Xiamen Jihong Co., Ltd.

Xiamen Jihong Co., Ltd. is a prominent enterprise listed on the Main Board of the Shenzhen Stock Exchange since 2016. The company specializes in cross-border social e-commerce and paper FMCG packaging solutions, leveraging technology, innovation, and digital intelligence to enhance its operations. It has established itself as a leader in the B2C export e-commerce sector in China, focusing on the sale of distinctive Chinese products to various international markets, including Southeast Asia, Japan, South Korea, and the Middle East. The company's operations are divided into two main business lines: cross-border social e-commerce and paper FMCG packaging solutions. Its e-commerce segment employs AI algorithms for market analysis and targeted advertising on social media platforms, allowing for efficient product selection and customer engagement. Meanwhile, the packaging division offers integrated solutions that encompass marketing planning, design optimization, intelligent manufacturing, and distribution, primarily serving leading companies in the FMCG sector. With a strong emphasis on environmental protection and innovation, Xiamen Jihong continues to expand its market presence and enhance its competitive advantages in both business lines.

(a) The company is an innovation pioneer and leader of B2C export social media e-commerce companies The company's cross-border social e-commerce business adopts a sourcing model, which is different from the business model of third-party e-commerce platform sales in many aspects, including access to user traffic, specific requirements for sellers and capital expenditure. Despite the high barriers to entry, the sourcing model provides greater flexibility and enables companies to adapt to market trends while reducing the upfront costs of maintaining large inventory volumes. It also enables the company to accumulate data insights to better understand consumer needs and preferences, and to enhance the effectiveness of the company's product selection, product delivery, supply chain management and logistics management capabilities. In addition, the company does not rely on any single third-party platform for online traffic or must maintain an online store on an e-commerce platform, and can flexibly advertise on social media platforms to maximize precision marketing and profitability. (b) The company's integrated AI technology runs through the company's comprehensive, efficient and scalable operating systems The company's cross-border social e-commerce business is efficient and flexible, enabling the company to navigate the complex cross-border social e-commerce business environment and meet diverse consumer needs. Since the establishment of cross-border social e-commerce business in 2017, the company has continued to train and strengthen data analysis capabilities and AI technology, including AI vertical model, machine learning and big data analysis, and AI technology throughout the entire business process, and constantly promote the company's business transformation from digital to digital intelligence. For the key processes of cross-border social e-commerce business, the company has successfully developed AI technologies covering product selection, image material design, video material generation, advertising copy and translation, precise product recommendation, advertising delivery and customer service, to achieve the upgrade of digital intelligence level. (c) Strong data analysis ability lays a solid foundation for the company's unique sourcing model The company has the first-mover advantage to accumulate massive consumer behavior data insights from cross-border social e-commerce business, which is the basis for the company to conduct data analysis and build algorithm capabilities. Through business operations, the company has accumulated in-depth understanding of advertising ROI across a wide range of channels. Unlike traditional e-commerce platforms, the company obtains user data analysis from digital marketing service providers and social media platforms, enabling it to accurately label products when advertising and efficiently remarket to other consumers with the same or similar needs. The company uses product labels, platform user labels and transaction information to build a proprietary product relationship matrix to accurately depict the relationship between the characteristics of user profiles in different regions and related products, which provides a solid foundation for the company to further improve its AI model capabilities. (d) The company's cross-border social e-commerce business has efficient and refined supply chain management capabilities, taking into account consumer satisfaction and cost control The company only maintains a certain level of inventory for specific products, and the main model is to purchase products from suppliers after receiving consumer orders (if the company does not have ordered products in the warehouse) to manage the supply chain of the company's cross-border social e-commerce business, which enables the company to maintain a lower stock-to-sales ratio than other companies in the industry. This supply chain management model is supported by the company's intelligent purchasing and logistics management system. Through the Giikin system, the company will deeply integrate the data insights with product suppliers and logistics service providers, and realize the intelligent management of logistics nodes such as commodity transportation, delivery and signing. (e) The company to marketing design and technology research and development breakthroughs, packaging solutions and FMCG leading enterprise customers to maintain long-term business relations The company is one of the few companies that can meet the one-stop needs of China paper FMCG packaging solutions from marketing strategy, product design, process design and technical planning, production to transportation and logistics. Based on the company's deep creativity, in-depth understanding of enterprise customers and accurate grasp of the latest ESG trends, the company is able to provide enterprise customers with a wide range of packaging solutions to meet the needs of enterprise customers for a wide range of products. (f) The company's resilient organizational structure is led by a senior management team with an innovative and pioneering spirit The company's senior management team has rich industry experience in FMCG packaging, cross-border social e-commerce and Internet digital marketing, and has a deep understanding of the company's business development and strategy. An efficient organizational structure is the key to the healthy development of the company. The company's cross-border social e-commerce business adopts a unique flat organizational structure, with a small front end team supported by the middle level, and several company family front end teams are established. Each family is responsible for the business process including product selection, advertising delivery and advertising material generation. The family evaluation criteria give priority to profit, while taking into account strategic contribution. This standard, combined with the horse-racing mechanism, promotes healthy competition and synergies between families, and enhances the company's market development ability and industry competitiveness. The company's middle and senior management teams are the guardians of the family, supporting, coordinating and delivering middle and back end business processes including supply chain, IT systems and customer service to maximize profits.