2023 is already halfway through, and it is time for mid year trading. Looking at the overall economic situation, the global political and economic situation is constantly changing, and the world economy is shrouded in gloom and continues to be sluggish. As a result, China's paper industry as a whole has suffered a heavy blow, with weak demand, inverted prices, and multiple factors such as overall overcapacity in the industry. In the first half of this year, listed companies in China's paper industry experienced a significant decline in performance, mainly covering packaging paper Different papermaking fields such as cultural paper and specialty paper. Many of these companies have incurred huge losses. In the disclosed semi annual performance forecast, Chenming Paper Industry, which is well-known to everyone, had a pre loss of 650 million to 750 million yuan in the first half of the year; Shanying International suffered a pre loss of over 400 million yuan in the first half of the year; Bohui Paper Industry's performance in the first half of the year was expected to suffer a maximum loss of 376 million yuan, which was quite devastating. Since the beginning of this year, neighboring enterprises have experienced phenomena such as insufficient production, shutdowns, salary reductions, and layoffs, making it difficult for them to operate.

On the other hand, our KAN company's performance report for the first half of the year showed a target sales completion rate of 41.0% and a target production completion rate of 38.4%. The company's annual sales revenue target is 700 million yuan, with a target completion rate of 43.6%.

The company's performance report for the first half of the year may not be impressive, but in the overall sluggish environment, achieving the current results is not easy. This is the result of the joint efforts of all KAN people. At the same time, we also need to recognize the current difficult situation and many existing problems of the company. The company is facing severe market challenges, and we still have a considerable gap from the annual target set at the beginning of the year.

This year, the company's gross profit margin has decreased by 4.1 percentage points compared to last year, and its profitability has continued to decline. At the same time, the company's per capita output has always been at a low level in the industry. At present, we are in a critical period after the transformation of the KAN company system. As the platform on which KAN people rely for survival, the company's profitability and development trends are closely related to every KAN person. How to break through the current difficulties, achieve the company's annual goals, and ensure the company's sustained, healthy, and stable development is a topic that every KAN person is facing.

To forge iron, we still need to be hard ourselves. Only by practicing our internal skills can we see the light in this uncertain market puzzle, find the definite force to move forward, and continuously advance towards the anchored overall goal. Next, the company will continue to strengthen and improve in the following areas:

1. Strengthen employment management, improve overall efficiency, improve employment system, and continuously improve the personnel efficiency ratio

KAN's current annual per capita revenue is only 50% of the industry average. We need to reform the shortcomings and loopholes in the original personnel management, achieve two-way selection of personnel, establish a scientific employment mechanism that is capable of going up and down, and capable of entering and exiting, so that those who are capable and willing to work can obtain more stage and rewards. At the same time, we will not support idle people, which contradicts KAN's development philosophy, and gradually adjust and optimize it.

2. Continuously investing in technological transformation to achieve the goals of improving efficiency, reducing costs, and seizing the market

In the coming years, the company will continue to increase investment in technological transformation, continuously update equipment and improve production capacity, promote the level of products and processes towards high-end, intelligent, and green, and further refine, strengthen, and expand the enterprise. Comprehensively improve the equipment level of existing equipment, further enhance production capacity and product quality; Continue to increase investment in intelligence, and on the basis of successfully completing the first phase of the digital factory project, continue to promote the construction of the second phase of the digital factory project, so as to achieve intelligent control of the entire production process, build an enterprise intelligent brain based on data to make accurate decisions, and promote the transformation and upgrading of enterprises from digitalization to intelligence; We will continue to increase energy-saving and consumption reduction renovations in various production processes, as well as the utilization of green energy. We plan to complete the energy-saving renovation project for high-temperature and high-pressure circulating vulcanization beds within two years, and actively introduce advanced energy-saving equipment and technology to achieve low-carbon and green production. We will accelerate the implementation progress of photovoltaic projects and continuously develop and utilize green new energy.

3. Accelerate the development of new products, improve quality and efficiency

Technological innovation has been KAN's winning weapon in the market for decades, and only innovation can win the future. The company will continue to monitor market demand, closely monitor technological advancements, benchmark world-class products, further increase investment in technology, accelerate the pace of new product development, seize market opportunities, accelerate the pace of new product development and entry into the market, and seize the high-end market. Our goal is to achieve a high-end market share of over 50% within 3 years.

4. Strengthen market development, optimize market layout, and enhance profitability

Sales is the vanguard of the company's open source. The sales team should study the market carefully, be brave enough to explore, and carefully plan and layout, formulate reasonable strategic plans, assess the situation, and achieve the goal of creating profits through performance in a good environment, finding highlights through stability in a bad environment, constantly opening new products for development, locking in the core, maintaining the mid-range, competing for the high-end, and selecting the low-end, holding onto the basic market, seeking new directions, and standing invincible in the market.

Victory has always belonged only to climbers who face difficulties. Standing at the midpoint of the year, looking back on the road ahead, looking into the future, recognizing the path beneath our feet, and embarking on a new journey, KAN people, let's work together to cheer and move forward towards the established annual goals with courage!