December 18, 2025, is a day that will be remembered by all employees of KANOU Precision. On that morning, the company’s directors traveled to Jiangmen at daybreak, filled with anticipation, to attend a Private Board Meeting led by Mr. Zhang Yihong of Zhizhe Youfang.

During more than ten hours of in-depth strategic coaching, Mr. Zhang applied his keen insight and extensive hands-on experience to guide us through a comprehensive and systematic review of our corporate strategy. Particularly moving was his commitment to continue providing ongoing business advisory support—standing alongside us as we navigate current operational challenges—and to position KANOU Precision as a benchmark case in his consulting work within the manufacturing industry.

We deeply value this wholehearted support and the trust placed in us.

Throughout the intensive discussions, Mr. Zhang guided us step by step in deep analysis—transforming vague development ideas into clear strategic frameworks, and breaking down potential challenges into actionable paths. This was not merely an exchange of ideas, but a comprehensive “strategic health check” and a “precision navigation” exercise that dispelled uncertainty and firmly set our course forward.

This meaningful gift at the close of 2025 is the most valuable one we could have received. Our immediate priority is to thoroughly digest and internalize the concepts and methodologies shared by Mr. Zhang. While the outline of our new strategy has begun to take shape, it will require continued in-depth discussion and careful refinement to transform it into a strategy system that truly fits KANOU Precision and can be effectively executed.

I. Strategic Insights: Strengths and Challenges Coexist

Through a systematic review, we clearly identified our core strengths:

1. A solid foundation in the Japanese market — 13 years of localized operations have enabled us to build deep understanding of Japanese customers’ expectations in quality, delivery, and service, as well as long-standing trust.
2. Flexible production capabilities — strong expertise in handling multi-variety, small-batch orders, well aligned with the needs of high-end manufacturing customers.
3. Localized team support — a Japan-based team providing direct service, ensuring fast response, smooth communication, and a clear differentiation in service excellence.

However, we also recognize with clarity that in a rapidly evolving global high-end manufacturing ecosystem, sustained growth requires overcoming common structural challenges. Viewing ourselves through a strategic lens, KANOU Precision is transforming these challenges into drivers for systematic upgrading:

1. Building a resilient supply chain network — We are actively advancing supply chain innovation, evolving from a high reliance on outsourcing toward a model of “core in-house control + strategic collaboration.” By carefully selecting high-quality partners and deepening equity and technical cooperation, we are building a more reliable, efficient, and value-sharing supply ecosystem to ensure delivery stability and consistent quality.
2. Extending capabilities toward the front end of the value chain — We are committed to transforming from a “build-to-print” manufacturer into a value partner in co-design and cost optimization. By engaging top-tier technical advisors and strengthening our engineering capabilities, we support customers at the early stages of R&D to optimize designs, reduce total cost of ownership, and achieve value co-creation.
3. Executing a prudent global market expansion strategy — Leveraging the deep trust and mature service system established in the Japanese market, we are systematically expanding into growth markets such as Europe and the United States. Through localized talent deployment and digital marketing outreach, we are diversifying market risk while integrating “Japanese-quality DNA” with global customer needs.
4. Strengthening lean operations and strategic investment — By optimizing cash flow management and expanding diversified financing channels, we ensure sustained investment in core technologies, talent, and supply chain capabilities. We remain committed to lean operations, ensuring that every resource is precisely focused on enhancing customer value and building long-term competitiveness.

II. Strategic Direction: Deep Focus and Co-Growth with High-Value Customers

We remain firmly focused on cutting-edge sectors with stringent requirements for quality, delivery, and cost, including precision medical devices, high-end robotics, and intelligent equipment industries. These customers represent the forefront of manufacturing innovation, seeking not merely precision components, but long-term, trustworthy value partners.

From precision machining to solution-oriented value partnership — We are advancing our capabilities toward the front end of the value chain by actively participating in customers’ early-stage R&D. Through systematic proposals encompassing design optimization, cost integration, and process innovation, we aim to reduce customers’ total cost of ownership and elevate our role from order executor to co-creator of technology and value.

Building an agile and reliable supply chain ecosystem — We are committed to transforming our supply chain model by forming deep strategic alliances with core suppliers through capital and technical integration. These partnerships emphasize close collaboration, shared risk, and shared rewards—serving not only as the foundation for stable delivery and consistent quality, but also as a strategic moat that underpins long-term competitive advantage.

Building a preventive, end-to-end quality management system — Quality is our lifeline. We are systematically upgrading our quality management framework, shifting the focus from “post-inspection” to “design-stage prevention and process assurance.” At the same time, we continue to empower our quality teams with industry-leading expertise, ensuring a zero-defect commitment throughout the entire product lifecycle.

Launching a dual-engine global market strategy — While continuing to deepen our presence in the Japanese market and unlock greater value from existing customers, we are also expanding into European and U.S. markets in a structured and disciplined manner. By establishing localized teams, participating in leading international trade shows, and leveraging digital marketing, we are steadily advancing customer diversification and global market penetration.

III. Core Commitment: Building Long-Term Competitiveness Through Key Capabilities

To turn our strategic blueprint into reality, KANOU Precision is focused on building four strategic pillars—our solemn commitment to the future:

Forging a benchmark reputation for excellence in delivery — We will devote our full efforts to ensuring that every key project—whether cutting-edge industrial robots, life-critical medical components, or core modules powering intelligent equipment—becomes an industry benchmark that showcases KANOU Precision’s exceptional capabilities and absolute reliability.

Building a solid financial foundation for resilient operations — By expanding diversified financing channels and optimizing working capital, we will continue to strengthen our financial resilience and strategic investment capacity, providing a robust foundation for long-term technology development and market expansion.

Bringing together top-tier intelligence that drives innovation — We are recruiting globally to attract leading talents and advisors in R&D design, precision quality management, and international market development, injecting intellectual momentum into the leapfrog upgrading of our core capabilities.

Building a value-coexisting ecosystem — We are actively exploring innovative collaboration models with outstanding upstream suppliers. Through capital linkage and deep operational cooperation, we aim to build a trusted, highly collaborative, and mutually growing industrial ecosystem.

At the same time, we clearly recognize that an excellent strategy must be supported by an excellent organization. To this end, we continue to optimize our talent attract–develop–deploy–retain mechanisms and build a systematic capability development framework. We are redefining the strategic value of the quality function, strengthening its role in front-end prevention and value creation. We are committed to fostering a value-driven, confident, and energized organization—one that motivates not only our employees, but also our partners.

All these efforts point toward a clear future: KANOU Precision is not merely a manufacturing company, but a trusted value co-creator and long-term strategic partner to our customers.

IV. Confidence in the Journey Ahead: Strategy × Organizational Capability

A clear strategy is only the first step of a long journey. Sustained success equals Strategy × Organizational Capability. We firmly believe that under the professional guidance and continuous empowerment of Mr. Zhang Yihong, and through company-wide internalization and execution, we will unite our people around a shared conviction and unleash collective momentum. Our goal is not merely to overcome immediate challenges, but to strengthen our foundations and build a new chapter of sustainable growth.

Looking ahead to 2026, a hopeful blueprint is gradually unfolding before us. Let us move forward with one heart and one purpose, translating strategy into action step by step—from quality upgrades and front-end technological engagement, to supply chain innovation and market expansion. Together, we will drive KANOU Precision’s transformation from “a China-based factory serving the Japanese market” into a value partner with true technical proposal and co-creation capabilities.

The call to advance has already sounded. The future now awaits our full commitment and determined pursuit.