Hengguang Co., Ltd. recently held adiscussion meeting on the reform of the group-type organizational structure,and announced the relevant implementation plan for the adjustment of thegroup's organizational structure, mobilizing all employees to unify theirthinking and clarify the goal, strengthen confidence, continue to struggle,work together, and make every effort to promote Hengguang Co., Ltd. to moveforward on the road of focusing on development.

Cao Lixiang, chairman of Hengguang Co.,Ltd., gave instructions at the meeting that entering the new era and new stageof development, all departments should understand the new requirements underthe new situation, have the courage to face change, be ready to meet change,create the ability to innovate and change, solve the challenges faced in thecompany's development process and grasp the opportunities in the developmentprocess through deepening reform and innovation and change, and promote thecompany to maintain rapid growth and high-quality development. Go all out towelcome the first anniversary of the company's listing with excellent results.

2022 is the "project constructionyear" and "management improvement year" of Hengguang Co., Ltd.Organizational structure is the most basic structural basis for enterpriseprocess operation, department setup and functional planning, as the tractionand top-level design of the company's comprehensive improvement of management,the establishment of the new organizational structure brings a good start,laying a solid foundation for deepening management reform and releasingorganizational vitality.

This organizational structure optimizationis the beginning of the company's current round of deepening reform andinnovation and change, which is a deep change to meet the needs of thecompany's rapid development strategy after listing, and also lays a solidfoundation for the further expansion of Hengguang's business. It furtherclarifies the development system of the company's industrial operation andinvestment development, clarifies the functions and positioning of eachdepartment of the company under the new development system, and thecorresponding organizational operation mechanism, laying the foundation forHengguang to move to a new stage, form a new model and build a new structure.

First, the background of this change.

Organizational change is the achievementof the strategic goals of the organization.

If you keep the maintenance of success, itwill be difficult to continue, because the creation of the industry will beself-sufficient. The best commemoration of history is to make new history. Since its establishment for 14 years,Hengguang Co., Ltd. has entered a new era from a new starting point, overcomingdifficulties and forging ahead, and reform and innovation have always been themain theme of the development of Hengguang Co., Ltd. From the Hongjiang Riverto Hong Kong, sailing overseas, reform and upgrading do not stop, innovationand optimization do not stop. Hengguang Co., Ltd. has rapidly developed into amore influential rising star in the domestic chemical new materials and newenergy industry.

In order to achieve the strategic goals ofthe new stage, create a new situation of high-speed and high-qualitydevelopment of the company, expand new business units, and accelerate theprecise layout of overseas, Hengguang Co., Ltd. opens a new chapter oforganizational change with the trend of "starting is sprinting".

This change will enable Hengguang tomaintain strong competitiveness in the complex and ever-changing market of newchemical materials and new energy materials, while optimizing internal talentreserve and organizational planning, and increasing its risk resilience torapid expansion in the future. The goal of this organizational change is toaccelerate the achievement of the organization's strategic goals whilepreparing for the future.

Second, accurately grasp the coreintention of this adjustment.

The key goal of this organizational reformis to build Hengguang into an efficient and capable, innovative and stronglearning matrix organization. In line with the principle of "refinedheadquarters, strong business", the group headquarters was established inaccordance with the positioning of the headquarters of business strategy controltype, the power and responsibility relationship between the group headquartersand the base (business unit) was adjusted, the functions of the groupheadquarters were clearly positioned, and the functions of the base werereshaped and optimized.

The Group Headquarters focuses on corefunctions such as strategic management, investment and financing and financialfund management, human resources development management, supply chainmanagement, project development, product and technology research anddevelopment, marketing control and resource collaborative sharing. The safetycontrol, production and operation and project construction functions of thebase have been precisely strengthened, and the role of the base has beenmaximized. The headquarters of the group and all departments of the base form astrong PM dual reporting relationship, forming an efficient and unified dualmatrix.

This adjustment mainly focuses on thefollowing principles.

1. Business strategy guidance: build amanagement and control model guided by the group's strategic goals, clarify theresponsibilities and authority of the group's headquarters and bases, build astrategic control-oriented group headquarters, and stimulate the safetyproduction and operation capabilities and vitality of the base.

2. Vertical and horizontal synergy:reorganize departments or modules with related or similar functions andoverlapping functions, implement a two-dimensional matrix organizationalstructure combining the group and the base, strengthen the core functions ofthe headquarters and the base, optimize the control process, exert synergy,improve management efficiency, and create a streamlined and efficient groupheadquarters and professional and high-energy production base.

3. Smooth and orderly progress: theorderly translation and connection of all functional personnel, fully considerthe career development of each employee, fairly and steadily adjust personnel,and gradually optimize.

Taking the reform of the group-type organizationalstructure as the "starting style", the company will continue topromote a series of optimizations in the fields of strategic investment,industrial structure and corporate governance, and continue to promote therapid growth and sustainable development of Hengguang shares. It is believedthat through the optimization and change of the organizational structure,Hengguang will create a new situation of higher quality development. Themission is on the shoulders, forge ahead. I believe that Hengguang, which hasthe cultural genes of reform and innovation, will be able to grasp the goal andpoint to brilliance!