In the year ended, HCH sales reached 170 million USD, which makes HCH sales increase 20% yearly for the past five years. Compare to the whole bearing industry, the figures show about the world-wide increases average 5% in the previous 5 years, HCH figure displays a strong market occupation. In the following years, HCH is likely to see a great increase. HCH also achieved positive cash flow by the end of the year. There will be another 10 million USD investment in the technology improvement and manufacturing facility and 6 million USD investments in the research and development in next year.

Cost evaluation is critical. As a leading precision bearing manufacturer in China, HCH has created the ABC activity based costing evaluation especially for the bearing industry. In previous years, this system plays great importance in the cost evaluation by adopting the method of product BOM and process BOM combination. Now it is updated and interrogated with Group ERP System following a more precise model to help the Group business administration run better.

In the previous years, HCH achieved high level of loyalty among associates. HCH introduced a performance-based variable salary programme with both a short-term and a long-term element.The maximum variable salary including both the shortterm and the long-term part is capped at a certain percentage of the fixed annual salary. The percentage is linked to the position of the individual and varies for Group Management members between 60% and 90%. HCH associates also made an important contribution to the employee’s accommodation and working environment improvement. HCH was honored as “China Harmony Enterprise”. Employee’s loyalty is further enhanced. The strong bond between the company and its employees was illustrated by the latest associate survey, Eighty percents of respondents said that they were “proud to work for the HCH Group”.

Previously, our manufacturing and sales operations have been separating functions. This will be changed into the system of Business Units in which manufacturing and sales operations will be unified. The purpose of this is to assign each Business Unit with responsibility and authority so as to improve business performance of both sides of manufacturing and sales operations, and to serve our customers better. As the HCH Group, we must be competitive and work together to achieve our goals. We have worked hard to get to the top. We are committed to succeeding, to ensuring sustainability in our actions and to being passionate about our company: “We aim to move the world more efficiently.”

Hu Jinke