Review of Board Management of Jingwei Textile Machinery in 2020

The business review of Jingwei Textile Machinery (000666) in the first half of 2020 is as follows:

I. Overview

In the first half of 2020, affected by the pneumonia epidemic in COVID-19, the world economy declined deeply, international trade and investment shrank sharply, the international financial market was turbulent, and international exchanges were limited. Trade protectionism and unilateralism prevail, and geopolitical risks rise. Since the discovery of novel coronavirus in 1 month, people's livelihood economy has been greatly affected, and industrial development is facing great difficulties. It will be an important way to ensure national economic security and plan new growth space to establish a new development pattern with domestic big cycle as the main body and domestic and international double cycles promoting each other. Affected by the above macroeconomic changes, the global textile value chain has been greatly impacted, the proportion of order cancellation and postponement has increased, the global textile turnover is expected to drop by 30-50%, and the prospect of industry recovery is not optimistic. Affected by the sharp drop in export orders, domestic textile enterprises are seriously under-started, new projects are suspended, and the willingness to update equipment is reduced. Since the beginning of the year, under the influence of stricter regulatory environment, downward market interest rate and continuous loose liquidity, the pressure of financial trust business exhibition industry has been increasing, non-standard assets have been continuously compressed, the yield of new portfolio has decreased, the trend of active management transformation has been obvious, and uncertainties in business development have increased.

During the reporting period, under the strong leadership of the board of directors, the company made unremitting efforts to build a textile supply chain system and promote the high-quality development of financial trust business in the face of difficult situations. In the first half of the year, the company achieved a total operating income of 3.665 billion yuan, a year-on-year decrease of 26.55%. The net profit attributable to shareholders of the parent company was 1.7 1 billion yuan, down by 5 1.66% year-on-year, which pointed out the direction for the company to recognize the business form and implement the work deployment.

Textile machinery business

(a) scientific epidemic prevention, orderly resumption of work, highlighting the political responsibility of central enterprises.

After the outbreak, the company set up a leading group for prevention and control work step by step to grasp the internal epidemic dynamics of the company and fully carry out material deployment and emergency support; Handle the relationship between epidemic prevention and control and production and operation, and return to work in a scientific and orderly manner. Actively practicing social responsibility and actively participating in epidemic prevention donation, Zhongrong Trust, a subsidiary, established epidemic prevention charity trust in time, which made contributions to epidemic prevention and anti-epidemic work. Jingwei Intelligent New Technology Company, a subsidiary company, has successfully developed fully automatic N95 high-end stereo mask machine and semi-automatic plane mask machine in a short time, which has provided strong material support for national epidemic prevention and control. The company was included in the list of key enterprises (material production) for epidemic prevention and control by the Ministry of Industry and Information Technology and the National Development and Reform Commission, which reflected the strength and responsibility of the national team of central enterprises.

(2) Continue to promote transformation and upgrading and innovate business models.

With the consensus of many governments, a number of smart textile industrial park projects are going through the examination and approval procedures, some of which have been approved and are attracting investment, providing a carrier for business model innovation. To tap the value of industrial chain, it is planned to open up yarn sales channels and improve customer service ability by setting up professional companies. Study yarn business standards that meet the needs of users, negotiate with professional institutions to plan business models, and explore the construction of industrial Internet service platforms.

(3) Meet the difficulties of market development and take measures to compete for orders.

(4) Adhere to the drive of scientific and technological innovation and promote product research and development.

Promote the construction of intelligent textile factory, and complete the declaration of an enterprise100000 spindle project, laying a solid foundation for improving the market demonstration effect. Determine key research topics and key technological breakthroughs to consolidate and strengthen the competitive advantage of textile machinery. VCRO automatic winder has completed a number of key technological innovations, and the product technology has been greatly improved through the appraisal of scientific and technological achievements.

Organize CREO and EPLAN training, combine with PLM promotion, complete design drawing conversion, and strengthen the application effect of design software integration. Organize professional organizations to investigate the company's manufacturing system and build a two-level collaborative manufacturing management system. A number of patents were granted in the first half of this year.

(5) Improve the construction of professional platforms and steadily improve service capabilities.

The procurement center adjusts the supply channels and coordinates the supplier resources to ensure the normal operation of the supply chain during the epidemic; Optimize the supplier team and improve the concentration of suppliers, and the number of suppliers has dropped significantly compared with the beginning of the year; Carry out life cycle cost management and promote the transformation from price management to cost management. The financial management platform standardizes the content of business financial work, establishes the working mechanism of project management, and promotes financial management to extend to the front end of business; Adhere to budget orientation, reasonably control expenses and reduce the number of bank accounts. Improve the application depth and scope of informatization capability, determine the module division and functional boundary of cotton ERP development, complete the overall business plan design, and continuously improve the integration capability of industrialization and informatization.

(six) to strengthen the management and control of enterprise operation, and strive to improve the quality and efficiency.

Faced with the operational difficulties in the first half of the year, the company strengthened its business monitoring, analyzed the current situation of enterprises one by one, discussed business strategies and solved enterprise problems. Yichang Textile Machinery, a subsidiary, implemented YPS management promotion plan to promote lean production. Wuxi special parts continued to carry out automation transformation, and the results of cost reduction and efficiency improvement appeared. Strengthen the coordination of production and marketing to ensure the normal delivery of contracts during the epidemic period. Formulate legal guidance and legal popularization work plans to ensure that all enterprises operate according to law. Strengthen risk prevention in the process of business model innovation, and initially build a customer credit evaluation system. Promote the optimization of personnel structure and reduce general management and logistics personnel. Promote the vertical management of audit work and expand the breadth of audit vision and the depth of audit thinking.

finance

During the reporting period, Zhongrong Trust strengthened risk management and control, and no new risk items were added due to the epidemic, and its active management ability was further improved. At the end of June 2020, the total scale of trust assets was 783.230 billion yuan, an increase from 765.452 billion yuan at the beginning of the year. In the first half of the year, Zhongrong Trust achieved a total operating income of 2.337 billion yuan, an investment income of 80 million yuan, totaling 24/kloc-0.70 billion yuan, a total profit of 80/kloc-0.0 million yuan, a net profit of 66/kloc-0.0 million yuan, and the capital adequacy ratio continued to meet the standards.

In terms of business development, Zhongrong Trust has continuously improved its active management capabilities, continuously promoted business transformation, increased support for high-quality private enterprises and small and micro enterprises, and achieved good development in innovative business areas such as asset securitization, consumer finance and supply chain finance. Traditional financing businesses such as industrial and commercial enterprises and infrastructure construction have not diminished, effectively supporting the development of the real economy; Breakthroughs have been made in innovative businesses such as inclusive finance and Family Trust, and the business scale has grown steadily. In terms of risk management and control, Zhongrong Trust actively responded to regulatory requirements, adapted to changes in the market environment, updated risk management systems and operational norms from multiple levels, and improved the level of risk management and control in the whole business life cycle.

In terms of compliance management, Zhongrong Trust comprehensively improved the requirements of compliance exhibition industry, strictly carried out business compliance management, timely interpreted laws and regulations and issued risk warnings, and continued to carry out compliance publicity and training to improve the level of compliance management. In terms of product distribution, Zhongrong Trust provides diversified, customized and characteristic services to customers by establishing a wealth management information platform, and takes various measures to carry out special investor education to effectively protect the legitimate rights and interests of investors. In addition, Zhongrong Trust actively builds a financial technology exhibition platform, and realizes online whole-process management of products and operations from product reservation and video signing. During the epidemic, Zhongrong Trust obtained project information through video connection and public data analysis, and assisted on-site visits through off-site teams, intermediaries, cooperative financial institutions and other channels, which improved the financial service support capability.

Two. Risks faced by the company and countermeasures: the decision-makers and management of the company focus on risk prevention and control in key areas, strengthen the capacity building of comprehensive risk management, ensure that there are no major potential risks in the company, comprehensively apply measures such as internal control construction, rule of law construction and internal audit to carry out risk management, and promote the effective combination of risk prevention and control with production and operation and enterprise management. Let the awareness of risk prevention and control be deeply rooted in the hearts of the people, turn the company's will into individual actions, and truly implement the comprehensive risk management work. 1. Macroeconomic Risks The outbreak of COVID-19 epidemic has accelerated the pace of global textile industry transfer and structural adjustment. The recovery of textile machinery international market will also be affected by the global epidemic, except for some sub-industries, the overall demand of textile industry is insufficient. At present, domestic economic development is facing unprecedented challenges. The CPC Central Committee has made a major decision to do a solid job in "six stabilities" and implement "six guarantees". Various localities have introduced measures to help enterprises and policies to stimulate consumption to boost enterprise confidence and release consumer demand. With the effective prevention and control of the epidemic, the domestic demand market gradually picked up, but the recovery rate of consumption was less than expected. Under the policy environment of stricter supervision, the trust industry will still bear certain development pressure. As an important equipment supplier in the textile industry, the company will calmly cope with the downward pressure of the economy, optimize the business layout, focus on customer needs and market trends, and strive to upgrade in transformation and upgrading, market expansion, product research and development, operation control, reform and restructuring, and incubate new profit growth models. 2. The development of product and R&D risk textile industry is facing the "double squeeze" of "re-industrialization" in developed countries and "accelerated industrialization" in developing countries. At the same time, under the trend of intelligent textile equipment reform, R&D strength plays an increasingly prominent role in the competition of textile machinery industry. Enterprises that can break through professional technology in many sub-sectors and provide equipment for the whole process of the industrial chain will have greater scale advantages. In the future, the textile machinery industry will show a polarized development trend. On the one hand, "big and comprehensive" leading enterprises will lead the development of the industry, on the other hand, "small and refined" enterprises will focus on a few subdivided products and provide professional services, and the industry concentration will be greatly improved. Faced with the above-mentioned complex industry development trends, the company has relatively comprehensive advantages in R&D capability, supply chain system, sales channels, market reputation and management capabilities, but there are also problems such as decision-making efficiency, personnel layout and quick response. The company will persist in scientific and technological innovation, improve the technical level of products, strengthen process planning, take quality and service as a breakthrough, promote the construction of intelligent manufacturing system and enhance the conversion rate of scientific and technological achievements. 3. Market Risk In the first half of the year, with the global spread of the COVID-19 epidemic and the intensification of Sino-US trade disputes, the domestic and international textile and clothing market demand dropped significantly, the investment confidence and ability of the textile industry chain weakened, and the fixed investment scale of textile machinery shrank sharply, especially the impact on overseas textile machinery markets. With the closure of the country, overseas promotion, overseas installation and overseas logistics have been seriously affected. In order to effectively cope with the severe market situation, the company strengthened the vertical management of the marketing system and the marketing of major complete sets of projects. Coordinate and help overseas customers to extend the letter of credit, rely on localized employees to follow up the project of model factory, pay a return visit, recommend and serve key customers, and stabilize the inherent overseas market. On the basis of completing the turnkey project, actively participate in and actively explore the customer base in emerging markets. 4. The contradiction between human resources and the sustainable development of enterprises in human resources risk companies is more prominent, with insufficient reserves of scientific and technological talents, high-skilled talents and compound management talents, and unreasonable age and structure; The total number of employees in the enterprise is on the high side, and redundancy and lack of employees coexist, which is difficult to meet the needs of the company to create a world-class enterprise. At the same time, the professional management and service capabilities of human resources such as salary distribution, performance management and personnel training need to be further improved. To realize the optimization and adjustment of personnel structure, it is necessary to increase the proportion of front-line personnel such as technology research and development, marketing, manufacturing and installation services, and provide platforms and opportunities for talent growth. Focus on cultivating compound talents with excellent quality and excellent business, vigorously carry forward the "artisan spirit", straighten out the career development path, and strengthen the training of leading experts in the industry. Improve the career growth mechanism of the all-round development of the talent team and form a vibrant and energetic employment environment. 5. Investment risk companies implement the new development concept, change the development mode, make efforts to fill shortcomings and improve weaknesses in accordance with the national industrial policy, make good use of measures such as mergers and acquisitions and cooperation around the spirit of promoting the integrated development of advanced manufacturing and modern service industries, and take the development of "textile machinery+finance" as the measure to optimize the business structure and improve the industrial chain. In this process, we should focus on the main business, strictly implement the investment management regulations, do a good job in pre-risk assessment such as project establishment and feasibility study, strictly implement control measures such as approval, filing and implementation, and conduct post-investment assessment in time. Strengthen the daily supervision of investment projects, strengthen the standardized management of shareholding enterprises, fulfill the responsibilities of investors, and ensure the realization of investment objectives and the preservation and appreciation of investment projects. 6. Financial business and policy risk Financial trust business is closely related to the national macroeconomic and financial policies, and is closely related to the business environment and economic cycle of the industries involved in trust assets. With the fluctuation of industrial economy and the constant adjustment of macro-financial policies, the profit space of financial trust industry is also shrinking. At the same time, trust business involves a wide range of industries and customers, and there are risks and losses caused by emergencies. Although Zhongrong Trust has established relatively perfect risk control measures, it still cannot rule out the credit risk of individual projects due to poor management of debtors. Under the background of tightening financial supervision, the development of trust industry will continue to be under pressure. After the official introduction of the new regulations on asset management, the challenge of transforming the old and new models of the trust industry is prominent, and the traditional financing business is facing challenges. Innovative business and original business still need to be cultivated vigorously. In this regard, Zhongrong Trust will firmly believe in transformation and development, continue to further promote business innovation, enhance active management capabilities, improve compliance risk management and control, and continue to provide comprehensive financial services to the market.

Three. Analysis of core competitiveness (I) Enterprise resource integration ability As a state-owned listed company under SINOMACH, the company has the ability to manufacture cotton spinning equipment and service, and owns financial enterprises such as Zhongrong Trust. In the process of production and operation, the company has established extensive and stable cooperative relations with target users, financial institutions, universities and scientific research institutions, and material suppliers. , and has industry influence in obtaining key resources such as customers, capital, talents, technology and materials, and has strong resource planning and integration capabilities. (2) Core competence of textile machinery business 1. The independent innovation ability of science and technology company adheres to the research and development direction of textile machinery with digital intelligence, high speed and high efficiency, reduced labor, environmental protection and intrinsic safety, and vigorously cultivates core technologies and high-end products with independent intellectual property rights. By setting up research institutes overseas, establishing R&D institutions with universities, user enterprises and suppliers, and accelerating the research on key core technologies and short board technologies, the company has made a breakthrough in the intelligent technology of cotton spinning complete equipment and launched a new comprehensive spinning solution. The company's information equipment and applications cover a wide range, and big data analysis and guiding operations have achieved remarkable results. The development of science and technology promotion and management promotion has strengthened the company's backbone position in domestic textile machinery manufacturing enterprises, and the influence of overseas textile machinery market has also been continuously improved. 2, product manufacturing and marketing capabilities The company has a complete production organization system and quality control system, advanced processing and manufacturing capabilities, and controllable quality assurance processes. The company has established a strong textile machinery sales and service network, with remarkable advantages in complete sets of products, profound brand accumulation and wide customer coverage. By expanding the connotation of complete cotton spinning services, expanding the construction of intelligent factories, enriching the product categories of spare parts sales centers and online spare parts shopping malls, promoting the research on yarn online detection technology, improving the "comprehensive solution for textile mills" and strengthening the after-sales service guarantee, the company has deepened its transformation from a "manufacturing" enterprise to a "manufacturing service" enterprise. 3. Information application integration ability The company aims at building a digital enterprise, adheres to the idea of unified planning and centralized construction, and has a complete information platform architecture, integrated system sharing, unified data standards, standardized business processes, and comprehensive information management covering all business fields, which has become an important platform and grasper for company management and control. At the same time, informatization continuously expands its connotation and extension, continuously meets the needs of deepening and refining management internally, supports management upgrading and innovation, strengthens collaborative interaction with suppliers and customers externally, enhances supply chain capabilities and customer service level, and supports business model transformation. With the help of information technology, the company transforms its management ability into competitive ability and competitive advantage in business operation, risk prevention, management decision-making, collaborative efficiency and group management and control. (III) Core Competence of Financial Business The comprehensive strength of Zhongrong Trust, a holding subsidiary of the company, ranks in the forefront of the trust industry. Its main business indicators have always been in the first echelon of the industry, and it has won the highest rating in the industry for many years. It is the first trust company in China to obtain the credit rating of an international rating agency. In order to become a domestic first-class comprehensive asset management institution with comprehensive business optimization, greatly improved management and continuous innovation, Zhongrong Trust has continuously strengthened its own construction. By establishing an effective restraint and incentive mechanism and partner mechanism, the business department can be given a high degree of autonomy in business development and department setting, which can stimulate the initiative and creativity of the business team to the greatest extent; The trust business team has high market sensitivity and can quickly capture potential risks and opportunities in the market. At the same time, the trust management team can quickly make decisions and promote implementation, and has strong product distribution ability and investment and research ability; A perfect wealth center has been established, and wealth institutions have been set up in major cities across the country, with strong distribution capacity and fast distribution speed; A professional investment and research team has been set up, covering capital market, real estate, infrastructure, alternative assets and other formats, which can provide research support for all business lines, discover market trends in time through collaborative exchanges with educational and scientific research institutions, and better control the direction of product innovation; It has a relatively complete risk control system, established and strengthened the project review meeting mechanism, rationally arranged all kinds of resources in the field of risk prevention, and matched the elements from the aspects of institutional setup, talent introduction, system construction and system support, forming a comprehensive compliance management and an all-round and matrix risk prevention and control system.