1. Introduction to the Project

1.1 Project background

1.1.1 Project introduction

With the rapid development of the "smart home" industry, the huge potential demand in the smart home market has been gradually released. Furniture manufacturers' demand for furniture manufacturing equipment is also increasing day by day. At the same time, furniture enterprises have an increasingly urgent need to upgrade the furniture production process to "Industry 4.0", putting forward higher and higher requirements for the manufacturing process and quality of special furniture production equipment, and increasing the demand for the upgrade of high-end technologies such as intelligent and numerical control of equipment.

The project is located in Ningjiang District, Songyuan City. The high-end smart home production equipment project is crucial to industrial development. It can improve production efficiency, reduce costs, ensure product quality, meet consumer needs, help to enhance the international competitiveness of the domestic industry and promote technological innovation. On the basis of technological integration, this project will promote the smart home industry to develop to a higher level.

1.1.2 Market prospect

(1) Current development status of the smart home industry

According to data, from 2016 to 2020, the market size of smart homes in China increased from 260.85 billion yuan to 514.47 billion yuan, with an average annual compound growth rate of 18.51%. It is predicted that by 2025, the market size of smart homes in China will reach 835.71 billion yuan.

In recent years, the shipment volume of smart home devices in China has been growing rapidly. According to data, in 2017, the market size of smart home devices in China was only 114 million units. By 2019, the shipment volume of smart home devices in the Chinese market exceeded 200 million units, reaching 208 million units, an increase of 33.5% compared with 2018. In 2020, the shipment volume of smart home devices in the Chinese market reached 220 million units, and in 2023, the shipment volume of smart home devices in China reached 240 million units.

With the advent of the global "Smart +" era, artificial intelligence in China has received high attention from relevant departments. Coupled with the rapid development of technologies such as the Internet of Things and 5G, the potential of "Smart +" is increasingly evident. As one of the important applications of the Internet of Things, smart homes have been mentioned many times in national policies. With the integration of new-generation information technology and manufacturing technology, intelligent manufacturing has become an inevitable trend in the development of the manufacturing industry and the key for countries to compete for the status of a scientific and technological powerhouse. In recent years, the state has launched the adjustment and revitalization plan for the equipment manufacturing industry, requiring the improvement of the independent innovation and localization level of the equipment manufacturing industry. The State Council has issued the "Made in China 2025" development strategy to comprehensively promote the implementation of the strategy of building a manufacturing powerhouse.

Due to the rapid development and industrial upgrading of China's furniture industry, higher requirements have been put forward for the manufacturing process and product quality of equipment. In recent years, customized furniture has developed rapidly, which objectively has also increased the demand for the upgrade of high-end technologies such as intelligent and numerical control of manufacturing equipment in the furniture manufacturing industry. At the same time, the industrial concentration of China's panel furniture manufacturing equipment industry is relatively low. Although there are a large number of domestic professional panel furniture equipment manufacturers, most enterprises are small-scale and of low quality, which is not conducive to the long-term development of the industry. In order to optimize resource allocation and guide the healthy development of the industry, it will be an inevitable trend to form several large-scale enterprises with strong competitiveness. 

(2) Development forecast for the smart home industry

Due to the booming development of the "home-based economy", the younger generation not only seeks satisfaction in life, consumption, and entertainment in the home environment, but also work and learning activities are increasingly integrated into home life. Home-use intelligent vision manufacturers have entered the smart home field starting from home security products. Home security has become one of the fastest-implemented and most specific applications in the smart home field. It covers a large amount of front-end data perception and cloud-based data processing related to video streams, such as functions like message push, video playback, and security early warning.

With the continuous improvement of chip computing power and the wide-scale deployment of 5G technology, cloud-platform construction technology, audio-video AI algorithm technology, and product intelligence technology will provide strong support for the smart home industry. At the same time, with the popularization of vision technology in smart home products, future home-use intelligent vision will go beyond the independent operation of a single home-security scenario, but achieve automatic linkage of multiple scenarios based on vision technology, enabling smart home products to actively perceive, identify, and share information, achieve intelligent feedback and execution of the whole house, and provide personalized services according to user preferences, promoting the transformation and upgrading of the industry.

After intelligent technology is improved constantly, the scale of smart home devices in the Chinese market continues to expand. Smart home devices include the intelligent upgrade of a variety of devices from security monitoring to lighting, temperature control, audio-video entertainment, etc.

Smart home devices have become the main force driving the development of the smart home market in China. Among them, security monitoring devices are the most popular, with a market share of 41.4%, followed by temperature-control devices, with a market share of 24.8%. In addition to security monitoring and temperature-control devices, smart home devices also include smart lighting, smart home appliances, smart audio-video entertainment, smart wearable devices, etc. Among them, smart lighting devices have the highest market share, accounting for 26.6%, followed by smart home appliances, with a market share of 12.1%, smart audio-video entertainment with a market share of 8.4%, and smart wearable devices with a market share of 3.9%. In addition, the development of smart home devices has also received strong support from the government. The government attaches importance to the development of smart home devices, increases investment in smart home devices, and promotes the research and development and application of smart home devices.

In December 2022, the Central Committee of the Communist Party of China and the State Council issued the "Outline of the Expanding Domestic Demand Strategic Plan (2022-2035)", clearly stating that it is necessary to promote home decoration consumption, increase the consumption of smart home appliances, promote the development of digital homes, and promote the consumption upgrade of rural residents in home appliances, furniture, and home decoration. In July 2023, 13 departments including the Ministry of Commerce issued the "Several Measures to Promote Home Consumption". As an important part of residents' consumption, home consumption has received support from national policies, providing a solid foundation for the development of China's furniture industry and continuously promoting the upgrading of the home industry and consumption upgrade. In the long run, the Chinese home consumption market has huge growth potential. With the continuous expansion of the Chinese consumption market, the overall economic growth rate will steadily increase, and the scale of the home consumption market will also expand. Home consumption shows trends of customization, intelligence, greenness, and health. In recent years, home consumption has become the second-largest expenditure of households, with huge market potential.

At present, Songyuan City still needs to further improve its industrial chain, launch leading high-end equipment in the industry, enhance its popularity and market recognition, and further enhance its brand value. Only in this way can it continue to develop and grow on the existing basis, become a national brand with international competitiveness, and reduce its dependence on imported products. Overall, the project construction is necessary and in line with market trends.

1.1.3 Advantageous conditions of project construction

(1) Policy advantage

Industrial policies such as the "14^th Five-year Plan for the Development of the Smart Home Industry", the "National New-Generation Artificial Intelligence Standard System Construction Guide", the "Guiding Opinions on Accelerating the Development of Digital Homes and Improving the Quality of Residence", and the "Outline of the Expanding Domestic Demand Strategic Plan (2022-2035)" have provided clear guidance for the development of the smart home industry.

"Made in China 2025" proposes the key task of "promoting the in-depth integration of informatization and industrialization", accelerating the integrated development of new-generation information technology and manufacturing technology, and taking intelligent manufacturing as the main direction of the in-depth integration of informatization and industrialization. Through the in-depth integration of "informatization and industrialization", it leads and drives the development of the entire manufacturing industry, focuses on developing intelligent equipment and intelligent products, promotes the intelligentization of the production process, cultivates new production methods, and comprehensively improves the intelligent level of enterprise R&D, production, management, and service. The report of the 20th National Congress of the Communist Party of China proposes to "promote the high-end, intelligent, and green development of the manufacturing industry", which points out the direction for the development of the furniture industry.

(2) Industrial advantage

Songyuan City is actively building a smart home industry. Penghong Group has invested 250 million yuan and 150 million yuan respectively to build ecological board and floor base material production projects. The smart home full-house customization project is the third project invested by Penghong Wood Industry Group in Fuyu, and it is also a landmark project for the transformation and upgrading of Penghong Group.

The core boards and veneers produced by artificial board manufacturers around Songyuan City are supplied to Penghong Wood Industry. The blockboard of Penghong Wood Industry and the pine integrated wood solid-wood door and window frame materials produced by Jilin Hongyuan Solid-Wood Products Co., Ltd. can provide raw materials for Jilin Xinlongyi Door and Window Co., Ltd. The pine integrated wood produced by Jilin Hongyuan Solid-Wood Products Co., Ltd. and the colored aluminium produced by Jilin Dongyuan Aluminium Co., Ltd. provide raw materials for Jilin Xinlongyi Door and Window Co., Ltd. to produce wood-aluminium composite doors and windows. The wood processing enterprises in and around Jilin Qianguo Economic Development Zone have formed an industrial cluster, extending the industrial chain. At the same time, it has also driven the synchronous development of related industries in and around the development zone, promoted the optimization and adjustment of the economic structure, industrial structure, and product structure, transformed the local advantages in all aspects into economic advantages, realized the sustainable development of the regional economy, and promoted the prosperity of the regional economy.

(3) Location advantage

Qianguo County is located at the junction of Jilin, Heilongjiang, and Inner Mongolia, and is an important transportation hub and logistics center connecting the three northeastern provinces and 8 cities and 14 counties in Inner Mongolia Autonomous Region. The Changchun-Baicheng Railway runs through the whole county from north to south. Ulanhot-Tumen, Mingshui-Shenyang, and Kaifang national and provincial trunk highways intersect with rural roads, providing direct access to cities such as Changchun, Baicheng, Dalian, Qiqihar, and Ulanhot. 

(4) Talent advantage

Songyuan City is a blue-collar training base in the province. In addition, more than 30 well-known domestic and provincial universities, such as Jilin University, Changchun University of Technology, Northeast Normal University, Jilin Agricultural University, Changchun University of Science and Technology, Changchun University, and Changchun Institute of Technology, produce a large number of professional and management talents every year, providing a large amount of fresh blood for this project.

(5) Construction condition advantage

The project is located in Jilin Qianguo Economic Development Zone, with good infrastructure conditions. Transportation and communication are extremely convenient. All kinds of raw materials required for the project construction can be solved nearby, with guaranteed material supply, short transportation distance, and low transportation cost. The construction water and electricity can meet the construction needs. 

1.2 Contents and scale of project construction

The project covers an area of 40,000㎡ and has a construction area of 32,914.47㎡. It has 2 joint workshops and 1 comprehensive building. It plans to purchase fully automatic stamping production lines, automatic cleaning machines, molds, cutting machines, tapping machines, drilling machines, polishing machines, injection molding machines, and other equipment, with a production capacity of 10 million sets of smart home devices and molds annually.

1.3 Total investment of the project and capital raising

The total investment of the project is 500 million yuan, including the construction investment of 400 million yuan.

1.4 Financial analysis and social evaluation

1.4.1 Main financial indexes

After the project reaches the production capacity, its annual sales income will be 323.62 million yuan, its profit will be 97.09 million yuan, its investment payback period will be 7.15 years (after the tax, including the construction period of 2 years), and its return on investment will be 19.42%.

Note: “10 thousand yuan” in the table is in RMB.

1.4.2 Social evaluation

This project relies on the advantageous industrial resources of Songyuan City, increases investment in the development of high-end intelligent technologies, optimizes the production layout, launches new products, purchases automated production machinery and equipment, and improves the level of automated production. These measures are taken to respond to the future development trend of "Industry 4.0" intelligent manufacturing and seize the market opportunities brought by the rapid development of the smart home market at home and abroad. The project is in line with national and local industrial development policies. All external conditions for the project construction are complete. It adopts advanced technologies, brings remarkable economic and social benefits, and is highly feasible.

1.5 Cooperative way

Joint venture and cooperation.

1.6 What to be invested by the foreign party

Capital, equipment and technology.

1.7 Construction site of the project

Qianguo Economic Development Zone

1.8 Progress of the project

The project cooperation plan has been prepared.

2 Introduction to the Partner

2.1 Basic information

Name: Investment Attraction Service Center of Qianguo County

Address: No. 995, Wulan Avenue, Qianguo County, Songyuan City

2.2 Overview

Qianguo County, subordinate to Songyuan City, Jilin Province, is located in the northwest of Jilin Province and the south of the Songnen Plain. It is the only Mongolian autonomous county in Jilin Province, covering an area of 6,980 square kilometers with a total population of 600,000. The county seat is in the same city as Songyuan City. Five central-directly-affiliated enterprises are located within its territory, including PetroChina Northeast Oil and Gas Branch, Sinopec Northeast Oil and Gas Branch, Changshan Chemical Co., Ltd. of Sinochem Group, Changshan Thermal Power Plant of China Datang Corporation, and Changchun Oil and Gas Transportation Branch of PetroChina Pipeline.

It has an excellent ecological environment. Qianguo County is home to Chagan Lake, one of the top ten freshwater lakes in China. The Songhua River and the Nen River flow through the county for 75 kilometers. The wetland area is 770,000 mu, and the forest land area is 976,000 mu, with a forest coverage rate of 11.4%. Qianguo County has the typical regional characteristics of grassland-lake-wetland in western Jilin Province. It is one of the top 100 counties for afforestation in China and an ecological construction demonstration county in Jilin Province.

The county is rich in mineral resources. Qianguo County is extremely rich in mineral resources. The proven oil reserves are 320 million tons, the natural gas reserves are 100 billion cubic meters, and the reserves of oil shale, bentonite, and purple sand pottery are quite considerable.

It has a prominent agricultural advantage. Qianguo County is located in the heart of the golden corn belt. The Qianguo Irrigation District, one of the large-scale irrigation areas in China, is within its territory. It is a national commodity grain base county, a national agricultural standardization demonstration county, and a national rice standardization production demonstration area. The county's cultivated land area is 4.83 million mu, and its grain output has always ranked among the top ten major grain-producing counties in China. The county has a long-standing history of animal husbandry production with unique natural conditions. It produces 120,000 tons of high-quality forage annually and is a national-level grassland construction base county. 

2.3 Contact method:

2.3.1 Contact method of project cooperator:

Contact unit: Investment Attraction Service Center of Qianguo County 

Contact person: Li Xiaochun  

Tel: +86-13351556769  +86-438-5098098

E-mail: zsjxmk2209905@163.com

2.3.2 Contact person of the city (prefecture) where the project is located:

Contact unit: Investment Attraction Service Center of Bureau of Commerce of Songyuan City

Contact person: Yu Lili

Tel: +86-18004388787