exported to dozens of countries and regions such as Japan, South Korea, Southeast Asia and Europe, with an annual output value of several hundred million yuan.

　　In today’s society, people’s use of wormwood is no longer limited to copying traditional Chinese herbal medicine culture, but researchers are constantly breaking through and studying its new value. With Nanyang Medical College’s "Nanyang Ai Products Engineering Technology Research Center" and Nanyang Institute of Technology’s "Zhang Zhongjing Provincial Key Laboratory of Prescription and Immunoregulation" as research platforms, through school-enterprise cooperation, a research and development team of wormwood industry was established to continuously promote the transformation of scientific and technological achievements.

　　Located between Dafengying Town and Qiaotou Town in Sheqi County, Nanyang Zhongjing wormwood Industry Group covers wormwood planting, wormwood product research and development, domestic and foreign trade, etc. The company has more than ten subsidiaries, and its China Medical Zhongjing Company is the largest wormwood planting enterprise in China, which has driven more than 1,500 neighbors to find jobs, created economic benefits and constantly fulfilled its social responsibilities.

　　Wormwood has been fragrant for thousands of years, and its industry is flourishing today. Nowadays, Nanyang wormwood industry is taking the road of green development and ecological poverty alleviation with unprecedented vigorous momentum, and is striving to write a glorious chapter of building a well-off society in an all-round way in the southwestern part of Henan. (He Jian reporter Zhang Peiqi Fan Yaxu)

　　In September 2017, the 5th China (Mianyang) Science and Technology City International Science and Technology Expo with the theme of "integration of defense and civilian technologies, Science and Technology Innovation and Open Cooperation" was held, and the scene was unprecedented. Chen Dongdong photo/bright picture

　　On January 10th, 2018, the industrial base of integration of defense and civilian technologies in Jishui County, Jiangxi Province rose from the ground. Photo by Liao Min/Bright Picture

　　2017 is a milestone in the development of integration of defense and civilian technologies in China. This year, the Central integration of defense and civilian technologies Development Committee was established and operated efficiently, and its strategic guidance and overall planning were comprehensively strengthened. This year, integration of defense and civilian technologies’s development strategy was fully implemented, and the system was established, the pattern was fixed, and new plans were broken. integration of defense and civilian technologies’s development events were frequent. This year, the 19th National Congress of the Communist Party of China was successfully held, which defined the course and voyage of integration of defense and civilian technologies’s development, deployed the short-term tasks, drew a blueprint for the future and injected new impetus. This year, major reforms in integration of defense and civilian technologies were significantly accelerated, and a series of policies were launched intensively. integration of defense and civilian technologies’s development boom surged and entered a new era.

　　1. usher in the most profound qualitative change

　　The 19th National Congress of the Communist Party of China held in October 2017 made a series of arrangements and long-term plans for integration of defense and civilian technologies. The report of the 19th National Congress of the Communist Party of China emphasized "integration of defense and civilian technologies" in three places, profoundly expounded the theoretical guidance, strategic position, development goals and key tasks of integration of defense and civilian technologies’s development in the new era, and further highlighted integration of defense and civilian technologies’s strategic position in strengthening the country and the army. The 19th National Congress established the guiding position of the supreme leader’s thought of strengthening the army in national defense and army building, and formally regarded the development of integration of defense and civilian technologies as an important part of the supreme leader’s Socialism with Chinese characteristics Thought in the new era, and incorporated it into the scientific system of the supreme leader’s thought of strengthening the army, which provided a scientific guide and program of action for promoting integration of defense and civilian technologies’s development and realizing the dream of strengthening the army and strengthening the country in the new era.

　　The 19th National Congress of the Communist Party of China listed integration of defense and civilian technologies’s development strategy as one of the seven national strategies to start a new journey of building a socialist modern country in an all-round way, and wrote the firm implementation of integration of defense and civilian technologies’s development strategy into Constitution of the Communist Party of China, further highlighting the important position of integration of defense and civilian technologies’s development strategy in the national strategic system. This will be a major national strategy that runs through the whole process of building a world-class army and building a socialist modern power in an all-round way. By establishing such a strategic orientation, our Party will be able to give full play to the political advantages of unified leadership, the institutional advantages of socialist concentrated efforts to do great things, stimulate the creative spirit and patriotic enthusiasm of hundreds of millions of people throughout the country, and do a good job in implementing the development strategy of integration of defense and civilian technologies.

　　The report of the 19th National Congress of the Communist Party of China emphasized the formation of integration of defense and civilian technologies’s deep development pattern, the construction of an integrated national strategic system and capabilities, and the clear direction of integration of defense and civilian technologies’s development in the new era. To build an integrated national strategic system and capability is to reshape the national security and development strategic system, completely eliminate the dual separation of military and civilian, promote the integrated allocation of military and civilian resources and the integrated use of military and civilian forces, realize the overall planning of national development and security, the integrated development of economic construction and national defense construction, and the simultaneous improvement of economic strength and national defense strength, comprehensively enhance the country’s comprehensive strength and strategic competitiveness, and provide strategic support for building a socialist modern power. The report of the 19th National Congress of the Communist Party of China defined the key tasks of integration of defense and civilian technologies’s development in the new era, and emphasized the need to strengthen unified leadership, top-level design, reform and innovation, and the implementation of major projects, and deepen the reform of national defense science, technology and industry. This task deployment focuses on political guarantee, strategic planning, system construction and project implementation, and establishes the basic focus of implementing integration of defense and civilian technologies’s development strategy.

　　To promote the in-depth development of integration of defense and civilian technologies, it is difficult to break through the institutional bottleneck. It has become an important historical task to break the institutional mechanism and the interest barrier behind it to promote the development of integration of defense and civilian technologies. At the beginning of the new year in 2017, the Political Bureau of the Communist Party of China (CPC) Central Committee held a meeting and decided to set up the Central integration of defense and civilian technologies Development Committee, with the Chairman of the Supreme Leader as its director. As soon as the news came out, it quickly triggered widespread concern at home and abroad and heated public opinion. The establishment of this major institution has established a unified leadership system for integration of defense and civilian technologies’s development from the top-level institutional framework of state governance, and strengthened unified leadership and overall decision-making on major issues in integration of defense and civilian technologies across military areas, fields and systems. It is a major reform and innovation of China’s national defense system and mechanism, which has far-reaching historical significance.

　　In 2017, people strongly felt that it was normal for the Central integration of defense and civilian technologies Development Committee to hold regular meetings to study and decide on major issues of integration of defense and civilian technologies’s development. On June 20th, the Central integration of defense and civilian technologies Development Committee held its first plenary meeting, and deliberated and adopted the Working Rules of the Central integration of defense and civilian technologies Development Committee, the Recent Work Points of the Central integration of defense and civilian technologies Development Committee, and the Opinions on the Establishment of Development Leading Institutions and Working Institutions in integration of defense and civilian technologies Province (autonomous regions and municipalities). On September 22nd, the integration of defense and civilian technologies Development Committee of the Central Committee held its second plenary meeting, focusing on the tasks of integration of defense and civilian technologies of national defense science, technology and industry, socialization of military support, and implementation of national defense requirements for major infrastructure. Integration of defense and civilian technologies’s development has entered the fast lane of improving quality and increasing efficiency.

　　All provinces (autonomous regions and municipalities directly under the Central Government) have set up provincial-level integration of defense and civilian technologies development leading bodies and working bodies based on local conditions and in accordance with the principle of "real need, simplification and high efficiency". By the end of December last year, the party committees of 31 provinces, municipalities and autonomous regions had successively set up leading bodies in integration of defense and civilian technologies. At the same time, military-related reforms have been accelerated. In 2017, a new institution in the People’s Army — — With the birth of the Military Scientific Research Steering Committee of the Central Military Commission, together with the Science and Technology Committee of the Military Commission, China’s national defense science and technology innovation has a brand-new top-level structure, and the construction of integration of defense and civilian technologies’s innovation system has a strong institutional support.

　　In 2017, the development system of integration of defense and civilian technologies ushered in the most profound qualitative change in the past 40 years of reform and opening-up, and established the working pattern of overall decision-making by the committee, comprehensive coordination of the office, and division of responsibilities between the military and local departments, and made great progress in building a vertically integrated, horizontally coordinated, smooth and efficient organization and management system in integration of defense and civilian technologies.

　　2. The policy and institutional environment has been continuously optimized.

　　To promote the in-depth development of integration of defense and civilian technologies, it is basically to promote the transformation of economic construction and national defense construction from fragmented design to integrated military and civilian planning, from key integration areas to multi-field extension and expansion, from loose combination of factors to integration and integration of all factors, and then realize the process of structural optimization, resource conservation and technological innovation.

　　2017 is a year of frequent major policy system reform initiatives in integration of defense and civilian technologies. Relevant policies and measures have been introduced at all levels in the military and civilian areas. The fiscal, taxation and financial policies related to integration of defense and civilian technologies’s development have been further improved, the channels for ensuring funds have been continuously expanded, and the institutional environment for integration of defense and civilian technologies’s development policies has been continuously optimized.

　　Major reforms have been further accelerated. The reform of the first batch of 41 military scientific research institutes was implemented, and the reform schemes such as airspace management system, military pricing bargaining rules and equipment procurement system were further demonstrated. The "weapons and equipment quality management system certification" and "equipment contractor qualification examination" were integrated, and the working mechanism of joint examination of weapons and equipment research and production licenses and equipment contractors was comprehensively promoted. We will promote the integration and sharing of large-scale military and civilian defense scientific research instruments and equipment, the innovative cooperation of military-civilian dual-use technology alliance with equity as the link, and the identification and access standards of supporting core military products for civilian enterprises throughout the country.

　　Major policies were launched intensively. On August 23rd, the Ministry of Science and Technology and the Science and Technology Committee of the Military Commission publicly released the Special Plan for the Development of Science and Technology integration of defense and civilian technologies in the 13th Five-Year Plan. On September 22nd, the second plenary session of the Central integration of defense and civilian technologies Development Committee deliberated and adopted the 13th Five-Year Plan for the Development of National Defense Science, Technology and Industry, Opinions on Promoting the Deep Development of National Defense Science, Technology and Industry in integration of defense and civilian technologies and Implementation Opinions on Promoting the Deep Development of Military Logistics in integration of defense and civilian technologies during the 13th Five-Year Plan. On November 23rd, the General Office of the State Council issued "Opinions on Promoting the Deep Development of National Defense Science, Technology and Industry in integration of defense and civilian technologies", which contained high gold content and sent a strong signal to the outside world to break the boundary between military industry and civilian population and break through the barriers of ownership.

　　Only by integrating according to law can we be stable and far-reaching. In January 2017, People’s Republic of China (PRC)’s National Defense Traffic Law came into effect, which is the first basic law in the history of the Republic to specifically regulate national defense traffic activities. It is also the first national defense legislation in China since the 18th National Congress of the Communist Party of China, bearing the great mission of solving the development problems of integration of defense and civilian technologies by the rule of law. Integration of defense and civilian technologies’s comprehensive legal legislation has been stepped up, integration of defense and civilian technologies’s laws and regulations have been enacted, revised, abolished and interpreted in different fields, policy documents and standards that are not suitable for integration of defense and civilian technologies’s development have been comprehensively cleaned up, abolished and revised, and local policies and regulations that support integration of defense and civilian technologies’s development have been promulgated one after another, and integration of defense and civilian technologies’s environment for developing the rule of law has gradually taken shape.

　　Promote integration through openness. In 2017, a series of real tricks for information disclosure and market opening occurred frequently. In order to "wake up" the national defense patent "Sleeping Beauty" status, on March 6, the Equipment Development Department of the Central Military Commission released 2346 pieces of national defense patent decryption information for the first time, boosting the transfer and transformation of national defense patent technology to the civilian field. On September 25th, the national defense intellectual property information platform was put into operation and provided information inquiry service, aiming at solving the problem of poor communication and sharing channels of national defense patent information. In the two years since the PLA’s weapons and equipment procurement information network was launched, more than 11,900 registered and certified enterprise users have published more than 7,500 pieces of military equipment procurement information, and more than 5,000 pieces of superior products and technologies recommended by enterprises have been made public in military demand information, effectively building a platform for online supply and demand information docking. For the first time, our army published the guide of equipment pre-research project online, which opened the door to participate in national defense science and technology innovation for high-quality social resources. In late May, the Logistics Support Department of the Military Commission issued 63 military logistics open scientific research projects, and selected research units for local open competition, marking an important step in the development of integration of defense and civilian technologies in the field of military logistics science and technology.

　　3. Combat effectiveness and productivity have achieved double improvement.

　　On October 23, 2017, a news aroused great concern in the society: Air Force Logistics Department signed strategic cooperation agreements with five leading local logistics enterprises, including Shunfeng Group, China Railway Express, China Post Express, Debon Logistics and Jingdong Logistics, to promote logistics and logistics in integration of defense and civilian technologies in a "systematic, integrated and full coverage" way. This exploration shows a general trend of the times. It can be predicted that the in-depth development of integration of defense and civilian technologies will set off an all-round military management revolution, completely change the traditional self-contained and relatively closed development model, and absorb and apply the most advanced knowledge, cutting-edge technology and top-quality talent resources in the economic society to the construction of modern services.

　　In 2017, based on their own advantages, all localities implemented integration of defense and civilian technologies’s development strategy and innovation-driven development strategy as a whole, and took integration of defense and civilian technologies’s development as an important part of promoting supply-side structural reform. They implemented differentiated development according to local conditions, actively created a new pattern of regional integration of defense and civilian technologies’s development with different characteristics and emphases, and made efforts to create new development momentum and expand new development space. Some provinces and cities have formulated opinions and planning plans for the implementation of integration of defense and civilian technologies’s development, boldly explored new mechanisms and new modes of military-to-civilian, civilian-to-army and military-civilian collaborative innovation, vigorously promoted military-civilian technology integration, product integration, capital integration and talent integration, and successively built a number of platforms for information sharing, open innovation, investment and financing, incubation and transformation, so as to fully tap the development potential of integration of defense and civilian technologies in this region. Some local governments take integration of defense and civilian technologies-related industries as high-end industries that will lead the future development, and launch a series of genuine policies and measures to support the development of regional integration of defense and civilian technologies, making efforts to build industrial clusters in integration of defense and civilian technologies and cultivate and tap new economic growth points. It is the organic combination and interaction between the visible hand of the government and the invisible hand of the market that the government creates the environment — Innovative entrepreneurs gather — Enterprise agglomeration — Industrial agglomeration — The economy is bigger and stronger — A virtuous circle pattern of enhanced integration and development potential is accelerating in some key areas.

　　With the continuous efforts of the military and civilian levels, integration of defense and civilian technologies’s "Ren Du Er mai" is being opened, which has promoted the double promotion of combat effectiveness and productivity and accelerated the generation of integrated national strategic capabilities. Major demonstration projects deployed in the 13th Five-Year Plan have been launched, and a number of major projects are being accelerated. At the third integration of defense and civilian technologies Exhibition on the Achievements of Developing High-tech Equipment, 422 integration of defense and civilian technologies innovations from 354 enterprises in China made a wonderful appearance, and a large number of scientific and technological innovations were exciting. Beidou satellite navigation system, the national quantum secure communication "Beijing-Shanghai trunk line", Shenwei Taihu Light Supercomputer and other national heavyweights made public appearances. Over the past year, Chang ‘e III has achieved the first soft landing of extraterrestrial objects and the automatic inspection of the lunar surface, and the manned space missions of Tiangong-2 and Shenzhou-11 have been successfully completed. Beidou-3 began global networking, and the accuracy of providing services for the Asia-Pacific region has reached the meter level. Beidou-3 began global networking, and the accuracy of providing services for the Asia-Pacific region has reached the meter level. The first flight of C919, a large aircraft, and the first flight of a new generation of large and medium-sized launch vehicles were successfully completed, and many major technological breakthroughs were made in the special projects of aero-engine and gas turbine. Significant progress has been made in the special project of "Nuclear High Base", and the independent guarantee rate of core electronic devices of supporting equipment has been increased from less than 30% to 85%, and the problem of "sticking neck" of core electronic devices that have long relied on imports has been alleviated. Over the past year,The transformation of military and civilian technology has been accelerated, such as "air conditioning vest", "missile" for fire fighting, ground penetrating radar for "CT scanning" of underground pipelines, and unmanned aerial vehicle & HELIP, which is monitored 24 hours a day; … A large number of high-end scientific and technological achievements are also benefiting society.

　　I will ride the wind and break the heavy waves some day, and then set the cloudlike sail and cross the sea. The coming period is not only an opportunity period to promote the deep integration of military and civilian, but also a crucial period to break the dual separation of military and civilian. We must firmly grasp the historical opportunity, overcome difficulties, forge ahead, and work together with the military and the people to accelerate the formation of a deep development pattern in integration of defense and civilian technologies.

　　(Author: Jiang Luming, Professor of integration of defense and civilian technologies Development Research Center of National Defense University; Wang Weihai, Lecturer, integration of defense and civilian technologies Development Research Center, National Defense University)

Stock name Up and down in the past week Up and down in recent January Up and down in the past year Great Northern Wilderness (in Northeast China) 0.42% 3.28% 20.07% Hainan rubber -0.74% 5.47% 24.74% Longping high-tech 3.23% 7.62% -19.47% Suken agricultural development 0.31% 3.01% 1.16% Quanyin high-tech 6.07% 11.58% 46.53% Denghai seed industry 9.46% 8.06% 12.12% Nongfa seed industry 1.64% 7.91% 1.19% Yasheng group 0.71% 4.40% 9.43% Huilong stock -0.72% 1.46% 25.28% Pingtan development -4.95% -8.19% 27.49% Fengle seed industry 2.02% 6.32% 12.31% Shennong seed industry 8.50% 20.56% 57.82% Dayu water saving 4.25% 15.35% 22.96% Dunhuang seed industry -0.65% 8.48% 9.84% Zhong xing jun ye -1.25% -0.28% 13.78% Wanxiang denon 3.89% 12.92% 17.91% Xinjiang Talimu Agriculture Development Co.,Ltd. 1.40% 2.51% 7.39% Qiule seed industry 6.57% 24.79% 58.70% Runnong water saving 18.85% 29.40% 170.21% Xinsai stock -1.75% 1.29% 5.08%

At the press conference. People’s Daily Online photo by Chen Ziyuan

People’s Daily Online, Beijing, October 8 (Chen Ziyuan) Today, the National Health and Wellness Commission held a press conference to introduce the "seasonal solar terms and health" and answer media questions.

At the meeting, Chang Zhaorui, a researcher at the China Center for Disease Control and Prevention, said that discomfort symptoms such as cold, cough, vomiting and diarrhea after the "Eleventh" holiday may be caused by factors such as weather changes, crowd gathering, eating problems, and disrupted life schedule. Chang Zhaorui suggested that for the above symptoms, first, pay attention to rest, ensure adequate sleep and help the body recover. The second is to drink plenty of water and eat lightly. The third is symptomatic treatment to relieve symptoms. The fourth is to monitor the symptoms. If the symptoms get worse or last for a long time, it is recommended to seek medical advice in time. If you are diagnosed with respiratory or intestinal infectious diseases such as influenza and norovirus, you should try to avoid going to crowded places to reduce cross-infection.

Chang Zhaorui pointed out that young children and the elderly are the key groups in the prevention and control of respiratory infectious diseases. On the basis of maintaining good personal hygiene and healthy lifestyle, the following measures should be strengthened: First, for respiratory infectious diseases that can be prevented by vaccines, timely vaccination should be carried out according to immunization procedures. Second, in the season of high incidence of respiratory infectious diseases, it is recommended that the elderly and young children try to avoid going to places with closed environment and crowded people. If they really need to go, they should wear masks scientifically to reduce the risk of infection. The third is to strengthen the daily monitoring of the elderly and young children. If there are symptoms such as fever and cough, you should seek medical treatment in time according to the situation and use drugs scientifically and safely according to the doctor’s advice. During the medical treatment, patients, including accompanying personnel, should be well protected to avoid cross-infection. In addition, if there are patients with respiratory infectious diseases among family members, try to avoid close contact with other family members, especially the elderly and children.

　

Tan Hui

　　"Everyone mentioned Tan Hui during the start-up, but if you want to be a century-old shop, I hope everyone will only mention Xingmei." As the younger brother of Tan Hui, Qin Hong, the boss of Stellar Group, said so when interviewed by this reporter.

　　On July 20th, Stellar International announced that SMIIC, a wholly-owned subsidiary of Stellar International, was going to spend HK$ 55 million to win 25 cinemas from Tan Hui, and had signed a letter of intent.

　　　　　　 According to the plan, Stellar Group will abandon the coexistence of several businesses in the past and focus on the film industry.

　　And this strategic evolution, the Qin brothers have experienced more than 10 years of struggle.

　　The legendary big brother

　　Tan Hui seems to be an inextricable link, whether it is the Xingmei Department or the lace-colored "Heaven and Earth".

　　According to the industrial and commercial registration data, Beijing Changtai Song and Dance Hall Co., Ltd., the predecessor of "Heaven and Earth", was established in 1993. In May 1997, Changtai Song and Dance Hall was approved by the State Trademark Office to obtain the registered trademarks of "PASSION" and "Heaven and Earth" in both Chinese and English. In September, 1999, the State Trademark Office approved the change of the registrant of the registered trademark to Beijing Changqingtai Catering and Entertainment Co., Ltd. funded by Tan Hui.

　　It was in 1999 that Tan Hui took the first step to become a legend. He placed 75% of the shares of "Heaven and Earth" in his Beijing Sino-foreign joint venture Changqingtai Catering and Entertainment Company, with a registered industrial and commercial investment of 1.95 million US dollars. After the renovation, the "Heaven on Earth" changed from an old nightclub to a KTV-style business structure, and the consumption standard also soared.

　　According to people familiar with the matter, when the "Heaven and Earth" was light, the daily water recorded reached more than 300,000. It is estimated that the annual profit of "Heaven on Earth" is at least 20-30 million yuan.

　　Such a stable cash flow gave birth to Tan Hui’s "Zhuojing Department", and at the same time, it also completed Tan Hui’s capital accumulation from "stubborn master" to capital player.

　　In addition, the high-end communication field of "Heaven and Earth" has brought a large number of powerful people to Tan Hui. In the case of Zhang Enzhao, the former president of China Construction Bank, the prosecution’s indictment disclosed such details: In May 2002, Zhang Enzhao accepted $10,000 from Tan Hui for the first time in the "Heaven and Earth" parking lot, and after that, he went through various experiences and got a loan of 650 million yuan. The acquaintance with Li Peiying, chairman of the Capital Airport, is exactly the same.

　　In the face of the media, the Qin brothers did not deny that they once owned "heaven and earth", but stressed that "they were transferred out five years ago".

　　However, it was the creation of "heaven and earth" five years ago that made Tan Hui, the legendary big shot, succeed in his future fate.

　　In contrast, although Tan Hui’s "business childhood" is not well known by the outside world, it has some primitive accumulated strength.

　　In August, 1997, Tan Hui cooperated with his brother Qin Hong to establish Chongqing Changfeng Communication, invested in 800Z mobile communication (the predecessor of CDMA), and began to enter the telecommunications industry.

　　After Tan Hui controlled "Heaven and Earth" for one year, with the annual profit of 20-30 million yuan, in 2000, it invested in Chongqing Changfeng Communication (000892.SZ), the first capital platform in China. At the same time, it has acquired an optical fiber backbone network covering the whole country, and established a broadband metropolitan area network covering the whole province in Sichuan, Chongqing, Hubei and Jiangsu. A broadband network platform covering the whole network and accessing four provinces was formed.

　　After that, in 2001, the telecommunications map of Tan Hui took shape after seven years of business. In order to build the content platform of Changfeng Communication, connect with the network terminal users of Changfeng Communication, and establish the industrial model of "Telecom+Media+Technology", Zhuojing Investment and Changfeng Communication jointly established Xingmei Media Group Co., Ltd. The "Xingmei Department" was born.

　　　　　　 ride on a horse to enclose

　　With money and "capital strength" in 2002, Tan Hui’s business expansion was extremely exciting.

　　In October of that year, Tan Hui served as the chairman of Changfeng Communication, and began to invest in large-scale acquisition of content companies and media assets. Its subsidiaries include more than a dozen companies including Beijing Huaxia Culture Communication Company, China Film Stellar Cinema Co., Ltd., Feiteng Film and Television Base, Stellar Film and Television Culture Co., Ltd., Stellar Digital Media Co., Ltd., Stellar Shanghai Zhonglu Culture Co., Ltd. and Instek Video Technology Co., Ltd. in China Electric Film Archive.

　The industrial model of "telecommunications+media+technology" has made Stellar Group a dark horse in the industry for a while, and its M&A speed and business model have attracted attention.

　　In 2003, Tan Hui launched its capital market. In order to integrate overseas entertainment content and lay out Hong Kong’s capital platform, it acquired Oriental Charm (00198.HK, later renamed as "Stellar International"), Jingqi Publishing Group (8010.HK, later renamed as "Stellar Publishing") and mobile advertising (8036.HK) in.

　　As a result, the Qin brothers controlled four listed companies, and an industrial structure with capital as the leader, new media as the core and content as the support was formed.

　　However, the expansion of the Qin brothers has not stopped. In 2003, through the acquisition and publication of the banner, it controlled Cheng Bao, the oldest Chinese newspaper in Hong Kong. At the same time, it acquired Sunshine Satellite TV and established a content production and broadcasting platform. In July of that year, the first digital entertainment channel in China was launched in cooperation with Fujian Cable TV Network. In September, it signed a strategic agreement with China Telecom and became one of the first 13 strategic partners of China Telecom’s "Connected Star".

　　In 2004, relying on Stellar International (00198.HK), Tan Hui acquired the chain business of Internet cafes in Sichuan, and used the group resources to acquire Hunan Hunan Computer (SZ000748) to lay out the digital terminal equipment industry.

　　It has been impossible to verify the views of the Qin brothers on Xingmei Group at that time. However, when Qin Hong reviewed the original situation of Stellar Group to our reporter, he said, "The stall is too big, which puts great pressure on management, manpower and capital."

　　In fact, around 2004, due to the rapid expansion, Stellar Group has owned 17 companies of various types. At the same time, it has formed the capital platforms of four or five listed companies with Zhuojing Capital as the investment link, and the scale of fixed assets has reached nearly 2 billion yuan.

　　However, Stellar Group’s cash flow is facing torture. Qin Hong clearly remembers that "the debt ratio of the group was very high at that time". And this pointed to the pain of Xingmei Group’s expansion at that time.

　　Not surprisingly, Tan Hui still defined 2005 as the expansion year in the brief history of his enterprise.

　　At that time, Tan Hui bought Great Wall Broadband, with the intention of connecting the huge user base of Great Wall Broadband with Xingmei content industry and establishing an aircraft carrier giant of telecommunications media. When negotiating with CITIC Group and Great Wall Group (300089, Share Bar), the shareholders of Great Wall Broadband, the case of Zhang Enzhao, the president of China Construction Bank, involved Tan Hui.

　　Although it was later unscathed, Stellar Group and its related subsidiaries were affected one after another. In 2005, Stellar began to divest non-performing assets on a large scale, repay bank debts, sell Sunshine TV and reorganize Changfeng Communication.

　　Also in 2005, Tan Hui went through the relevant legal procedures and officially withdrew from "Heaven and Earth".

　　It is impossible to find out from the hidden known information whether quitting the "Tianshan Human World" helped Tan Hui. However, perhaps because of his sensitivity, in the case of Li Peiying, the chairman of the Capital Airport in 2009, he turned the tables again.

Qin hong

　　　　　　 Difficult reorganization

　　However, the impact of such twists and turns on this entertainment tycoon is obvious.

　　Qin Hong recalled, "trapped by the negative influence at that time, from 2005 to 2009, we have been in the process of restructuring."

　　In addition to retiring from Changfeng Communication, Sunshine Satellite TV and "Heaven and Earth" in 2005, in 2009, Tan Hui withdrew from Xingmei Union and was taken over by Du Huikai, the son-in-law of Zheng Yutong, Chairman of New World (600628, Share Bar) Group. In 2009, Tan Hui signed an agreement with Yang Jiacheng to withdraw from Chengbao.

　　　　　　 To be exact, Stellar Group has spun off almost all industries except the film industry.

　　In fact, Tan Hui has handed over the main business of Stellar Group to Qin Hong. Qin Hong is now the chairman of Stellar Group. At the same time, in March this year, Tan Hui increased his shareholding in Stellar International to 64.23% as a major shareholder. Almost at the same time, Wang Kui-cheng gave the position of chairman of Stellar International Board of Directors to Qin Hong.

　　When describing the whole structure of Stellar Group, Qin Hong said, "Listed companies are the platform for us to operate the whole strategy. Therefore, first of all, after four years of difficult resumption of trading, it was finally realized in late 2009."

　　Regarding focusing on the film industry, Qin Hong explained to our reporter, "From a realistic perspective, our Stellar Media was established for digital media, and then it entered the traditional media. By 2005, when we sorted out the company’s assets, we felt that the film sector was relatively complete. At that time, as a pioneer, Stellar Media has always been the first and second cinema in China and has been in this position. "

　　According to relevant information, in 2009, the box office market of the whole movie reached 6.3 billion yuan, and from the overall income of the whole industry, according to the industry practice of 1:3, all movie-related market plates reached 20 billion yuan.

　　In Qin Hong’s view, the film industry in the cultural industry, in terms of economic benefits, is the last large undeveloped industry that can be seen at present. The data shows that the box office of the film industry keeps growing by 30% every year.

　　start a new undertaking

　　"No matter how the outside world understands it, I prefer to regard this transformation of Stellar Group as a second venture." Qin Hong said, "And this idea of transforming the film industry is also the result of my discussion with Tan Hui."

　　Qin Hong’s film industry includes film production, cinema distribution, cinema construction and management, and film and television base development.

　　In January, 2010, Tan Hui injected capital into Stellar International with the gesture of "returning the carbine". According to the announcement, the company issued a convertible note with a principal amount of HK$ 100 million to its major shareholder, Tan Hui, and the net proceeds of HK$ 99 million were used as funds for possible future investments and general working capital.

　　As a result, Tan Hui and Smil (Strategic Media International, a major shareholder affiliated company) hold 59.41% of the company’s equity. If all convertible notes are converted, the total shareholding will increase to 64.23%.

　　At the same time, Stellar Group controlled by the Qin brothers injected high-quality assets into Stellar International. At the end of June, Stellar International announced that Stellar International would acquire its Admiral Team at a cost of about HK$ 1.2 billion, including issuing HK$ 480 million convertible notes and about 2.44 billion shares to Tan Hui. The company already owns two companies, GDL and SMIIC, which hold relevant shares in the operating companies of 12 cinemas in China.

　　In the cinema map of Stellar Group, Qin Hong said, "We have eight cinemas in Beijing next July, and we have three in Shanghai. We actually want to form four domestic cinema centers, the northeast and north China with Beijing as the leader, the east China with Shanghai as the leader, the south China with Guangzhou and Shenzhen as the leader, and the southwest center. "

　　　　　　 CCTV News:During the epidemic period, cases of illegal hunting and sale of wild animals still occurred, and law enforcement agencies in various places severely cracked down on the crime of headwind and severely punished them according to law.

　　　　　　 At 5: 00 pm on January 31, when the police of Jiangchuan District Forest Public Security Bureau in Yuxi City, Yunnan Province inspected the jurisdiction, they found a villager carrying hunting tools, and birds chirped from time to time.

　　　　　　 Stopped by the police, the man put down his tools, bird cages and other items, saying that he was here to help people with Sanqi. When he was idle during the Spring Festival, he went up the mountain to hunt birds to eat.

　　　　　　 From the personal belongings of the suspected man, the police seized six tools for illegal hunting, two white-cheeked noises used as bait, a whistle, and 20 thrush illegally hunted, of which 16 were dead. The police immediately brought Xiong back to the Jiangchuan District Forest Public Security Bureau for further processing.

　　　　　　 In the law enforcement case handling center, Xiong confessed that he and his workers would hunt some wild animals from time to time to improve their lives when they were protecting Sanqi. In order to cut off the epidemic source at the first time and severely crack down on illegal hunting of wild animals, the forest public security organs at Yuxi City and Jiangchuan District immediately dispatched police to the area of Jiuxi Town in Jiangchuan District overnight to conduct surprise inspections on the dormitories and surrounding areas.

　　　　　　 On that night, 5 live wild animals, 1 live partridge, 1 live quail and 1 live yellow-butted snipe were seized, 16 catching tools, 11 iron clips, 1 whistle and 3 slingshots were seized, and 4 people involved were arrested. At present, the case is being further processed.

　　　　　　 In fact, cases like this are not uncommon. In the past few days, the Forestry Bureau of Tujia Autonomous County along the river in Guizhou Province has launched a special law enforcement campaign to crack down on wildlife trafficking. A total of 7 comprehensive farmers’ markets and more than 30 restaurants have been investigated, and 4 wild porcupines, 27 pheasants, 2 rabbits and 11 wild goats have been collected on the spot.

　　　　　　 On February 4th, Xizhu Police Station of Yixing City Public Security Bureau in Jiangsu Province successfully arrested Wang, a suspect suspected of illegal hunting. Through further search, five squirrels and ten Yellow weasel were found dead in the refrigerator of his home, as well as a large number of hunting equipment. After the trial, Wang confessed that since July 2019, more than 20 squirrels and 40 Yellow weasel were illegally hunted and sold in the form of hunting clips.

　　　　　　 What is actually hidden behind a case is the greedy demand for illegal interests.

　　　　　　 On November 7, 2019, security personnel at Guang ‘an Railway Station in Sichuan found a large number of dead wild birds in the suitcases of four passengers, including Lu Moguang. After checking and counting by the police of Guang ‘an Forest Public Security Bureau, 2418 dead wild birds and some hunting tools such as electronic bird traps and bird nets were found in the suspect’s suitcase. After the trial, four suspects confessed to using electronic bird traps and bird nets to hunt wild birds near Fenshuiling Village, shiya town, Yuechi County, Guang ‘an City, and two other suspects. Guang’ an Forest Public Security Bureau quickly organized the police of the Municipal Bureau, Qianfeng District and Yuechi County Forest Public Security Bureau to rush to the scene to arrest. The police investigating the case arrested the suspects Lu Mouliang and Yang Mouyou in Fenshuiling Village, shiya town, Yuechi County, and found seven greenhouses with live wild birds and two refrigerators with dead wild birds. After counting, there were more than 11,000 live wild birds and more than 2,200 dead wild birds.

　　　　　　 Guang ‘an Forest Public Security Bureau immediately set up a "11.7" extra-large illegal hunting case task force to carry out investigation work. After investigation, from mid-August, 2019, the suspects Lu Mouliang and Wu Moufu discussed bird catching to make money, and agreed that Lu Mouliang would be responsible for selecting bird catching places, renting houses, personnel round-trip fares, transportation, bird nets and other preparatory work and sales work. Wu Moufu was responsible for organizing bird catchers. For the birds caught by the bird catcher found by Wu Moufu, Lu Mouliang bought them at the price of live birds 0.8 yuan/bird and dead birds 0.6 yuan/bird, and Wu Moufu paid a commission of 0.2 yuan/bird. In mid-September, 2019, Wu Moufu organized Lu Moguang, Lu Moneng and others to illegally catch birds from congjiang county to Guang ‘an. Subsequently, Lu Mouliang’s cousin Lu Moxi also joined the illegal bird catching. After review, during the period from September 21 to November 6, 2019, criminal suspects illegally hunted more than 110,000 wild birds, mainly sparrows. The criminal suspects transported the hunted wild birds to Qingyuan, Foshan and other places in Guangdong for sale at a price ranging from 1.1 to 3 yuan by means of passenger car consignment, and made an illegal profit of more than 150,000 yuan.

　　　　　　 Recently, with the approval of the procuratorate, 10 suspects suspected of illegal hunting were arrested according to law.

　　　　　　 Cao Mingde, a professor at the School of Civil and Commercial Economics of China University of Political Science and Law, said: "In fact, illegal hunting and illegal trading of wild animals have been repeatedly prohibited for a long time, and an industrial chain has been formed, including illegal hunting, sales and purchase, as well as transportation, carrying, sending and utilization, including domestication and breeding. Then the reasons are various and the demand comes from consumers. Where there is demand, there is a market. "

What are the most noteworthy models at the end of the year? The newly listed Geely Galaxy Starship 7 EM-i should be ranked first. The new car is priced at 103,800-136,800 yuan, and there is a limited-time discount of 4,000 yuan. The price is only 99,800 yuan. So will this new car of Geely Galaxy work?

　　[Global Network Reporter Wang Boyaqi] Because of the sudden COVID-19 epidemic, Russia had to postpone the commemoration of the 75th anniversary of the victory of the Great Patriotic War scheduled for May 9 this year. Although the large-scale military parade has been cancelled due to the epidemic, on the 9 th, fighters will fly over the Red Square in Moscow to participate in the air parade. In addition, according to the Russian News Agency, the celebration of the "Immortal Legion" on Victory Day also continued through the "online" way. According to reports, the registration time for the event ended at 15: 00 Moscow time, and about 2.1 million people have signed up to participate.

　　According to RIA Novosti, the broadcast of the "Immortal Corps" online activity will start at 11: 00 am Petropavlovsk time (2: 00 am Moscow time) in Kamchatka Territory. Sputnik news agency & radio said that people who are willing to participate in this activity need to send photos of heroes of World War II to a specific mailbox and attach stories related to them. At present, more than 2 million people have signed up to participate.

　　According to the report, during the event, the photos of the heroes of World War II will be displayed circularly on the media screens of various streets in Moscow, and broadcast on the website of the Russian "Immortal Corps". In this process, the public can play back the video content online, and the relevant staff will also answer the hotline 24 hours a day to provide consulting services on any details of the online activities of the "Immortal Corps".

　　RIA Novosti said that at present, about 3,700 volunteers in the country have helped to prepare for this event, and they have all received professional training in advance. Among them, the oldest is a 72-year-old history and social studies teacher from Khabarovsk, Russia.

　　In previous years, the Russian people will take photos or portraits of veterans to participate in the "Immortal Legion" parade on Victory Day on May 9.

　　On May 9, 2018, on Neva Street in St. Petersburg, Russia, people took photos or portraits of veterans to participate in the "Immortal Legion" parade. Photo from Xinhua News Agency

　　Russian President Vladimir Putin said at the meeting of members of the Russian Federal Security Council held on April 16th that the risks brought by the current COVID-19 epidemic did not allow Russia to hold a military parade to commemorate the 75th anniversary of the victory of the Great Patriotic War on May 9th, and related preparations were forced to be postponed. On April 28th, Putin announced that on May 9th, some Russian cities will hold air parade and fire salute.