——New Year’s Greetings for 2019


On the occasion of the resignation of the old and the new, I, on behalf of the board of directors and management of ShangGong Group, would like to express my highest respect to all Chinese and foreign employees, and my greetings for new spring to all the global customers, partners, and friends who have always cared for the development of ShangGong Group.


In the past 2018, ShangGong Group adhered to the “market-oriented, benefit-first” management philosophy, faced challenges and overcome difficulties, and achieved remarkable results. Through the integration and restructuring of the Group's headquarter and domestic sales subsidiaries, the parent company's materialized operation has been restored, and the profitability has been greatly improved. Through SGE's merger and acquisition of DA AG, SGE's integrated management and management capabilities have been enhanced; Through the acquisition of 65% equity of Tianjin Richpeace and the restructuring of Shanghai Junji’s business, the Group's smart equipment manufacturing base was consolidated; by insisting on technological innovation, increasing R&D investment and achieving more product technology upgrades. The Group's annual sales revenue grew steadily,and high-end products continued to maintain its leading position in the global sewing equipment industry.


Facing the complex and severe market conditions, we must be soberly aware that ShangGong Group is in a critical period of urgent need for change. On the one hand, we are under tremendous cyclical pressure on corporate growth, labor costs are growing, some product technology advantages are being challenged, the market base of conventional products is still not established, and the intelligent manufacturing base in China is still under construction. On the other hand, the decline of automobile industry is accelerating. The downstream markets such as clothing and luggage are accelerating the transfer to other countries and regions. The external factors such as the increasingly fierce low price competition are having negative impact to us. Meanwhile, we are also facing major development opportunities. ShangGong Group has the foundation to promote change again. The reform of the mixed ownership system has basically been realized, the Group’s management team has begun to operate the Group with shareholder’s status, and the corporate governance structure has been further optimized.


System determines mechanism and change determines development. In the new year, facing the unchangeable globalization and market-oriented economic development trend, the Chinese and foreign enterprise managers of ShangGong Group must have a global market outlook, a comprehensive strategic view, and a global development concept, and help each other in the same boat. The Group will vigorously promote the comprehensive reform to form a customer-oriented organization structure. The departments of the Group will adjust the system based on the rapid response to the market, and the salary distribution of the cadres and the employees shall be based on economic benefits. We must further improve our internal strengths, streamline procedures and policies, reduce costs, and improve efficiency. We must resolutely overcome the ideological spirit of self-satisfaction and self-sufficiency formed by the growth of corporate profits in the past few years, advancing with the times and innovating thinking. We must have a sense of crisis, be prepared for danger in times of peace, promote hardworking spirit,and save all kinds of expenses. As a listed company, ShangGong Group should seize market opportunities, conduct financing or investments in a timely manner, and explore and promote the moderate diversification of manufacturing products. As a leading company in China's sewing equipment industry and are presentative manufacturer in Shanghai, ShangGong Group will accelerate the construction of Intelligent Manufacturing Base in Taizhou, China and the R&D Pilot Base in Bensheim, German, consolidating the Group's leading position in the global industry. At the same time, we will usher in the 100th anniversary of the "Butterfly" brand. ShangGong Group will take this opportunity to invite global partners to celebrate and seek common development and cooperation.


Standing on a new starting point, facing the market opportunities and challenges, let us join hands and work together, forge ahead, work hard, and write a beautiful chapter of ShangGong Group!


I wish you all good health, good work and happiness in the new year!


Chairman and President of ShangGong Group

Zhang Min

January 1, 2019