Miniature development of domestic automotive fastener industry

Recently, China's trade friction with the United States has increased. Trade frictions reflect the fact that China's industrial manufactured goods exports are undergoing tremendous resistance while the export of resource products is facing heavy pressure to be forced to expand.

Due to the sluggish world economy and the tightening of domestic macro-control policies, the domestic economic growth has slowed down, combined with adverse effects of inflation, RMB appreciation, rising labor costs, faster frequency of steel price fluctuations, and difficulties in the financing of small and medium-sized enterprises. It is difficult for companies and a considerable number of companies to be independent. According to Luo Baihui, Secretary-General of the International Model Association, Jin Yi Industrial Co., Ltd. is an ordinary machinery manufacturing industry - machinery parts sub-sector. Business scope: production and sales of fasteners, tungsten steel molds, hardware products, steel wire drawing, railway fasteners, non-quota licenses, acquisition and export of non-franchised goods, research and development of fastener products, and the above The wholesale and import and export business of products (involving quotas, licenses, commodities subject to special regulations and management) shall be handled in accordance with the relevant regulations of the State, commission agencies (excluding auctions). The main products include bolts, nuts, screws, screws, iron buckle products and fine lines. After experiencing rapid growth in 2010, due to factors such as the deceleration of high-speed railway construction, Wenzhou “7.23” rear-end train crash and the frequent occurrence of Beijing-Shanghai high-speed rail accident in 2011, the company’s anticipated risk from market changes at the beginning of the year Become a fact. Since the second quarter of the second quarter of 2011, the company has directly affected the progress of the company's participation in tenders and tenders for high-speed rail fasteners. It has a direct impact on the progress of delivery and revenue settlement of the company's high-speed rail fasteners, and has a direct impact on the company's second half and even the whole year. The production and operation goals are completed on schedule. The company was squeezed by both the market and the cost, and encountered unprecedented difficulties and challenges. In the face of unfavorable business environment, the company closely focused on the working principles set by the board of directors at the beginning of the year, resisted market pressure, overcome many difficulties, and adopted practical and effective countermeasures, including timely adjustment of business strategies, accelerated differential product development, and strengthened internal refinement. Management, and strive to further enhance the company's competitive advantages from new product development, sales channels, cost control, product quality, logistics and distribution services, although the company's overall production and operation have basically maintained the smooth operation, and consolidate the position of the industry's leading enterprises. The company's operating performance for the year has experienced a significant decline. In 2011, the company achieved total consolidated business revenue of 2.703 billion yuan for the year, total profit of 91.826 million yuan, net profit attributable to shareholders of listed companies net of non-recurring gains and losses of 64,837,700 yuan, a decrease of 10.62% over the same period last year. 69.20%, and 72.02%.

Analysis of Sales of Main Products in 2011 (1) In the reporting period, the main business income of the parent company in China totaled 1,484.66 million yuan, a year-on-year decrease of 29.79%, accounting for 77.64% of the parent company's main business income of RMB 1,192.23 million during the reporting period. . Among them, 8.4454 million yuan for fasteners were generally completed, a year-on-year increase of 13.04%; and 640.12 million yuan for high-speed fasteners was completed, a year-on-year decrease of 53.19%.

According to the quarterly analysis, it was completed in the first quarter of 501.39 million yuan, an increase of 105.00% year-on-year; of which, fasteners generally completed 194.12 million yuan, an increase of 69.51% year-on-year; high-speed rail fasteners completed 306.27 million yuan, an increase of 136.37%. In the second quarter, the company completed a total of 428.59 million yuan, a year-on-year decrease of 32.50%; of which, 294.61 million yuan were generally used for fasteners, an increase of 3.52% year-on-year; high-speed rail fasteners were completed at 179.98 million yuan, a year-on-year decrease of 54.56%; , 6.5 million yuan, a year-on-year decrease of 45.10%; of which the general fasteners completed 21,413 million yuan, an increase of 10.41%; high-speed rail fasteners completed 10,652 million yuan, a year-on-year decrease of 72.69%; fourth quarter completed 23,503 million yuan , a year-on-year decrease of 63.92%; of which the general fasteners completed 186.68 million yuan, a year-on-year decrease of 5.48%; high-speed rail fasteners completed 48.35 million yuan, a year-on-year drop of 89.35%.

According to the semi-annual analysis, the first half of the year was 924.98 million yuan, an increase of 5.68% year-on-year; of which, the fasteners generally completed 443.73 million yuan, a year-on-year increase of 24.77%; and the high-speed rail fasteners completed 485.25 million yuan, a year-on-year decrease of 7.29%. . In the second half of the year, it was 555.68 million yuan, a year-on-year decrease of 55.02%; of which, general fasteners completed 400,081,000 yuan, an increase of 2.39% year-on-year; high-speed rail fasteners completed 154.87 million yuan, a year-on-year decrease of 81.65%.

(2) In the report period, the foreign main business income of the parent company completed a total of 427.57 million yuan, an increase of 17.81% year-on-year, accounting for 22.36% of the parent company's main business income of 1.909963 billion yuan during the reporting period.

Quarterly analysis: In the first quarter, RMB 96.8 million was completed, representing a year-on-year growth of 26.42%; In the second quarter, it was RMB 111.42 million, representing a year-on-year increase of 23.94%; In the third quarter, it was RMB 107.79 million, an increase of 0.25% year-on-year; 11,156 million yuan, an increase of 25.42% over the same period last year.

According to the semi-annual analysis, it completed RMB 208.22 million yuan in the first half of the year, an increase of 25.08% year-on-year; and RMB 215.35 million yuan in the second half of the year, representing a year-on-year increase of 11.65%.

During the reporting period of technological innovation in 2011, the company continued to increase technical innovation, technological innovation and new product development. The annual implementation of the furnace for spherulization furnace, continuous heating furnace for heating and gas heating, renovation and transformation of nut forming equipment, and introduction of life cycle management in the United States 4 technological transformation projects such as systems, a total planned investment of 36.1 million yuan, and 30.55 million yuan completed by the end of the year, with an 85% achievement rate; 44 employee technical improvements were actively carried out, involving equipment technology, die life, production processes, system programs, etc. By the end of the year, 30 projects had been completed and the rate of completion was 68%. There were 305 new product developments throughout the year, and the amount of new product orders was more than RMB 6 million, of which "spheroidized annealed alloy steel wire" and "stabilized high-strength steel structure connection" "Two items were identified as "provincial industrial new products." In the year, the company obtained 11 utility model patent certificates, and two invention patents entered the substantive examination stage. In the whole year, the company applied for 1 invention patent and declared 19 utility models, among which Has been granted 6 patent notices, received 11 acceptance notices.

Energy Saving and Emission Reduction in 2011 During the reporting period, the company's industrial comprehensive energy consumption was 36,218.12 tons of standard coal, which was a year-on-year increase of 0.35%; the comprehensive energy consumption per million yuan output value was 0.15965 tons of standard coal, which was a year-on-year increase of 0.03131 tons of standard coal; industrial wastewater discharge and COD emissions Each emission reduction was 12%, and emission reductions were both reduced by 4.2% year-on-year; industrial solid waste production was reduced by 16%, which was the same level of the previous year; water reuse rate was 38%, which was the same as that of the previous year. During the reporting period, the company passed the ISO14001 environmental protection system certification and was awarded by the Jiashan County People's Government as “Advanced Unit for Pollution Reduction in the Jiashan 11th Five-Year Plan Period.”

The issuance of short-term financing vouchers by the company During the reporting period, the company successfully issued short-term financing bills with a size of RMB 450 million and a term of one year. The issuance interest rate was 5.6%. Short-term financing bills are a type of securities issued by non-financial companies in the interbank bond market. They have the characteristics of short issuance period, no guarantee, simple procedures, flexible methods, and low financing costs. The successful issuance of this short-term financing bill has changed the company's single financing channel and provided a strong financial guarantee for the future strategic transformation and development of the company.

The company obtained relevant honors report period, the company has been awarded "China Machinery 500 Enterprises" by the China Machinery Industry Enterprise Management Association for 9 consecutive years, and was named "China's industry leader" for seven consecutive years by the China Industry News and many other media; At the same time, Jiaxing Municipal Party Committee and Municipal Government awarded the “Advanced Enterprise with Strong Development and Strong Party Building in Jiaxing City”, and was awarded “Jiaxing Foreign Exchange Honest Construction Type A Enterprise” by the People's Bank of Jiaxing City and the Branch of the Foreign Exchange Management Center, and was Jiashan County Committee and County. The government awarded the “Top Ten Foreign-funded Enterprises in Jiashan County”, “Informatization Demonstration Enterprise in Jiashan County” and “Top Ten Emerging Industrial Development Model Enterprises in Jiashan County” and other honorary titles.

Prospects for the future development of the company 1. About the overall development trend of the industry In the coming years, especially in 2012, we believe that the state will continue to benefit China's economic and social development, accelerate the transformation of economic development patterns, and promote economic development. Basic components - the better development of the fastener industry. Since 2009, national and central ministries and commissions have successively promulgated and issued the “Adjustment and Revitalization Plan for the Equipment Manufacturing Industry” and the “Industrial Rejuvenation Plan for Mechanical Components and Components Industry”, “12th Five-Year Plan for Basic Mechanical Components, Basic Manufacturing Processes and Basic Materials. "Development Plan" and "The 12th Five-Year Development Plan for the Machinery General Parts Industry" etc. From these planning and implementation opinions, it can be clearly seen that the state will pay more and more attention to the development of the mechanical basic parts industry. For example, the implementation plan for the revitalization of the mechanical basic parts and components industry pointed out: “The basic mechanical parts (mainly: bearings, gears, molds, hydraulic parts, pneumatic components, seals, fasteners, etc.) are indispensable for the equipment manufacturing industry. The important components directly determine the performance, level, quality and reliability of major equipment and main products, and it is the key to realizing the transformation of China's equipment manufacturing industry from big to strong." The “Adjustment and Revitalization Plan for the Equipment Manufacturing Industry” pointed out: We must “combine the development of the whole machine with the improvement of the basic supporting level. Efforts should be made to realize the independence of major technology and equipment and drive the development of basic ancillary products. Improve the technical level of basic parts and develop special raw materials, and reverse The basic supporting products mainly depend on the import situation." The Twelfth Five-Year Development Plan for Machinery Basics, Basic Manufacturing Processes and Basic Materials pointed out: “The Twelfth Five-Year Plan is an important period of strategic opportunities for realizing the transformation from a large equipment manufacturing country to a strong equipment manufacturing country, and the development of a “three-base” industry to improve product quality. It is crucial to strengthen supporting capabilities and we must profoundly understand and accurately grasp the new changes and new features of the "three-base" industrial development environment, seize the historical opportunities, and achieve leapfrog development." The 12th Five-Year Development Plan of the Machinery General Parts Industry pointed out: “The situation that basic parts are seriously lagging behind the development of the host has caused the country’s great attention. The high-end development of parts and components has become a strategic issue for the development of the equipment manufacturing industry, and the mode of development needs to be transformed. ". It is required to “break through a batch of key manufacturing technologies for basic parts and components, and product technology levels reach the international advanced level in the early 21st century”, which creates a favorable policy environment for the development of basic components and parts. At the same time, the country has also issued dozens of industry adjustment and revitalization plans, as well as seven strategic emerging industry development plans, and more basic components - fastener industry provides a broad market prospects, especially High-speed railways, heavy-load railways, urban rail transit, highways, UHV power transmission and distribution, nuclear power, wind power, solar energy, aerospace, environmental protection, and major projects related to the national economy and people's livelihood, infrastructure, and national defense construction supporting equipment manufacturing needs The various types of fastener products provide a huge space for market development, and they also put forward higher requirements for the quality and level of their growth.

After years of explosive growth in China's auto market, it is normal to return to rationality and enter the adjustment period. Luo Baihui believes that although the development speed of the automobile market will slow down in the next few years, it does not mean that the domestic auto market has entered a down channel, but is returning to normal. According to the China Association of Automobile Manufacturers, China's auto production and sales will increase by approximately 2.45% year-on-year in 2011. The growth rate of production and sales was the lowest in 13 years. At this point, the Chinese auto market entered a stage of steady and rational growth. It is expected that the inflation situation in China will be more modest in 2012. High inflation and tightening control are the basic restraining forces for repressing the auto industry. The macro environment of the automotive industry in 2012 is expected to be much better than last year, 2011-2012. The year will be the peak period for the launch of new capacity in the Chinese automobile market. Therefore, the Chinese auto market in 2012 will be better than in 2011, although the growth rate has fallen sharply compared with the period of rapid growth in previous years, but as the world's largest automobile production and sales country, its development has a driving effect on the fastener industry. Still very significant. Based on the current automotive high-end fasteners still unable to meet the needs of the automotive industry and due to the "globalization" procurement of auto parts and multinational companies' "localization" strategy, automotive fasteners will have huge maintenance and new car market demand. For this reason, Luo Baihui believes that the next five years will surely be a period of rapid development of automotive fasteners, and will also bring bright prospects for the fastener industry to expand the market.

The characteristics of the industry's own development In recent years, the development of the industry itself has basically shown a trend of development in terms of specialization, clustering, and collectivization.

(1) As far as specialization is concerned, due to the large quantity, wide range, and wide variety of fastener products, it is more appropriate to adopt the development mode of specialized production and social collaboration. Products can be produced through specialization and mass production, which can not only achieve the goals of becoming bigger, stronger, finer, saving materials, reducing consumption, improving quality, and improving efficiency, but also the more specialized the products, the wider the market.

(2) In terms of clustering, in recent years, China’s fastener companies have seen a shift from coastal developed areas with higher production and operating costs to inland clusters with lower production and operating costs, which are in line with industrial gradient transfer. Objective economic laws can also reduce the project's construction costs, shortage of labor resources, production and operation of logistics transportation costs, and solutions to power shortages and environmental protection issues.

(3) As far as grouping is concerned, the model adopted by global multinational corporations, domestic host companies, and vehicle companies globalizing, grouping operations, and developing new products is becoming increasingly mature. Zero-inventory management and standardized production require fasteners and other zeroes. Manufacturers of parts and components are integrated and supplied in an integrated manner according to their production rhythms and requirements, and they implement JIT (timely delivery) delivery of “direct delivery stations”. Therefore, the development of fasteners and other spare parts production and supply companies for the host and vehicle companies to establish the scale, brand, reputation, technology and logistics and distribution as well as capital and capital as the strategic partnership partnership is the future direction of development.

The trend of product development The market has increased the demand for individualized and diversified fastener products. The production of fasteners has become more rapid, and it is moving toward the trend of more varieties, small batches, and differentiated products. Relying on low-quality and cheap labor to participate in market competition has no advantage in terms of variety, high efficiency, high quality, low cost and new technology. Luo Baihui believes that in the future, fastener companies must first pay attention to product structure adjustment, from low-intensity to high-intensity, from standard parts to non-standard special-shaped parts, and from low added value to high added value. Key developments: Strength ≥ 10.9, Fatigue Life ≥ 5 Million Cycles, PPM <60 Engine Fasteners (Law Bolts, Cylinder Head Screws, Flywheel Screws, etc.); Fatigue Life ≥ 5 Million Times, Corrosion Protection Performance> 700 Hours Wind power generation supporting large-size high-strength fasteners; fatigue life ≥ 5 million times, anti-jamming nuclear power special fasteners; anti-corrosion performance> 700 hours, adapt to high and low temperature environment, PPM <60 high-speed rail supporting fastener system; fatigue Lifetime ≥5 million times special aviation and space aluminum-magnesium alloy fasteners, special shaped fasteners, combination screws and assemblies, stainless steel fasteners, aluminum-titanium alloy fasteners, IT industry miniature screws, self-locking fastening Parts, chemical coating fasteners, etc.; focused on: cold heading technology and equipment for large-size fasteners, precision molding technology for complex-shaped fasteners, and automated intelligent cold heading precision molding technology, breaking through high-quality material technology , precision heat treatment technology, surface modification technology and other common key technologies; continuously improve the quality, grade and added value of China's fastener products, and realize the transition from price to value and brand advantage. change.

Second, we must do a good job of adjusting the market structure. It is necessary to constantly transform the sales model and cultivate the market, and to reduce the sales level of special parts and special-shaped parts, and obtain development through direct sales. While grasping domestic sales, we must take the initiative to adopt strategies for adjusting export regions and proportions so that the proportion and structure of external exports are more reasonable.

Third, we must do a good job of adjusting the price structure. We must step out of the cycle of deviation from the low-price competition that deviates from the rules of the market economy and price law, the deviation of price and cost, and the deviation from the product value. Adhere to the correct values ​​and pricing methods, constantly adjust the product price structure in the market practice, adapt the price of fastener products to the production cost, adapt to the international market, and adapt to the brand and quality.

Luo Baihui pointed out that in the future, fastener enterprises must pay more attention to the organic combination of scale, technology, cost, brand, and service, and accelerate the integration of information technology and industrialization in order to seek a sustainable comprehensive competitive advantage; only by using scientific and technological progress and scientific management, We must focus on the production factors such as energy consumption, material consumption, environmental protection, technology, quality, and variety, and through the fundamental transformation of development methods, we can ensure that companies and the entire industry maintain a healthy and sustainable development trend.

The Challenges for Future Development In 2012, the international situation was very serious and complicated. The uncertainties and instability of the global economic recovery were on the rise. The international economic environment was unlikely to improve significantly and the global market downturn may become the norm. Compared with 2011, the global level in 2012 The economy will operate on a lower platform. At the same time, the intensification of the overall downside risk of the world economy and the difficulty in driving domestic investment and the difficulty in driving investment will make the country’s economic situation even more severe, especially the sluggish economy in developed countries and the weakening of external demand in emerging market countries and developing countries. It will surely directly restrict China’s foreign trade and export situation. As far as the industry is concerned, after the international financial crisis, the re-industrialization trend of industrialized countries is obvious. Energy saving, emission reduction, consumption reduction, and low-carbon requirements are more stringent, and a more intense new round of industrial competition will be promoted. The development of China's fastener industry is not only subject to "high-end intrusion" from anti-dumping, countervailing, and trade protection measures such as intellectual property rights, technical standards, and green barriers in industrial countries in Europe and the United States; at the same time, it is also facing lower levels in emerging developing countries and developing countries. The "low-end squeeze" formed by cost competitive advantage.

However, we also see that there are many favorable conditions and opportunities in the severe and complex situation. Judging from the international situation, the international financial crisis has caused difficulties for some foreign well-known brand enterprises, even bankruptcy, and China is now at an important stage of rapid development of foreign investment. The demand for enterprises to “go global” continues to increase, and space continues to expand. The continuous introduction of “going global” policies by the country has been continuously improved, and it has also provided us with a broad arena and space; at the same time, some advanced foreign companies in developed countries will expand their technology transfer and equipment exports to introduce new industries for us. High-end technology and equipment provide opportunities. From the domestic point of view, first, the Central Economic Work Conference emphasized the overall tone of “stability for progress” in 2012; second, with the further manifestation of China’s macro-control effects and the gradual fall in the prices of international bulk commodities, price pressures are rising. There will be greater relief. Third, the implementation of policies from the central government to the local government to protect and improve people's livelihood, accelerate the development of the service industry, and increase the proportion of middle-income people will help further expand domestic demand. We should fully capture and make good use of these development opportunities in a timely manner to promote and accelerate the transformation and upgrading of the industry and the company, and strive to cultivate new competitive advantages to ensure the stable and healthy development of the industry and the company.

In the future, the economy, markets, and the competition between products and enterprises will ultimately be the competition of talents and wisdom. Talent and wisdom are the greatest resources for any company to survive and develop. Despite the company's internal training and external introduction in recent years, the company has built a relatively stable management and technical backbone team and staff team, which has become the guarantee for the company's continuous and healthy development over the years. However, with the continuous expansion of the company's business scale, business scope and industry boundaries, especially the company must continue to strengthen the high-end product manufacturing industry, on the one hand to continue to expand the modern service industry of logistics and distribution, encourage, train and introduce the company's future Leading figures in professional technology, business management, marketing, modern logistics, and computer information network technology will continue to be prominent issues that companies need to continue to focus on.

Work Ideas for 2012 In the face of more severe and complex international and domestic situations in 2012 and the development trend of the industry, the company will always keep a clear head and adopt positive and effective countermeasures. Firstly, guided by the scientific concept of development, we must closely focus on the national and local “12th Five-Year Plan” development strategic planning, conduct in-depth research and promotion of the strategic expansion direction and focus of each company’s products, and scientifically realize the company’s strategic expansion through capital operation. Adjust and optimize the industrial structure; Second, focus on non-public issuance of refinancing and fund-raising projects, vigorously expand domestic and foreign markets, increase technological and management innovation, strengthen production management and lean production, and increase operational efficiency and overall strength. Continuing to enhance core competencies; Third, we must take a good corporate image as a starting point, care about the work and life of employees, and improve employee satisfaction; strengthen and improve corporate internal control, actively fulfill corporate social responsibilities, and strive to reward shareholders and society, and fully achieve The company's operating goals throughout the year.

2012 Business Plan and Key Tasks for 2012 1. Business objectives for 2012: Total operating revenue of RMB 3.1 billion, an increase of 14.67% year-on-year; Operating costs of RMB 3.004 billion, an increase of 14.81% year-on-year; Total profit increased by more than 5% year-on-year.

2. The company plans to carry out key tasks in 2012. According to the company's 2012 work ideas and business plans, combined with the requirements of the new round of national and local government development plans, the company's key work requirements in 2012 are as follows:

1) Continuously improve the ability of scientific and technological innovation, and further give play to the leading role of technical support; Actively strive to obtain access to urban rail transit, heavy-load railways, overseas railway fasteners, high-strength fasteners for automobiles, and special fasteners for aviation and aerospace. Major breakthroughs, comprehensively improve the company's leading ability in science and technology, support capabilities and core competitiveness.

2) Continuously optimize the marketing system and service system, and further improve the customer-centric operating mechanism; on the basis of consolidating the existing market, closely focus on the national industrial planning, policy and investment direction, and forward-looking the development trend of the industry it belongs to. The research will make use of and give full play to the company's strong production capacity and its own advantages, speed up the product structure adjustment, optimize the product structure, adjust the company's marketing strategy in time, vigorously develop key markets, emerging markets, and consolidate and expand the domestic market. Expand overseas markets.

3) Continuously improve the manufacturing capabilities of key products and further improve the quality of products. Not only to reduce the quality of the loss, reduce the cost of quality, but also to make the product reliability and stability and consistency of performance has been significantly improved in order to continuously meet market demand.

4) Continuously optimize the procurement model to further reduce the cost of bulk raw materials and fuel purchases and the procurement of spare parts for materials, strengthen centralized management of material purchases, expand the scope and proportion of centralized procurement, strengthen centralized management and control of sales costs, and strictly control period expenses; further improve the organization The framework will increase the integration of resources, business integration, and industrial integration to lay a solid foundation for the company to further “strengthen and strengthen excellence”.

5) Continuously improve management and further improve the economic performance of the company. In accordance with the requirements of listed companies, strengthen internal control, system construction and process optimization. Continue to strengthen pre-control, interim audits and post-event audits of various businesses. Through regular operation analysis, real-time monitoring of budget implementation and revenue cost structure is conducted to increase revenues and reduce expenditures, tap potential and increase efficiency, expand profitability space, and enhance company risk prevention. The ability to continue to develop.

6) Continuously strengthen the construction of the talent team to further tap and bring into play the potential and role of talents. The company must always stand in the perspective of sustainable development and construct a high-quality talent team in a forward-looking manner. Adhere to both high-end introduction and internal training, focusing on employee value trends and personality traits, implementing differentiated incentive methods, and adopting a combination of competitive employment and job incentives to optimize the allocation of internal talents and create a theoretical and practical experience. The knowledgeable structure and age group with a reasonable talent team provide intellectual support and human resources guarantee for the company's sustainable development.

Analysis of risk factors for future development and countermeasures 1. Industry policy risks The company as a mechanical basic parts industry, the overall development of the industry is closely related to the macro economy. Under the current macroeconomic situation, some major domestic basic construction investment projects have signs of slowing down. After the Wenzhou “7.23” motor vehicle chasing after the big accident and other factors, the state’s investment in major infrastructure construction appears more cautious, and some project approvals or construction progress may slow down, and there may be investment quotas and investment progress may not be in line with expectations. If the macroeconomic situation in the future cannot be changed in the short term, the delivery schedule of the company's supporting high-speed rail fasteners for the country's high-speed railway construction may be affected, which will have a substantial adverse impact on the company's future operating performance. The management of the company will focus on the orientation of the government's macro regulation and control, and pay attention to the speed of construction of high-speed railways and the development of the industry and market trends, in order to better grasp the market, adjust business strategies in a timely manner, increase risk control, treat them objectively, and leverage on advantages and disadvantages. Avoiding harm, through product and technological innovation and development of distinctive operations, we constantly innovate and develop a number of advantageous products with strong industrial applicability, continuously expand the logistics and distribution business of fasteners and hardware accessories, and ensure the smooth and healthy operation of the company's production and operation.

2. Intensified market competition Although the company is in a leading position in China's fastener industry, especially in the field of high-speed fasteners and accessories, in recent years, domestic private enterprises have developed rapidly, increasing in conventional products and low-end markets. With the degree of market competition, multinational companies have also intensified their competition not only in conventional products, but also in the high-end market of domestic fasteners, thanks to their brand advantages, rich R&D manufacturing experience, strong capital advantages, and strong international marketing competitiveness. Once the country's policies related to encouraging and supporting changes, the company will also face more severe competitive pressures. The company will adhere to the principle of stable operation and steady development, further accelerate internal integration, strengthen corporate strategy, operations, team building and resource allocation and utilization; integrate R&D resources, conduct technical research, further improve the technology research and development system, and comprehensively use product development and strengthen By means of product service and expansion of product mix, we gradually built a company's product differentiation and integration and integration, implemented integrated management, and continuously improved the company's ability to independently integrate innovation.

3. Exchange rate risk In 2012, due to the severe international economic situation and the increase of uncertainties, the continuous appreciation of the renminbi will undoubtedly become a major factor affecting the company's export business. The company will continue to sign export orders, will fully consider the impact of exchange rate changes on earnings, make relevant restrictions on export prices and delivery conditions, and try to eliminate the negative impact of exchange rate changes on the company; The settlement and sale of foreign exchange, the effective use of forward trading tools, locking in foreign exchange costs.

4. Financial risks According to the company's future development plan, especially the implementation of the hardware sales logistics system construction project and the expansion of business scale, the demand for funds will increase significantly in the next few years. This raises the company's financial management and financing capabilities. Requirements, there may be the risk that financing capacity can not meet the funds required for rapid development. The company will increase the collection of accounts receivable, establish and improve the customer's credit rating and solvency evaluation system, strengthen risk monitoring, reduce the risk of bad debts in accounts receivable; strengthen the unified management of funds, reduce financial costs, accelerate Capital turnover, improve the utilization of funds, and effectively prevent financial risks, improve the quality of business operations. Broaden the financing model, legal compliance and comprehensive use of various financial instruments, access to funds required for business development.

5. Risks of personnel changes Although the company has accumulated certain talents and technological advantages during its many years of development, in recent years, due to various reasons such as the speed of development, operating efficiency, and operating mechanism, the company still has insufficient progress in the continuous training and introduction of talents. Employees in the production frontline have large mobility and generally lack of experience. The relatively low level of technical and managerial talents in middle and high levels attracts and retains the professional and technical personnel and senior management personnel required by the company, and strengthens the management and reserve of human resources. This has not only become a constraint on companies. The main difficulties and obstacles in the continuous development of new products, new business development, and enhancement of the company's core competitiveness are also the keys to the company's future better and faster development. The company will adhere to the "people-oriented" concept of employment, continue to improve the medium and long-term training and selection of cadres and implement strategic talent pools; aiming at employee value trends and personality traits, continue to improve the compensation management system and internal incentives through the implementation of differentiated incentives. The mechanism attracts outstanding management and technical talents; it adopts various measures such as constantly increasing employee wages and benefits, increasing effective training, introducing more highly educated personnel, and increasing the range and scope of awards for outstanding personnel, stabilizing the personnel team and strengthening team building. Efforts will be made to improve work, study and living conditions and reduce the risks associated with personnel changes.

6, energy-saving emission reduction risk:

During the “Twelfth Five-Year Plan” period, the national energy-saving and emission-reduction policies are becoming increasingly stringent. Central and local governments at all levels will impose higher requirements on energy conservation and environmental protection. At the same time, increasingly stringent environmental protection policies will have an impact on the needs of downstream users. Although the high energy consumption in the company's production process and the emissions of pollutants such as waste gas, waste water, and waste slag have all reached the national and local emission standards after treatment, the national requirements for energy conservation and emission reduction continue to increase. The more stringent, the company will still have certain risks. The company will earnestly raise its awareness of energy conservation and emission reduction, adhere to the path of comprehensive, coordinated, and sustainable development of resource-conserving and environment-friendly companies, and continue to increase investment in energy conservation and emission reduction, continuously improve production processes, and achieve continuous improvement of the production environment. .