Brand Rise and Sustainable Development of Enterprises

——Speech by Ge Hanbin, Chairman of Jiangsu Dihao Decoration Engineering Co., Ltd., at the Nantong Economic and Wealth Forum

Dear leaders, entrepreneurs, ladies and gentlemen, good afternoon:

I am entrusted by President Wang of the Nantong Decoration and Decoration Industry Association (Chamber of Commerce) and invited by Mr. Li of Nantong Shicheng Decoration to discuss with everyone how decoration enterprises can become specialized, strong, big, and long-lasting.

Today, we are all elites in our industry, and many sister companies have their own successful experiences. Therefore, when I chose this question, I was a bit nervous, as if I were trying to teach a lesson. But I would like to discuss with you how to become specialized, refined, strong, large and lasting in this industry and what kind of ways we should take to develop our decoration enterprises by describing the experience and perception of Emgrand decoration in practice and holding the attitude of exchange and learning. I believe that in order for enterprises to become stronger, larger, and longer, they must first start with specialization and refinement. Only after specialization and refinement solidify the foundation can they become stronger, then larger, and finally longer. Throughout the world, none of the famous large enterprises have come this way, which is almost a universal law of enterprise development. To be specialized and refined is to be a brand. Brand is a culture, and cultural strength is the soft power of an enterprise, which is the vitality to promote its sustainable development.

We can optimistically see that the current development of China's construction and decoration industry is very rapid, accounting for an increasing proportion of the entire gross domestic product. Engineering construction is in full swing, and the market holds enormous business opportunities for us. However, due to the particularity of the decoration industry itself - non high-tech industry, there is no need to produce huge amounts of working capital or heavy equipment, factory buildings and other fixed assets, and the threshold is relatively low, which makes many people flock to it, the number of employees expands rapidly, and its growth rate far exceeds the growth of market opportunities, thus leading to the current situation of the industry with many people and few people. Among the mixed competitors, many companies exhibit weak moral and legal concepts, as well as a lack of reputation awareness, resulting in frequent occurrences of dishonesty and breach of contract; In addition, the government's legislation, regulation, and regulation of the market are still unsatisfactory, as well as severe information asymmetry, which has tilted the decoration market stage and triggered vicious competition in the industry. So facing such a cruel scene of 'dancing with wolves', we are helpless and confused. Most companies are still struggling in the vortex of vicious competition, losing their direction. Some companies adopt unfair low-priced bidding methods, then substitute inferior products, cut corners, and manufacture tofu residue projects. This cannot be said to be the tragedy of our industry!

Therefore, I call for "brand rise", first and foremost, "brand self rescue". We feel guilty of being weak and unable to make much contribution to the industry, but the crisis awareness of "brand self rescue" is constantly knocking on our hearts. Remember Adam Smith's viewpoint in his article "Labor and Employment": The market economy is an economy of specialized competition. The ultimate and initial principle of the market economy is specialized division of labor. Without specialization, one cannot create a brand, occupy the market, occupy market share, and have lasting vitality. "The current market competition is becoming increasingly fierce, and if enterprises focus all their efforts on a certain industry or even a certain field, and persevere to become experts in that industry or field, By specializing and refining the most advantageous industries that one is already familiar with, forming "flagship" products, improving core competitiveness, and creating a brand, one can naturally become stronger and larger. We think carefully about market segmentation. Department stores are divided into grocery stores and boutiques, and decoration is also divided into general decoration and hardcover, home decoration and public decoration. Through years of practical operation, Emgrand people have continuously explored and summarized, and have chosen the high-end high-end decoration market represented by five-star hotels as their core field. This is because owners in this field will have a greater willingness to actively pursue high-quality products, and creating high-quality projects provides us with broad expansion space for specialization and refinement. So, we aimed at this goal, focused on management, and went all out. Although we dare not say that we have achieved remarkable results, the correlation between the Emgrand brand and high-end decoration has gradually gained recognition from the market and customers.

So, how can we become specialized and refined? Or more specifically, how can we create high-end boutique decoration projects for five-star hotels?

We recognize that the decoration industry is a labor-intensive traditional industry without so-called core technologies. Therefore, the gap in enterprise strength is largely reflected in its business philosophy, strategic objectives, management methods, and business models. Therefore, first of all, our strategic thinking needs to be correct. The strategic positioning of Emperor Hao is very clear: loyal to customers, dedicated to creating decorative boutiques, and persistently following the path of brand strategy. So how do you build your own brand? Firstly, being a business is like being a person. To cultivate oneself, one must balance "talent, appearance, and morality". To shape a brand, one must also possess "quality, taste, and character". Quality is equivalent to talent, and products and technology are its backing; Taste is equivalent to appearance, and culture and talent are its core; Character is equivalent to morality, and responsibility and morality are its fundamental principles. However, 'no sincerity, no substance', 'no reality, no standing', and 'sincerity' is a major direction towards the path of a brand! I often mention two words to our team, twelve words: "Heart is greater than brain, sincerity is greater than skill." When doing anything, especially in decoration engineering, serving customers, one should operate with heart, not play tricks, think they know some technology, deceive owners, and earn some small profits in front of the eyes. If one loses integrity, they will always lose customers. Only by sincerely paying and considering customers, is it far greater than any of your skills, It is our customers who have made us successful. Only by being loyal to customers can they be loyal to you! Mr. Li from Nantong Shicheng Decoration proposed: "Do a project, make a friend." They started from home decoration, understood this concept, and achieved the scale they have today. It is truly admirable in the decoration industry! So we say, "A single business is not a business, only a repeat business is the real business.

Once the strategic goals are clear, the next step is how to implement them and how to fight this battle well. This is the problem of how to improve and transform enterprise management methods and business models. We believe that good management is equivalent to scientific management systems, mechanisms, and good execution. To achieve excellent management level, enterprises must achieve systematic management, establish a scientific and comprehensive system of enterprise systems, norms, and standards, and constantly change and innovate to find a scientific management path suitable for the development of the enterprise itself. We have validated these theories from long-term practical experience and continuously deepened and improved them.

In the process of establishing and implementing the system, we deeply realize that no matter how good the system is, it still requires people to implement it. The most important thing is whether the system can be conscientiously implemented and implemented in place. This involves the issue of execution power. So, how can we improve execution? This cannot but mention the talent development strategy of the enterprise. How to forge a high-quality talent team? We advocate the establishment of a learning oriented enterprise, turning Emperor Hao into a school, a military unit, and a family, allowing talents to continuously learn through practice and improve through learning and hard work. And put forward the "eight character" requirements for talents and teams, which are "professional, responsible, harmonious, and efficient". It is through these policies and systems that we cultivate and motivate talents through continuous learning, thus forging a good corporate team execution ability.

Secondly, in order for enterprises to upgrade and grow, they must transform their business models, break free from the constraints of small-scale production workshops and adopt the path of factory assembly. The concept of "decoration integration", which means factory production and assembly construction, is proposed to form a diversified, integrated, and all-round development of the decoration industry chain. In recent years, the company has once again expanded its scale on the basis of its previous industry, and has established multiple subsidiaries such as Jiangsu Dihao Wood Manufacturing Co., Ltd., Nantong Dihao Textile Decoration Co., Ltd., Nantong Jingsheng Building Materials Co., Ltd., Shanghai Jinxi Art Co., Ltd., and Shanghai Dihao Decoration International Design Center, The five-star Rugao Jinling Jinding Hotel, which participated in the investment and construction, has received great attention from many decoration enterprises and customers.

Emgrand Decoration adheres to the above standards of integrity, professionalism, and efficiency, with high industry standards as the mirror, owner reputation as the mirror, and social value as the mirror. The company adheres to the development policy of "strengthening intensive management, optimizing industrial structure, and building a decoration enterprise with core competitiveness", continuously strengthening its own construction in work, absorbing and integrating new technologies in the decoration industry, and creating the "Emgrand" brand on the basis of continuous improvement, Provide comprehensive and high-quality service to customers. Since its establishment, the company has obtained numerous international management system certifications. So far, the company has established a nationwide market and has completed landmark projects such as the Dalian Century Huihao Johnson Hotel, the iconic building "Dalian Futures Building", the Wuhan Yuexi Peninsula Hot Spring Resort Hotel, the Zhengzhou Yonghe Platinum Grand Hotel, the Nantong Jinshi Hotel, and the Hainan Shenzhou Peninsula Sheraton Hotel, among others. Multiple projects participated in the construction have won the "National Building Decoration Award" from the China Building Decoration Association and dozens of provincial and municipal excellent projects. In 2010, he was promoted to the first level qualification for decoration and decoration engineering design and construction issued by the Ministry of Construction. On December 28, 2012, he was successfully listed on the Tianjin Stock Exchange.

If we say that the transition from "brand self rescue" to "brand rise" has injected vitality and vitality into our decoration enterprise, providing a strategy for us to become more refined, specialized, strong, and big! So, how to make the enterprise an evergreen tree, that is, how to make the enterprise grow longer and faster! Is the second topic that we need to explore together, how can enterprises achieve sustained and rapid development in traditional industries? The innovation of business models and the integration with the capital market are the only way for enterprises to develop rapidly and sustainably! With the successful listing of Emgrand Decoration on the Tianjin Stock Exchange on December 28, 2012, we became the first people in the construction and decoration industry in Nantong to eat crab. At this moment, we truly realized that we had just taken the first step and felt that our responsibilities were even heavier. The road to the future is even more arduous! Going public means that a company has transformed from a regional company to a public company.

The favorable factors for a company to go public are:

1. Go public to raise funds and expand development. Funds can be invested in renovation projects for the production of decorative components, the construction of decorative creative industrial parks, and the construction of enterprise informatization, ensuring smooth communication between the company and the project department, and leveraging the control power of the company's headquarters resources.

2. Successful listing can further improve and standardize the corporate governance structure of a company, which is conducive to establishing a modern enterprise system and improving the level of enterprise management. The shareholders' meeting, board of directors, supervisory board, and management each bear their respective responsibilities, supervise and constrain each other, and promote the standardization of corporate governance.

3. By using equity incentives, we aim to enhance the enthusiasm, initiative, responsibility, and creativity of management and company employees.

4. Successful listing is beneficial for companies to strengthen their capital operations, expand financing channels, build a capital operation platform, enhance the value of the company and its shareholders, facilitate rapid development, occupy the market, significantly improve the company's brand, reputation, and reputation, and help companies seize new development opportunities, implement brand management strategies, and more effectively explore the market.

Of course, there are also unfavorable factors for going public, such as information disclosure that makes enterprise information public, loss of privacy rights, and reduction of control over the enterprise by the original shareholders after going public. Managers will bear more responsibility, limited decision-making power, high tax payment and listing costs, and also need to bear the expenses of various intermediary agencies.

We will not break down the pros and cons of going public for the time being. Here, I would like to mention the role model in our industry, Suzhou Jintanglang Architectural Decoration Co., Ltd. Since its listing in 2006, with the power of capital, it has continuously strengthened its own strength, from a production value of 2 billion to the current 20 billion. Recently, it successfully acquired 70% of the equity of international design company HBA in the United States, and intends to acquire 70% of the equity of a well-known domestic decoration brand with a 5% stake. This once again demonstrates the legend of the capital market's "snake swallowing elephant", demonstrating the magical power of the capital market.

We, Emgrand Decoration, failed to seize the opportunity of entering the main version of the capital market, but we dare to practice and regulate our own corporate behavior in the "three version market" pilot of the national financial reform. As for this "crab eating taste", we are definitely willing to share it with our peers! Our next plan is to establish a multi-functional, innovative, and international street villa style "Emperor Hao Decoration Culture and Creative Industry Park" in Dongcheng District, Nantong. Attracting international and domestic design companies, creative elites in decoration, establishing design workshops, and introducing more than 300 brand building materials manufacturers, setting up flagship stores for display, aggregating a complete upstream and downstream decoration industry chain, achieving a "one-stop" service, intensive industrialization of the headquarters economy, and also integrating Nantong construction enterprises. The resource and talent advantages of nationwide layout are important measures for the horizontal innovation of Emgrand decoration business, It also adds a strong touch of color to the "hometown of architecture". Her successful implementation will pave the way for business innovation in the decoration industry and become a national replicable and sustainable development experimental site for the entire industry. I am willing to cooperate and advance with the elites and entrepreneurs present here, sharing opportunities together and making greater contributions to the beautiful future of my hometown Nantong!

Thank you all!

Chairman of Jiangsu Dihao Decoration Co., Ltd

Ge Hanbin

January 16, 2013

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