The cooperation between Huachuang Testing and Walmart will be a new opportunity for the development of diversified business

Event: On August 1, the company announced that it had signed a cooperation agreement with Wal-Mart to provide testing services for food, cosmetics, environment, toys, textiles, electrical appliances, etc., and to provide testing-related training, supply chain management solution suggestions, supplier audits and consulting services. The testing fee is paid monthly, and the agreement is for a period of 2 years. Wal-Mart's testing investment may continue to grow, and future performance will benefit significantly: China is an important market for Wal-Mart. At the end of 2015, Wal-Mart opened 433 stores in China and cooperated with more than 7,000 suppliers. According to the Global Network, Wal-Mart China President Ke Xianjun announced at the Zhuhai New Year Preparation Meeting that Wal-Mart plans to add 30 new stores in China in 2016, launch cross-border e-commerce services, etc., and increase investment in various businesses. According to an interview with Chief Compliance Officer Gao Leibo, Wal-Mart China invested 300 million yuan in food safety testing from 2013 to 2015. With the expansion of its business in China, it is expected that the testing investment will accelerate in the future. The cooperation agreement between the company and Wal-Mart was implemented at the end of July 2016, and it is expected that the company's performance will benefit significantly from the increase in Wal-Mart's order demand. The giant effect opens up the space for medium- and long-term market expansion and improves profitability. The cooperation with Wal-Mart is a major breakthrough for the company in the comprehensive retail market. Given Wal-Mart's retail scale and market influence, it is expected that this cooperation will have a positive impact on the company's performance in the next two years, and will be conducive to the company's mid- and long-term expansion of life science and consumer product testing businesses in the comprehensive retail market. At the same time, the giant effect will help the company accelerate the expansion of business scale and merchant resources, and enhance service levels and market influence. As a leader in private comprehensive testing service institutions, the company is accelerating the expansion of diversified business layout. According to the National Certification and Accreditation Administration, the scale of the inspection and testing service industry in 2015 was 179.9 billion yuan, a year-on-year increase of 10.37%, and an average annual growth rate of 13.45% in the past three years. According to statistics from the China Industry Information Network, the market share of private testing companies in my country is only 10%. According to the 2015 revenue of 1.288 billion yuan, the company accounts for 7.16% of the private testing enterprise market. With the deregulation of the testing industry and the acceleration of institutional reform, private institutions are expected to gain greater development space. At the same time, the company accelerated its strategic layout of diversified business areas, covering environmental monitoring, life science testing, food testing, consumer and industrial product testing, etc. In July, it announced that it had acquired 71.26% of the equity of Henan Digital Certificate Co., Ltd. held by Zhengzhou Grain Wholesale Market and its holding subsidiaries through bidding. The digital certificate authentication system based on public infrastructure technology is committed to building a basic public security digital authentication platform for e-government, e-commerce and network applications that serves Henan and radiates to the surrounding areas, which is in line with the future development trend of the combination of the testing industry and the Internet.

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