A new year, a new chapter
The first light of 2026 marks more than a new calendar year: it renews our confidence and determination. As China's 14th Five-Year Plan concludes and the 15th is about to begin, we prepare for the next stage of our work.
At this turn of the year, Hongxiang Shangdao extends its sincere thanks and warmest wishes to the leaders, partners, customers, colleagues and families who have supported our development.
In 2025, global uncertainty and industry transformation reshaped our markets. Amid rapid technological change, we remained committed to steady, sustainable development . We sought dependable opportunities in uncertainty, building capacity and adapting our business for the future.
We strengthened our systems, processes, organization and capabilities. Improvements in management, compliance and operating discipline made decisions easier to verify, execution easier to trace and risks easier to identify. Quality and safety remained priorities in every delivery and service. Sustainable development means refusing to trade long-term resilience for short-term momentum, or quality for speed. We will continue to build patiently and hold ourselves to higher standards.
Technology: building a sound foundation through innovation
Technology development is both a principal source of future growth and an essential foundation for sustainable operations.In 2025, we continued investing in reusable technology, product development and engineering systems, choosing approaches that allow knowledge and capabilities to accumulate and scale. We view technology as a long-term asset, research and development as a core capability, and products as the outcome of coordinated teamwork. Our aim is to turn innovation into value that can be delivered, improved and sustained.
This year, we received national-level recognition as a science and technology SME. This recognition acknowledges our research capabilities, growth potential and organizational development. We see it as a starting point for higher standards and a reminder to remain worthy of the trust placed in us.
We treat AI as a means to improve our engineering systems as it reshapes productivity. In 2025, we adopted AI across our work, integrating it into coding and research workflows, from understanding requirements and implementation to testing, debugging and documentation. Overall efficiency improved by approximately 90% on comparable projects . Beyond speed, we are developing a different engineering approach: automating repetitive work, allowing people to focus on judgment and creativity, and capturing engineering knowledge in shared processes. These changes give us a more reliable method for building good products consistently.
In 2026, the opening year of the 15th Five-Year Plan, we will expand the use of AI . Intelligent capabilities will guide product design, architecture and delivery. We believe future competitiveness will depend on organizational learning, mature engineering systems and sustained innovation, with AI forming part of that foundation.
We also participated in and supported the organization of the National University Student Innovation and Entrepreneurship Practice Competition. Business growth should contribute to innovation, young people's development and society. Connecting industry and education means opening real problems and practical settings to students, so they can build skills, resilience and an understanding of industry through collaboration. We will continue supporting cooperation among education, talent, technology and markets.
During the year, we established a company Communist Youth League branch and continued to follow Party-building leadership. In uncertain times, direction matters; in complex situations, shared purpose matters. Party-building strengthens our shared values and discipline and connects our work to national development. We believe this gives sustainable development a firmer organizational foundation.
Workforce services: earning trust through professionalism, discipline and care
Workforce services put our commitments into practice and demonstrate our standards on site. In 2025, we expanded our service capacity, organization and partnerships while maintaining delivery under more demanding conditions. Discipline supports safety, professionalism earns trust, and care improves the experience. Reliable execution and emergency response are the basis of our reputation.
During the year, we provided staffing for 24 concerts, up approximately 166.7% from nine in 2024. The increase required more complex scheduling, tighter standards and stronger coordination, reflecting the development of our operating systems.A total of 179 people participated in assignments, a new high, and we completed four temporary event assignments. Each assignment depended on standardized processes, clearly defined roles, coordinated teamwork and the ability to remain calm under pressure.
People are the foundation of service quality.In 2025, 38 candidates completed examinations with a 100% pass rate, up 90% from 20 candidates in 2024. These results reflect sustained training and team development. We align training with real situations, assessment with professional standards and development with career paths. Reliable service depends on skills and responsibility built through long-term practice and organizational support.
Meanwhile, we signed a supplier agreement with a state-owned enterprise, marking progress in our service standards, qualifications and organizational reliability. The partnership brings higher expectations for compliance and dependable delivery. We will honor that trust through stronger controls, consistent service and a commitment to lasting cooperation.
Equity investment and incubation: developing a second source of growth
Business incubation is a long-term investment in innovation, combining industry experience with capital to support emerging ventures.In 2025, we moved from individual project support toward a coordinated incubation system, focused on finding promising projects, developing useful products, building capable organizations and achieving sustainable operations. We place increasing emphasis on choosing sound directions early, improving support mechanisms and coordinating resources to help projects grow.
We incubated five projects during the year. Three won gold awards in the National University Student Innovation and Entrepreneurship Practice Competition, and three companies were established through our incubation work. The value of incubation extends beyond awards. It involves helping ideas become products, teams and businesses. We will continue supporting incubated projects with governance, industry connections, market access and management resources to make growth more sustainable and risks more manageable.
Looking ahead to 2026
At the start of 2026, sustainable development remains our guiding principle. We will turn strategic commitment into continued investment, long-term thinking into organizational capability, and quality into consistent delivery.
We will strengthen research and development at our technology company , with more systematic technical work, clearer product plans and better documentation of results, laying the groundwork for a future high-tech enterprise application and making our innovation capabilities demonstrable, repeatable and scalable.We will also increase investment in asset-light projects where the rationale is clear and risks are manageable, supporting our strategy, industry cooperation and long-term returns.
As our businesses and organization evolve, we plan to establish a corporate management company to improve governance and coordination . This will support more effective resource allocation, risk management and execution while preserving each operating company's accountability. We also plan to refine our equity structure to align incentives and cooperation with our strategy, giving future growth a stronger institutional foundation.
Colleagues and friends,
Progress comes from taking the next step, even when the road is long and the task is difficult. Our results in 2025 reinforce our confidence in our direction. Our plans for 2026 call us to keep working.
Let us continue together, supported by technology, investment and service, to build the next chapter of our development.
We wish you and your families a happy, healthy and successful new year. We look forward to continuing together in 2026, making steady progress toward new possibilities.
Hongxiang Shangdao ® — Elexvx ® Inc
Data sources: Group Human Resources Department and Investment Management Committee
Reviewed by: Company Youth League Branch and Administration Department
Published by: Communications Department
