In order to achieve transformation and upgrading, to make progress in stability and create the situation of sustainable development, we shall breakthrough the “business on large scale”, consolidate the main support of “highway municipal, port channel, asphalt road material” and discover the growth source to comprehensively improve the capability of market development.

In the new year, we shall, with the strategic thinking of “big business on large scale”, integrate the resources to make the three main sectors of “highway, port and shipping as well as road material” bigger, more excellent and stronger. Furthermore, we shall establish the operating mechanism that connects with the market and makes rapid response to seize the business opportunity for restarting infrastructure and promote the transformation and upgrading of the Group driven by “three carriages”. The first is to optimize the business layout. Based on the Group’s original business center, we shall adjust to the capability and establish the operational framework composed by two major operating sectors of “highway, port and shipping”. For this, we have appointed one or two vice presidents to take the lead. We will set goals, build teams, divide regions, specify rewards and punishment, implement the system of simulated company to realize market-oriented operation. We will carry forward the “nail” spirit, focus on regions, projects and worker to further release the productivity of highway, municipalities, port and shipping. For the highway and municipality sector, we shall focus on the markets of the Southern and Northern Jiangsu Province, and take into account the surrounding markets; for the port and shipping sector, we shall focus on the coastal and littoral areas, but highlight key areas such as Panjin, Zhanjiang, Huangpi, Nantong, Yancheng, Shanghai and Zhejiang. For the road material sector, Kaida Road Material Co., Ltd. focuses on improving the corporate governance structure, strengthening the function building, and firmly grasping the opportunity of environmental protection and rectification to make the “transformation, upgrading and layout optimization” better. It is necessary to refine the market research analysis and fully investigate the stock market and newly-added markets in the radiation area. With this as the basis, we shall take out specific plans for shutting down, relocating, renovating and new construction. In the varieties of operation, we must break through the constraints of traditional business. Instead, we shall select appropriate varieties, cultivate first-class business and “skills” with characteristics to create a brand and occupy the market. The second is to activate business strategy. We shall pay attention to the changes of macro environmental and the trend of industry development in order to strengthen the business philosophy of further cooperation. In the new year, we shall focus on the regional operation strategy, take the three major business sectors as the main battlefield, and the engineering bureaus and subsidiaries as the tentacles to establish strategic alliances and expand the circle of friends. As cooperative operation being the strategic partnership between enterprises, we must make enterprises complement each other’s advantages of resources, enhance the capability of market development, penetration and competitiveness, in order to reach long-term or short-term cooperation and increase the opportunities for joint development and market utilization. In the new year, we shall focus on finding and strengthening the cooperation with companies and individuals of good reputation and strength, and using their resources to make breakthroughs. Strengthen the cooperation with large enterprises. We shall firmly keep up with central enterprises to make progress. We shall seek cooperation and connection with the capital market, and unite social capital to expand new projects. During the year, the three main business sectors shall, at least, reach a strategic alliance of operational cooperation with five or more large central enterprises and a group of powerful enterprises; each engineering bureau and subsidiary shall choose one or two central enterprises and key state-owned enterprises as their target of cooperation. With the idea of cooperation and win-win, we shall reach good relationship with the owners, banks, and partners to achieve mutual benefit and common development. The third is about the rigid management assessment. It is necessary to use innovative thinking to establish and improve the target assessment system. This year, the three main sectors of “highway, port and shipping as well as road materials”, all engineering bureaus, subsidiaries and Zhonggang Investment (overseas business) have to sign the target liability form. On the basis of characteristics of each business sector, various forms including stockholding system, contracting system and rental system shall be put into trial use. The personnel can be resigned by appointment and competition, the standard of which is choosing the competent person and giving up the incompetent one. The Group has set up a target responsibility system assessment leading group and appoints one vice president and relevant departments to be responsible for the strict assessment. We will specify the reward from punishment. Through the target responsibility system assessment, we will stimulate vitality of personnel, consolidate and develop the “three main business” sectors and maintain our main business; we will take into account the investment and overseas sub-sectors to explore new areas such as environmental protection, cultural tourism for creating new development space.

(Office of the Chairman)