The Golden Age Of Industrial Internet: A Letter To Huicong People

The golden age of industrial Internet.

A letter to HC

Dear HC,

Today is the first day of July, the end of the second quarter of intense work, we began the third quarter of 2019, ushered in the middle of the node. This is a crucial period for us to link up with the past and to carry forward the future. We continue to think in actual combat, move forward in thinking, and keep iterating in advance.

Thinking in iteration: the industrial Internet methodology of Huicong group

The next five to ten years will be the golden age of the industrial Internet. I remember that when I came to work in Huicong group, I studied American companies, and the market value of 2B and 2C was basically the same. There are 86 companies with more than ten billion dollars, 62 from 5 billion to 10 billion dollars, and 248 from 1 billion to 5 billion dollars. Half of 2B company mainly solves the problem of internal management and efficiency, and the other half mainly solves the problem of external transaction and efficiency. Seize this golden age, we will be able to take advantage of the situation and achieve some results.

In January 17th of 2018, we put forward the vision of Huicong group to "become a leading industry internet group in China". Our mission is to "use the Internet and data to empower traditional industries".

For enterprises, the strategy is based on the future thinking, and the vision comes from the vision, and the vision comes from the mission. We also made clear the methodology of Huicong group's industrial Internet, focusing on the vertical industry, with the platform and resources of Huicong group as the support, looking for the best industry expert team by investing and incubating, doing the reconstruction of value chain to improve efficiency, helping customers to do business and realizing the value of HC group.

From the vertical track, we find the law of success.

Based on these considerations, we have chosen six vertical runways. It is gratifying to note that several runways have begun to take shape.

In the first half of the year, China ranked the top in the vertical runway profit ranking. I have been thinking about the phenomenon of "intermediate mode". Why did it run so fast in less than a year?

I think the answer is this: a large margin market has experienced the opportunities of technological progress, and the industry's post market services are relatively heavy and its financial attributes are relatively strong. We have a team of experienced wolf wolves who are well experienced and well aware of the pain in the industry. They have dreams and can fight. We also find some rules, in addition to the supply of products, we need to provide new scenes through the service system, the technical solution system and the financial service system.

More and more complex scenarios need to provide product supply system and service system. For small B, China International mode provides housekeeping services and empowerment. In terms of industry, the mode international is improving the efficiency of the industry. We have done a good job in this vertical industry. In addition, Huicong group has provided a good business system support, investment is not controlled, help no confusion, staff do not make decisions, help brothers independent listing, the team's fighting spirit and kinetic energy is enough to support barbaric growth.

As we all know, Zhongguancun online has just completed the A round of financing. In the past year, the Zhongguancun online team has done a great job. For a company that has been established for 20 years, sometimes restructuring is more difficult. Fortunately, the team led by Xiaodong (president of Huicong group and Liu Xiaodong, chairman of Zhongguancun online) has the determination to start again and has a high spirit to combine the influence of technology media with the thinking of industrial routers.

When we gradually have tens of thousands of small B customers using SaaS connections, when we have 7 million to 8 million independent user visits per day, we have the ability to connect the supply side and the demand side. We use the media to influence people and find people, connect people and service people with small B. We have the ability to provide a complete set of solutions to the supply side. The profit model has also shifted from the single media advertising service to the three wheel drive of advertising, supply chain and finance. In the sinking market, the 4 to the 6 line market service system and supply system are still in a very primitive state. Overseas markets, Southeast Asia and the Middle East low end market have huge opportunities for consumption upgrading. In a few days, I believe Zhongguancun online will usher in a bigger explosion.

Dayawan, Huizhou, for dreams!

The relocation of Huicong group headquarters in Huizhou is not the impulse decision of the leadership. It is a decision made by the board of directors and management repeatedly. Huicong group is a Hong Kong listed companies, but also a Shenzhen and Hong Kong standard company. However, we have no offices in Hongkong so far, which has caused the market value of Huicong group to be underestimated for a long time. Investors do not know you yet, how can they invest in you? Listed companies are platforms for operation and capital. On the one hand, we must persist in doing valuable things, persist in doing the right things, and maintain strategic determination. On the other hand, we also need to make good use of the platform of listed companies.

Hongkong has many excellent new economic companies, such as Tencent, Xiaomi, USA, and Zan, all of which have been recognized by the capital market and have laid a solid foundation for further development of enterprises. Huicong group will set up an office in Hongkong to strengthen communication and exchange with investors.

Huicong group headquarters selection in Dayawan, Huizhou is for the following reasons to make a careful decision:

First, Huizhou has obvious regional advantages and huge space for development. At present, the high-speed rail from Huizhou to Hongkong can reach ten hours an hour, and the next high-speed rail is expected to arrive in less than fifty minutes. The Huicong mansion is located in Dayawan, which is separated from Shenzhen. At the same time, the land area of Huizhou is 11300 square kilometers, compared with the area of 1997 square kilometers in Shenzhen, Huizhou has great development space.

Secondly, we should make use of the resources advantages of Dayawan's head enterprises to focus on hatching and buying plastic products. The purchase of chemical and plastic products is the vertical runway that Huicong group will focus on next. Dayawan's development strategy is the petroleum and petrochemical industry and the electronic information industry. In 2018, the scale of the purchase of chemical and plastic products has exceeded 6 billion yuan, benefiting from the development strategy of Dayawan in Huizhou, combining the business advantages of the head with the internet capability of buying and selling plastics, and building the Internet platform for chemical plastics industry from information, transaction, finance, service to data application, and become more space and operability. On this issue, our ideas have been highly recognized and supported by the leaders of Huizhou and Dayawan. Next, I will work closely with Xi Hong (buy CEO Guo Xihong) team to study the plan and strive to buy the next industry unicorn. Our business logic is to be deep in one industry, thorough, specialized and strong.

Thirdly, improve efficiency and gather resources to help HC to find new growth points. HC group's management radius is too long. We are a small entrepreneurial company. Our team is distributed in cities like Beijing, Shanghai, Hangzhou, Tianjin, Guangzhou and Shunde. We have more than 600 employees in Guangdong alone. How to improve efficiency, gather resources, choose to do deep rather than spread on the surface is a problem that we must face. The home appliances team led by the government (CEO Yu Zhiguo, the world appliance and Industry Company of Huicong group) grew rapidly last year, ranking third in the vertical runway rankings.

Fourth, it is the strategic choice of Huicong group to enhance cooperation between SMEs and Tencent. Huicong Network grew rapidly in 2019. It is the fastest growing member of Huicong group and the highest proportion of cash flow growth. The Pearl River Delta and the Yangtze River Delta are the two most concentrated areas in China's industrial belt. In 2018, the number of individual industrial and commercial enterprises and private enterprises in Guangdong exceeded 10 million, and the added value of the private economy reached 5 trillion and 260 billion yuan, which accounted for 54.1% of the total GDP. There are 8439 new industrial enterprises above Designated Size in Guangdong Province, over 5 Enterprises above Designated Size, ranking first in the country, and the number of state-level high-tech enterprises exceeds 4, and the total, total revenue and net profit rank first in the whole country. 40% of Huicong net's members are located in the Pearl River Delta industrial belt, the layout of the bay area, to serve our customers more closely. Using SaaS connection services to support transactions has become a workbench for small and medium-sized enterprises, and better empowering SMEs, which is in line with the strategic development of SMEs in China. At the same time, the cooperation between Huicong group and strategic partner Tencent is also deepening and strengthening. The advantage of Tencent lies in infrastructure and tools. HC group's advantage lies in customers and scenes. Next, further deepening cooperation with Tencent is the strategic choice of Huicong group. As mentioned above, between Huizhou and Shenzhen, Sun Yi (Huicong group HC CEO Sun Yi) and Xiaolin (Huicong group Huicong net COO Lin Xiaolin) team do not need to fly to Shenzhen any longer, which greatly relieves the hardships of the travel and improves the work efficiency. Huicong group's relocation to Huizhou has provided the basic conditions for further deepening cooperation with Tencent.

Fifthly, the Huizhou government, the Dayawan government and our partner long Guang group have given Huicong group great support and help. From Huicong building to industrial fund, the introduction of tax policy to strategic shareholders has helped us immense. The development of enterprises will always depend on the support of the government and partners. Huarun and Shenzhen metro are in Vanke; the National Academy of Sciences of China is affiliated with Lenovo holdings and Lenovo Group; Tsinghua University and Tsinghua holdings are in the purple light group; Guangzhou city voted and broadcast television express in China Digital. There are numerous successful cases. There is a myth in ancient Greece. A child struggles with a giant. A child can't beat a giant. Every time he has no strength, he will kneel down to kiss his mother earth and gain strength. Finally, the child triumphed over the giant. There is no doubt that HC group has just started its pioneering journey in the industry internet, just like a child. Our government leaders, partners and our customers are the mother earth of HC group.

Therefore, Huicong group will move to Huizhou in 3 to 5 years in the future. It is not only the convergence of resources, but also the so-called preferential policies, but the strategic choice of Huicong group. On behalf of the core leadership of Huicong group, I would like to mobilize everyone here and start from my point of view, and make preparations for moving south of the family to the big bay area of Guangdong, Hongkong and Macau. In addition, the partner long Guang group also provided 100 sets of 20 percent off residential, the government has also provided accounts, children's school and many other support, which provides a sufficient guarantee for employees of Huicong group to live and work in peace and contentment. I also very much hope that everyone will have a happy family life on the way of starting a business. Admittedly, the relocation of more than 1000 people is a big project. Huicong group will migrate in batches. Compared to Beijing, Huizhou will be a better choice in settling down, going to school, living costs, transportation costs and so on. We believe Huizhou can make most families of employees have a chance to become happier.

In the future, if we succeed in business, we believe that HC can live and work in Hongkong, Shenzhen and Huizhou. This will make me and Huicong group management team feel happy and gratified. Live in earnest, work happily, maintain ideals and family happiness, and strive to make Huicong group a trustworthy and respected industry leading Internet company, so that everyone can earn money and live in peace and comfort, which is the eternal pursuit of the board of directors and me.

2019 in the first half of the year, cotton alliance and trillion letter continued to maintain a rapid growth trend. Business grew very fast. From COFCO to Moutai, from PetroChina to Tongrentang, a large number of head customers have laid a good cooperative relationship with us. I and HC group management team also pay high tribute to the team led by Wen Long (cotton CEO Gong Wenlong) and Liu Shan (Zhao Xin shares COO Liu Shan).

Today, I have been working in Huicong group for more than twenty months. The biggest gain in these twenty months is the team. I am well aware that employing people is not about employing people, making money in their business, but in making money. Starting from CEO Yonghong (Huicong group executive director and CEO Zhang Yonghong), with a salary of 1/10, he returned to the two start-up business. From the beginning of President Xiaodong, he always asked himself for the interests of Huicong group. Sun Yi and Lin Xiaolin used their determination in their work. Every weekend I come to my company. Alex (Senior Vice President of Huicong group, CFO Li Weiwang), Lu lawyer (Lu Qingguo, chief counsel of Huicong group), Zhao Hong (Senior Vice President of Huicong group), Wu Lei (executive vice president of Huicong group), Xiao Li (He Xiaoli, chief financial officer of Huicong group) are fighting every detail. Ice morning (Song Bingchen, executive vice president of Huicong group) and Mou Chao (general manager of Zhejiang investment) said that where there is a project there is a home, Lin Hou Bo (Senior Vice President of the group, Lin Houbo, chairman of China Yi Hui Hui) is also working hard in hospital. There are too many examples. Such twenty months are the glorious years of my life. We have gathered a fighting collective. The HC group is still very small today, and does not mean that the future is very small. We are young, we have dreams, we have many lessons and a little experience. Brothers and sisters, let us keep our hearts in mind. We will welcome the bright future of the Internet with the most determined determination.

Chairman of HC group

Monday, July 1, 2019