Nothing can stop Hanergy from moving forward!
Li Hejun's speech on Hanergy's 22nd anniversary on September 29, 2016
Li Hejun, Chairman of the Board and Chief Executive Officer of Hanergy Holding Group, delivers a speech on the 22nd anniversary of the group on September 29, 2016.
I am very pleased to meet you all here. The title of my speech today is "nothing can stop Hanergy from moving forward."
At this time last year, exactly the same day, same time, same place, Hanergy announced its plans of four major reforms, including strategy transition, business refocusing, restructuring of corporate organizations and open cooperation. During the past year, Hanergy has made bold movements in pushing forward these reforms, implementing massive modifications and have all of them reflected in our daily actions. Despite of pressures, we have made breakthroughs in businesses, demonstrating encouraging trends for our future development. Today, I would like to summarize what we have achieved during the past year and introduce the plan for Hanergy's future development. Hanergy, after going through the storm, is sailing for our new endeavor today!
What did Hanergy achieve during the past year?
As a company that combines high-technology with energy, Hanergy has its unique competitiveness. Technology is and will always be our foundational asset. Our corporate mottos say, "cutting-edge technology ensures longevity." During the past year, no difficulty interrupted our continuous input in R&D, and we have made remarkable achievements.
Earlier this year, Hanergy's GaAs flexible cells (duel-junction) reached 31.6% of efficiency, and 28.8% for single-junction cells. Certified by NREL, both are the world's new records. This has been the sixth time Alta Devices breaks the world record since 2010. Recently, Hanergy has set new world records of the efficiencies of flexible CIGS (sputtering) cells and flexible CIGS (co-evaporation) cells at 17.96% and 17.7% respectively. These four world records demonstrate Hanergy's powerful R&D and innovation capability.
Recently, when asked what the annual R&D investment input ratio is for Hanergy, I laughed and told him, there is no ratio. That means, as long as it is needed by technology, equipment, industrial design or product development, no matter how much it will cost! Ever since Hanergy entered the thin film power industry, we have invested billions of US dollars! This is an unusually high level of investment. Why? Because we need to maintain the leading position of our technology - the core competitiveness of Hanergy. In this respect, we are tech-mania. Eventually, a new industry has been successfully established.
What is the advantage of Hanergy's technology? I think there are 7 aspects. The first is that it is original. We own 5 technological routes, on average they have been developing for 12 years, with 1,319 patents globally, 60% of which are inventions. The second is that we have a rich talent pool. Hanergy has more than 1,800 engineers and scientists globally, including leading scientists in semi-conductor and photovoltaic industries. The third is technological advantages, as mentioned before, we keep 4 world records. The fourth is strong equipment manufacturing capability. We have realized the domestic manufacturing of core equipment. The fifth is strong product innovation capability. We have developed series of products including mobile energy, solar cars and drones, and we are introducing them to the market. The sixth is that we are bringing down the cost. GaAs cells of Hanergy have all been ordered by world famous companies, and dozens more are negotiating with Hanergy right now for our GaAs products. The seventh is that Hanergy's R&D and innovation capability has been recognized by industrial authorities in both China and overseas. Now, Hanergy is unquestionably the world's leader in thin film solar industry, not only in scale, but also in technology.
Due to the efforts of Hanergy, thin film power has levelled up to become China's national strategy. Between last June and this July, 8 government documents issued by the State Council of China, National Development and Reform Committee (NDRC), Ministry of Industry and Information Technology (MIIT), National Energy Administration (NEA) and Ministry of Science, namely, National Scientific Innovation Plan for the 13th Five-Year Plan, Key Industrial Technology Development Guidebook (2015), Catalog for Strategic New Industry Key Products and Services etc., all clearly pointed out that we need to develop new types of PV cells and modules including CIGS and high-efficiency GaAs, and high-end equipment of manufacturing flexible new solar cells. Their support was given with unprecedented dedication. Why? Because thin film solar is now the focus of technological and industrial competitions globally, now more and more people are understanding our industry, relevant departments of Chinese government is understanding the importance and strategic significance of thin film solar.
Especially earlier this year, the relevant authorities conducted systematic research and evaluation, with a report concluding: thin film solar technology is the important direction for future PV development; in the future, international application market is about to witness an explosive growth; China maintains leadership in thin film technology and industry, which is one of the few industries that China can lead the world ; the thin film solar technology owned by Hanergy is world-leading, and Hanergy has the capability of developing and manufacturing high-end equipment; its technology is mature and has great application potential, carrying essential significance in drones, aviation and IOTs; it suggests offering Hanergy projects strong supports, in order to maintain China's international leadership in this industry.
While enhancing its technology, Hanergy is also enhancing its high-end equipment R&D and manufacturing capabilities. Colleagues who had experience with manufacturing all know that equipment manufacturing is the most difficult part when a new advanced technology is introduced and industrialized. Where do the products come from without core equipment and production line?
Moreover, the more advanced the technology is, the higher the standard is for the equipment. Without the capability of high-end equipment R&D and manufacturing, when can we turn "Made in China" into "Created in China"? After going through all these years of efforts, Hanergy has invested a great sum of money, achieving the capability of manufacturing high-end equipment, with 100% intellectual property rights. Hanergy's MiaSolé and GSE have achieved GW-level production line capability every year. Core equipment like MOCVD can be applied in other industries like semiconductor, replacing imported products. It is safe to conclude that core high-end R&D and manufacturing capability is a core competitiveness of Hanergy.
Hanergy focuses on thin film power. On one hand, we keep developing our technology and equipment, on the other, we keep innovating our products. In July, we launched 4 full solar power vehicles globally. As you can tell, this is a very symbolic, completely overwhelming event. People now can travel without charging stations; also it is possible for people to travel by cars in urban areas "unplugged". Without gas, solar can power the car for 20,000km each year. More importantly, the major power of this car is from the sun, making it the real "zero-pollution" renewable energy automobile. It can be described as the world's first full solar power vehicles with industrial mass production capability and promising business potentials. In the past two months, many local governments, automobile companies and agencies have come to visit Hanergy and negotiations for cooperation are being conducted.
Our plan for Hanergy solar automobiles is clear, that is fully open for cooperation. Hanergy is willing to provide its thin film cells, and have technology, equity, product and channels open! Hanergy is willing to work with automobile companies and investors in China and overseas, constructing a value chain for sharing the benefits of this industry, cooperating in developing solar automobile market, and introducing it to every family of the world as soon as possible, serving all human kinds.
The nature of enterprises is competition and the core of competition is talents
Automobiles are the strategic plan in mid- or long-term range, and also the business growth point in the future. While improving the business of current sectors is the focus of Hanergy at this stage. Therefore we have adopted a series of plans in order to safeguard the development of mature sectors. In the past year, our equipment manufacturing, household power generation, commercial power generation and agricultural application, anti-poverty PV applications have all made remarkable achievements. Hanergy's sales team is witnessing the trend coming, for continuous and rapid growth!
Let me share two stories here. A security guard of Hanergy headquarter, well-trained and a good member of the company, also married in Beijing, decided to join the sales team of Hanergy and took all his family back to his hometown in Yunnan Province, and became a sales agent of Hanergy. His efforts were soon paid: thin film products occupied the local market very rapidly. The former driver of an executive of Hanergy, also chose to join the sales team. He used to be the person who holds a poster sign by the road promoting Hanergy's products. His work was also paid – Hanergy's products sell quickly in his area. So, the sales breakthroughs we have made today are pushed forward by the collaboration of all Hanergy sales team and our sales agents, brick by brick, system by system!
As for the sales results, the 2016 mid-year report has revealed in details, I am not going to repeat it here, but I would like to introduce you two figures. First, 284%. The revenue of household and commercial rooftops in the first 6 months of this year has tripled. Since the later 2015, Hanergy has made great changes by exploring household PV system as a "blue-ocean market", by the end of 2015, we had 7,100 orders, and by the end of this June, we have received orders (and shipped) more than 20,000 sets of systems. Hanergy has found the right market. The other figure is 1,300. What does that mean? The number of Hanergy sales agents has surpassed 1,300 in just one year. The mid-year report forecasts that by the end of this year, Hanergy sales agents are going to cover 75% of all counties in China. Hanergy has established a national sales network. In this aspect, we have surpassed our peers!
Channels are fortune! Relying on powerful sales network, active and effective promotion, rapid delivery capability and one-stop green energy solution, Hanergy has established a brand new sales model, and recognized by the market. Therefore, my judgment is that with the high-end equipment R&D and manufacturing at the upper stream, sales networks and products sales at the downstream as the two pillars for businesses. The sales of listed company turned red into black in the early half of this year. Among all the revenues, 86% of them are sales with non-related parties (or known as third-party customers). On the basis of this, I have confidence that our business will prosper! By the way, I want to thank again for those who shorted Hanergy last May. They refreshed Hanergy Thin Film Power and forced us to grow and prosper!
We made sales breakthroughs mainly because we did a positive and effective exploration of business models to form our own one. Since July this year, the Group organized many intensive discussions to sort up our business-development experiences of the last 6 months, explicating the business flows, fund flows and information flows. Now our general business model has come into shape, each business division needs to optimize its own business model according to the general one, in order to occupy as soon as possible the market opportunities, establishing our own market position, and finally establish stable cash flows.
A key point to reach the target is the organizational reform. On this regard, we have our own guiding ideology: we have to transform our company from an investment-oriented organization into a horizontal organization that is highly responsive to the market. During the past year, our organizational reform has already gained some effects. Now our structure is more suitable for our business development, and the operation is also in process of adjustment, a more rigorous, efficient and dynamic organization is approaching. As I said before, first of all, we have to believe in the thin film power industry, and then resolutely implement the result-oriented principle: a good leader must be ready to take either a lower or a higher position. Hanergy will provide you a good platform and rewards beyond your expectation if you can make things happen! Hanergy has no caps on rewards it pays to employees!
Through a year of efforts, Hanergy's corporate image and brand value has been recognized by all circles of the society. In June this year, the World Brand Lab released in Beijing the "2016 China 500 Most Valuable Brands", Hanergy Holding Group ranked 44th in all Chinese brands and 1st in all clean energy enterprises with a brand value of 62.9 billion RMB. In July, Hanergy has been awarded "Global Technological Innovation Award" by its leading solar power car travel management system. Recently, Hanergy has been listed in "China's top 100 domestic-branded enterprises" by People's Forum Magazine of People's Daily, and it has also been ranked on the list of "China Top 10 leading figures of independent brands".
Practically speaking, although we've made great progress in the past year, and we've made great breakthroughs, but an enterprise like Hanergy, to reach our goal in reform and adjustment, we still face a lot of problems and challenges. Our organizational reform is not yet complete, it should be more market-responsive. Our corporate culture still has some problems, such as the lack of executive force, the lack of "Wolf" pursuit. I want to say: an enterprise is a land for competition! These problems and challenges that need us to solve and overcome are all about talents with abilities. Finding the right person, assign them and train the person in the right way, is and will always be our priority!
What Hanergy is going to do in the following 5 years
After one year of adjustment, Hanergy's core competitiveness became more prominent. Then what is the core competitiveness of Hanergy? I think there are 3 aspects: 1. Distinguished entrepreneurship; 2. Prospective strategic capability; 3. World leading thin film power technology. We have the world's leading technologies and product advantages in thin film power generation, what's the next to do? I think we should transform them into real market advantages, to turn them into cash flows! The Group has made a five-year strategy (2016-2020) based on the new changes and trends of technology and market, including the following aspects:
Vision and Mission: Hanergy sets up new goal, by 2020, to become one of the greatest companies in the Chinese business circle!
Strategic positioning: Hanergy's strategic positioning is to lead the global thin film power generation technology, and to build the thin film power generation industrial ecosystem. The first sentence is quite easy to understand: to keep our technological precedence. The second one I shall explain here: the thin film power generation is an important national emerging strategic industry, it has very broad application fields, and it can achieve energy substitution which will lead an explosive market expansion in the future. Hanergy as the industry leader will build platform, creating ecosystem to let everyone join the development of thin film power industry.
Core value: Hanergy's core value is: "Suit the action to the word, to provide the best products and best services to our customers." Now we are exploring the market, we should always consider the users' needs first. From now on, all our employees should act in accordance with this principle: use it as their guiding ideology for decision-making in their daily work. You should ask yourself often: "have you offered the best products, best services? Did you suit your action to your word?"
Brand strategy: The goal of Hanergy branding is to become one of the most influential brands in China by 2020, a leading brand by overall competitiveness and influence. In essence, Hanergy is a technological brand, the brand association of Hanergy should be formed following the route of "Hanergy=thin film power generation", and based on this imagination route, the customer's cognition and recognition of Hanergy will be established, then finally Hanergy's brand loyalty will be shaped. In the aspect of products' branding, we should establish corresponding marketing communication strategies according to different target customers to promote sales.
Talent strategy: "Success is determined by these three factors: people, people and people." I believe firmly that "united we triumph!" The leaders we need must be those who have worked and succeeded in relevant fields. In addition, Hanergy is introducing its All Employee Equity Ownership Plan, inviting all staff sharing the benefits of Hanergy development. During the meanwhile, we want to emphasize the sense of crisis and survival. The insecurity is the real security. A company that always gives sense of total security to its employees is not secure in essence, that is Mr.Q spirit (in Chinese saying, it means a kind of Don Quixote Spirit)! Because an enterprise is born to be in market competition!
Technology strategy: through continuous global technology integration and independent innovation, to lead the global thin film power generation technology and create the thin film power generation industry. In a short-term, Solibro will be our core technology and products; in a short-middle term, MiaSolé and Global Solar Energy will be our core technology and products; in a long term, Alta Devices will be our core technology and products. Our goal is to form the absolute competitive advantage of technology and scale by 2020.
Product strategy: Hanergy's strategic positioning of product is: bring our products to perfection! Hanergy's own products mainly include 3 categories: 1. Production line equipment; 2. Thin film cell; 3. All solar-powered car – the civil rigid demand product. Hanergy's application products include distributed power generation solutions and other cross-industry cooperative mobile energy products. The specific requirements are: 1. Every business division shall elaborate its products' planning roadmap; 2. Every business division shall build up its product development system; 3. Every business division shall elaborate its products' cost reduction roadmap.
Market strategy: Hanergy's market strategy is being market-oriented, taking product as the core, implementing the trinity market strategy of product, brand and channel.
Channel strategy: Hanergy takes sell on commission, direct sales and strategic partners as its channel strategy. Each business division shall define its own channel strategy in accordance with its own business sectors, products and status-quo.
Financial strategy: Direct financing as the main method, indirect financing is complementary. Gradually establish a financial supporting system composed by fund, insurance, financial company, trust company, securities, financial leasing, bank these 7 financial instruments.
Hanergy’s organizational reform: integrating high quality resources, to form Hanergy Thin Film Power Generation Holding as the new platform; let business divisions to lead the supply chain, to build up a fully authorized and strictly controlled horizontal organization.
All Employee Equity Ownership Plan: "while money is gathering, people is getting away", "Once the money has been distributed, people will stay side by side." No matter how rich you are, the money will be given back to the society at the end. To better motivate our employees, the Group will continue to launch the All Employee Equity Ownership Plan, to let more employees to share together our achievements, to harvest a successful life in Hanergy.
New breakthrough, new Long March and new sailing
Dear colleagues, in the past 22 years, Hanergy has experienced ups and downs, and faced lots of tough challenges. There were so many times we were at critical moments. Someone in the leader group told me that we eventually overcome all the difficulties that we once doubted we can solve. Why? After then, I get a conclusion, just four words:
First, ethics; for many years, a lot of people have been helping us at critical moments. The most important thing is that they believe in me. Why? Because of the ethics!
Second, wisdom; We need to handle specific problems by our wisdom, to grasp the key point. We shall always make the right decision and act quickly.
Third, will. You must have an iron will and strong ability of handling stress, and keeping the faith. You must endure the loneliness and don't be shamed, keeping the chin up. As I said, "More difficulties you overcome, more growth you will get." Today, Hanergy has overcome a matter of life and death. Therefore, the lower we fall down, the higher we rebound!
Fourth, luck. Nothing we can achieve without luck. Where we can get the luck? From the sense of mission! I feel, there is a mysterious power in the universe, when you fight for your mission, you will be given this power which helps you overcome every difficulty, bringing you luck and courage! I always said, "Things prosper by following the trend." Last year, Hanergy suffered from a big setback. However, in this year, we have carried over and have made a significant improvement in equipment manufacturing ability and sales. We get strong support from the government and financing institutions. That is all because Hanergy is following the trend!
I used to say, "great enterprise needs great experience and toughening." A friend said, "greatness is from struggle with time." More experiences bring more growth. I always tell the "10-90 rule" to you, which is: when you have done 90% of the mission, your achievement would be only 10%; When you finish the rest 10%, you can achieve the rest 90%. The "10-90 rule" teaches us to insist.
What to insist by? By belief and faith! When you believe in one thing from the bottom of your heart and keep working on it, it will happen. This is "mind law”. The dream of Hanergy is "to change the world by thin film power and mobile energy"! I believe in it! The core members of Hanergy team believe in it! We believe in our dream! Dream produces creativity! Dream makes us grow! At that time, I said in the ceremony of Jin'anqiao hydropower station, keep working until the God helps! Last year, for our dream, we encountered unprecedented difficulties, however, we also gained unprecedented growth! At the most difficult time last year, a friend sent a message to me, which is well-written, "Suffering is another kind of blessing!" That means after suffering from the difficult experiences, you will know it is actually a good thing. Mr. Ren Zhengfei, the CEO of Huawei, made the same point, "the bird cannot be scorched is a phoenix." I believe, after the blessing of difficulties, Hanergy has become a phoenix now!
Dear colleagues, it is the moment of breakthrough for Hanergy. Nearly a year and half of adversity experience has given us an unprecedented opportunity for growth. I want to say, a great organization, can only grow up in adversity. For now, I'm thinking of the Long March. We know of the Long March, when the Red Army approaching north Shaanxi, the number of people decreased from 86,000 to 7,000. I think, because this army had faith, although they needed to climb snow mountain and cross the swamp, all those were heroes. Therefore, the Long March is a process that built an army of iron, after then nothing can conquer them! No more difficulty they cannot overcome after bearing all the difficulties of Long March. The Long March in the history of the Chinese Communist Party has a sacred significance.
Also, the experience of Hanergy since the event of "May 20" is the same as Long March. All of you are heroes! I think, there are two kinds of heroes in Hanergy, the first is people who joined Hanergy before "May 20", working with us till today; the second is the people who joined Hanergy during the period between "May 20" and the resumption of trading in the future, which is the toughest period for Hanergy! I appreciate your perseverance and trust! This stage of Hanergy is just the same as the Red Army arrived in Yan'an, the north Shaanxi, a new era is coming! I remember when Chairman Mao was getting close to the north Shaanxi, after climbing Liupan Mountain, he wrote a famous poetry: "The sky is high, the clouds are pale, we watch the wild geese vanish southward. Those who reach the Great Wall are heroes, we who have already measured twenty thousand Li. High on the crest of Mount Liupan, Red banners wave freely in the west wind. Today we hold the long cord in our hands, When shall we bind fast the Grey Dragon?" There are no depression or confusion in this poetry, but only firm faith and determination to win. Likewise, Hanergy people also have firm faith and we are close to victory! I thought about it, what is the "long cord" for Hanergy? It is our strategic ability, technology and core competitiveness! Where is our "Grey Dragon"? In market! In sales!
Dear colleagues, I just said, a great organization must be growing in adversity, the great personality only sublimate in adversity! All of you are the pride of Hanergy, and core power of Hanergy! I believe, there is no doubt that Hanergy will be a great company. It is just only a matter of time! Suffering belongs to the past, bright future is coming to us! You have witnessed the best piece of Hanergy’s history, a great company growth experience! I hope that in your life, just like the way I feel, it is one of the most meaningful and the most wonderful life experience! We are welcoming a new breakthrough and a bright new journey!
(Translated by Zheng Meichen, He Gaoyuan and Lu Tao)