Our Lonking-Lonking Holdings Limited

Lonking Holdings Limited is a large engineering machinery manufacturing enterprise founded by Mr. Li San Yim, a deputy to the 11th and 12th National People's Congress, a national model worker, and an outstanding builder of socialism with Chinese characteristics in Longyan, Fujian Province in 1993. In 2005, Lonking led China's engineering machinery industry to be listed on the Main Board of the Hong Kong Stock Exchange (stock code: HK03339). It ranks among the world's top 50 engineering machinery enterprises.

The Company has adhered to the enterprise governance policy of "Relying on talents, focusing on management; improving quality, creating famous brands; winning the trust of the world and leaping to the top" and achieved rapid, stable, and sound development since its establishment. The Company's products cover loaders, excavators, forklifts, road rollers, skid steer loaders, etc. of more than 1,000 models. Among them, Lonking loaders, excavators, forklifts, and road rollers are favored by users due to their high quality and cost-effectiveness, and their market share is increasing year by year. The Company independently developed and manufactured core parts and components such as mechanical transmission components and hydraulic components with core competitiveness, and built a large-scale modern precision casting and forging production base. Among them, the supporting high-end hydraulic pump valves of excavators changed the situation that such basic components in China were previously dependent on imports for a long time.

The Company has always committed to the "one principle" of the "sales agency system", continuously strengthened the "three advantages" of "quality, service, and cost-effectiveness", and built a marketing service network of Lonking products all over the world. It has fully implemented the "four-in-one" sales service mechanism of complete machine sales, maintenance service, spare parts supply, and financial leasing in more than 1,000 primary and secondary key distribution agencies. The comprehensive implementation of the full authorization system of after-sales services fundamentally ensures the day-by-day improvement of sales channels and the rapid response to after-sales services. The Company has established a sales management mechanism of "returning to the truth according to the facts and freely concentrated and scattered management", continuously improved the risk control system, and ensured the stable and sound development of the Company.

The Company owns 19 wholly-owned subsidiaries in Fujian, Shanghai, and Jiangxi bases. Advanced equipment in the global industry is adopted for production and manufacturing. The manufacturing process is all subject to lean management in accordance with the "Operating Instructions". The quality management system has successively passed the certification of ISO9001:2015, GB/T19001-2016, and the national military standard GJB9001C-2017.

On the basis of comprehensively summarizing the successful experience of leapfrog development in the past, the Board of Directors of the Group, standing at the height of the times and the forefront of the international market, has formulated the development outline of Lonking's "second startup", fully implemented the strategy of "international orientation and leapfrog development", and clarified the direction for building an international first-class enterprise and a "Century Lasting Lonking".

Lonking's Enterprise Culture Framework

[Framework Overview]

The so-called enterprise culture is the value concept advocated by entrepreneurs, committed by all employees, and consistently executed in practice. Lonking's enterprise culture is actively advocated by Mr. Li San Yim, the founder of Lonking, and his senior management team, and is the value concept widely recognized and practiced by Lonking staff.

Lonking culture covers spiritual, institutional, and physical levels.

The spiritual level includes core values such as vision, mission, purpose, spirit, and style of work, as well as sub-concept clusters such as market, brand, service, quality, talent, morality, development, management, and environment. It is the core and soul of culture and the "mind and heart" of an enterprise.

The institutional level is transformed from the spiritual level, including more than 100 management regulations, more than 10 codes of conduct, and more than 20,000 Operating Instructions, covering enterprise management, product R&D, production and manufacturing, marketing, after-sales service, public relations activities, logistics support, and other aspects, revealing the strong institutional execution of the Company. It is the "limbs, hands, and feet" of an enterprise.

The physical level includes the Company's visual identity system, physical environment, even the appearance and packaging design of products, the communication network of enterprise culture, etc. It is the carrier of the spiritual level, the most intuitive external system of culture, and the "face and clothing" of an enterprise.

From the spiritual level to the physical level, from abstraction to concreteness, and from the physical to the mental level, there is a deflection and emphasis from meaning understanding and preaching to practice.

The vision is at the top of the culture framework, indicating that Lonking culture is a culture navigated by vision. It is market-based and has a guiding function. The next is the mission, which is proposed based on consumers and clarifies the justification and value of the Company's existence. These two are going with the flow because whether we are fully prepared or not, the engineering machinery market has already become an international market. Becoming an international large company is not only the need of Lonking's own development but also the objective requirement of market competition. At the same time, the time when the quality of engineering machinery is identified by experts has passed. The main body to appraise the quality of products becomes the market and end users. The products developed and manufactured by us and the services elaborately provided must satisfy the needs of users and be favored by users. Therefore, the mission emphasizes the orientation of consumers.

The so-called core values are the basic concepts and main beliefs actively promoted by us, reflecting the prospect and principles of the Company. Mission is also the core value of our company. Our core values are formed based on Lonking's unique culture cells that are different from other organizations and such values are inherited, innovative, and improved. We seek standards in contradictions to make culture cells healthier, more adapted to the times and society, and enable a stronger cohesion function for employees. The sub-concept clusters are derived from core values and clarify the Company's positions and concepts in different aspects, with a lasting incentive function. This part mainly explains the way of survival and development of Lonking.

The content of the institutional level and physical level standardizes, regularizes, and systematically manages all behaviors of the enterprise and employees, forms a unified image of enterprises, facilitates unified operation and management, and plays a role of restraint and identification in culture. Corresponding to explaining ways, this part is to optimize methodologies and focus on seeking channels and approaches for culture operationalization.

The enterprise purpose and enterprise spirit run through all v levels of culture and the sub-concept clusters, institutional level, and physical level reflect the style of the enterprise.