The Yuegong Group’s first-quarter economic performance analysis meeting concluded successfully.

Recently, the Yuegong Group convened an economic performance review meeting at its Shaoxing headquarters to assess its first-quarter results, thoroughly summarize the work accomplished in the first quarter of 2018, and carefully plan and outline the strategic direction for the second quarter.

Meeting agenda:

1. Each company reported on its economic performance for the first quarter, the key issues it faces, and the measures it plans to implement going forward.

2. Implementation of the Group’s innovation and excellence initiatives, QC activities, and “Safety and Quality Month” campaigns;

3. Liu Qingli, General Manager of Shandong Yuegong, presented an analysis and reflection on the company’s market positioning and development.

4. Hua Yuwu, General Manager of Zhejiang Yuegong, outlined the current status of research, development, and promotion of Yuegong’s green prefabricated construction, as well as the plans for the next phase of work.

I. The chairpersons and general managers of each subsidiary of the Group will, in turn, present their summaries of first-quarter 2018 performance and their plans for the second quarter.

Jiang Jinlong, Executive Vice President of the Group and Chairman of the Zhejiang Company, stated: We will further strengthen measures to attract and incentivize talent; align our goals of enhancing efficiency and profitability with initiatives such as innovation and excellence, as well as safety and quality; and achieve tangible results in cost reduction and productivity improvement.

Hua Yuwu, Group Vice President and General Manager of the Zhejiang Company: Break down economic targets into granular components; establish an elite team and set up a Green Building Department; pursue both revenue growth and cost reduction; revise and refine the management manual, standardize operations in preparation for an IPO; and continue R&D on Yuegong’s green prefabrication technologies. Proceed in an orderly manner.

Luo Yinchang, Vice President of the Group and Chairman of the Shandong Company: Talent development is the top priority for Shandong Company; the 2018 marketing policy has been revised and refined, with business incentives increasingly tilted toward engineering projects; the “Manufacturing Department Salary Assessment and Management Regulations,” the “Equipment Management System,” and the “Warehouse Management System” have been updated; and the 2018 technological upgrade plan has been implemented.

Liu Qingli, General Manager of the Shandong Company: A four-character marketing strategy centered on “identify, promote, build, and seize”; and the refinement of the marketing network and engineering system.

Aisheng Hui, General Manager of the Machinery Company: Through technological innovation and optimized technical upgrades, we have successfully developed a vertical‑lift parking garage; we are continuing to upgrade our flat‑move‑type models to enhance stability and improve quality; meanwhile, the maintenance and after-sales service market is growing steadily.

Lou Zugen, General Manager of the real estate company: The project’s final settlement and wrap-up are proceeding in an orderly manner; property ownership certificates have been obtained and are being issued sequentially; preparations are underway for the property management building and the Phase III high-rise development.

Wu Jiamin, Safety Officer in the Group’s Corporate Management Department: Safety must never be compromised for the sake of production; employee safety and accountability training must be deeply ingrained in both mind and heart; strengthen the rigor of safety inspections and management at project sites to prevent superficial compliance; integrate safety management throughout the entire project lifecycle; ensure that pre-shift checks and regular meetings are conducted without exception; and guarantee adequate funding for safety initiatives.

Detailed data and scientific methodologies were used to analyze and discuss the company’s and department’s operations, production, and business performance, as well as the challenges they face. Constructive proposals for the next phase of work were put forward, laying a solid foundation for achieving tangible results across all initiatives in the upcoming quarter.

II. Group President Ren Qiliang Delivered a Speech

The president stated, In the first quarter, the Group’s subsidiaries maintained steady production and smooth operations, with performance surpassing last year’s levels, overall remaining quite stable. Each subsidiary and department, closely aligned with its own operational realities, devised a number of tailored initiatives, yielding a wealth of notable achievements:

In terms of its talent‑competition mechanism, Zhejiang Company has conducted performance‑review discussions with employees whose assessment results were unsatisfactory and whose overall evaluations were low, and has even advised or terminated such employees, proactively weeding out those who fail to meet standards—setting a precedent for the company. On the front of cost‑saving and revenue‑generating measures, Zhejiang Company has put forward initiatives to reduce expenditures. 150-200 A target of ten million yuan has been set, with a detailed breakdown and concrete measures in place. In the realm of green prefabricated construction, following the establishment of the Green Building Department, work plans and performance targets have been formulated, and the existing technical and marketing systems are being continuously refined. Yuegong Green Prefab is steadily building momentum—let’s watch and see what unfolds.

The Shandong Company’s first initiative in the first quarter was to organize a program involving all mid-level managers. 2017 How do you see it? 2018 The “How to Get Things Done” large-scale discussion campaign, in which the management core team pooled their wisdom and efforts, left a lasting impression. Since assuming his post, General Manager Liu Qingli has also made significant progress in Shandong Company’s operations—such as proposing and implementing a technical upgrade plan, and introducing improvement measures across manufacturing, marketing, and other areas to address existing issues. Concrete advancements have been achieved in wage calculation and performance appraisal within the Manufacturing Department, as well as in equipment maintenance and on-site management.

The machinery company successfully passed in the first quarter. PCS11 The type‑test and certification review for the vertical‑lift multi‑level parking system are underway, and the manufacturing license is expected to be granted shortly. In addition, significant progress has been made in expanding the maintenance and service market, with several new maintenance providers added since the beginning of the year.

In the first quarter, the real estate company completed its liquidation and final cleanup, focusing on the collection and distribution of property ownership certificates while streamlining its workforce. Meanwhile, the chemical company’s overall transfer‑out process has also been largely finalized, with a smooth and orderly transition of personnel.

In addition, several key initiatives of the Group made solid progress in the first quarter. The IPO process is advancing steadily according to the established timeline. During the quarter, the first round of due diligence was completed by Grandall Law Firm and Tianjian Accounting Firm. In the face of… IPO With increasingly stringent review requirements, a more rigorous assessment process, and a relatively low approval rate—leading some companies in the market to voluntarily withdraw—Chairman Chen of the Group promptly convened a meeting of the Group’s leadership team and the IPO task force to conduct an analysis. At the same time, securities firms and law firms were invited to join a joint symposium to assess the situation. The consensus reached was clear: the goal of listing on the stock exchange remains unchanged, and the Group will continue, as before, to pursue its capital‑market strategy in accordance with the established objectives and plan. This decision promptly aligned thinking, dispelled doubts, and clarified the way forward. The “Innovation and Pioneering” and “Safety and Quality Month” initiatives received widespread attention across all subsidiaries and departments. In particular, the “Innovation and Pioneering” campaign saw active participation from top executives at each company, with a level of commitment far exceeding last year. The innovation proposals submitted by various companies and departments were largely tailored to address their specific challenges; especially noteworthy were collective projects covering management innovation, technological advancement, energy conservation and efficiency improvement, workplace safety, and construction quality. These initiatives featured well‑defined countermeasures, quantifiable targets, and data‑driven monitoring. As for the Safety and Quality Month activities… 4 Since the initiative was launched at the beginning of the month, companies and departments have organized a variety of activities, including holding special meetings to discuss implementation plans, conducting on-site training for frontline employees, inviting experts to deliver safety‑related lectures, and carrying out safety drills, among others.

Overall, thanks to the concerted efforts of the Group and its subsidiaries, the first quarter maintained general stability. However, a number of issues remain in our work, with the key problems and shortcomings concentrated in several areas:

First, in terms of key economic indicators, each company within the group recorded negative year-over-year growth, and there is also a lack of balance across the companies.

The second aspect is the issue of human resources. 2018 This year, we faced the most severe recruitment challenges in our history, and several companies within the group are currently experiencing…   The “double shortage” phenomenon manifests itself in two ways: on the one hand, there is a shortage of frontline production workers; on the other, there is an acute lack of high-caliber talent in areas such as technology, management, and marketing.

Thirdly, from the perspective of the Group’s overall performance, while our results remain relatively balanced, we have yet to deliver any truly impressive or standout achievements—whether in economic indicators, key priority initiatives, or project execution. Our performance has been steady but lacks notable highlights, making it increasingly challenging to fully meet our annual targets.

Regarding the next steps, President Ren emphasized several key points:

1 We must firmly adhere to our annual targets, stay on track with key milestones, and heighten the sense of urgency in our work. We should meticulously review first-quarter performance against the plan, paying particular attention to identified shortcomings, weak links, and negative‑growth indicators, and rigorously develop strategies to address them. For example, how can the Machinery Company unleash its full potential in the second quarter, tap into untapped markets, and convert that into concrete orders and tangible production capacity? This calls for proactive, well‑thought‑out measures. Meanwhile, the Zhejiang and Shandong companies are facing less-than‑ideal output targets; they need to adopt a comprehensive approach—enhancing recruitment, streamlining production, leveraging outsourcing and subcontracting, and implementing technological upgrades—while taking decisive actions, managing the timeline effectively, and striving for meaningful progress in achieving their second‑quarter objectives.

2 It is essential to effectively implement the two initiatives—“Innovation and Excellence” and “Safety and Quality Month.” Emphasis should be placed on process control and continuous improvement, with clear quantification of objectives at each stage, rather than merely summarizing results at year’s end. During the course of these activities, we must guard against the misguided mindset of pursuing recognition for its own sake or conducting events simply as a formality. We should not treat “excellence” as the sole goal; this perspective, articulated by the Zhejiang Company, is particularly sound: “Winning awards is not the ultimate aim; enhancing performance is the true objective.” By advancing these initiatives, we can genuinely address shortcomings in our work, substantially boost operational efficiency, and steadily elevate the competencies of our employees.

3 We must further deepen our understanding of, and provide stronger support for, and greater cooperation with the listing process. Over the past period, all companies have actively cooperated with the listing plan, undertaking a substantial amount of detailed preparatory work. At this stage, our main challenges are financial in nature and relatively complex; we need to align our thinking and proceed in accordance with the Group’s listing objectives.

4 The research and development, as well as the business expansion, of Yuegong Green Prefabricated Construction must strive for early results and swift implementation. As everyone can see, Yuegong’s green prefabrication has already taken a solid first step—just as President Xi put it: “Now that the curtain of reform and opening-up has been raised, we cannot afford to close it again!” Once the momentum for green‑prefabricated construction is set in motion, there is no turning back; we must press forward. Yuegong Green Prefabrication carries the hopes for the company’s next phase of growth, and the responsibility is immense. Expectations from all quarters are high, so Zhejiang Company and the Green Building Department must apply greater self‑imposed pressure, further refine our systems, and proactively advance project implementation and contract signing. The leadership of our Group, along with all subsidiaries and departments, must offer unwavering support to this initiative, working closely with the Green Building Department to conduct in‑depth feasibility studies. In principle, as long as proposals are reasonable and viable, we stand ready to move forward.

5 It is essential to maintain ongoing communication and knowledge sharing among the companies, particularly between our two core subsidiaries—the Zhejiang Company and the Shandong Company. Regular exchanges and collaborative learning will help us reinforce one another, drive mutual progress, and jointly elevate our corporate management capabilities while safeguarding our professional qualifications. Each company has its own unique strengths; through frequent interactions between senior leaders and frontline managers, we can leverage each other’s expertise and address areas for improvement. At present, the group’s three principal companies are all led by professional managers. The group’s leadership and the chairpersons of each subsidiary should extend full trust, empower them to take initiative, and encourage innovation. At the same time, we must harness our collective prestige to foster a more conducive working environment, uphold the authority of the general managers, and work together to achieve our shared objectives.

III. Address by Chen Bailiang, Chairman of the Group’s Board of Directors

Chairman Chen delivered an important address, beginning by commending and thanking all companies for their efforts and achievements in the first quarter, while also expressing his expectations and offering encouragement. With regard to the next phase of work, he underscored three key points:

First, now that the Group has clearly and firmly committed to pursuing a path in the capital markets, corresponding efforts to ensure compliant operations have become urgently necessary. All parties must adopt the right perspective on compliance: going public entails costs and trade-offs. When our production and business activities conflict with listing requirements, prioritizing compliance with the listing process is paramount. Of course, in practical implementation, each subsidiary and department must devise feasible solutions that neither jeopardize the listing nor harm the interests of the company, project teams, or other stakeholders.

II. Regarding 2018 The Party-building work of the Group’s Party Committee. 2018 The themes of the annual Party-building work are as follows: First, to carry out a study-and-education campaign on “Studying, Understanding, Mastering, and Implementing the Spirit of the 19th National Congress of the CPC”; second, to align with the realities of the enterprise and, with Party members and cadres at the forefront, advance efforts to facilitate the company’s IPO. All departments and Party branches are required to implement these tasks strictly in accordance with the work plan.

III. Group Treasury Management. One of the nation’s three major tasks is to wage a decisive battle to prevent and defuse financial risks, accompanied by a series of stringent regulatory measures. This sends us an important signal: liquidity will become increasingly tight, and financing costs will continue to rise. In light of this, following multiple rounds of analysis, the Group will… 5 A contingency plan for fund management was issued this month, and all companies are encouraged to cooperate actively.

At the conclusion of the meeting, Chairman Chen expressed his hope that our management team would advance with unstoppable momentum, embracing a spirit that faces challenges head-on and remains undaunted by risks. He urged them to stay resolute in their goals, take bold responsibility, and unite as one, guiding all members of Yuegong forward toward the capital markets and ushering in a new era of glory for the company.