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Against the backdrop of increasing global economic volatility and uncertainty, Hongdou Group has adhered to the real economy with extraordinary strategic vision and perseverance, focusing on the three main business sectors of clothing, tires, and pharmaceuticals, and achieved high-quality development of the company through technological innovation, intelligent manufacturing and global layout. According to incomplete statistics, since 2021, Hongdou Group has invested nearly 10 billion yuan in industrial transformation and upgrading, which has not only consolidated its market position, but also achieved breakthrough progress in many fields.

Clothing sector: innovation-driven, creating a new track for comfortable menswear

In recent years, the clothing sector of Hongdou Group has continued to increase its investment in product research and development and design. In particular, its subsidiary Hongdou Co., Ltd. (600400.SH) has joined hands with top international design masters and well-known colleges and universities to form a strong R&D team. From 2021 to 2023, the company invested more than 53 million yuan in R&D, focusing on the research and development and innovation of classic and comfortable menswear. The "Hongdou 0-sense Comfort Shirt" launched in 2022 quickly became the focus of the market with its excellent design concept and comfort, and won many awards at home and abroad, including the Bazaar Men's Shirt Award, the French Janus Design Award, etc., and was certified by international authoritative organizations as "the leading sales of mid-to-high-end shirts in the whole network nationwide". As of now, nearly 1.5 million pieces have been sold, and the Hongdou 0-sense Comfort Shirt has been awarded the "No. 1 0-sense Shirt in China" Euromonitor Market Position Statement Certification. Hongdou Men's Wear has also been awarded the title of "Comfortable Men's Wear Track Pioneer" by the China Clothing Association. This series of successes not only demonstrates the profound foundation of Hongdou Men's Wear in product design, but also lays a solid foundation for the improvement of its brand image and the expansion of its market share.

In terms of marketing, Hongdou Men's Wear has also spared no effort, with a total investment of 258 million yuan in the past three years, and has comprehensively enhanced its brand influence by hiring celebrity spokespersons, planning creative marketing activities, holding international fashion conferences, and holding the 0-sense comfortable shirt festival. This series of measures not only attracted the attention of a large number of consumers, but also further consolidated Hongdou Men's Wear's leading position in the domestic market. In 2023, Hongdou Men's Wear achieved revenue of 2.33 billion yuan, a year-on-year increase of 23.57%.

To accelerate the cultivation of new quality productivity, Hongdou Group continues to implement "new manufacturing" with intelligent transformation, digital transformation and networking. The company has built the Hongdou Men's Wear 5G fully connected factory, introduced information technologies such as intelligent hanging systems, AGV distribution, and intelligent decision-making, and used digital applications to achieve full-domain connection between production factors, increasing production efficiency by more than 32% and reducing work-in-process inventory by 30%. The construction period of the Hongdou Men's Wear 5G Fully Connected Factory project is from January 2019 to December 2021, with a total investment of 41.5308 million yuan. In 2023, the "Hongdou Men's Wear 5G Fully Connected Factory" was selected into the "2022 Industrial Internet Pilot Demonstration List" announced by the Ministry of Industry and Information Technology of the People's Republic of China. It is the only clothing demonstration factory selected in the country.

Tire sector, overseas layout, creating a new benchmark in the industry

The tire sector of Hongdou Group also performed well. Through the construction and expansion of overseas production bases, it achieved rapid growth in production capacity and in-depth expansion of the international market.

As the first overseas production base of General Rubber (601500.SH), General Rubber (Thailand) Co., Ltd. is an important milestone in the company's global layout. The first phase of the Thailand project has invested US$378 million and has built an annual production capacity of 1.3 million full-steel tires and 6 million semi-steel tires. Since its production, it has demonstrated strong production capacity and profitability, contributing 596 million yuan in net profit to the company in 2023. In September 2023, the second phase of the Thailand expansion project was officially launched, with an investment of 1.976 billion yuan and a designed annual production capacity of 10 million semi-steel tires. It was officially put into production on June 28, 2024 and is expected to reach full production in the first half of 2025. After full production, it is expected to add an average annual operating income of 2.466 billion yuan and an average annual net profit of 459 million yuan to the company.

At the same time, General Tire Technology (Cambodia) Co., Ltd. has also made significant progress. The company is located in the Sihanoukville Special Economic Zone (hereinafter referred to as "Sihanoukville Special Economic Zone") in Cambodia and is the largest investment project currently settled in the Sihanoukville Special Economic Zone. The total investment in the first phase is 1.906 billion yuan, which is the first project in Jiangsu Province to invest more than 100 million US dollars in RCEP member countries after the RCEP takes effect in 2022. The first phase of the project will be fully put into production in May 2024, achieving an annual production capacity of 900,000 full-steel tires and 5 million semi-steel tires. In December 2023, the company launched the Cambodia Phase II expansion project with an investment of 1.495 billion yuan and an annual production capacity of 750,000 full-steel tires and 3.5 million semi-steel tires. It is expected to be officially put into production on August 28, 2024 and fully put into production in the second half of 2025. After full production, it is expected to add an average annual operating income of 1.701 billion yuan and an average annual net profit of 231 million yuan to the company, bringing new growth points to the company.

At present, the annual production capacity of the first phase of the Thailand and Cambodia base projects of General Shares exceeds 13 million, making it the first domestic tire company in the industry to achieve full production of "overseas dual bases". The global layout is moving forward steadily, and the company's international competitiveness continues to increase, which has brought about a rapid improvement in the company's performance. According to the company's performance forecast announcement, the company expects to achieve a net profit of 270 million to 300 million yuan attributable to the parent company in the first half of the year, a year-on-year increase of 364% to 416%.

Pharmaceutical sector, in-depth cultivation, cultivating new momentum for green industry

In the pharmaceutical field, Taxus Pharmaceuticals (873858), a subsidiary of Hongdou Group, has been deeply engaged in taxane anti-tumor APIs for more than ten years and has become a leading company in this market segment in China. In 2023, Taxus Pharmaceuticals successfully entered the innovation layer of the New Third Board and was awarded the title of a national-level specialized and innovative "Little Giant" enterprise.

In order to further enhance its competitiveness, "Taxon Pharmaceutical" has launched an intelligent factory project for high-end complex anti-tumor preparations, with a total investment of 227 million yuan, which is expected to be officially put into production in 2025. The project will build two anti-tumor production lines and a multifunctional laboratory, using world-class standards to achieve automation and intelligence in the entire production process. After the project is put into production, it will greatly improve the company's anti-tumor drug production capacity and quality. At the same time, the project will also help the company build a high-clinical value, high-value-added product, high-end complex preparation industrialization CMO production service platform, accelerate the internationalization process, and promote industrial upgrading.

In the 1980s, Hongdou Group proposed that enterprises should "form the heat in the recovery period, hold on to the climax period, prepare for the decline period, and take the lead in the low tide period". Zhou Haijiang, chairman of the board of directors of Hongdou Group, said that if an enterprise wants to maintain vitality and continue to develop, it must have the ability to constantly adapt to new changes in the domestic and foreign economic environment. Looking back at Hongdou's 67 years of development, from a small handicraft workshop to a large multinational enterprise group with more than 30,000 employees today, each round of major development has faced different domestic and foreign economic environments, and has been moving forward in adaptation and adjustment. In 2023, Hongdou Group won the top ten outstanding contribution enterprises in Wuxi in 2023, demonstrating the company's innovation ability and development strength. In the future, Hongdou Group will continue to adhere to the concept of high-quality development, focus on its main business, deepen its cultivation, and move towards a more glorious tomorrow with more determined steps.

Editor: Lin Sen