Adhere to technological innovation, increase investment in technological transformation, and promote the rapid and healthy development of enterprises

Adhering to technological innovation and increasing investment in technological transformation,

Promoting the rapid and healthy development of enterprises

Nantong Liwei Machinery Co., Ltd.

2010 Year 4 Month 23 Day

Respected leaders and entrepreneurs: Good afternoon everyone!

   　2004 In the year, it was initiated by shareholders and acquired the bankrupt enterprise "Rugao City Engineering Machinery Factory" originally located in Jianshe Township, and established "Nantong Liwei Machinery Co., Ltd.". In the initial stage of the company's establishment, in response to the bottlenecks restricting the development of the original enterprise, such as backward technology, aging equipment, and single products, a technological transformation investment plan and goals were clarified: the net increase in cash flow generated by production and operation activities each year will be used for the next year's technological transformation investment, and the total amount of technological transformation investment each year will not be less than 20% of the annual sales revenue. Due to the emphasis on technological innovation and investment in technological transformation, the company's scale has continued to expand. The company's area has expanded from less than 6000 square meters to more than 10 square meters. The production workshops have expanded from the original dozen small tile houses to standardized workshops with an area of 5 square meters. The equipment has expanded from the original few old-fashioned lathes to nearly 200 sets of high-precision large and medium-sized mechanical processing equipment. Fixed assets have increased from less than 2004 in the year 50 yuan to nearly 100 million yuan at present. Sales revenue has also rapidly increased from less than 10 million yuan in the year 2004 to over 200 million yuan in the year 2009 growing healthily at a rate of doubling every year. Technological transformation has added vitality to the enterprise, and scale expansion has demonstrated the enterprise's strength. I would like to take this opportunity to give a brief report to the leaders and entrepreneurs on the company's technological transformation in recent years.

    1 . Increase investment in technological transformation and transform and upgrade traditional products.

Persisting in using advanced technology for technological transformation has improved the production capacity of the company's existing equipment, effectively reducing energy consumption and material consumption, and giving traditional products new vitality. As a traditional product of the company, winches are the foundation and support for the company's development. In order to expand market share and enhance the market competitiveness of products, the company has accelerated the technological transformation of traditional winch products, 2006 In the year, all winch processing equipment was updated and replaced, with advanced CNC processing equipment replacing outdated old machine tools, and advanced mechanical processing equipment replacing manual operations, enabling traditional products to transition from extensive management to intensive management, , from labor-intensive to technology-intensive, , and from producing low-value-added products to high-value-added products. In the year alone, the investment in technological transformation of traditional winch products exceeded 2006 yuan. Through the implementation of multiple technological transformation projects, the specifications and models of winch products have expanded to nearly 1000 specifications and varieties, product quality has also been improved, profitability has continued to grow, and the market share of winches has reached 50 or more. The product market has expanded from domestic to international markets. Currently, the annual sales revenue of winches exceeds 70% 100 million yuan. The company's "Li Ji" brand winches have won the titles of "Jiangsu Famous Trademark," "Jiangsu Brand Name," and "Jiangsu Quality Credit Product." The "High-speed Railway Passenger Dedicated Winch" was rated as a "Jiangsu High-tech Product." It has made significant contributions to national key projects such as national highways, railways, large bridges, wharves, ports, and water conservancy. Traditional winch products have become the company's foundation for leapfrog development and the economic cornerstone of the company's rapid development. 1个亿。公司“力机”牌卷扬机获得“江苏省著名商标”、“江苏名牌”和“江苏省质量信用产品”称号，“高速铁路客运专线专用卷扬机”被评为“江苏省高新技术产品”。为国家高速公路、铁路、大型桥梁、码头、港口、水利等国家重点工程作出了巨大的贡献，卷扬机传统产品成为了公司跨越发展的基础产品，是公司飞速发展的经济基石。
    2 . Increase investment in technological transformation and expand the development of leading products.

2007 In the year, through market research, the company identified the large demand for gold mine winches in South Africa and established the "Export Gold Mine Winch" technological transformation project, investing 1200 yuan to purchase large hobbing machines, double-column vertical lathes, and other mechanical processing equipment 33 sets. The investment, production, and profit generation were achieved in the same year, 2007 In the year, the production of export gold mine winches reached 200 sets, achieving sales revenue exceeding 5000 yuan, becoming a key product for the company's development and supporting its rapid growth. At the same time, seizing the opportunity of shipbuilding as the leading industry in our city, the company newly acquired 80 mu of land in Da Yin Village, Rucheng Town, to implement the technological transformation project for marine winches. The total investment in the project is 8000 yuan, including equipment investment of 6000 yuan and the addition of 60 sets of new mechanical equipment. A new standardized production workshop of 4 square meters was built, forming an annual production capacity of 1000 sets of marine winches, with annual sales exceeding 2 100 million yuan. The project 2007 Year 8 began construction in the month of 2008 Year 5 and was completed and put into production in the month of. The produced hydraulic anchor windlasses, large offshore platform deck cargo winches, and marine towing winches are supplied to large shipyards at home and abroad, becoming a key supplier to many world-renowned shipbuilding companies.

3 . Increase investment in technological transformation and innovate and develop new products.

The company pays attention to technological innovation and progress, cooperating with Shanghai Jiao Tong University, CSSC 704 Research Institute, Jiangsu University of Science and Technology, and Jiangsu University to jointly develop new products leading the development of the shipbuilding industry, such as large-tonnage marine winches, mooring and positioning winches for offshore operation platforms, and ship-moving winches, 2009 In the year, with a total investment of 1 100 million yuan, a new area of 60 mu was acquired east of the new factory area in Da Yin Village for the "Offshore Operation Platform Mooring Automatic Positioning System" project. This project is included in the Jiangsu Provincial Key Technological Transformation Project. Currently, the basic construction of the project has been completed, and large-scale mechanical processing equipment is being prepared for installation. After the project is completed and put into production, it can produce 60 sets of large-series mooring and positioning winches annually, 40 sets of towing winches, 60 Platform sets, anchor windlass 300 Platform sets,   Year-on-year increase in sales revenue 3 hundreds of millions, providing sufficient impetus for the company's development.

    Technological transformation is an eternal theme for the survival and development of enterprises, and it is a shortcut to accelerate structural adjustment and transform economic development from "fast walking" to "fast running." In the future, we will use technological transformation as a breakthrough point, relying on science and technology, and taking improving product quality and meeting customer needs as the investment direction for technological transformation. With the development goal of "leading the way and pursuing excellence," we will further strengthen the company's independent innovation capabilities, increase effective investment in technological transformation, gradually form scale advantages, technological advantages, quality advantages, and competitive advantages, and promote the healthy and rapid development of the company.

    First, establish a scientific development concept to promote sustained and sound economic development. We will use the scientific development concept to guide project development and feasibility studies to avoid mistakes in project decision-making; continuously strengthen market research, conduct comprehensive investment decision analysis, find the right direction for technological transformation investment, and reasonably decide each year 1 up to two technological transformation investment projects.

Second, establish a sense of crisis and accelerate the pace of investment in technological transformation. In view of the existing problems in the company's development, such as small scale, weak enterprise technological innovation capabilities, and serious lack of technological investment, we fully recognize the sense of crisis and urgency in the development process. In the fields of technology and industry with competitive advantages, strong industrial relevance, and good market prospects, we will prioritize a number of projects and products for key investment to improve the technological content and overall competitiveness of products.
    Third, establish an awareness of seizing opportunities and accelerate the promotion of key projects. Projects are the carriers of technological transformation and are key links and work priorities for the rapid development of enterprises. Opportunities are always reserved for those who are prepared. We will make full use of existing advantages and opportunities to increase investment in technological transformation. We are currently in cooperation talks with PetroChina, Nan Gao Gear, and Xu Coal Group to conduct collaborative product development. If the cooperation is successful, the additional investment will exceed 3 hundreds of millions, and the company's scale will double.

  Fourth, establish an advanced thinking awareness and increase research and development of new technologies.   We know that doing business is like climbing a mountain. We must establish an advanced awareness and a sense of crisis. Only by always being at the forefront of the industry and leading the development of the industry can the enterprise develop and grow. In the future, the annual investment in technological research and development will exceed 6% of the annual sales, and the total annual investment in technological transformation will exceed 20% of the annual sales revenue. Through large investments in technological research and development and technological transformation, we will promote the great development of the enterprise and strive to 5 build a 1 billion-scale enterprise in the year!

Thank you!