In 2019, let’s start smiling and grow towards the sunshine on our new journey
where amazing happens time and again.
At Cedar Holdings, we witness new dreams that come true.
1
The sun and the moon rise and set. The world is renewed day in and day out. When the first ray of sunshine of 2019 shed on the earth, we may still feel the chill of winter. The Cedar trees have started budding, ready to grow in the sunshine. Together, we have embarked on a new journey. Everything is full of possibilities. everything is fresh and new.
2018 was a memorable year of unusual happenings. The Chinese government called for deepened reforms and opening up when the ever-changing and unpredictable international market overwhelms, perplex and even deter people across the industry and the market. China’s economy, especially the real economy, seemed to be struggling.
To survive an economic winter, we need to keep in mind where we started. This winter reminds me of the 1990s when I first entered the industry. The Pearl River Delta region was creating a “Made in China” manufacturing miracle, thanks to its geographical proximity to Hong Kong and Macau a well as China’s reform and opening-up. Behind the sunshine, however, loomed a crisis threatening the OEM-based Chinese manufacturing industry. the Chinese OEMs are over reliant on the low-cost labor force and land and, at the same time, lack sufficient technological innovation and brand competitiveness. Theyare, therefore, somewhere at the bottom of the global value chain, and many of them were put out of business by even a minor sluggishness in the global market.
Some foresighted businessman came up with the idea of “Smiling Curve” –the U-shape curve showing how value added varies across the manufacturing industry, where the OEMs lie at the bottom with lowest value added, while technological R&D and branding move to the high value-added block towards the upward ends. The closer manufacturers get to the ends, the more competitive and profitable they become. It has been proven that most of the OEMs which took the lead in transforming and upgrading to “smile up” have survived and grown into innovation-driven industry leaders.
The wisdom still rings true today. In a time of cloudiness, a country or a business needs to remain true to the original aspiration for industrial development, smile and stay positive.
Faced with a complicated and challenging external environment combined with the economic downward pressure, the Chinese government has taken a firm stand on its basic economic policies to move towards the upward ends of the “Smiling Curve”. On the one hand, to achieve a quality development, the Chinese economy is undergoing a fundamental shift from the “resource-based” pattern to an “innovation-driven” one; on the other hand, the government has carried out the supply-side structural reform aiming to facilitate upgraded consumption with an enhanced supply system that is able to provide better living conditions for Chinese people.
Likewise, Cedar Holdings as a business has integrated the notion of “Smile Curve” into our development strategy. As we stick to “Redefine Industrial Values and Stay Forward-Looking”, we have been very optimistic about the future of China and determined to march towards higher ends of the value chain. On the one hand, we will continue to implement the Blue Ocean Strategy with greater inputs in innovation and R&D in fine chemicals and new chemical materials to be more globally competitive in technologies. On the other hand, we will give full play to our advantages as a core enterprise in the industrial chain, improve services in cultural tourism, , smart and connected community services, and the ability of the industrial finance to serve the real economy in particular.
The year 2018 has given us so many reasons to hold more firmly to our strategic path. As one of the companies listed on the Fortune Global 500, Cedar Holdings is ready to set off on a new journey to anew height. The significant progress we have made in the speed, quality, and scope of business development has provided a solid foundation for a leapfrog development in the future. As our business prospers, more people who share the same faith and values have chosen to join us and grow with Cedar Holdings.
After Twenty-one years of sound growth, we have every reason to be confident in our strategic path. The fact that we have survived rounds of cyclical industry-wide crisis proves that the development pattern chosen by Cedar Holdings is stable and prospective. Thanks to what we have accomplished, we are moving closer than ever to our strategic goal of growing into a world leading company. As long as we stay true to our original aspirationfor industrial development, strengthen our common belief with our corporate culture, and take the lead in a focused planning with an optimistic and fearless attitude, we will get a head-start.
Rather than just stay inside a room waiting for the spring to come, true warriors will build a giant and stable ship which will carry them across the waves. In 2019, which marks the 70th anniversary of the founding of the People’s Republic of China and a fresh start as well for Cedar Holdings to develop further on this vast oriental land of opportunity, we need to work for higher strategic goals underpinned by enhanced efforts to optimize the current business structure towards the upward ends of the “Smiling Curve”, and further expand major business operations for a stronger growth. Like a boat sailing on the sea, we must forge aheador else we could be swept downstream.
2
On the very first day of 2019, we released the Cedar Holdings Five-year Plan (2017-2021), including our new strategic objectives: by 2021, Cedar Holdings will grow into a world leading multi-industry group, serving 200 million people, building connections among 30,000 companies, restructuring Cedar Holdings’ four major businesssegments, and prioritizing the development of our fifth one– social services.
These strategic objectives can be summarized with a 1-2-3-4-5 as follows:
“1” – growing into a world leading multi-industry group. With a dramatic revenue growth, Cedar Holdings made into the list of Fortune Global 500. In the future, we will continue our business expansion in both scale and competitiveness by proactively exploring the global market, and participating in global cooperation and competition, so as to become a world leading company with a competitive edge in all sectors we’ve engaged in.
“2” – serving 200 million people. Cedar Holdings Cultural Tourism Group has so far planned and operated more than 10 cultural tourism projects, and will further expand its operations in this sector to cover full-range tourism, urban RBD, and healthcare and nursing. Cedar Holdings Smart Technology Group has provided community services in 109 cities in 17 provinces, managing real estate properties with a gross floor area of 120 million square meters. By 2021, Cedar Holdings Cultural Tourism Group will become China’s biggest cultural tourism brand with 20 projects directly serving 100 million people, and Cedar Holdings Smart Technology Group will grow into one of the largest community services providers in China. Through the self-operated projects and the value-added services in other projects, it will serve another 100 million people. In doing so, Cedar Holdings directly serves 200 million people.
“3” – connecting 30,000 companies. As a supply chain services provider, Cedar Holdings operates largely as a business-to-business company. By 2021, Cedar Holdings will connect 30,000 companies through its global supply chain services system, smart technology community services platform, and B2B cultural tourism platform to profoundly support the development of China’s real economy, while meeting the Chinese people’s expectation for a better living and upgraded consumption.
“4” – restructuring the four major business segments, which provides a foundation for the fulfillment of the first three objectives. Cedar Holdings will restructure the value chain of iour four major business segments, namely global commodities supply chain, new chemical materials, cultural tourism and nursing, and smart & connected services, in order to become a leader covering the entire industrial chain.
“5” – prioritizing the development of our fifth major business segment, or social services. Cedar Holdings will establish an independent and integrated social-service-based enterprise building on our currently CSR projects specialized respectively in targeted poverty alleviation, culturepreservation, and charity undertakings. Independently operated as a non-profit business entity, we aim at promoting the sustainable development of social services with commercial means, better fulfill our corporate social responsibility and create a better life.
Centering on these strategic objectives, we will reorganize our current six major business segments into five, namely, commodities supply chain services, new chemical materials, cultural tourism, smart & connected community services, and social services.
As a leading provider of commodities supply chain services in China, Cedar Holdings will redouble our efforts on two aspects: providing better supply chain financial services and tapping into the global market. We plan to make Cedar Holdings one of the world’s top five commodities supply chain services providers in three years with a larger scale, more channels, and better resource allocation ability to better serve China’s national strategies.
In t new chemical materials, we will strengthen our R&D and production capacity cooperation with top-notched chemical companies around the world, aiming to achieve key technological breakthroughs. Built on the competitive edge in technologies, Cedar Holdings will grow into a world-class industry leader, helping China to become a top player in the fine chemicals sector.
Cedar Cultural Tourism Group will bring together culture, tourism, real estate, healthcare and nursing and other businesses operations.in the context of an explosive industrial growth as China is entering a consumption-oriented era. Cedar Holdings has made an early attempt in securing a position in this “blue ocean” and, with rich experience in tourism and real estate development and a platform of listed company, we will seize the window of opportunity to lead the industry transformation.
Our community service business will focus on further developing the provision of industrial leading community ecosystem services by integrating our resources in technology, information, finance, and services to tap into the service traffic generated by community life and the last mile scenarios. A smart & connected community platform will be built to develop new-type community services, in an effort to become one of the largest community service providers in China.
Our newly added social services operation is currently run under the Cedar Foundation and will become a professional social services enterprise integrating all Cedar Holding’s social service projects. Cedar Holdings makes the creation of industrial value our biggest social responsibility to fulfill. All Cedar Holdings’ resources will be leveraged to maximize the value of social services, and make this operation a pillar of Cedar Holdings’ future development.
3
If a vessel is not properly navigated, it is likely to be attacked by the wind from all directions, but our sailing course is determined, and we need only to go forward across the sea. We will not only survive the winter, but also grow tenaciously across the waves to reach our ambitious goal.
In this era of challenges and opportunities, we may be under pressure of transitions, but we are courageous enough to reform. We may be stranded for the moment, but we will find the right track soon. We may suffer an economic winter, but we trust each other and have faith in getting through. In this era, our journey ahead will never be easy, but we at Cedar Holdings always stay together.
We remain committed to our original intention, are keen on delivering value, and have full confidence in this era and the future of China. We have worked hard to become a Fortune Global 500 company, as happiness comes from efforts and diligence makes a great dream come true. Time will witness how we walk steadily from day to day towards our goals.
On our new journey in 2019, which will inevitably attract more attention, we may encounter more complicated changes and unknown risks and see more cloudy days. However, with the firm faith we always cherish, we will nevertheless enjoy the sunshine. Cedar Holdings is never afraid of winter, as a cedar grows vibrantly on a snowy day. We are part of the fearless minority looking to the future, the committed doers and the strong-minded optimists. We are what we work to protect.
In 2019, we will continue to stride forward bravely and confidently on our icebreaking journey. Nothing will stop us from making our dreams come true, unless we stop ourselves.
In 2019, I wish everyone at Cedar Holdings a wonderful year of fulfillment. I greatly appreciate your hard work that makes the success of Cedar Holdings possible, and that shares the great prospect of Cedar.
In 2019, let’s start smiling and grow towards the sunshine on our new journey where amazing happens time and again. At Cedar Holdings, we witness new dreams that come true.
By King Cheung, Chairman of the Board
