Sun Tzu said, “The good fighters of old first put themselves beyond the possibility of defeat, and then waited for an opportunity of defeating the enemy. To secure ourselves against defeat lies in our own hands, but the opportunity of defeating the enemy is provided by the enemy himself. Thus, the good fighter is able to secure himself against defeat, but cannot make certain of defeating the enemy.”

The first half of 2023 unfolded against a backdrop of formidable external challenges: declined investment growth, stalled consumption recovery, sharply plunged export growth, insufficient impetus for economic growth, and slowdown in the growth of the infrastructure market. Despite the challenges, CDHORIZON registered steady revenue growth and continued to optimize its income structure, in addition to a marked improvement in operational efficiency and a healthier financial structure. CDHORIZON held its 2023 Mid-Year Work Meeting on July 14 at the Jinshan Base in Shanghai to fully assess the market landscape, reflect on past performance, and chart a confident path forward. At the meeting, CDHORIZON examined various aspects of its operations, fostered consensus across all levels of the company, and outlined the goals and priorities for the next stage of corporate development. Over 170 managers from different departments attended the meeting at the main venue and through parallel online sessions.

01

Improving Operational Quality and Efficiency

Building a New Operational System

Yu Guang, Chief Operating Officer (COO) of CDHORIZON, comprehensively reviewed the company’s operational management status during the first half of 2023. Mr. Yu highlighted that, amidst steady business growth, CDHORIZON kept improving operational efficiency while reshaping its management system. Specifically, the company registered solid progress, as it achieved consistent improvements in the management of human resource, equipment, and materials through scientific, digital management and process system development. In terms of the AERIAL WORK PLATFORM, CDHORIZON approached the market with its segment-specific strategy, channeling resources into high-value regions to optimize equipment utilization across different cities. The company’s shoring business saw improvements in construction capabilities, facilitating the standardization of foundation pit projects and expanding the scale of bridge projects, which enabled the effective utilization of idle assets. As for scaffolding, CDHORIZON built a top-notch engineering management team, and fostered an innovative management model, earning client recognition with first-rate services.

02

Adapting to Business Realities

Unlocking Growth Potential

Tang Li, Chief Financial Officer (CFO) of CDHORIZON, delivered a detailed report of the budget execution and performance growth of all departments during the first half of 2023. Mr. Tang emphasized that CDHORIZON sustained quality business growth and maintained its industry leadership, ranking 14th in Global Top 100 Rental Service Providers (IRN100). The Northern Business Group promptly adjusted the income structure to offset the seasonal impact of the winter break, topping all other business groups in asset disposal income; the Central Business Groups outperformed peers across multiple indicators, with a stable client base; the Southern Business Group showed robust momentum through swift engineering contract signing and fast outsourcing integration. Moreover, a combination of financial strategies was adopted to manage the company’s payables, which significantly enhanced its ability to control costs and manage cash flows.

03

Thorough Deployment and Multifaceted Approaches

Striving for Performance Targets and Quality Growth

Looking ahead, the market will continue to pose challenges in the second half of 2023. In light of reports by executives, CDHORIZON stands ready for thorough deployment in both operation and management. On the operational front, the company will optimize its internal marketing segmentation to foster synergies among business groups. This involves continuously deepening CDHORIZON’s regional presence by splitting one branches into two or more branches to improve coverage density and augment market share. Furthermore, the company will recruit more employees to seek performance growth. Additionally, CDHORIZON’s focus will extend to outsourcing and subletting arrangements, aiming to expand its assets under management. CDHORIZON will minimize capital consumption and gradually expand its outsourced asset scale through an approach of “growing larger, and then grow stronger”. In terms of management, the paramount objective is to establish effective mechanism and system for optimizing the allocation of assets, and actively adjust asset allocations, thus improving return on assets per unit. Secondly, the company will amplify its digitization efforts to continuously improve operational efficiency and build an operational system poised for global development. In the second half of 2023, CDHORIZON will prioritize quality business growth and seek progress in budget execution, while cementing its position as a top trustworthy player for its exceptional business efficiency.

04

Seeking Crucial Breakthroughs

Advancing Progress with Concerted Efforts

Pan Yang, Executive Director and Chief Executive Officer (CEO) of CDHORIZON, delivered a concluding remark at the end of the conference. He noted that CDHORIZON’s growth is no longer news to the public; rather, after the company achieves a massive scale and presence, sustaining quality growth will be the indicator of the company’s ability and managerial level. After going public, CDHORIZON will have to respond to more internal demands and external expectations. The company must continue to create real value for clients and partners through steady growth and give back to shareholders and society with exceptional performance, which is a shared expectation for the company, both internally and externally.

Responding to internal and external challenges with well-thought-out measures

In 2023, we saw an increase in uncertainties at home and abroad. This year, the Chinese economy showed signs of deflation, and companies had to face intensifying market challenges. For an asset-heavy entity of CDHORIZON’s size, it is crucial to respond with well-thought-out measures. Amidst this volatile landscape, CDHORIZON ought to remain resilient and focus on its long-term strategic commitment to get through the stagnant market cycle.

Fostering Momentum to Retain Competitiveness

The external environment will remain volatile for an extended period. Mr. Pan emphasized that as a new journey unfolds, CDHORIZON, which is in its prime, should remain cautiously optimistic, take proactive measures, and establish a robust business foundation, which will allow the company to retain its competitiveness and cope with a tough environment. Since its incorporation and established in 2011, CDHORIZON has evolved into China’s largest and strongest integrated equipment operation service provider, garnering extensive recognition. Today, the company possesses three business groups and sixteen business departments with comprehensive segments of integrated equipment operation. Following its listing on the HKSE Main Board, CDHORIZON is now backed by strong financial and resource support and has ventured into broader business landscapes. What is particularly worth noting is the “3+3+3” core strategy that captures the company’s future focus: CDHORIZON will continue to explore overseas markets, as it forays into Southeast Asia through steady steps, fostering a second growth curve.

Future-oriented Operations: Empowering Business Transformation via Digitization

Through comprehensive digital management upgrades, CDHORIZON has possessed its operational efficiency, streamlined internal processes, and optimized asset utilization, with improved flexibility and agility. According to Moore’s law, a certain level of digitalization will lead to more advanced business models and marketing approaches, thereby empowering business operations and fostering internal growth drivers. Mr. Pan pointed out that in the future, CDHORIZON will intensify its digital transformation to empower business transformation and upgrading. Moreover, the company will build stronger partnerships, improve its engineering and technical services, and promote asset-light operations by leveraging the asset-heavy business model to avoid the drawbacks of the asset-heavy approach.

Strengthening Internal Management: Responsibility, Strategy, and Determination

Mr. Pan emphasized the importance of team building and management, citing the wisdom of The Art of War by Sun Tzu. In an uncertain environment, managers must embrace responsibility. While striving for goals, managers also ought to pursue efficiency and quality. Approach and strategy are also key considerations. Given CDHORIZON’s vast footprint, region-specific measures should be adopted, catering to varying regional demands. Last but not least, managers should show determination and lead their teams with firm resolve, which is the key to success.

During the breakout sessions in the afternoon, focusing on the achievement of annual goals, each group had a detailed discussion on their specific initiatives for the second half of the year and each group leader made a summary report. At the report meeting, Mr. Pan stressed that when trying to achieve the annual goals with more effective business initiatives, all teams must remain pragmatic and adopt a goal-oriented approach by leveraging collective wisdom and fully involving front-line workers in the decision making. He also stated that the teams should develop a more competitive marketing system and deliver specific, feasible business initiatives; and managers must embrace responsibility, ensure accountability, and help their teams thrive through thick and thin.

Mr. Pan concluded that despite the complex, volatile market environment, CDHORIZON will continue to “Be Global for Shared Prosperity”. Guided by the “Finance + Industry” strategy and backed by strong support from the capital market, CDHORIZON will continue to improve its operational capacities, expand the scale of equipment management, and bolster capital efficiency through digital upgrades and management enhancement. In addition, the company will reinforce its efforts in exploring overseas markets as it ventures into Southeast Asia through steady steps, aiming to sustain quality growth. CDHORIZON has faith in the resilience of China’s economy and its own capability to excel, echoing the ancient wisdom of The Art of War: the good fighter is able to secure himself against defeat, but cannot make certain of defeating the enemy.