CANNY Elevator’s 2020 Semi-annual Board of Directors Operation Review

CANNY Elevator (002367) 2020 Semi-annual Board of Directors Operation Review contains the following content:

1. Overview

At the beginning of 2020, the new coronavirus pneumonia epidemic suddenly hit the normal environment. Impact on life and work. All CANNY people have made more efforts to achieve the set goals. The company resumed work and production on February 17th, with full production capacity and reliable output product quality. The company is united as one, showing the same good style as always and "working harder" "The fighting state. Under the correct leadership of the board of directors, the company's management, facing an increasingly competitive market, closely focuses on the company's development strategy and business plan, seizes industry development opportunities, actively expands the market externally, improves operating performance, and accelerates technological innovation internally. , upgrade, and constantly pursue model innovation, product innovation and management upgrade. In the first half of 2020, the company achieved solid progress in various performances:

The company achieved operating income of 1.7648976 million yuan in the first half of 2020, an increase of 3.60% over the same period last year; the total profit was 199.736 million yuan, An increase of 59.67% over the same period last year; the net profit attributable to shareholders of listed companies was 167.463 million yuan, an increase of 62.38% over the same period last year.

As of June 30, 2020, the company’s total assets were 5.794 billion yuan, total liabilities were 2.965 billion yuan, and the asset-liability ratio was 51.17; the owner’s equity attributable to the parent company was 2.804 billion yuan, and the weighted average net asset income The rate increased by 2.45 percentage points compared with the same period last year.

As of June 30, 2020, the company’s effective orders being executed were 6.343 billion yuan (excluding the Beijing New Airport Section of the Intercity Railway Contact Line, which won the bid but did not receive the deposit, and the new Beijing-Shenyang Passenger Dedicated Railway). Xinghuo Station and Hub Project, Beijing Railway Hub Fengtai Station Reconstruction Project, Yinchuan-Xi'an Railway (Shaanxi Section), Zhengzhou-Zhoukou-Fuyang Railway Zhengzhou South Station, Nantong Urban Rail Transit Line 1 Phase I Project, Chongqing Rail Transit Line 9 The first phase of the line, the newly built Shanxi section of the Taiyuan to Jiaozuo railway, and the Nanjing to Jurong intercity rail transit project, the winning bid amount is a total of 622 million yuan).

(1) The progress of the company’s key tasks during the reporting period

1. Deepen marketing reform and transformation, continue to improve channel efficiency, and reshape product and service capabilities

According to the company Based on the development situation at home and abroad, combined with the development trends of the elevator industry, the company has comprehensively carried out business innovation and reform. The domestic marketing and engineering system management reform has achieved remarkable results in 2019. On this basis, in the first half of 2020, we will deepen the marketing reform and transformation, actively promote and implement the reform plan, use policies to guide branches to actively explore the market, and adhere to the "Cooperation* The concept of "win first" maintains a good cooperative relationship with agents and provides strong support to their terminal channel construction and advertising. Deepen the market operation layout and drive order growth. Further explore and optimize regional market management strategies to improve market response capabilities; the company further consolidates and strengthens cooperation with existing strategic customers and the top 100 real estate companies in the country, and increases the order amount of strategic customers; focuses on the development of the rail transit industry, and in China's high-speed rail and rail transit markets Under the opportunity of rapid development, we have seized the peak of key construction, actively participated in market bidding, and improved our ability to obtain orders for rail transit projects. As of July 22, 2020, the company has obtained important bid-winning contracts in the high-speed rail and rail transit markets in 2020 with a total value of 60, 0.8431 million yuan, accounting for 118.28% of the company's total winning bids in the high-speed rail and rail transit markets in 2019. The market competitiveness and market recognition of the company's heavy-duty escalator products are increasing day by day. As the company's business scale expands, the company is also actively planning for the long-term development of the repair, renovation and maintenance business sectors, and vigorously exploring the paid service market.

In view of the people's livelihood project of installing elevators in old buildings, Xingfu Elevator faces the market with dual business models of single elevator sales and integrated engineering, develops an agent system, and deepens management at the headquarters through independent projects and cooperative development projects. In the context of changes, the company will subsequently strengthen the layout and operation of Xingfu Jiadi in the business field in response to the national deployment of accelerating the transformation of old urban communities.

2. Adhere to investment in R&D, develop innovative products and build product competitiveness

The company continues to increase investment in R&D, introduce talents, strengthen R&D and technical strength, and achieve success in electricity and escalator industries. The R&D technology of the complete machine and key components of the product has been greatly improved, which has greatly improved the performance of the product, expanded the integrity of the product, and actively improved product performance and quality advantages.

The company’s R&D personnel continue to make breakthroughs and overcome difficulties, and have achieved a series of brand-new technological achievements. As of the end of the reporting period, the company has obtained 932 valid patents, including 69 invention patents and 786 utility model patents. , 66 design patents; 11 PCT authorized patents.

3. Actively expand overseas markets and vigorously develop independent brands

CANNY Elevator actively explores overseas markets with the help of the "One Belt and One Road" initiative, insists on focusing on independent brands, and focuses on strategy, technology, We vigorously develop independent brand building in quality, training, talent, service and other aspects. Through the agent sales model and adhering to the concept of win-win cooperation, the international reputation of CANNY brand continues to increase. At present, CANNY elevator products have been exported to more than 100 countries and regions. By focusing on cultivating overseas agents with strong comprehensive strength and optimizing sales channels, CANNY has achieved stable development in overseas markets.

In the first half of 2020, the outbreak of the overseas new coronavirus pneumonia epidemic has affected overseas markets to a certain extent. Judging from the company’s sales and shipments in overseas markets, it has recovered to some extent, but the foreign market situation is still in the In the state of slow recovery, the company will continue to strengthen overseas strategic planning and overall global market layout by strengthening agent communication and cooperating with service efficiency, prices, policies and other aspects to restart the business, insisting on focusing on its own brands to carry out new development models. Explore; maintain long-term investment in overseas market construction.

4. Optimize the quality control system and adhere to quality innovation

The company takes the pursuit of "zero defects" as the highest pursuit of quality management, ensures the applicability and reliability of products, and always focuses on " "Seven Quality" links, continue to fully implement the SSQS total quality management model within the enterprise, and continue to emphasize the pre- and post-event quality control from the entire value creation process of product research and development, procurement logistics, manufacturing and marketing services. Through the monitoring of key KPI indicators, quality responsibility is implemented in every link to continuously reduce quality costs. The company will, as always, adhere to the general direction of comprehensively improving product and service quality, continue to clarify quality goals and missions, strengthen supplier quality management, strengthen key process quality control, strengthen engineering maintenance quality management, and strengthen full-process quality analysis and improvement.

5. Continue to promote management innovation through informatization construction and comprehensively improve operational efficiency

After years of development, the company has formed excellent informatization and process management capabilities. It has CANNY EOS elevator industrial Internet platform that runs through the entire business process. As a benchmark enterprise of its own brand, the company continues to invest in informatization construction as a driving factor to promote the improvement of company management. During the reporting period, on this basis, the company will further improve the enterprise information management system, further improve the enterprise's management level, reduce the enterprise's operating costs, and enable the enterprise to gain greater competitive advantages in the competition in the same industry. The company continues to promote digital transformation, promote and optimize the deep integration of informatization with customer delivery process as the main line, and invest in multiple informatization projects including the integrated execution platform for standard orders. In the future, based on the information-based data warehouse, the company can delegate power more accurately, further change the traditional management model, improve decision-making efficiency, and stimulate operational vitality.

6. Refined cost control capabilities provide guarantee for CANNY’s steady development

CANNY Elevator has been committed to establishing and improving the cost control system, adhering to the concept of refined cost control, Save unnecessary waste. With the goal of increasing value and improving production efficiency as a means, the company gradually optimizes the manufacturing system and implements full-process cost control. At the same time, it relies on "budget management" to regularize cost analysis work.

During the reporting period, based on the company's overall strategic plan, CANNY Elevator liquidated and canceled its subsidiaries Suzhou Xinli Electronic Control System Co., Ltd., Suzhou Runji Drive Technology Co., Ltd., and Suzhou Elevator Show Decoration Co., Ltd. to further streamline the organization. structure, reduce management costs, improve management efficiency, and integrate existing resources. Through production automation innovation, the company improves the level of automation, promotes the transformation and upgrading of intelligent manufacturing, and reduces the demand for production personnel; through production digital innovation, it improves the level of production informatization and lays a solid informatization foundation for intelligent manufacturing. Improve decision-making efficiency and operational accuracy, and stimulate operational vitality.

7. Focus on industry positioning and actively expand industrial perspectives in new fields

In the first half of 2020, the Kangli Junzhuo Internet of Things Fund ***, which the company holds 87.72 shares of, completed three investments. The total investment amount reached 90 million yuan, including: buying a stake in Suzhou Spichi Information Technology Co., Ltd. with a shareholding ratio of 1.2174; buying a stake in Suzhou Yishui Information Technology Co., Ltd. with a shareholding ratio of 1.5576; buying a stake in Shanghai Panqi Microelectronics Co., Ltd. , shareholding ratio 3.2206.

In the future, the company will steadily advance the established investment plan and seek to invest in outstanding companies with synergistic effects on the company's core business. It has formed CANNY Youlan, Yinfeng Shares, Jiangsu Tianyi, and CANNY Technology The multi-line investment layout of the Industrial Investment Company, Kangli Junzhuo Internet of Things Fund and Blu-ray Jiabao Property strives to play the role of a listed company platform and create benefits for the company.

8. Actively improve the corporate governance system, continue to strengthen internal control, and promote the company’s standardized operations

During the reporting period, the company strictly followed laws and regulations and the requirements of the China Securities Regulatory Commission and the Shenzhen Stock Exchange. Other relevant requirements, carried out the work of the Three Meetings, held 3 shareholders' meetings, 6 board of directors meetings, and 7 supervisory board meetings to standardize the company's daily operations, strengthen the company's information disclosure work, pay attention to investor relations management, prevent the company's operating risks, and continue to Strengthen the continuous optimization of financial regulations, internal audits, risk management and control, actively improve the corporate governance system, effectively implement the company's internal control system, adhere to the rule of law, and establish a scientific and effective decision-making mechanism, market response mechanism and risk prevention mechanism, Further promote the company's management towards standardization and standardization, laying a solid and powerful foundation for the company's healthy, stable and sustainable development.

9. Deepen the talent training mechanism, build an all-round employee incentive system, protect the rights and interests of shareholders, and help CANNY develop steadily

The company has a complete human resources management system to facilitate employee recruitment , training, incentives and constraints provide institutional guarantees. During the reporting period, the company focused on introducing R&D talents, technological innovation talents, market development talents and compound senior management talents; increased efforts to improve the healthy competition mechanism for talents, fair and reasonable talent use and incentive systems; improved the efficiency of the use of human resources, and ensured All kinds of talents needed for the development of the company can make full use of their talents and show their talents. Based on the principle of combining internal training and external recruitment, the company has implemented specific measures in all aspects of "selecting, employing, educating, and retaining people"; at the same time, it further optimizes the performance management system and dynamically adjusts performance appraisal and salary plans according to the company's conditions. , achieve the effective decomposition of the company's goals, encourage the company's employees to give full play to their talents in their jobs, and form a set of scientific talent introduction, training and management systems to lay a solid talent foundation for the company's long-term development.

In 2020, CANNY will continue to promote the binding of responsibilities between the company's core management team and the company's long-term growth value, and further improve the long-term incentive mechanism. The company launched the 2020 stock option incentive plan, and the second phase of employee retention The stock plan has consolidated an effective mechanism that aligns the interests of the company's top management, core personnel and all shareholders of the company.

The company insists on safeguarding the rights and interests of shareholders, guarantees a sustained and stable dividend policy, and shares the company's growth with all shareholders.

While stabilizing dividends and cash payments, the company continues to launch and implement a series of share repurchase plans. After completing the share repurchase in 2018, the company launched a repurchase plan again in 2019, which continues to be used to implement the company's equity incentive plan and/ Or employee stock ownership plan to maintain the stability of the company's market value and the interests of all shareholders. As of June 30, 2020, the total number of repurchased shares in the company's special securities account for repurchase reached 13,090,631 shares, with a total transaction amount of 87.6346 million yuan (excluding transaction fees).

(2) Operational work plan for the second half of the year

1. Continue to deepen sales and management reform, continue to optimize the marketing incentive mechanism, further promote the implementation of full-staff performance appraisal, and do a good job in corporate cost control .

2. Increase brand marketing efforts and continue to improve the full-process service capabilities of pre-sales, sales and after-sales.

3. To unleash new technological vitality, we must continuously increase investment in research and development, achieve technological innovation, optimize products, and develop high-end products through technological research; and ensure product quality and improve product competitiveness through technical strength.

4. Cultivate high-precision talents, enrich the enterprise's talent pool, continuously promote and improve professional and technical channels, implement employee equity incentives and other measures in place, enrich the solid strength of the enterprise, and unlimitedly unleash the potential of talents, Recommend and select outstanding young cadres, open up channels for corporate talent training and promotion, fully mobilize enthusiasm and reduce the brain drain rate.

3. Analysis of core competitiveness 1. Brand influence continues to upgrade, empowering market advantages. Since its establishment in 1997, CANNY Elevator has made it clear that building a national brand is its responsibility and coordinates the development of brand building and corporate operations. After going public in 2010, "brand strategy" was listed as one of the six major corporate strategies. The evolution of a brand requires long-term accumulation and investment. The company insists on building and establishing brands with excellent quality and industry-leading technology, and declares its responsibility and responsibility to create China's first-class brand for the elevator industry. Over the years, brand building has achieved fruitful results. The company has been the only Chinese elevator brand ranked in the top ten in the world on the "Global Elevator Manufacturers TOP10" list for four consecutive years, and its industry status has been fully recognized; it has topped the Chinese elevator industry in the "China Brand Value Evaluation Information Release List" for three consecutive years; It has been selected as one of the "Top Ten Elevator Service Suppliers for National Government Procurement" for eleven consecutive years; it has been selected as the "Preferred Elevator Supplier of the Top 500 Chinese Real Estate Development Enterprises" for eight consecutive years. During the reporting period, the company won the top 100 brands of "China Brand Day-I Spoke for Chinese Brands" and the "Top 10 Investment Value of China Real Estate Supply Chain Listed Companies in 2020", etc., and was selected for the "China Brand" 2020 Two Sessions Special Issue and the "Chinese Brand" Strategy Partners etc. 2. Market layout and full-process product service solution capabilities are increasing year by year. The company has established complete marketing channels and an efficient service system across the country, with integrated functions such as sales, management, engineering installation, maintenance services, overhaul and repair, and spare parts sales. Direct sales and agency channels are complementary to each other, mutually beneficial and win-win. Especially in recent years, it has formed its own advantages in the fields of strategic customers, rail transit, typical projects, and the Belt and Road Initiative, making key breakthroughs and significantly improving its ability to provide national services to large customers. The company's integrated development model of "mainly producing complete machines and supporting the production of key parts" has mastered core component technologies. Under the vision of the industry gradually moving towards a manufacturing-based and service-based transformation, the cost of parts and components The advantages and response speed advantages will lay the foundation for greater market development and development goals in the future. 3. Continuously pursue a research and development system to continuously promote technological innovation and product upgrades. The company adheres to the development concept of "innovation and leadership" and adheres to independent research and development of core technologies and technological leadership. Several core components of elevators and escalators are independently developed, including key technologies for second-generation all-in-one machines. The company has established a technological innovation system that is guided by market demand and combines industry, academia, and research. It adheres to the innovation-driven approach and continuously consolidates its leading position in the industry. Since its listing, the company has invested steadily and adequately in R&D, and has a first-class laboratory and a nationally recognized corporate technology center, including the world's tallest elevator test tower.

The main R&D personnel have profound theoretical foundation and rich industry experience, and have strong research and development and independent innovation capabilities, establishing R&D scale advantages. Through cooperation with domestic first-class scientific research institutions such as Harbin Institute of Technology, Nanjing University of Technology, and Zhejiang University, we jointly deepen technological innovation and lay out medium and long-term technical reserves, laying a solid foundation for maintaining continued leading product technology advantages. As of the end of the reporting period, the company had obtained 932 valid patents, including 69 invention patents, 786 utility model patents, and 66 design patents; it had obtained 11 PCT authorized patents. 4. The industry-leading SSQS comprehensive management system shapes CANNY's quality image with high quality standards. CANNY Elevator has always regarded product quality as the lifeline, adheres to the "zero defect" quality culture oriented to customer needs and social responsibility, and implements all-round implementation for all employees. Quality training, extensive QCC quality improvement activities and Six Sigma quality improvement projects, gradually forming a comprehensive quality management model with independent innovation as the core. The company has a strong sense of change in quality management, promotes quality management reform, focuses on promoting the development of CANNY's quality management in a systematic direction, and deepens the construction of a strong quality enterprise. On the basis of learning and absorbing the advantages of ISO9000, Six Sigma, performance excellence model and other management systems, and based on the operating characteristics of the company's elevator products, the company has established a full-process management quality system with "seven quality elements" as the core from the inside out to achieve The cognitive transformation of quality from the inside to the outside from design and manufacturing to safe use has formed a systematic quality operation monitoring system to carry out full-process quality control of products and services. Promote the quality construction work of enterprises to rise to national standards, shape industry development benchmarks with ingenious manufacturing, and create a more competitive quality image of Made in China. 5. Management and team advantages The SAP system currently used by the company covers many important departments and links such as human resources, marketing, procurement, manufacturing, financial accounting, budget management, etc. On this basis, the company has improved the enterprise information management system , further improve the management level of the enterprise, reduce the operating cost of the enterprise, and enable CANNY Elevator to gain greater competitive advantages in the competition in the same industry. After years of development, the company's core management team has rich experience in the elevator industry, with a stable structure, robust style, and unified goals. It can ensure the continued stability of the company's production and operation policies and efficiently formulate execution strategies that adapt to market changes and are in line with the company's strategy. By focusing on procurement management, production management, product quality management, customer service management and other aspects, we have established a series of management measures and modern management systems, with strong process management capabilities, ensuring the company's steady and healthy development. The company not only maintains professional depth in the professional teams of R&D and innovation, production quality, marketing, and basic management, but also pays more attention to the construction of various talent echelons, continuously expands the scope of different talent professional fields, and focuses on introducing and cultivating diversified and compound talents. talent echelon. The company strives to create a good development platform for employees, provide broad development space and industry-competitive salary and benefits, and create a good corporate culture atmosphere.