As 2023 draws to a close, I'd like to take the opportunity to look back on a year that was crucial for macro-economy and YOFC. This year had been a journey with its fair share of challenges, but through it all, it showed how strong we are as a company. We moved into the brand-new YOFC Headquarters Building, and managed to navigate a steady path of recovery and growth amid sustained pressure. I want to take the moment to express my deepest gratitude to our esteemed customers, investors, partners, all dedicated employees and their families who have always been with us.

Before you unplug and enjoy the holidays, I'd like to reflect on the year with you, and give kudos to the achievements.

In 2023, YOFC still stuck to its five pillar strategies: all-business growth, internationalization, diversification, technological innovation & digital transformation, and capital optimization. It was inspiring that we made gratifying progress across the board.

In the past year, we worked hard to be stronger in main business that gave us a leg in the market and achieve growth on all fronts. Leveraging tailwinds created by government policies such as Digital China, Strong Cyberpower, Eastern Data and Western Computing, YOFC secured large share in the operators' centralized procurement, putting it in a leading position in optical fibre, optical cable, and optical fibre preform market. Among these achievements, G. 654. E optical fibre and cable made headway both in domestic and international markets, evidenced by its overwhelming success in China Mobile's tender, and application in the Philippines project. 

We continued to expand overseas presence to bridge the digital gap around the world. 6 production bases in Indonesia, South Africa, Brazil and Poland were set in motion. Communication projects in Peru and the Philippines were running on track. We also broke new ground in the Indonesia and Mexico markets. YOFC always comes into play where it is not connected, no matter tropical bush, sea, mountains or complex shanty towns. Over 30% of revenue were generated by international markets for two consecutive years, and the number was even up to 35% in the first three quarters in 2023. 

Our diversified development track was in high gear with many milestones. With regard to the third-generation semiconductor business, YOFC Advance's third-generation semiconductor power device R&D and production base construction got off the ground, set to be a world-class benchmark plant for silicon carbide device manufacturing. In terms of the industrial laser business, EverFoton's industrial laser intelligent manufacturing project in Xiangyang had hit the ground running, aimed to expand the production capacity of high-end laser intelligent manufacturing industry chain. Regarding quartz materials business, YOFC Quartz's R&D and industrialization project for optical and semiconductor quartz materials was gathering pace. For marine engineering business, YOFC Baosheng delivered two types of engineering vessels, indicating the significant improvement of its strength in the whole industry chain. In terms of optical modules and optical components, Broadex Technologies had achieved large-scale sales of 25G LR silicon optical modules and 50G PAM4 optical modules for 5G base station transmission, and mass production and delivery of 400G-DR4 silicon optical modules based on silicon optics.

Innovation has always been at the heart of YOFC, rooted in our entrepreneurial tradition. We celebrated YOFC Innovation Day on July 21, 2023 for the first time to encourage innovation. We established Hubei Province Innovation Consortium of Optical Fiber and Cable Manufacture Technology, in collaboration with 8 universities, research labs, and enterprises. The Consortium released its first achievement in the year. We invested in next-generation ultra-high-speed communication technologies such as space division multiplexing fibre, hollow core optical fibre, and hollow core anti-resonant optical fibre, advanced the mass production and application of related products, and brought new types of optical fibre to be applied in various fields. We conducted multi-core optical fibre testing with China Mobile and pioneered the trial of four-core and seven-core optical fibres in the same cable, setting an example for the engineering application and promotion of multi-core optical fibre. YOFC Science and Technology Park's Optical Cable 5G Factory was included in the "5G Factories Directory for 2023", promising exciting developments in 5G factory production.

Capital optimization efforts put us on a sustainable trajectory. We set up Hubei Yangtze YOFC Laser Smart Manufacturing Venture Capital Fund Partnership, expected to play an active role in the laser industry and high-end equipment manufacturing industry, signifying a strategic move towards empowering development within the sector. YOFC Advance Semiconductor, one of our investment companies, secured over 3.8 billion yuan in Series A financing, setting a record in the private equity financing scale in the field of domestic third-generation semiconductor. We won the Listed Enterprises of the Year award from Bloomberg Businessweek Chinese edition for eight consecutive years, highlighting our track record and immense potential for future growth.

In the coming year, the five pillar strategies will still define how we behave to achieve sustainable growth with future-fit competitiveness. 2024 will be about:

• Customer-centric solutions. We continue to create value for customers and partners.
• Main business focus. We will consolidate our advantage in optical fibre, cable and optical fibre preform to make sure we can stay ahead with leading market share.
• International presence. More efforts will be put into America and other regions to garner the bigger slice of the pie in the international market and make YOFC brand increasingly aware overseas.
• Diversified development. We shall endeavor to translate our diversified businesses into the second growth curve for sustainable development.
• Prioritizing innovation, products and technologies. We will harness the role of State Key Laboratory to push the boundaries of new products development and application.
• Leveraging capital market. We will try to make the most of investment and financing channels to improve our performance in the capital market. 

Looking forward, digital economy is dramatically transforming the way people live and economy develops. Generative AI Model represented by ChatGPT will be a game changer for new industrialization. In a landscape where AI computing explosion is on the horizon and positive trends for optical communication seem to be here to stay, it's crucial for us to stay the course, and stick to our strategies to get ahead.

The upcoming year of 2024 is the Year of the Dragon. In traditional Chinese culture, the dragon symbolizes power, wisdom, and infinite possibilities. In this challenging and opportunistic year, all YOFC employees will be inspired by the spirit of the dragon. We will be driven by our aspiration and determination to seize every opportunity and overcome all challenges that come our way to build YOFC into a world-renowned enterprise!

Dan Zhuang 
Executive Director and President
Yangtze Optical Fibre and Cable Joint Stock Limited Company