Prospects

Prospects

The stable supply in the oil market and moderate rises in the price of oil are expected to have a positive impact on boosting the demand for and price of industrial raw materials. However, the trade friction between China and the United States (“US”) will lead to increasing risks in the Chinese economy, and the fluctuation of Renminbi exchange rate and the production costs in China will exert additional pressure on companies. Thus, the management remains cautious about the future development of the Group’s overall business.

With respect to business development, the Group will continue to execute its set development direction – broadening its customer base, creating new income sources, and exploring more potential markets and regions. Apart from continuously manufacturing traditional home appliances and maintaining stable relationships with major toy manufacturers, the Group will directly negotiate with end-customers and will allocate more resources in prospecting for more end-customers such as sanitary products and construction materials companies in order to support China’s policy of boosting the domestic sales market. Furthermore, to create new income sources, the Group plans to work with new technical institutions to jointly invest in R&D resources in developing high value-added products with high margins. Meanwhile, the Group is actively preparing for expanding into the Greater Bay Area market in order to seize the development opportunities in different markets through domestic and overseas business development, thereby generating long-term stable income and enhancing its overall profit performance.

As for cost control, the Group will continue implementing strict cost control measures. While lowering administrative and distribution expenses and borrowing costs, the Group will also promote electronic administration processes in full strength. This initiative not only will help streamline the many and complicated workflows, but also will improve the overall administration in turn achieving greater operational efficiency.

The Group will engage in executing sound and pragmatic business strategies as it has previously done in a bid to achieve long-term stable growth and bring long-term promising returns to its shareholders.