2024 Environmental Social and Governance (ESG) ReportAbout the Report

This is an Environmental Social and Corporate Governance (ESG) report for the year 2024 issued by Luen

Mei Quantum Co. Ltd. (hereinafter referred to as "Luen Mei Quantum" "the Company" or "We"). The report

comprehensively presented our efforts and progress in environmental protection social responsibility and corporate

governance. For better communication and engagement with stakeholders we tried our best to make the report

concise clear and easy to read. The reader feedback form at the end of the report is designed for recording your

comments and suggestions which are crucial for us.Organizational Scope

Unless otherwise specified the scope of this report is consistent with that of the consolidated statement of the

Company's 2024 annual report that is covering the Company and its subsidiaries.Reporting Period

This report covers the period from January 1 2024 to December 31 2024 (hereinafter referred to as the "reporting

period"). Considering the continuity and comparability of the disclosed information some contents may relate to

previous years or subsequent years.Release Period

This report is an annual report and the sixth environmental social and corporate governance (ESG) report issued by

the Company.Information Description/Data Source

The information and data cited in this report come from the official documents statistical reports and financial reports

of the Company all of which have been audited by relevant departments of the Company. The financial data in the

report are in RMB as the bookkeeping currency unless otherwise noted.Reference Standards/Basis of Compilation

*United Nations Sustainable Development Goals (SDGs);

*GRI standards;

*Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulation of Listed Companies—Sustainability Report (Trial);

*SSE Guideline for Self-regulation of Listed Companies No.4-Compilation of Sustainable Development Report;

*Guidelines for Sustainable Development Report of China Enterprises (CASS-ESG 6.0)-General Framework.Access to the Report

This report is released in Chinese and English and the electronic version can be viewed and downloaded on the

website of Shanghai Stock Exchange (https://www.sse.com.cn/) and the Company's official website (http://www.luenmeilz.com/). In case of any discrepancy between the two versions the Chinese version shall prevail.CONTENTS

Chairman's Message 01 02

Protecting and

Entering Luen Mei 03 Beautifying the

Company Profile 03 01 Environment Jointly 03

Organizational Structure 04 Benefiting Thousands

Connecting Together Climate Change Tackling 25 of Household

Development History 05 for Co-governance Strengthening Environmental Management 28 Creating Better

Management Strategy 07 and Co-growth Optimizing Resource Utilization 31 Future Together

Corporate Culture 08

Honors in 2024 09 Standardizing Corporate Governance 17 Innovation-driven Transformation 37

Business Compliance Management 20 Stick to Strict Quality Control 38

Upholding Business Ethics 20 Optimizing Service Experience 40

ESG Management 10 Protecting Investors' Interests and Rights 21 Create a Sustainable Supply Chain 42

Protect Employees' Rights and Interests 43

ESG Management Structure 10

Building a Harmonious Society Together 49

Communication with Stakeholders 12

Analysis of Material Topics 13

Key Performance Table 51

Index table 54

Reader Feedback Form 59Chairman's

Messaage

In an era that continually surges forward our commitment to responsibility becomes ever more profound. Taking Responsibility as the Anchor Writing the Chapters of Shared Prosperity

As we stand at the historical milestone of 2024 upholding the spiritual principle "Connecting to the Future We firmly believe that the value of an enterprise lies not only in profit creation but also in sharing development outcomes

Making Life Beautiful" with the original aspiration of serving the nation through industry the boldness with society. Luen Mei Quantum is committed to its mission of "Connecting to the Future Making Life Beautiful"

of driving development by innovation and the commitment to green development Luen Mei Quantum navigating with mutual benefit and leveraging technological innovation to drive capital investment for good technology

leaves its footprint after footprint on the journey towards sustainble development. This year we have development well and industrial convergence. We advocate for coordinated governance across the industrial chain

embraced our role not only as active participants in the "carbon peaking and carbon neutrality" strategy and shared value among stakeholders aiming to transform the business ecosystem from zero-sum games to positive-

but also as pioneers of new quality productive forces. We are both the creator of a better life and staunch sum co-creation. We uphold our multi-dimensional commitments to shareholders employees the environment and

guardian of social value. On behalf of Luen Mei Quantum I extend our sincerest gratitude to all partners society.who have supported and encouraged us and share with you our reflections and practices on sustainable

development. Using governance as the helm steer towards a new era of inclusive and shared progress

Today the consensus on sustainable development is rapidly solidifying corporate governance has transcended its role

as a mere "compliance baseline" to become the core engine driving the "value creation". Luen Mei Quantum using

governance as the helm steers towards the intersection of long-termism and inclusive growth. In resonance with the

With Green as the Foundation Pioneering a New Realm of Sustainable Development advancement of business civilization and human well-being it calibrates its direction and scale for moving forward on

In the face of dual challenges posed by global climate change and energy transition Luen Mei Quantum has always the path of sustainable development. We are keenly aware that exemplary governance is the cornerstone of lasting

upheld green development as the lifeline of the enterprise. We deeply understand that "green" is the distinctive prosperity. In 2024 our company has continued the development and improvement of ESG management framework

undertone of high-quality socio-economic development. As a pioneer in China's clean energy supply sector we actively fully identifying and analyzing the impacts risks and opportunities presented by sustainable development factors

respond to the national "carbon peaking and carbon neutrality" initiative adhering to the principles of "clean efficient to the Company aiming at activating the Company's value potential through system innovation and ensuring every

smart and low-carbon." Guided by forward-looking strategic planning we have comprehensively reviewed and strategic decision on sustainability can stand the test of time.upgraded our integrated energy strategy and found four pathways—developing low-carbon technologies for energy

conservation and emissions reduction expanding integrated energy services exploring energy storage markets and In such an era focusing on sustainable development Luen Mei Quantum is committed to following this path with

laying out hydrogen energy industries. unwavering dedication. We firmly believe that by rooting ourselves in green development embracing our social

responsibilities and using governance as our guiding light we will be able to write our unique story on the canvas of

this era. Let us look forward together to a future where the skies are bluer cities are more beautiful and communities

are warmer!

April 2025

01 02Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

Company Profile Organizational Structure

President

Luen Mei Quantum Co. Ltd. (hereinafter referred to as "Luen Mei Quantum" "Company" or "We") (stock code: SH.600167) is a core

member enterprise of Luen Mei Group the largest clean heating company listed on A-share market at present. As an integrated

energy smart operator the Company integrates clean coal-fired combined heat and power (CHP) natural gas distributed cooling/ Environmental Protection and Performance Management Construction Committee Committee

heat/electricity integrated supplies recycled water-source thermal pump heating biomass-fueled combined heat and power (CHP)

generation and hydrogen industry chain development.Heat Source and Heat Network Overhaul and Technological

Construction Committee Transformation Committee

Over the years the Company has consistently adhered to its business philosophy of technological innovation as a driving force and

lean management as its cornerstone. Based on different energy needs and regional characteristics of energy use focusing on the

goals of "low carbon cleanness efficiency and economy" the Company provides appropriate integrated energy solutions and smart Vice Chief Chief Financial Vice Vice Vice Vice Vice

operations management service in line with its goals of low carbon cleanness efficiency and economy. It achieves smart energy President Engineer Officer President President President President President

operations and provides energy management service using the Luen Mei Smart Operations Platform to address the needs of urban

residents for heating and cooling and to meet the multi-energy requirements of industrial parks huge urban public buildings and

others.Luen Mei Quantum is based in Shenyang Liaoning and seeks to expand nationwide in “self-building + acquisition + operationsmanagement” mode. It is currently implementing and operating multiple projects in Shenyang Liaoning; Taizhou Jiangsu;

Heze Shandong; Shanghai; and so forth. Among these its demonstration projects—including flue gas waste heat recovery the

demonstration application of Intelligent Heating 2.0 and recycled water-source thermal pump heat source stations—are in the

leading position in the industry. Through these projects the Company has continuously contributed to green low-carbon and

energy-saving emission reductions across society providing high-quality integrated energy services for social development and

people's lives and realizing an organic integration of social economic and ecological benefits.Technological innovation as a driving force 〡 lean management as its cornerstone

ENTERING

LUEN MEI

0304

Inspection Department

Luenmei Smart Energy Technology (Shenyang)

Co. Ltd.Beijing Luenmei Environmental Science and

Technology Research Institute Co. Ltd.Financial Department

Legal Affairs Department

Operations Department

IT Management Department

Market Development Center

366 Mobile Internet Technology Co. Ltd.

Integrated Energy Business Division 1

Integrated Energy Business Division 2

Horgos Luen Mei Engineering Technology Co.Ltd.Integrated Energy Business Division 3

Hydrogen Energy Business Division

Securities and Brand Department

Human Resources and Administration Department

Xinyuan Project Construction HeadquartersEntering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

Development History

March 2022

Mega-info Media a

subsidiary of Luen Mei

Quantum was officially

l isted on Shenzhen

April 2017 Stock Exchange (stock

April 2020 code: 301102)

Luen Mei Quantum (stock

February 2008 code: 600167) completed I t s i g n e d t h e h e a t /

t h e r e o r g a n i z a t i o n electricity integrated

a n d o p t i m i z a t i o n o f g e n e r a t i o n p r o j e c t

Shenyang New District t h e o r g a n i z a t i o n a l March 2019 agreement w i th the Development (600167. structure and improved People's Government

S H ) w a s t h r o u g h t h e C o m p a n y ' s l e a n o f Su j ia tun D is t r i c t

industrial and commercial January 2016 management level It acquired Shandong Shenyang City under

registrat ion renamed Heze Fulin Thermal wh ich the Company

as "Luen Mei Quantum L u e n M e i Q u a n t u m Technology Co. Ltd. would invest a total of

Co. Ltd."; then its stock

April 2005 renamed to Luen Mei thus enhancing i ts RMB 2.1 Billion in the n a m e f o r s h o r t w a s Quantum Co. Ltd . in business deployment district

changed to "Luen Mei industrial and commercial in heating sector

After completing the equity Quantum" while its stock registration with stock

transfer with Shenyang code 600167 remained abbreviation "Luen Mei

N a n h u T e c h n o l o g y unchanged Quantum" and the stock

Development Group Co. code "600167"

L t d . L u e n M e i G r o u p

became No. 1 major i ty

shareholder of Shenyang

New District Development

(600167.SH) and the nature

o f t h e l i s t e d c o m p a n y

changed from state-owned

holding to private holding December 2022

C E M T w a s l i s t e d

i n t h e T O P 1 0 0 o f

G l o b a l H y d r o g e n

May 2016 March 2020 Energy Enterprises in

2022GHEE and Luen

September 2012 Luen Mei Quantum(stock code: I t a c q u i r e d p a r t o f Mei Quantum actively

6 0 0 1 6 7 ) c o m p l e t e d i t s a s s e t November 2018 the shares in NECC explored the business

I n v e s t m e n t a n d acquisition and restructuring and ( S h a n g h a i ) e n e r g y December 2021 in hydrogen energy June 2006 c o n s t r u c t i o n w o r k was jo ined by Shenyang X inbe i Luen Mei Quantum (stock station and deployed its

industry

began on the No. 3 Thermoelectric and its subsidiaries code: 600167) acquired natural gas distributed It officially invested

Shenyang New District Heat Source Plant of Guohui Environmental Protection and 100% equity of Mega-info c o o l i n g / h e a t i n g /

its subsidiaries (7 companies in total) in CEMT by way of Development (stock Hunnan Heat-supplying Media the largest digital electricity integrated

and so forth as member companies equity transfer and code: 600167) founded a subsidiary of Luen operator of high-speed rail s u p p l y b u s i n e s s i n

thus expanding its business scale and became its important S h e n y a n g H u n n a n Mei Quantum (stock media in China South China

Heat-supply ing Co. code: 600167) acquiring new businesses such as

shareholders

putting it in a double-main-

Ltd. comprehensively clean coal combustion biomass-based business mode featuring

carrying out the clean combined heat and power (CHP) and "clean energy + high-speed

heating and heat supply intelligent monitoring of extremely railway digital media"

business in Hunnan high environmental benefits

New District Shenyang

City

05 06Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

Management Strategy Corporate Culture

Driven by technological innovation the Company

actively adapts to changes in both internal and external

environments aligning itself with the evolving trends Thriving Well-being

of the times. With the triple mode of " self-building + Heilongjiang

acquisition + operations management" the Company

strategically expanded its business across the nation. Jilin Enterprise Healthy Development Staff Healthy Development Social Healthy Development

By continuously reinforcing its operational foundation

Xinjiang Liaoning

and firmly adhering to its strategic roadmap the ShenyangInner Mongolia Beijing

Tianjin

Company leverages its managerial strengths to Hebei

Shanxi Focus on the main business Promote the physical and Promote mutual benefit and win-win

overcome challenges and maintained a robust and Ningxia

Qinghai Shandong and strengthen the industry mental health of employees between enterprises and society

steadily improving operational performance thus Gansu Shaanxi Henan

Jiangsu

laying a solid foundation for the Company's sustained Tibet Anhui Collaborative operation and Share the achievements of Achieve harmony between Shanghai

healthy and high-quality growth. HubeiSichuan continuous innovation enterprise development humans and nature

Chongqing Zhejiang

Jiangxi

Hunan

The Company mainly engages in the fol lowing Guizhou Fujian Improve the mechanism and Encourage employees to

operate in compliance grow and progress Create a high-quality life

business: heat supply power supply steam supply Yunnan Taiwan

Guangxi Guangdong

and engineering construction. The combined heat and Hongkong

Macao Improve management mechanism Comprehensively enhance Be responsible corporate

power (CHP) with a focus on clean heating recycled and develop steadily personal value citizenship

Hainan

water-source thermal pump heating biomass-fueled

combined heat and power (CHP) generation clean

energy based cooling/heat/electricity integrated

supplies are all businesses prioritized for development Fulfilling Workplaces

by the state. The Company will continue to focus on

core products in cooling heating electricity and steam

Achieving Others While Perfecting Ourselves Creating a Better Future Together

supplies integrating the latest energy technologies and

equipment to provide customers with clean efficient

safe and stable integrated energy solutions. While

further enhancing the efficiency of urban centralized Make yourself happy Make the team happy Make your family happy Make your customers happy

heating systems the Company will vigorously develop

distributed clean energy technologies and equipment

operations Work hard

to achieve cleaner upgrades at the source; At the end self-building acquisition and pursue dreams Mutual trust Harvest abundantly Whole-hearted servicemanagement

the Company will further improve its service quality by

leveraging IoT technology to enhance response speed Realize self-value Willing to support and share Enjoy a happy time

Create a better

future together

and precision realizing accurate feedback.

07 08Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

Honors in 2024 ESG Management

China Institute of Energy Economics JRJ.com China securities indexESG Luen Mei Quantum consistently practices the concept of sustainable development and fulfills its social responsibilities. By integrating

sustainability into its corporate strategy and operations the Company continuously optimizes its ESG management system. In

Research China Energy News Won the JRJ's 13th "GoldenWis" Award ESG Rating Ranked third in the 2024 the Company further strengthened its ESG management by systematically reviewing material topics management strategies

industry

Made the "2024 China Energy (Group) Won the "Green and Low Carbon practical actions and key performance related to environmental protection social responsibility and corporate governance. The

Top 500" for the fifth time Outstanding Contribution Award" Company actively responded to the expectations and demands of its stakeholders and was committed to providing clean reliable

and affordable heating services to the public in a manner that is honest responsible and sustainable.National Business Daily China ESG Observers Consortium Office of National High-Tech

Enterprise Identification and

The 13th Summit of Listed Selected in 2024 Report on ESG ▼ ESG Management Structure Management Leading Team

Companies in China Won the Award Practices of Chinese Enterprises

for the Most Socially Responsible Excellent case of social management Luen Mei Smart Energy a subsidiary Luen Mei Quantum has established a top-down three-level ESG management structure clearly defining the responsibilities at all

Listed Companies practice company was Recognized as a levels effectively promoting all departments to actively participate in ESG work helping the Company comprehensively systematically

National High-Tech Enterprise and efficiently transforming its sustainable development concept and commitment to stakeholders into concrete actions.Shenyang High-tech China Industry News Agency Ministry of Culture and Tourism Responsible for the deliberation and decision-making of major ESG issues including

Enterprises Association Decision- Board of

China Energy Industry of the People's Republic of China making layer Directors the formulation of relevant strategies and guidelines and special review of the annual

Development Network Mega-info Media a subsidiary of ESG report Guohui Environmental Protection

passed the national high-tech Luen Mei Quantum passed the Won the "Green Energy Star

enterprise recognition review for review of "National Cultural Industry Excellence Award"

four consecutive times Demonstration Base" Co-ordinated by the Company's Office of the Board of Directors ESG Co-

Management ordination Responsible for coordinating ESG related affairs including collecting ESG related layer

Group performance information compiling ESG reports and conducting communication and

exchanges with ESG investors

ESG Working Group consists of functional departments and business departments of

the headquarters and affiliated companies

ESG Working

Execution layer

Group Responsible for the centralized management of ESG topics continuously deepening

ESG key practices and regularly submitting relevant management measures

performance indicators and excellent cases

Luen Mei Quantum has continuously improved its scientific ESG management by organizing sustainability and ESG related training

sessions and activities for relevant personnel improving the sustainability awareness and professional expertise of decision-making

layer management layer and executive layer thus ensuring the relevant personnel are equipped with the necessary skills and

capabilities. During the reporting period Luen Mei Quantum actively engaged senior executives in ESG training and exchange events

hosted by prestigious organizations such as the Shanghai Stock Exchange and the China Association for Public Companies as well

as other societal forums like the 2024 ESG Management System Conference for Listed Companies making them stayed informed

about the latest policy developments and trends in ESG and learn from industry-leading practices thus significantly improving its

professional understanding and practical capabilities in environmental social and governance areas. Simultaneously the Company's

Securities and Brand Department continuously studied relevant regulations and guidelines deepening their knowledge of ESG

related subjects to further enhance the Company's ESG management capabilities.By establishing a regularized ESG learning mechanism Luen Mei Quantum has further enhanced the integration of sustainable

development principles and its daily operations and management laid a robust foundation for the effective implementation of the

Company's ESG strategy.

09 10Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

Case Luen Mei Quantum Participated in the 2024 ESG Management System Conference for Listed Companies. ▼ Communication with Stakeholders

On September 26 2024 Luen Mei Quantum participated in the 2024 ESG Management System Conference for Listed To better understand and actively address the expectations and concerns of various stakeholders the Company identified its key

Companies themed "focusing on practice of sustainable development and creating a new engine for value growth". The stakeholders based on the industry trends the Company's characteristics and development status. By maintaining communication

conference collected excellent ESG cases from all listed companies and their subsidiaries and presented 48 excellent practice with these stakeholders through diverse channels including stakeholder interviews surveys and other forms of engagement

cases. Among them Luen Mei Quantum won the award of "Excellent Social Management Practice Case" by its efforts in "Striving conducted on a regular or ad-hoc basis the Company listened to their suggestions and provided timely and appropriate responses

to Create Social Value Intelligent Heating Making Life Beautiful". promoted the stakeholders' further understanding on the Company's ESG governance practice thereby improving the Company's

ESG governance capabilities and promoting its fulfillment of its social responsibilities.Stakeholders Focus Areas Communication Mode Luen Mei Quantum's Responses

˙Government communication ˙Providing reliable heating Guarantee heating servicemeeting ˙

services ˙ Exchange with regulatory

˙Integrity and Compliance in agencies ˙Abide by laws and regulations

operations ˙Information disclosure and

Governments and ˙Pay taxes voluntarily according to

regulatory authorities ˙Paying taxes according to law

submission

˙Regular visits law

˙Periodic reports and information

˙Steady growth in performance announcements ˙Improve business performance

˙Standardized company ˙Investor investigation

governance ˙Shareholders' Meeting ˙Strengthen internal control

˙Transparent information ˙Interactive platform level

disclosure communication and answering ˙Regular information disclosureShareholders

questions

˙ ˙Hold the workers' congress Expand communication and Protection of employees' rights ˙˙Employee satisfaction survey feedback channels and interests

˙ ˙Organize all kinds of employee Strengthen the occupational Occupational health and safety ˙training health construction

˙Training and career

development ˙Set up complaint and feedback ˙Optimize the training and

mailboxes. promotion mechanism

Employee ˙Compensation and benefits

growth ˙Organize staff recreation and ˙Improve the compensation and

sports health activities benefits system

˙Disclose service quality

commitment

˙Improve service quality ˙Customer room temperature ˙Strengthen personnel training ˙Protect customers' rights and measurement ˙Perfect after-sales service interests

Customers ˙Telephone hotline services

˙Customer satisfaction survey

˙Supplier/contractor ˙Hold bidding meeting

management ˙Contract negotiation and daily ˙Create responsible supply chain

˙Fair and transparent meeting ˙Fair and open bidding

procurement ˙On-site inspection ˙Industrial chain cooperation

Business partners ˙ ˙ and exchange Win-win cooperation Supplier evaluation work

˙Promoting employment growth ˙Hold public open day

˙ Create employment opportunities Protecting the community ˙ ˙Community visits and exchanges.environment ˙Strengthen environmental ˙Employee volunteer service protection management

˙Driving the development of local activities

Communities communities

˙Support community building ˙Carry out knowledge publicity

˙ ˙Carry out public welfare projects Participating in charity activities and education

11 12Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

▼ Analysis of Material Topics

Luen Mei Quantum based on its business scope industry characteristics expectations of internal and external stakeholders and Matrix of material topics

global sustainable development trends has updated and upgraded its corporate evaluation system in accordance with relevant

domestic and international disclosure standards such as the Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulation of

Listed Companies—Sustainability Report (Trial) and the GRI 3: Material Topics incorporated financial materiality analysis based on the

previous impact materiality assessment thereby comprehensively identifying topics that affect the Company's financial economic

environmental and social aspects and pertain to stakeholder concerns and forming a matrix of material topics.* Innovation-driven

* Circular Economy

Topic Assessment Process Analysis Methods

* Usage of Water Resource * Product Quality

* Supply Chain Security * Service Experience

* Communication with Stakeholders * Pollutant Discharge

Understand the Company activities and business relationships * Employees

Understand the background * Waste Disposal

01 of company activities and Understand the external objective environment * Anti-unfair Competition * Climate Change Tackling

business relationships

Understand the main affected stakeholders * Anti-commercial Bribery and Anti-corruption

* Energy Usgae

* Exploring Clean Energy

Referring to the topics set forth in the Guidelines No. 14 of Shanghai

Stock Exchange for Self-Regulation of Listed Companies—Sustainability

02 Topic selection Report (Trial) and combining with the industry characteristics industry development stage own business model relevant regulatory policies

and peer practice analyze and initially identify the material topics of the

Company

* Rural Revitalization

* Contribution to the Society

* Ethics of Science and Technology

Impact materiality assessment: Assess whether each topic will have a

* Equal Treatment to Small and Medium-sized Enterprises * Environmental Compliance Management

potential or actual significant positive or negative impact on the economy

society and environment. * Ecosystem and Biodiversity Protection

03 Materiality assessment Financial materiality assessment: Assess whether each topic is expected * Data Security and Customer Privacy Protection

to have a significant impact on the Company's business model business * Due Diligence

operation development strategy financial status operating results cash

flow financing methods and costs in the short medium and long term

Low materiality Financial Materiality to the Company High materiality

04 Topic confirmation According to the materiality assessment results of topics form the matrix of material topics

Dual-materiality topics Financial material topics Impact material topics Related topics

1314

Materiality to economic social and environmental impacts High materiality01

Connecting Together

for Co-governance and

Co-growth

Response to United Nations Sustainable

Development Goals (SDGs)

In Luen Mei Quantum' ESG practice journey a sound and efficient governance system serves as the cornerstone solidifying the

foundation for the Company to fully fulfill its social responsibilities and achieve sustainable development. Excellent governance is

not only crucial for the orderly operation of the Company internally but also profoundly influences its effectiveness in addressing

environmental challenges and promoting social well-being. By establishing a comprehensive governance system adhering to

compliance in operations and upholding business ethics the Company has steadily advanced along the path of ESG creating long-

Standardized corporate Business compliance Upholding business Protecting investors' term value for all stakeholders.governance management ethics interests and rights

15 16Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

Board of Directors

Standardizing Corporate Governance As the decision-making body of the Company the Board of Directors is an important part of the governance structure and is responsible to

the shareholders' meeting. The Board of Directors of the Company strictly abides by the relevant legal requirements to perform its duties

attends board meetings and shareholders' meetings seriously strictly implements the authorization of the shareholders' meeting to the Board

Luen Mei Quantum strictly abides by the Company Law of the People's Republic of China Securities Law of the People's Republic of China Rules of Directors and implements the resolutions of the shareholders' meeting.Governing the Listing of Stocks on Shanghai Stock Exchange and other relevant laws and regulations and is committed to establishing a rigorous

scientific and standardized governance structure ensuring that the "three boards" (namely the shareholders' meeting the Board of Directors The Board of Directors of the Company consists of four special committees namely the Strategic Development Committee the Remuneration

and the board of supervisors" operate in a compliant and orderly manner unswervingly leading the party's work style and clean government and Assessment Committee the Nomination Committee and the Audit Committee. Each professional committee provides relevant

construction into practice providing organizational guarantee institutional guarantee and ideological guarantee for business related decision- professional support and suggestions for the Company's development according to their respective responsibilities effectively improving the

making and leading the Company's long-term and steady development with excellent corporate governance. scientific and normative nature of corporate governance.▼ Improving Organizational Structure When selecting board members the Company systematically considers the age structure educational background professional qualifications industry experience and other diversified elements of board members so as to build a decision-making team with complementary

professions and rich experience that can not only effectively matches the development needs of various business sectors of the Company

The Company has established a governance mechanism with clear rights and responsibilities and standardized operation according to the but also significantly improve the strategic decision-making efficiency and management level of the Board of Directors thus providing a

requirements of relevant laws and regulations. In such mechanism the Board of Directors is the highest governing body of the Company strong governance guarantee for the Company's sustainable development. At present the Company's Board of Directors consists of seven

responsible for and reporting to the shareholders' meeting. There are four special committees under the Board of Directors each of which directors including three independent directors. The members of the Board of Directors have diverse professional backgrounds rich industry

performs its own duties to ensure the standardization science and effectiveness of the board's decisions. Simultaneously the company is experience and professional knowledge reserves who can provide professional insights and make independent judgments for the Company's

committed to integrating the philosophy of sustainable development into its corporate governance framework promoting comprehensive major decisions from multiple dimensions.integration between the ESG governance system and the existing governance structure. The Board of Directors are responsible for the

deliberation and decision-making of major ESG issues. Under the coordination of the Company's Office of the Board of Directors an ESG Co-

ordination Group has been established to formulate sustainability-related strategies management methodologies and operational plans

while overseeing the operations of the ESG Working Group. For more details on governance architecture please refer to the chapter "ESG During the reporting period ﹥﹥﹥

Management Structure" in this report.The company organized and held the meeting through a combination of "on-site+communication voting"

Shareholder

Board meeting Audit Committee Nomination Committee Remuneration and Appraisal Committee

Board of Directors Board of Supervisors 10 9 2 1

Strategic Devlopment Renumeration and Nomination Committee Audit Committee

Committee Assessment Committee

Board of Supervisors

Management As the highest supervisory body of the Company the Board of Supervisors is directly responsible to the shareholders' meeting. The Company's

Board of Supervisors earnestly performs its duties in strict accordance with relevant regulations and supervises and inspects the Company's

decision-making procedures legal operation performance of the Board of Directors and senior management construction of internal

control system regular reports profit distribution related party transactions and use of funds so as to effectively safeguard the interests of

HQ Department Subsidiaries shareholders.▼ Efficient Operation of "Three Boards" During the reporting period ﹥﹥﹥

Board of Shareholders

the Company organized 7 meetings of the Board of Supervisors by means of "on-site+communication voting" to review

The board of shareholders is the highest authority of the Company. In strict accordance with the requirements of laws and regulations the the annual report quarterly report general election special dividends deposit and actual use of raised funds and other

Company comprehensively regulates the convening of shareholders' meetings the qualifications of participants and the voting procedures of proposals.shareholders' meetings. In the whole process the Company treats every shareholder equally fully guarantees the shareholders to exercise

their rights and interests according to law paying particular attention to protecting the legitimate rights and interests of minority shareholders.No incidents have occurred that would harm the rights and interests of minority shareholders.During the reporting period ﹥﹥﹥

The Company held One annual general meeting to review the 2023 annual report and other related proposals

shareholders' meetings

Five extraordinary shareholders' meetings to review the general election of the board of directors

6 and the board of supervisors amendments of some articles of the articles of association special time dividends and other proposals.

1718

IncludingEntering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

Training for Directors Supervisors and Senior Management

The Company actively participated in online and field trainings for directors supervisors and senior management organized by

Shanghai Stock Exchange China Securities Regulatory Commission Liaoning Office and China Association of Public Companies Business Compliance Management

and participated in 9 trainings throughout the year which further improved the capabilities of directors supervisors and senior

management to perform their duties.Luen Mei Quantum has continuously strengthened the construction of internal control system and improved its ability to resist

Training on the new Company Law organized by Liaoning Association of Listed Companies Training on the new Company risks. The Company consistently integrates lawful corporate governance with production and operations and focuses on cultivating 2024.3.14 Law organized by Liaoning Association of Listed Companies a corporate legal culture. It has established and improved mechanisms for preventing legal risks and has initially developed a multi-

dimensional compliance management system to ensure that all production and operational activities are legally compliant.

2024.4.3 Shanghai Stock Exchange's "Follow-up Training for Independent Directors"

"Training Meeting on Interpreting the New Capital Market Policies of Listed Enterprises and Listed Reserve Enterprises in the ▼ Strengthening Internal Control Inspection

2024.4.26 Province" jointly organized by China Securities Regulatory Commission Liaoning Office and Office of Finance Committee of

Liaoning Provincial Committee of CPC The Company has formulated inspection management measures including the Internal Control Management Measures Heating

Inspection Management Regulations Regulations on Equipment and Materials Quality Inspection Management and Measures for

2024.9.19 Shanghai Stock Exchange's "the 5th Follow-up Training for the Secretary of the Board of Directors of Listed Companies in Management of Environmental Protection Materials Sampling. During the reporting period according to the internal control system 2024" the Company has carried out routine internal control inspections in key areas of the Company and completed four routine

inspections and two special inspections. Through the inspection supervision and evaluation of key internal control links such as

2024.10.23 Liaoning Association of Listed Companies "Studying the Spirit of the Third Plenary Session of the 20th CPC Central system construction process control and business execution the Company has timely identified and prevented various mistakes and Committee: Training on Financial Support for High-Quality Economic Development" malpractices thereby mitigating various operational risks and ensuring all levels and links within the Company operate scientifically

and efficiently.

2024.11.12 China Association of Listed Companies' "Special Training on Typical Cases of Listed Companies' Violation of Laws and Regulations in 2024"

2024.11.16 China Securities Regulatory Commission Liaoning Office's "Special Training on Reform of Independent Director System" ▼ Conducting Compliance Training

The Company actively carries out law-abiding and compliance training to enhance employees' awareness of law-abiding and

2024.11.28 Shanghai Stock Exchange's "Special Compliance Training for Independent Directors of Listed Companies" compliance and create a corporate culture atmosphere of law-abiding and compliance thus ensuring the orderly promotion of

various management systems of the Company and the stable development of various businesses. During the reporting period the

2024.12.9 China Securities Regulatory Commission Liaoning Office's "Special Training on Comprehensive Punishment and Prevention

Company has organized and studied the latest revised securities law company law accounting standards and other related industry

of Financial Fraud in Capital Market" policies.Securities laws and Regulations and rules on Other laws and

▼ Strengthening the Leadership of Party Building regulations information disclosure regulations

SSE Guideline for Self-regulation Listing Rules of Shanghai Stock Company Law of the People's

of Listed Companies No. 7--Share Exchange Republic of China

The Company adheres to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Repurchase

Era thoroughly implements the Party's guidelines and policies and fully leverages the leadership role of Party organizations. It Guidelines on the Bylaws of SSE Guideline for the Application of

comprehensively advances all aspects of Party building providing a strong guarantee for the company’s high-quality development. Listed CompaniesSSE Guideline for Self-regulation Listing Audit Rules No. 6

of Listed Companies No. Measures for the Administration

1-Announcement Form No.13 of Independent Directors of Listed

Announcement on Raising Funds Companies

The Company consistently integrates Party leadership with corporate governance continuously strengthening the core for Listing

guiding role of Party organizations in decision-making execution and supervision and encouraging Party members to play an

exemplary role in their daily work. At the same time the Company has established a normalized education and training mechanism

for Party members continuously conducting training to improve their qualities in firmly resisting interest-driven temptations

adhering to original aspirations so as to foster a clean and upright environment to ensure the company's healthy and sustainable

development while enhancing its management and operational standards.The Company is steadfast in advancing anti-corruption efforts and regularly inspects the Party conduct and integrity

building of all Party branches to ensure the strict implementation of comprehensive and strict Party governance. The Company

adheres to an attitude of "no forbidden zones full coverage and zero tolerance" enforcing the Party conduct and integrity building Upholding Business Ethics

and combat corruption by means of audits special inspections and regular routine checks. The Company has implemented a

strict supervision and reporting system in the procurement and bidding process set up a clean reporting method in the bidding

documents and arranged the internal control department participate in the main links of the bidding work. Any unit or individual

can complain and report to the internal control department of the Company if there are illegal acts in the bidding work.process. Luen Mei Quantum has always adhered to the highest standards of morality honesty integrity and compliance insisted on strict

The Company commits to conduct a rigorous investigation on the bidding projects and suspend the bidding or cancel the bid- demands on itself with high standards of business ethics severely cracked down on unfair competition and steadily improved the

winning results of any project after verifying that the reported problem of the project is true. level of anti-commercial bribery anti-corruption and anti-unfair competition by continuously promoting the construction of business

ethics system optimizing diversified supervision systems and improving the complaint reporting mechanism.

19 20Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

▼ Anti-commercial Bribery and Anti-corruption During the reporting period ﹥﹥﹥

The Company strictly abides by the requirements of the Criminal Law of the People's Republic of China and other laws and regulations The company has completed the distribution of equity Cumulative cash dividends distributed per share (including tax)

and has established internal control systems. By conducting both special inspections and regular checks and by setting up public

reporting hotlines and email addresses the Company performs routine reviews of commercial bribery and embezzlement risks by 2 0.32 RMB

the principle of zero-tolerance to commercial bribery and embezzlement. The Company strictly protects whistleblowers to ensure

that their rights and interests are protected.The Company urges all employees to strictly abide by relevant laws and regulations industry norms and guidelines company rules

and regulations and professional ethics so as to establish a good atmosphere of honesty self-discipline and diligence. At the same

time the Company clearly conveys its anti-commercial bribery and anti-fraud policies to suppliers agents and ecological partners In terms of information disclosure management Luen Mei Quantum has adhered to the business philosophy of openness

and opposes all forms of unfair competition. transparency legality and compliance abided by the Securities Law of the People's Republic of China the Company Law of the People's

Republic of China and the Listing Rules of Shanghai Stock Exchange and established the Information Disclosure Affairs Management

System to ensure the proper performance of its information disclosure obligations protect the legitimate rights and interests of the

During the reporting period ﹥﹥﹥ Company its investors creditors and other stakeholders and enhance the information transparency.Proportion of directors receiving Proportion of managers receiving Proportion of employees receiving During the reporting period ﹥﹥﹥

training on anti-commercial bribery training on anti-commercial bribery training on anti-commercial bribery

and anti-corruption and anti-corruption and anti-corruption The company successfully completed the information disclosure work Regular reports Temporary announcements

100 % 100 % 30 % on time and regularly communicated the its development status to the

public with a total of 118 announcement documents 4 71

▼ Anti-illegitimate Competition The Company fully respects and safeguards the legitimate rights and interests of investors placing great importance on

communication and engagement with them. It has established the Investor Relations Management System and makes full use of

multiple communication channels such as shareholders' meeting performance briefing on-site visits telephone consultations and

The Company strictly abides by the relevant provisions of the Anti-Unfair Competition Law of the People's Republic of China and the Anti- SSE's e-platform to maintain close interaction with investors and strives to build a harmonious and trusting relationship between the

Monopoly Law of the People's Republic of China. By establishing and improving the internal management system strengthening the Company and investors.moral training of employees and setting up a special supervision mechanism etc. it ensures that all business activities are legal

and compliant maintains a healthy and orderly market environment and resolutely puts an end to any form of unfair competition

contributing to building a positive and competitive market ecology. Performance presentation: On May 30 2024 the Company held a performance presentation for its annual report and the

Q1 report; On October 21 the Company held a semi-annual performance presentation. On December 10 the Company held

During the reporting period there were no lawsuits or major administrative penalties caused by unfair competition. a performance presentation for its Q3 report on which it actively answered the questions raised by investors.Receiving institutional investors for

on-site researches:The Company has

received 5 on-site surveys made by

institutional investors.Protecting Investors' Interests and Rights

Telephone counseling: The Company has received more than 200 calls from investors every day.Luen Mei Quantum adheres to the investor-oriented principle and continues to create exceptional value for shareholders. With its

outstanding hydrogen energy and comprehensive energy business the Company has maintained steady growth for many years.Not only does it lead in profitability compared to its peers but its prepayment model for residential heating services also ensures

excellent cash flow with substantial available funds far exceeding industry standards. Additionally the company consistently SSE's e-platform: Respond to investors' questions for 35 times by using SSE e interactive platform.rewards its investors through methods such as cash dividends and stock buybacks. With high dividend payout ratio and active share

repurchase programs it has been listed multiple times on the list of high-dividend potential stocks demonstrating its commitment to

investors through concrete actions.

2122

Including02

Protecting and Beautifying

the Environment Jointly

Response to UN Sustainable Development Goals (SDGs)

As a pioneer in the field of clean heating in China and a comprehensive energy service provider driven by scientific and technological

innovation Luen Mei Quantum actively responds to the national initiative "carbon peaking and carbon neutrality" adheres to the concepts

of "cleanliness high efficiency wisdom and low carbon" consistently guiding its development with forward-thinking strategic planning.It is committed to prioritizing ecological conservation and pursuing a path of green development focusing on building intelligent and

environmentally friendly production models. Luen Mei Quantum is actively advancing initiatives such as ultra-low emission projects for heat

sources heating with medium water source heat pumps industrial waste heat utilization and smart energy operation and management

systems. Concurrently the Company is swiftly developing a new type of clean and intelligent energy service system characterized by balanced

Climate change tackling Strengthening Environmental Optimizing Resource energy mix and dynamic supply-demand interaction contributing to the goal of "carbon peaking and carbon neutrality".Management Utilization

23 24Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

Opportunity

type Description Impact period Financial impact Countermeasures Climate change tackling

The rising tide of climate change response is driving the Operating Actively promote the improvement of clean Market

opportunities emergence of clean energy and other related fields bringing Medium-term

revenue technology and process and enhance the

even greater market demand for the Company increasing market competitiveness of the Company's products

Climate change has become a critical topic impacting global economic and social development posing a major challenge faced by

humanity. Actively addressing climate change not only helps the company fulfill its environmental responsibilities and demonstrate By promoting the transformation of low-carbon and efficient Optimize energy utilization efficiency

social accountability but also lays a solid foundation for building long-term competitive advantages and achieving high-quality Resource production methods energy consumption can be reduced Short and Operational cost conduct energy efficiency assessment

Efficiency

development. Luen Mei Quantum adheres to the requirements of the Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulation and efficiency can be improved

medium-term decreasing regular ly and enhance employees '

awareness of resource utilization

of Listed Companies—Sustainability Report (Trial) and focuses on four areas: governance strategy risk management indicators and

objectives to comprehensively improved its ability to cope with climate change.◎ Notes

Impact period Short-term is within 1 year (including 1 year) after the end of the Company's sustainable information reporting period

▼ Climate-related Governance medium-term is 1-5 years (including 5 years) and long-term is more than 5 years

Luen Mei Quantum incorporated climate change issues into the Company's development strategy and established a sustainable

development governance structure consisting of the Board of Directors ESG co-ordination group and ESG working group so as ▼ Climate-related Impacts Risks and Opportunities Management

to comprehensively improve the Company's level and professional capabilities to cope with climate change. For more details on

governance architecture please refer to the chapter "ESG Management Structure" in this report. The Company has strengthened the management of climate risks and opportunities by formulating standardized processes for

climate risk identification assessment and response and made timely adjustments to such processes according to its own business

characteristics and internal and external environmental changes so as to continuously improve its risk management capability in

response to climate change.▼ Climate-related Strategies

To address climate change Luen Mei Quantum identifies potential risks and opportunities that the Company currently faces or may Comprehensively analyze the current environmental conditions domestic and international policies and

encounter in the future taking into account industry characteristics and business scope. It assesses the impact cycles and levels of Risk identification regulations industry characteristics and stakeholder demands and identify potential climate-related risks

these risks and opportunities and develops targeted risk mitigation measures so as to enhance the Company's risk management based on the Company's actual situation

capabilities and reduce the impact on its business operations.For the identified climate risks comprehensively evaluate their potential impacts on the Company's

Risk type Description Impact period Financial impact Countermeasures Risk assessment income cost and assets from the dimensions of impact period and impact degree and adjust the priority

of climate change risk management according to the evaluation results

Temperature is a critical factor affecting the profitability Operating costs I n c r e a s e i n v e s t m e n t i n

Acute of heating companies. Sudden extreme weather events Short and rising in f ras t ruc ture upgrad ing to

risks during the heating period can directly impact the medium-term Operating income improve its defense ability against For various risks identified and evaluated the relevant departments shall be responsible for the

Physical risks Company's financial performance declining sudden extreme weather

Risk control implementation of targeted control measures

Chronic Drought or wet weather causes equipment damage or Medium-term Operating costs Strengthen the daily maintenance

risks difficulty in operation and maintenance and long-term increasing of equipment and facilities

Environmental investments and operations are a critical

component of the production process for heating C l o s e l y m o n i t o r r e l e v a n t

companies. Currently the Company's environmental Production cost regulations at the international

Policy and equipment and operations fully comply with national increasing national and local levels to ensure

legal risks standards and emission requirements. However as the Medium-term Operating costs that its operations comply with

state progressively raises its environmental standards increasing the latest environmental policy

the Company needs to increase environmental requirements prevent potential

investments and operational costs penalties and litigation

Increase investment in green

t e c h n o l o g y r e s e a r c h a n d

Transformation In order to cope with climate change the Company

Risks Technical needs to adopt more advanced and environmentally R&D costs d e v e l o p m e n t a c t i v e l y s e e k

risks friendly production technologies and equipment and Long-term increasing partners establish innovation

input more in technological innovation mechanisms and accelerate the application and promotion of new

technologies

The centralized heating industry in China is moving

towards cleaner operations with customers increasingly R e d u c e t h e i m p a c t o n t h e

Market favoring more low-carbon and energy-efficient products. Operating environment by adopting clean

Risks If the company fails to meet customer expectations in Medium-term revenue energy and popularizing low-

terms of energy savings and sustainability performance decreasing carbon technologies

it may face the risk of losing customers

25 26Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

▼ Climate-related Indicators and Goals

Strengthening Environmental Management

◎ Climate Goals of Luen Mei Quantum

Guided by "green development scientific and technological innovation clean energy supply" the Company has continuously The company consistently upholds a firm commitment to environmental responsibility placing the impact of its production activities

upgraded its heat source and heating network projects through independent research and development cooperative introduction on the environment at the core of its considerations. By taking concrete actions the Company fully implements green and low-

and other means strengthened green and low-carbon technologies committed to improving resource utilization efficiency and carbon production principles. From the very beginning to the end of the production process the Company meticulously monitors

reducing emissions caused by its production. By deeply integrating its sustainable development with the national "carbon peaking and controls every step to ensure that each step strictly adheres to environmental compliance requirements. Through these practical

and carbon neutrality" goal the Company contributed its share to advancing the realization of the "carbon peaking and carbon measures the company actively contributes to environmental protection and sustainable development.neutrality" goal.During the reporting period the Company successfully completed its carbon emission compliance obligations and did not encounter ▼ Environmental Governance

any instances requiring rectification or investigation by relevant authorities.The Company attaches great importance to the protection of ecological environment takes the improvement of environmental management

mechanism as the top priority of the Company's environmental protection work and strives to minimize the impact of production and

Indicator Unit 2024

business activities on the environment. The Company strictly abides by national and local environmental protection laws regulations

Direct greenhouse gas emissions (Scope 1) Million tons of carbon dioxide equivalent 3.01 and standards such as Environmental Protection Law of the People's Republic of China Law of the People’s Republic of China on Environmental

Indirect greenhouse gas emissions (Scope 2) Million tons of carbon dioxide equivalent 0.04 Impact Assessment Law of the People’s Republic of China on the Prevention and control of Atomospheric Pollution the State Council's Opinions on

Strengthening Key Work of Environmental Protection Regulations on the Administration of Construction Project Environmental Protection Emission

Total greenhouse gas emissions (scope 1+ scope 2) Million tons of carbon dioxide equivalent 3.05 Standard of Air Pollutants for Thermal Power Plants and Emission Standard of Air Pollutants for Boilers etc. and has formulated the Environmental

Protection Management Measures of Luen Mei Quantum and the Environmental Protection Responsibility System clarifying the general requirements

of the Company on environmental protection. The Board of Directors is responsible for supervising the implementation of the environmental

◎ Notes protection work of the functional departments at each level in the headquarter; Subsidiary companies fulfill their primary responsibility for

environmental protection ensuring that grassroots units implement environmental protection measures effectively. By establishing a three-

Calculation basis: Luen Mei Quantum has accounted its carbon emissions in accordance with the Guidelines on Enterprises Greenhouse tier environmental management system consisting of decision-making supervision and implementation thereby enforcing a vertically graded

Gas Emissions Accounting and Reporting--Power Generation Facilities issued by the Ministry of Ecology and Environment along with other management structure.relevant standards or technical specifications. The Company's emission facilities include boilers gas turbines and power generation

equipment purchased. The carbon emission accounting was carried out by the operational control approach and using factors set

forth in standards such as the Announcement on the Release of 2022 Power Sector CO2 Emission Factors jointly published by the Ministry Responsible for the Company's overall material procurement and management cost management

of Ecology and Environment and the National Bureau of Statistics Horgos Luen Mei Engineering engineering management and other functions Screening suppliers of environmental protection

Technology Co. Ltd. facilities and related materials equipment and services and managing environmental protection

companies

◎ Greenhouse gas emission reduction Operations Management Responsible for tracking collection and analysis of data in each operation link including the raw

By establishing and improving the carbon emission management system improving the carbon emission management Headquarters Department materials boilers pipe networks and end users and monitoring daily environmental data level

system promoting low-carbon technology innovation and low-carbon projects the Company effectively controls the total amount Explore and study the application of new environmental protection technologies in the Company's

and intensity of carbon emissions. The company integrates digital technologies and applies the latest energy technologies and Luen Mei Smart Energy business field and responsible for directing the implementation of heating projects and technical

equipment to enhance the efficiency of urban centralized heating systems. At the same time it vigorously develops distributed Technology (Shenyang) Co. Ltd. support for comprehensive energy business

clean energy technologies and equipment. By continuously and deeply optimizing heat sources from multiple dimensions the

Company implements energy-saving and emission-reduction renovations thereby achieving ongoing clean upgrades at the source. Audit Department Monitor environmental protection work and the operation of environmental protection facilities and

During the reporting period the Company’s greenhouse gas emission reduction reached 56921 tons of carbon dioxide equivalent. coordinate environmental protection-related affairs of various functional departments

Based on the environmental protection management system at the company headquarters level

In terms of the heat source end the Company is committed to promoting the environmental protection transformation of the develop the environmental protection management system for their company; collaborate with

heat source plant achieving ultra-low emission standards and minimizing the impact of heat sources on the environment. Production Technology the local environmental protection administrative authorities; responsible for the operation

Subsidiary Departments Operation management and maintenance of the environmental protection facilities of their company

In terms of operation end the Company has installed and optimized online detection system and uses a smart operations Companyies Departments and other the initiation and construction supervision of the overhaul technical transformation and new

platform to conduct real-time data monitoring precise adjustments and optimized configuration of heat sources and the heating level departments in member construction of the environmental protection facilities of their company conduct testing of

companies environmental materials; record and analyze data on emissions and the operational status of

network so as to minimize emissions from operations to the greatest extent possible. Additionally building on the significant environmental protection facilities; and ensure the safe stable efficient and economical operation

success of the pilot circulating fluidized bed (CFB) boiler project the Company has been continuously advancing the transformation of these facilities

of other projects to further enhance boiler efficiency reduce coal consumption and thereby promote energy conservation and

emission reduction.▼ Environmental Strategies

During the reporting period ﹥﹥﹥ Recognizing the critical importance of environmental management our company is well aware that mishandling pollutants and waste

generated during production and operations can lead to regulatory penalties and negatively impact neighboring communities and

Achieve carbon dioxide equivalent reduction in greenhouse gas emissions the environment. To avoid these risks the Company has identified potential risks within its environmental management processes

114835.08 and formulated targeted response strategies so as to strengthen its emergency environmental protection measures and effectively tons prevent significant environmental risks. During the reporting period the Company did not experience any administrative penalties or

criminal liabilities related to environmental incidents.

27 28Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

Risk type Risk description Impact period Financial impact Countermeasures ◎ Wastewater Management

The company implements a separated system for rainwater and sewage by establishing pipe networks for each.As the government strengthens the standards The Company pays close attention to and Domestic wastewater is directed via municipal sewage pipelines to a centralized wastewater treatment facility. strictly abides by the relevant laws and

Policy of waste water waste gas discharge and waste Short and Operating costs regulations on pollutants and wastes in time Industrial wastewater is handled in strict compliance with legal administrative regulations and standards set by treatment the Company needs to invest more

risks the national environmental protection authority with specific discharge points established accordingly. Toxic and money to upgrade technology and control medium-term increasing to ensure that its production and emissions meet the latest environmental policies and hazardous water pollutants in industrial wastewater are collected and treated separately ensuring they meet the pollution discharge regulations processing requirements of centralized treatment facilities before being discharged. In this way it guarantees

that no industrial wastewater enters rivers or underground water sources through drainage systems.Monitor and manage all kinds of pollution

As the public pays more attention to water emissions and regularly entrust qualified third-

Market safety and air quality enterprises with high Operating revenue party testing units for testing so as to find and Long-term deal with potential pollution risks in a timely ◎ Waste Gas Management

Risks pollution and high emissions will lose their market decreasing

competitiveness manner; At the same time actively introduce The Company abides by the requirements of total emission control of key air pollutants sets up air pollutant green and low-carbon technologies to reduce discharge outlets in accordance with laws and regulations and the regulations of the competent department of

the emissions generated by production

environmental protection in the State Council installs and uses pollution prevention facilities in accordance with

The Company has formulated the Emergency regulations for production and service activities that produce waste gas containing volatile organic compounds

Plan for Sudden Environmental Incidents and adopts measures such as sealing enclosure covering cleaning and sprinkling water to reduce dust and The chemical substances used in equipment

operations such as ammonia water can cause s p e c i f y i n g t h e e m e r g e n c y c o m m a n d gaseous pollutants generated in internal material storage transmission loading and unloading. For malodorous

Chemical irritation and corrosion to the human body. If Operating costs organization and its responsibilities prevention gas produced in production and business activities the Company takes measures such as setting a reasonable

risk safety management is inadequate during storage

Short-term increasing and early warning information reporting protective distance and installing purification devices conducting daily spot checks on waste gas treatment

and usage leaks are likely to occur potentially emergency response post-treatment and other work requirements for sudden environmental facilities and entrusting a qualified third-party institution to regularly monitor the environment of waste gas leading to environmental incidents pollution incidentsas well as regular training outlets.and drills for emergency plans The Company continuously upgrades its technologies by adopting low-nitrogen combustion technology as well as Selective Non-

Catalytic Reduction (SNCR) and Selective Catalytic Reduction (SCR) systems to control nitrogen oxide emissions. Meanwhile it uses

electrostatic bag dust remover and fabric filter dust remover to control particulate matter and adopts in-furnace calcium injection

limestone-gypsum wet scrubbing magnesium oxide wet scrubbing sodium carbonate-lime dual alkali method and circulating

▼ Impact Risk and Opportunity Management fluidized bed methods to control sulfur dioxide emissions.The Company has formulated the Environmental Self-monitoring Plan according to the national standards continuously strengthened Case Denitrification Catalyst Replacement and Boiler Heat Exchanger Partition Reconstruction Project of Guorun Low Carbon

the management of environmental assessment and completion acceptance of the project entrusted a qualified third party to carry

out testing and input it into the self-monitoring system for publicity and regularly identified evaluated and monitored the potential

risks in production and operation. During the reporting period Shenyang Guorun Low Carbon

Thermal Power Co. Ltd. (hereinafter referred to as "Guorun

At the same time the Company closely integrates environmental protection with production. By implementing an environmental Low Carbon") a subsidiary of Luen Mei Quantum replaced

protection job responsibility system safety operation procedures for environmental protection operation record ledgers daily one layer of denitration catalyst for six boilers and at the

operation reports and inspection standards for desulfurization and denitrification agents upon delivery to the plant the Company same time partially dismantled the heat exchanger partitions

minimizes the negative environmental impact during the production process. of some boilers and adjusted the temperature of denitration

reactor within the range in which the catalyst can maintain

reasonable high efficiency. Following the technological

▼ Indicators and Objectives upgrades the company Shenyang Guorun has achieved

stable ultra-low emissions of nitrogen oxides.The Company intends to progressively increase its financial commitment to environmental protection focusing on several key areas

including pollution control the acquisition of advanced environmental monitoring equipment and the research and development of

new environmental technologies so as to maximize the elimination of "three wastes" (wastewater waste gas and solid waste) during

the production process strictly control pollution ensure that any remaining wastewater and exhaust gases meet emission standards

and manage waste disposal appropriately thereby preventing any sudden major environmental incidents.▼ "Three Wastes" Management Measures

◎Waste Management

The Company has invested heavily in the installation of environmental protection equipment. Over the years it has continuously

invested in technology updating and equipment transformation and is committed to providing quality services to users in an The company is steadfast in its efforts to prevent and control environmental pollution caused by solid waste

innovative energy-saving environmentally-friendly and low-emission operation mode and constantly strictly managing wastewater adopting centralized collection and management practices for all waste materials. The primary types of solid

waste gas and solid waste. waste generated during the production and operations of the Company include fly ash filter residue and

desulfurization gypsum from boilers which are all transported to a third party with qualification and disposal

During the reporting period the Company and its subsidiaries have strictly complied with the pollutant emission concentration capacity for off-site treatment. In addition the industrial solid waste report Solid Waste Consumption Contract and

limits established by environmental protection authorities. There have been no significant adverse effects on employees local a Solid Waste Evaluation Record are provided. During the reporting period Shenyang Hunnan Thermal Co. Ltd.community residents or the environment due to the Company's pollutant emissions. Additionally the Company has not faced any (hereinafter referred to as "Hunnan Thermal") comprehensively utilized a total of 200000 tons of industrial solid

major administrative penalties or criminal liabilities. For more details about pollution discharge information please refer to our "2024 waste (slag and fly ash) and entrusted a qualified third party to prepare a comprehensive utilization report for

Annual Report". disclosure ensuring closed-loop management.

29 30Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

Optimizing Resource Utilization During the reporting period ﹥﹥﹥

Coal consumption Diesel consumption Consumption of liquefied petroleum gas

Luen Mei Quantum places great importance on the rational utilization of resources and has established management systems for

key resources such as fuel and water. During production and operations the Company employs innovative technologies to improve 2181316.07 tons 745963.92 liters 26.66 tons

resource use efficiency thus achieving effective and efficient operations. While vigorously promoting energy conservation and

efficiency improvement the Company strengthens the management of water resources and improves the recycling rate of resources

truly achieving the goal of "using the least resources to provide the best heat supply service". Gasoline consumption Electricity consumption Total amount of purchased heat

56756.52 liters 181314.49 MWh 495636.49 GJ

▼ Saving Energy Reducing Consumption and Increasing Efficiency

The heating industry is a critical component of essential public services and also a major energy consumer. In the Action Plan for

Carbon Dioxide Peaking Before 2030 issued by the State Council it clearly emphasizes the importance of reducing carbon emissions ▼ Promoting Water Conservation

safely ensuring energy security and actively implementing renewable energy alternatives to accelerate the construction of a clean

low-carbon safe and efficient energy system. The Company strictly complies with the relevant provisions of Water Law of the

People's Republic of China for water withdrawal and wastewater treatment striving

The company has taken energy-saving renovations as its starting point to progressively During the reporting period ﹥﹥﹥to reduce wastewater discharge and improve water resource utilization efficiency.improve energy efficiency. On one hand it closely follows the latest developments in During the reporting period ﹥﹥﹥ Simultaneously the Company actively promotes water conservation by posting water-

industry equipment updates and energy-saving technology research. On the other saving signs in office premises and project sites encouraging employees to conserve Total water consumption

hand it conducts thorough reviews of existing production processes to identify areas The Company has achieved water during their daily work and enhancing their awareness of water-saving practices.for increased efficiency. By phasing out high-energy-consuming equipment introducing clean heating rate 4104182.00 tons

energy-saving technologies and energy management systems and optimizing Shenyang Guohui Heat Supply Co. Ltd. a member company of Luen Mei Quantum

production processes as well as other measures the Company achieves more efficient 100 % has long been dedicated to comprehensive water resource utilization. By the end of

energy use. As of the end of the reporting period the Company has achieved a 100% the reporting period it had obtained 55 related patents. The company's independently

clean heating rate. developed "Heat Pump Self-Cleaning Technology" irecovers waste heat from treated

wastewater and residual heat through a thermodynamic water-source heat pump

system for centralized heating. This technology is the first of its kind domestically

and is internationally recognized as leading-edge offering substantial environmental

Case Technological Upgrades Promote Energy Conservation and Consumption Reduction benefits. It has been recognized as a demonstration project by the Ministry of Housing

and Urban-Rural Development.In 2024 Shenyang Guohui Heat

Supply Co. Ltd. a member company

of Luen Mei Quantum drew on

its experience from energy-saving ▼ Cyclic Utilization of Resources

technology upgrades in 2023 to

renovate an old boiler that had been Through the dual drivers of digital transformation and circular resource utilization the company systematically advances resource

in operation for 15 heating seasons recycling. It remains committed to using renewable and recyclable materials to promote efficient resource utilization and

and successfully transform the old environmental protection thereby achieving dual improvements in operational efficiency and environmental benefits.boiler into an internally circulating

fluidized bed boiler addressed In production the Company's heat source plant recycles chemical wastewater and boiler sewage for flushing ash or desulfurization

issues such as ash accumulation and drainage treatment: The sewage after washing ash is ash removal water which is discharged into the sedimentation tank for

corrosion and increased wear on sedimentation and the supernatant is reused for ash washing; After being used for flushing ash slag the wastewater (the ash water)

the heating surfaces. By the end of is directed into a sedimentation pond. Following settling the supernatant is reused for further ash slag flushing. For desulfurization

the reporting period the renovated the double alkali method is employed. Inside the desulfurization tower a mist of water (mixed with alkali solution) is sprayed to treat

boiler had been successfully ignited the exhaust gases generating approximately 1300 tons per day of desulfurization wastewater. This wastewater is then directed into

and put into operation achieving a sedimentation pond. After settling the supernatant is reused for desulfurization spraying. Both methods effectively enable the

a boiler efficiency of 88% 8.37% recycling of production wastewater.higher than that before renovation

g rea t l y improv ing the energy

utilization efficiency.During the reporting period ﹥﹥﹥

Number of computers Number of toner Total amount of water recycled Proportion of recycled water to total

recycled cartridges recycled water consumption

17 70 449761.00 tons 10.96 %

31 32Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

▼ Exploring Clean Energy

Driven by the "carbon peaking and carbon neutrality" policy that is guiding the industry's reform and development the Company has In addition the Company has been actively exploring renewable energy technologies

positioned itself as a comprehensive clean energy service provider steadily expanded and strengthened its clean heating business such as photovoltaics (PV) to further expand the share of clean energy. By utilizing During the reporting period ﹥﹥﹥

while continuously increasing the proportion of clean energy in its overall energy mix. The Company has been actively exploring approximately 910m2 of rooftop space on its main office building the Company

the industrial application of hydrogen energy and intensifying its investment and strategic layout in hydrogen-related businesses to constructed a distributed rooftop photovoltaic power station with an installed capacity Distributed photovoltaic power

promote the implementation of hydrogen energy solutions in the energy sector. of 30.8 kWp. During the reporting period the station generated a total of 27411.10 station generated a total of

kWh of electricity opening up new space for green development. 27411.10 kWh

333403

Benefiting Thousands of

Household Creating Better

Future Together

Response to UN Sustainable Development Goals (SDGs)

Luen Mei Quantum has been dedicated to comprehensive energy services for more than 20 years consistently adhering to the philosophy

of "Connecting to the Future Making Life Beautiful". The Company integrates the concept of "responsible heat supply" into its corporate

Innovation-driven Stick to Strict Optimizing Service Create a Sustainable Protect Employees' Building a Harmonious operations providing heat supply services with smart and clean heat supply technology for thousands of households. While striving to achieve

Transformation Quality Control Experience Supply Chain Rights and Interests Society Together commercial success Luen Mei is committed to creating greater social value and fulfilling its responsibilities as a modern enterprise.

35 36Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

Innovation-driven Transformation Stick to Strict Quality Control

In the context of the new era Luen Mei Quantum with technological innovation as its core driving force is committed to deepening Luen Mei Quantum views product quality as the cornerstone of its survival and development adhering to the principle of "Long-

the integration of smart heating systems and multi-energy complementary technologies advancing digitized management across term Planning Quality First." The Company is committed to building a differentiated competitive advantage by pursuing excellence in

operational processes and establishing a low-carbon high-efficiency energy ecosystem. Through these initiatives the Company quality. The Company has established a sound organizational structure and mechanism for quality governance fully identifying the

actively contributes to the green and low-carbon transformation of the economy and society. In 2024 Luen Mei Quantum has impacts risks and opportunities related to quality. By benchmarking against advanced international quality management systems

continued to exert its efforts in the intelligent operation of energy supply promoted the green and low-carbon energy supply through the Company actively leads or participates in the formulation of industry standards promoting quality upgrades and the sustainable

multi-dimensional intelligent and digital means built an intelligent operation platform that is now running stably. The Company is also development of the industry.actively promoting energy technology innovation accelerating the cultivation and development of new drivers for quality productivity

and continuously expanding its investments in emerging energy sectors such as hydrogen energy and energy storage advancing the

green and low-carbon transformation of the heating industry to a higher level. ▼ Quality Management

The Company possesses core competitiveness in research and development and technology and has formed a robust mechanism for The Company strictly abides by the Metrology Law of the People's Republic of China Standardization Law of the People's Republic of China and

technological innovation by laying out high-tech enterprises which are rare in the heating industry and a municipal-level enterprise other laws and regulations constantly promotes the improvement of quality management mechanism and establishes and improves the

technology center. During the reporting period the Company did not experience any incidents involving violations of scientific ethics. production and operation management system. The Company has formulated and improved systems including Management Regulations on

Quality Inspection of Equipment and Materials and Management Measures for Sampling and Testing of Environmental Protection Materials. The

Technical Renovation Committee of "Three Repairs" (minor repair intermediate repair overhaul) which is directly managed by the President

is responsible for the planning and target setting of production and operation and formulates the Annual Production and Operation Plan

Case Explore Full-dimensional Intelligent Heating at the beginning of each year. The Quality Audit Department is responsible for the daily quality management and regularly identifies and

updates related impacts risks and opportunities. The Company requires all member companies with certification qualifications to pass the

quality management system certification in time. By the end of the reporting period all member companies of the company that are stable

In recent years Luen Mei Quantum has continuously explored the full-dimensional intelligent heating operation framework in operation and possess certification qualifications have passed the quality management system certification and maintained the effective

aimed at realizing smart precise and highly efficient heating regulation by leveraging intelligent and digital tools to replace operation of their quality systems.traditional "manual experience". In 2024 the digital operation platform developed and implemented by Luen Mei Smart Energy

a subsidiary of Luen Mei Quantum achieved significant success. The platform successfully integrated 874 heat exchange station

devices effectively addressing the challenges of balancing secondary network heating systems. This provided operators with ▼ Quality Strategy

a powerful tool for network adjustment enabling heating department staff to schedule operations and issue commands via

PC terminals. As of February 2025 the smart heating pilot project of the secondary network of Luen Mei Quantum has been The company has always placed great emphasis on quality and safety management strictly monitoring the potential adverse impacts and risks

running for four consecutive heating seasons. The seven pilot projects networked covered an area of about 1.44 million square to current and expected financial conditions caused by aging pipeline equipment and engineering quality in the short medium and long term.meters and the highest heat saving rate achieved by these projects full-dimensional intelligent heating operation framework

reached about 20% demonstrating significant energy-saving results. The successful operation of the project is an important In terms of pipeline equipment In terms of engineering quality

step for the Company to establish and improve the full-dimensional intelligent heating operation framework. In the next step

Luen Mei Quantum will gradually expand the smart heating system and establish a full-dimensional intelligent heating operation the Company continues to optimize the current material and

framework special for Luen Mei Quantum from four dimensions: source-network-station-household. the company strives to use high-quality new materials engineering management systems focusing on the supervision

for new construction and pipeline upgrades; strengthens of newly built heat sources primary networks heat exchange

the maintenance of existing pipelines and equipment to stations secondary networks with large volume boilers under

extend their service life and control the costs of pipeline "three repairs (minor repair intermediate repair overhaul) special

and equipment maintenance and upgrades. environmental protection projects boiler overhaul furnace

insulation and renovation of vertical poles with large volume.▼ Impact Risk and Opportunity Management

The Company has established a comprehensive product quality management system and updates the system regularly every year based on the

requirements of the product quality management system internal business and management structure so as to ensure that it meets the actual

management requirements and effectively promote the continuous improvement of product safety management quality. The Company has formulated

and continuously improved the Measures for Engineering Quality Management (for Trial Implementation) Management Measures for Acceptance of Heat

Source and Heating Network Construction Projects (for Trial Implementation) Management Measures for Construction of Primary Network Projects (for Trial

Implementation) Management Measures for Construction of Secondary Network Projects and Heat Exchange Station Projects (for Trial Implementation) and

other systems to identify and evaluate short- medium- and long-term impacts and risks.During the reporting As of the end of the reporting period ﹥﹥﹥ Quality management of equipment and Engineering quality management: Heating management: Strictly prevent

period ﹥﹥﹥

Number of accumulated Number of Number of utility Number of Number of projects materials arrived:Check bulk materials Conduct on-site audit of the project unauthorized valve opening strengthen

R&D expenses authorized patents invention patents model patents software copyrights under research and key parts of heat source construction approved by each member company to statistical analysis of data strictly check the

2292.55 74 16 52 6 6 projects and primary network projects to prevent potential quality risks on the project reporting procedures and ensure inspection ten thousand yuan ensure the material quality and prevent site. coverage and valve confirmation rate.

potential short medium and long-term risks.

3738

IncludingEntering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

▼ Indicators and Goals

Optimizing Service Experience

The Company sets quality-related indicators and goals according to the Production and Operation Plan for 2023-2024.The Company strictly abides by the Law of the People's Republic of China on the Protection of Consumers' Rights and Interests adheres

to the principle of "customer-centered and market-oriented" establishes the concept of all-staff service establishes an industrial

During the reporting period ﹥﹥﹥ chain of sincere cooperation and mutual benefit with customers and pursues a long-term stable and win-win cooperative

relationship with customers.Number of major quality accidents Completion rate of rectification of quality hidden dangers/problems

0 100 % ▼ Service System Construction

Number of quality audits The Company has established a customer service team and a unified call center which is responsible for user consultation repair

432 report and complaints related to heat supply work. Users can communicate with the Company through telephone hotline online business hall WeChat official account and 24-hour offline business hall.

In terms of system In terms of performance appraisal In terms of skills training

Indicator Unit Goals Completion in 2024

The Company has formulated The Company has implemented "the one who The Company regular ly

Coverage rate of audits on bulk materials and key parts % 100 Completed and continuously improved answers first responsible" system which clearly trains customer service

t h e M an a ge me nt M e as ure s stipulates that the individual who receives the user personnel standardizes

Accidents resulting from poor engineering quality Cases 0 Completed f o r Comp ens a t ion fo r Lo w - information first is the person in charge of the and unifies service terms

t e mp e ra t ure Us e r s an d t h e user's questions who needs to track and handle and enhances business

Management Measures for Claims the user's claim and pay a timely return visit to the capabilities.for Running Water defined the customer. The indicators such as user reception

standards of service qualit y user claim handling and complaints are included

▼ Quality Control Measures and re lated remedies and in the performance appraisal standards. Excellent

ef fec t ively safeguarded the employees stations and offices will be rewarded.rights and interests of users.◎ Guided by Standards

According to the Company's long-term development strategic plan in order to implement the management mode that emphasizes

institutionalization standardization and synergies in business operations effectively prevent quality-related risks clarify relevant

technical requirements and ensure that quality and cost are effectively controlled the Company has fully analyzed national

standards and regulations. Through multiple rounds of discussion comparison and optimization of the standards previously ▼ Optimized Service Measures

adopted by subsidiaries the Company reached a consensus and established a continuously updated corporate quality and

technical standards system that covers the equipment materials engineering testing and other dimensions and contains 12

enterprise standards of Luen Mei Quantum. In 2024 the Company continued to organize the training of subsidiaries at all levels After years of development the Company has earned the recognition and trust of various users through its high-quality heating

publicized the technical standards of enterprises strictly implemented the quality standards unified the technical requirements services and exceptional customer support. In 2024 the company continued to enhance service efficiency and quality by

of the Company and laid a solid foundation for the improvement of product quality. implementing optimized service measures including the following:

◎ Quality-related Punishment

Increase the distribution of convenience service contact cards

In order to strengthen the Company's quality control and address any quality loopholes the Company has formulated and through which users can directly solve problems through the

improved the punishment procedures strengthened the quality inspection and acceptance of the arrived equipment so as to Company platform;

ensure that the materials used meet the qualified standards. For unqualified products the Company implemented the policy of

return and exchange and gave corresponding punishments; the Company also has strengthened the management of coal testing

ensured the timely and accurate testing data so as to provide reliable basis for controlling the quality of coal and the scientific

and efficient operation of the Company; the Company has strengthened the inspection of unauthorized valve opening severely

cracked down on unauthorized valve opening and unauthorized network connection so as to safeguard the legitimate rights and Shorten the work chain users' demands can be routed to

interests of heat users and improve the quality of urban heat supply service. maintenance personnel with customer service staff monitoring

the process in real time to ensure prompt service delivery;

Quality Punishment Procedures

01 02 03 04 Provide door-to-door services for special groups with mobility

The Quality Audit Department The relevant departments The quality audit department challenges due to health conditions and assign dedicated online

issues inspection reports and and leaders sign the issues the punishment notice The punished unit makes rectification and pays the fine customer service representatives to assist these users online.punishment opinions approval form to the punished unit

39 40Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

Case Intimate Service "E" Life Create a Sustainable Supply Chain

The WeChat of f ic ia l account "366e L i fe"

platform independently built by the Company Luen Mei Quantum strictly abides by the Law of the People's Republic of China on Tenders and Bids and other laws and regulations

is a comprehensive online platform integrating and continuously improves the supplier management system. Besides the quality of products and services the Company also

heating fee payment repair reporting service pays attention to the management of suppliers in employment compliance occupational health and safety business ethics and

complaints and operational guidance. In 2024 environmental awareness and continuously conveys the sense of responsibility for sustainable development to suppliers to build a

the Company made full use of the WeChat sustainable supply chain.official account's publicity function to remind

users of important nodes such as heating fee

payment and water supply time and occasionally

published common knowledge about heating

online through cartoons and videos. By the end ▼ Management System

of the reporting period the articles published on

the "366e" platform had been read more than

300000 times which was well received by all The Company is committed to establishing and improving a unified standardized and transparent supplier management system and

walks of life. formulating and improving such systems as Supplier Management Access System Bidding Management Measures Procurement Management

Measures Bidding Management Measures and Bidding Negotiation Procurement Operation Management Measures. The Quality Audit

Department will supervise the compliance and deviation of bidding to ensure the transparency and fairness of recruitment.During the reporting period ﹥﹥﹥

▼ Management Measures

Number of customer Telephone customer Online customer Customer complaint Number of customer commendations

service staff service satisfaction service satisfaction resolution rate and acknowledgments received

In order to optimize the Company's supplier management the Company continuously uses the online supplier management platform

60 100 100 100 320 to improve the efficiency of data processing and online audit in supplier management. On the basis of ensuring suppliers' compliance people % % % and performance the Company guides suppliers to abide by business ethics fulfill their social responsibilities and improve their

environmental and social performance through supplier evaluation. In the process of purchasing the Company fully ensures that the

supplied products meet the requirements of environmental safety and quality and encourages suppliers to improve and upgrade their

products to better serve the heating customers. To deepen cooperation and communication with suppliers the company proactively

conducts pre-bid evaluations of suppliers and performs on-site visits and inspections after the bid award. For engineering equipment

▼ Data Security and Customer Privacy Protection suppliers the Company's inspection of suppliers includes: comprehensive evaluation of supplier factory scale comprehensive evaluation of product quality comprehensive evaluation of technical ability and comprehensive evaluation of performance etc.The Company continuously strengthens the information security management and customer privacy protection system strictly

adhering to relevant laws and regulations such as the Cybersecurity Law of the People's Republic of China the Data Security Law of the

People"s Republic of China and the Personal Information Protection Law of the People's Republic of China full translation. The Company has Case Optimizing Supply Chain Cloud Management

established an approval process for accessing data and materials with designated personnel responsible for managing special system

data. All data access permissions are strictly controlled to ensure the utmost protection of data and customer privacy from unauthorized

disclosure. On the user side customers must provide valid identification or other identity verification information to access services such In 2024 the company make over 148 modifications 需求计划 采购合同 物料采购 库存领用 物料结算

as querying overdue payments suspension of heating supply or user contact details. Customer information is never disclosed to any to business data by relying on its supply chain cloud

third party without explicit consent. management system adjusted permissions more than 13家公司 新北 浑南 国新 国惠 国润 国盈 江苏联美 山东福林 合力 ……

10 times and addressed over 40 business vulnerabilities.

Additionally the Company completed the development 合同管理 采购管理 库存管理

of a consolidated payment module for procurement采购合同框架协议物料清单集中采购自行采购入库处理调拨处理出库处理

as well as secondary development work with suppliers'

During the reporting period ﹥﹥﹥

collaboration. At the same time the Company analyzed 确认单 合同变更 需求计划 采购订/退货 批量付款 库存调整 库存盘点 二级库

and optimized business processes and organized

The Company did not experience any data security incidents or 组织间结算 存货核算 付款管理materials inventory receipts and issues documents and

breaches of customer privacy. 结算判定 取价规则 交易路径 存货暂估 费用分摊 出库核算 付款申请contracts. As a result the number of available materials

for the year was streamlined from 63756 to 26329. 交易对账 对账查询 虚单方案 成本调整 跌价计提 分项核算 合并付款供应商协同注册登录准入协同询价比价招标管理报价助手黑白名单中台服务用户中心物料中心采购中心库存中心物流中心结算中心

Overall structure of cloud based supply chain

41 42Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

▼ Equal Treatment of Small and Medium-sized Enterprises Some safety and health-related systems of member companies

To ensure fair competition among small and medium-sized suppliers Shandong Heze Fulin Thermal Technology Co. Ltd. Jiangsu Luen Mei Bioenergy Co. Ltd.the Company implements a vendor pre-qualification system for all Compilation of Safety Management Systems by Jiangsu Luen Mei

bidding processes and selects suppliers from an approved supplier During the reporting period ﹥﹥﹥ Safety Production Management System Bioenergy Co. Ltd.pool in each bid. Suppliers outside the pool can also qualify if they

pass the qualification review. In 2024 the Company provided training Total number of suppliers Incidents of overdue payment Safety Production Reward and Punishment Management System Safety Risk Announcement Management System

to suppliers including small and medium-sized enterprises and to SMEs Emergency Rescue Plan for Work Safety Accidents

established standardized guidelines and requirements for pre- 2906 0 cases Emergency Plan for Safety Accidents of General Cargo Wharf

qualification bid opening bid evaluation and inquiry and price Rules for All-staff Responsibility of Safe Production

comparison.Regulations on Management of Special Operations Shenyang Guorun Low Carbon Thermal Power Co. Ltd.Safety Production Management System

Anti-Violation Management System

Safety Production Accident Management System

Management System for Labor Protection Equipment

Safety Production Responsibility System

Shenyang Guoxin Environmental Protection New Energy Co. Ltd.Safety Production Management System

Safety Production Management System

Regulations on Management of Hidden Risk Investigation and Governance

Responsibility System for Safety Production and Fire Prevention in Various

Posts at All Levels of the Company Anti-Violation Management Regulations

Three-year Action Implementation Plan for Special Rectification of Work Safety Responsibility System for Work Safety at All Levels

Shenyang Hunnan Thermal Co. Ltd. Shenyang Guohui Heat Supply Co. Ltd.Safety Production Management System of Hunnan Thermal Safety Production Management System

Responsibility System for Safety Production and Fire Prevention in Various Work Objectives and Control Measures for Work Safety in 2024-2025

Posts of Hunnan Thermal

Responsibility System for Safety Production and Fire Prevention in

Implementation Manual for the Construction of Risk Classification Control and Various Posts

Hidden Danger Investigation and Management System

Protect Employees' Rights and Interests

Shenyang Xinbei Thermal Power Co. Ltd

Luen Mei Quantum always regards talents as valuable resources and wealth for enterprise development. Guided by the philosophy 13 safety-related regulations

of "Healthy Development Happy Working" we have established a comprehensive occupational health management system and built

a robust compensation and benefits framework to motivate employees' growth and progress enhance their personal value and 25 special emergency plans for natural disasters accidents public health incidents and social security incidents

enable them to share in the company's development achievements.▼ Occupational Safety and Health

◎ Occupational Safety and Health Management System ◎ Strengthen safety training

The Company attaches great importance to production safety and employees' occupational health strictly abides by and implements the Work Safety training is crucial for the thorough implementation of the safety

Safety Law of the People's Republic of China the Interim Measures for the Investigation and Management of Hidden Dangers in Production Safety management system. The Company clearly stipulated in the Management

Accidents the Implementation Guidelines for the Investigation and Management of Hidden Dangers in Hazardous Chemicals Enterprises and other System of Employee Education and Training that regular external training

laws and regulations and forms a top-down occupational safety and health management system. At the Company level it is responsible for sessions are to be organized for safety management personnel. All employees

the revision of relevant systems of member companies and the supervision of safety production promoting the construction of management must undergo routine safety education annually. Furthermore the Safety

systems of member companies and implementing the long-term mechanism of safety production. The safety supervision department of each Supervision Departments of each member company shall organize monthly

member company is responsible for refining and improving their own occupational safety and health system according to the requirements specialized training sessions and practical drills for part-time safety officers

of Luen Mei Quantum. In order to properly implement the safety management the Company has established a part-time safety officer so as to enhance the safety knowledge and problem-solving capabilities of

management system in front-line production units. Some employees of member companies while performing their primary job duties after relevant personnel.recommended by their department and passing the training and assessment can take on the additional role of safety administrator within

their department or team assist and cooperate with the main person in charge of safety production in their departments to carry out daily

safety production management under the guidance of the safety supervision department.

43 44Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

Case Safety Training in Xinbei Company ▼ Employment and Rights and Interests of Employees

Shenyang Xinbei Thermal Power Co. Ltd. a subsidiary of Luen Mei Quantum firmly implements the principle of "safety first Luen Mei Quantum strictly abides by the Labor Law of the People's Republic of China Labor Contract Law of the People's Republic of China

prevention foremost and comprehensive management." The company successfully completed its annual safety training and the Trade Union Law of the People's Republic of China as well as other laws and regulations adheres to the principle of fairness

tasks and organized its key personnel safety officers and special operation personnel for handling and renewal of relevant justice and openness and respects and protects the legitimate rights and interests of employees. The Company adheres to the policy

certification achieving a 100% certification holding rate. During the "three repairs (minor repair intermediate repair overhaul) of equality and non-discrimination regulates employment according to law and establishes harmonious and stable labor relations

period" in the summer of 2024 Xinbei Company organized six centralized safety trainings with a total of 882 persons trained. with employees. In 2024 the Company actively carried out campus recruitment. Through a variety of methods including information

sessions job fairs and targeted visits to faculty members the company reached out to 19 relevant professional institutions and

extended a total of 134 interview invitations did a good job in ongoing talent acquisition and reserve.The Company continuously strengthens and refines its human resources management system signing

employment contracts with all employees according to law to define their rights and responsibilities.Employment The Company strictly abides by the National Regulations on Prohibiting the Use of Child Labor and the legal

according to requirements of the country (region) where it operates. It firmly prohibits the employment and use of child labor

law and opposes any form of forced or compulsory labor. The Company implements the supervision and inspection

system of labor and employment conducts spot checks on labor management practices from time to time and

conducts training on human rights protection for all employees. In 2024 the Company did not encounter any

incidents involving the employment of child labor or forced labor.During the employee recruitment process the Company strictly adheres to non-discriminatory hiring principles

◎ Focusing on occupational health Equal and ensures that employees of all genders ethnicities and religious beliefs are provided with a unified fair Treatment and non-discriminatory environment in terms of compensation promotion and other talent development

The Company integrates health into the daily management of the Company in accordance with the requirements of the Law of mechanisms.the People's Republic of China on Prevention and Control of Occupational Diseases the Management Measures for Occupational Health

Examination and other laws and regulations signing the Notice of Occupational Hazards with employees at the positions with

occupational disease risks when signing labor contracts explaining the potential hazard factors occupational contraindications and The Company implements the democratic management system of enterprises with the workers' congress as the

occupational disease protection measures stipulated by the Company to such employees paying attention to the labor protection Democratic basic form and encourages employees to actively contribute their ideas and suggestions for the development of

of employees in daily work and fully protecting their health rights and interests. Meanwhile the Company actively promotes its Management the Company. All subsidiaries regularly hold the congress of workers and staff and take the initiative to listen to

member companies to identify and evaluate occupational safety risks strengthen the management of occupational hazards improve employees' demands and solve their actual needs via the platform of the congress of workers and staff.the management of working environment reduce occupational hazards regularly arrange occupational health examinations for all

on-the-job personnel strengthen occupational health education for employees improve their awareness of labor protection and

prevent the occurrence of occupational diseases. The Company actively reforms the compensation and benefits system including providing employees with

Compensation salary not lower than the regional average salary level and paying social insurances and one housing fund in

Case Occupational Health Management Upgrade and benefits full (including paying the housing fund for employees at the highest proportion). In 2024 the Company's social

insurance coverage rate was 100% and the labor contract signing rate reached 100%.Shandong Heze Fulin Thermal Technology Co. Ltd. (hereinafter referred to as "Shandong Fulin") a subsidiary of Luen Mei

Quantum attaches importance to the management of employees' occupational health and safety. It formulates the Management The Company adheres to the concept of "healthy development and happy work" strives to balance the work and

System for Labor Protection Equipment (Trial) and other related management systems and is committed to strengthening the life of employees by holding trade union activities such as Spring Festival celebrating activity employee birthday

management of employees' working environment. In 2024 the company hired a third-party organization to detect and evaluate Employee

Care party and International Working Women's Day activity every year. In 2024 the Company organized multi-level the occupational hazard factors within the company fully identified the occupational hazard contact factors of employees on and multi-faceted employee care activities which not only enriched employees' leisure time but also further

the job organized 42 employees on the job to take comprehensive occupational health examination rectified the employees' boosted morale and enhanced team cohesion.working environment according to the evaluation results in the Occupational Hazard Factors Detection Report and General Report

on Occupational Health Examination issued by professional organizations and made an occupational disease publicity manual to

increase the popularity of occupational disease prevention knowledge. In 2024 the expenditure related to occupational health

management of Shandong Fulin reached RMB 20040.During the reporting period ﹥﹥﹥

Investment amount of work- Coverage of work-related Work-related Work-related Lost working hours due to

related injury insurance injury insurance injuries fatalities work-related injuries

115 ten thousand yuan 100 % 5 cases 0 case 1096 hours

45 46Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

◎ Employee Structure ▼ Career Development and Training

● Proportion of employees 14.50% ● Number of employees with high 60.93%

under the age of 30 school education or below Luen Mei Quantum continuously improves and deepens its talent cultivation mechanisms placing significant emphasis on employee career

● Number of male employees 88.67% ● Proportion of employees 50.44% ● Number of employees with undergraduate 38.00% planning strengthening the development of talent teams and ensuring an adequate number of talents with a reasonable hierarchy and

aged 30-50 and junior college education optimized structure. The Company has formulated and improved the training systems such as Internal Lecturer Management System and Talent

● Proportion of female employees 11.33% ● Proportion of employees 35.06% ● Number of employees with master's 1.07% Development Management System and constantly improved the induction training system compiled the induction training materials and plan

above the age of 50 degree or above assessment system and standardized the training process. Based on the Company's actual situation of management and its development

needs the Company provides equal development opportunities for different types of employees

For core talents Implements the "successor" development plan from 2021 to 2024 providing core talents with sufficient career development space

For employees with The company regularly carries out a series of professional skills training through the combination of internal

Gender structure Age structure Employee education training and external training and encourages employees to specialize in their strengths and engage in professional skills

of employees of employees structure professional work for a long time in the business field

The company places great emphasis on cultivating and reserving future talent. It continuously follows up on

For campus hires the development of previous campus hires and interns while formulating and improving systems such as the

management measures for the mentorship system of fresh graduates the training program and management

and interns measures for honor students etc. To help employees quickly adapt to the work environment familiarize

themselves with work processes and enhance the capability and competency levels of new employees.During the reporting period ﹥﹥﹥

Case "Successor" Talent Development Plan

Total number of Number of new Labor contract Social insurance Employee

employees employees signing rate coverage rate satisfaction

2524 796 100 100 100 In order to realize the sustainable development of the Company's core talent team the Company has established an effective core people people % % % talent training mechanism. Based on the training principle of "primarily internal cultivation supplemented by external cultivation with

a combination of unified and distributed approaches" Luen Mei Quantum adopts a "dynamic talent pool management" approach for

continuous and cyclical training. The talent development program covers three training plans namely "Luen Mei's Leaders" " Luen Mei's

Eagle" and " Luen Mei's Craftsman" with a total of 78 trainees from various business sectors. As of June 2024 the "Successor" talent pool

Case EHR System Enhances HR Management Upgrade project has been in operation for three years and 7 people have been selected as "Luen Mei's Leaders" 2 people have been promoted

as training targets and 25 people have been selected as "Luen Mei's Eagle" and 7 people have been promoted as the training targets.On July 22 2024 the Company held a three-year graduation ceremony of the "Successor" talent development project.In 2024 to enhance employee management efficiency and improve the precision of management the Company launched

the Beisen EHR system comprehensively reviewed and integrated existing personnel information structures and authority

allocations via the system and redesigned its approval processes phased out outdated attendance equipment and related

systems and upgraded the processing of attendance data to be more refined. Based on attendance data the Company

optimized payroll rules achieving seamless integration from employee records to attendance data to salary calculations.Case Using Voice to Convey Dreams

In 2024 Luen Mei Quantum participated

in the fourth speech contest organized

by Luen Mei Group. This year's speech Case Continuously Promote the Cultivation of "Honor Students" Talents

contest was centered around the theme

"Growing Together with Luen Mei".Participants used language as a medium In 2024 the Company organized the enterprise integration training

to vividly explain their understanding of of "Honor Students Phase V" and arranged the trainees of "Honor

the Company's corporate culture share Students Phase V" for mentorship ceremonies job rotations monthly

touching stories of practicing corporate online learning assignments and the submission of offline assessment

culture show the elegant demeanor and materials. By the end of the reporting period the retention rate of

spiritual outlook of Luen Mei and win honor students reached 100%.applause and honor.

47 48Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

Case Training and Empowering Professional Skills ▼ Paying taxes according to law

Paying taxes according to law is an important social responsibility of enterprises. While creating economic benefits Luen Mei

In order to improve the skills and quality level Quantum insists on paying taxes in good faith according to law to promote regional development. In 2024the Company has paid

of managers and key employees and improve the taxes with a total amount of RMB 299 million made a contribution to the national and local economic development and social

the quality level and organizational efficiency progress.of employees the Company has continuously

organized a series of employee empowerment

trainings since 2022. In 2024 it organized

technical and experience seminars and ▼ Collaborative Rural Development

production safety responsibility awareness

training for environmental protection auto Establishing deep roots in local communities and implementing localized operations are crucial strategies for promoting the

repair and other sectors with the participation of production and operation technicians such as safety supervision environmental integration of the company with local areas. Under the background of advancing rural revitalization the Company leverages the

protection and steam turbines as well as middle and primary management cadres with up to 500 trainees. characteristics of its industry to continuously expand its biomass clean energy sector. By fully utilizing agricultural and forestry

residues from rural areas the Company ensures it performs its primary duties of providing heating and cooling services effectively. By

the end of the reporting period Luen Mei Quantum has achieved an annual biomass processing capacity of 300000 tons.Case Building "Luen Mei Cloud Classroom"

Case "Energy Engine" of Rural Revitalization

In addition to offline training activities the Company makes full use of the "Luen Mei Cloud Classroom"

learning platform giving feedback to students on their learning progress at the beginning of the As the living standards and production levels in our country continue to rise the handling of agricultural and forestry residues in

month at the middle of the month and at the end of the month ranking the class hours of students rural areas has become a focal point for rural revitalization. In order to promote the transformation of agricultural and forestry

every six months and rewarding the top 10 students thus actively promoting employees' online wastes from "ecological burden" to "green wealth" Jiangsu Luen Mei Bioenergy Co. Ltd. a wholly-owned subsidiary of Luen Mei

learning. From October 2024 the Company established the "New Employee Induction Training" Quantum continues to innovate biomass energy utilization technology and promote the comprehensive utilization of agricultural

study group on the "Luen Mei Cloud Classroom" platform for new employees set up a new employee and forestry biomass towards larger scales industrialization intensification and smarter operations. Under the dual background

training account for each member company and updated the learning content (including the latest of "carbon peaking and carbon neutrality" goals and rural revitalization the comprehensive utilization of biomass energy holds

promotional video company introduction and rules and regulations). By the end of the reporting the promise of fostering a high-quality development with equal emphasis on rural development and cleaner energy practices.period a total of 145 new employees from the Company headquarters and member companies had

participated in the induction training for new employees on " Luen Mei Cloud Classroom" platform.During the reporting period ﹥﹥﹥

Total number of employees Number of middle Number of grassroots Training expenditures

participating in training managers trained employees trained

944 people 70people 874 people 47500 yuan

▼ Public Welfare Activities

Total number of participants in Average training duration Average training duration per Average training duration per

knowledge and skills training per employee middle manager grassroots employee

Adhering to the tenet of "dedication love unity and mutual assistance" the Company actively participates in public welfare activities

1347person-time 5.62 hours/person 4.47 hours/person 5.78 hours/person in various ways and contributes to the creation of a harmonious society and a beautiful community.

Case Charitable Walk for Love in Hunan

On September 4 2024 15 employees of Shenyang Guorun Low Carbon Thermal Power Co. Ltd a

member company of Luen Mei Quantum participated in the charity-themed city walking activity of

"Charitable Walk for Love in Hunan" and the charity walking was set around five themes: "Sports for

Building a Harmonious Society Together Good" "Digital for Good" "Culture for Good" "Sunshine for Good" and "Service for Good".While creating economic benefits Luen Mei Quantum actively fulfills its social responsibilities devotes itself to giving back to

communities and residents and supports local economic development. Based on its own advantages in human resources capital

and technology the Company pays attention to a number of public welfare topics encourages employees to actively participate in

urban construction and volunteer service and promotes the harmonious development of society.

49 50Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

Key Performance Table ▼ Social Performance

Indicator Unit 2024

Employment and rights and interests of employees

▼ Environmental Performance Labor contract signing rate % 100

Social insurance coverage rate: % 100

Indicator Unit 2024

Total number of employees Person 2524

Greenhouse gas emission

Female Person 286

Scope 1: Greenhouse gas emissions from direct emission sources Million tons of carbon dioxide equivalent 3.01 Number of Employees by Gender

Male Person 2238

Scope 2: Greenhouse gas emissions from indirect emission sources Million tons of carbon dioxide equivalent 0.04

Below the age of 30 Person 366

Total greenhouse gas emissions (scope 1+ scope 2) Million tons of carbon dioxide equivalent 3.05

Number of Employees by Age 31-50 years old Person 1273

Greenhouse gas reduction Tons of carbon dioxide equivalent 114835.08

51 years old and above Person 885

Emission Management

High school and below Person 1538

Total non-hazardous waste Ton 647453.8 Number of Employees by Undergraduate and Junior College Person 959

Non-hazardous waste density Ton/million yuan revenue 184.49 Education Background

Master's Degree or Above Person 27

Total hazardous waste Ton 420.74

Proportion of female middle managers % 22.92

Hazardous waste density Ton/million yuan revenue 0.12

Proportion of female senior managers % 5.88

Nitrogen oxide emissions Ton 618.81

Number of new employees Person 796

Sulfur dioxide (SO2) emissions Ton 169.63

Employee satisfaction % 100

Particulate Matter (PM) emissions Ton 30.67

Career Development and Training

Emissions of other harmful gases

(such as volatile organic compounds VOCs etc.) Ton 11.74 Total number of employees participating in training Person 944

Energy management Number of middle managers trained Person 70

Coal consumption Ton 2181316.07 Number of grassroots employees trained Person 874

Diesel consumption Liter 745963.92 Training expenditures Ten thousand yuan 4.75

Consumption of liquefied petroleum gas Ton 26.66 Total number of participants in knowledge and skills training Person-times 1347

Gasoline consumption Liter 56756.52 Average training duration per employee Hours/person 5.62

Total biomass combustion Ton 303638.03 Average training duration per middle manager Hours/person 4.47

Total amount of purchased heat GJ 495636.49 Average training duration per grassroots employee Hours/person 5.78

Electricity consumption MWh 181314.49 Training coverage of employees % 47.87

Direct energy consumption Tons of standard coal equivalent 1125248 Occupational health and safety

Indirect energy consumption Tons of standard coal equivalent 12015 Investment amount of work-related injury insurance Ten thousand yuan 115

Total energy consumption Tons of standard coal equivalent 1137263 Coverage of work-related injury insurance % 100

Tons of standard coal equivalent/million Work-related injuries Cases 5 Total energy consumption intensity yuan revenue 324.06 Work-related fatalities Cases 0

Water resource management Lost working hours due to work-related injuries Hour 1096

Total water consumption Ton 4104182 Coverage of physical examination and health records % 100

Total water consumption intensity Ton/million yuan revenue 1169.48 Technological innovation

Total amount of circulating water Ton 449761 R&D expenses Ten thousand yuan 2292.55

Percentage of circulating water to total water consumed % 10.96 Number of newly authorized patents / 3

Number of software copyrights / 3

Number of accumulated authorized patents / 74

51 52Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

Indicator Unit 2024

Product quality Index table

Number of major quality accidents / 0

Number of quality audits Time 432

Completion rate of rectification of quality hidden dangers/problems % 100 ▼ Index for GRI Standards

Service experience

Using the Luen Mei Quantum Co. Ltd. has reported the information cited in this GRI content index with reference to GRI

Number of customer service staff Person 60 standards standards from January 1 2024 to December 31 2024.Telephone customer service satisfaction % 100 GRI 1 applied Foundation 2021

Online customer service satisfaction % 100

Customer complaint resolution rate % 100 Disclosure items Corresponding chapters

Number of customer commendations and acknowledgments received Time 320 GRI 2: General disclosures 2021

Supply chain security Organization and its reporting practices

Total number of suppliers / 2906 2-1 Organization details About the Report

Rural revitalization and social welfare 2-2 Entities included in the organization's sustainability reporting About the Report

Amount invested in social welfare Ten thousand yuan 2.08 2-3 Reporting period frequency and contact point About the Report

2-4 Restatements of information Not involved

2-5 External assurance /

Activities and workers

2-6 Activities value chains and other business relationships About Luen Mei

2-7 Employees Protect Employees' Rights and Interests

2-8 Workers other than employees Protect Employees' Rights and Interests

▼ Governance performance Governance

2-9 Governance architecture and composition Standardizing Corporate Governance

Indicator Unit 2024 2-10 Nomination and selection of the highest governing body Standardizing Corporate Governance

Number of directors receiving training 2-11 Chairman of the highest governing body Standardizing Corporate Governance

on anti-commercial bribery and anti-corruption Person 7 2-12 Supervisory role of the highest governing body in managing influence Standardizing Corporate Governance

Number of managers receiving training Person 147 2-13 Delegation of responsibility for managing influence Standardizing Corporate Governance on anti-commercial bribery and anti-corruption 2-14 Role of the highest governing body in sustainability reporting ESG Management Structure

Number of employees receiving training Person 757 2-15 Conflict of interest / on anti-commercial bribery and anti-corruption

2-16 Communication of critical concerns Analysis of material topics

Proportion of directors receiving training

on anti-commercial bribery and anti-corruption % 100 2-17 Common knowledge of the highest governing body Standardizing Corporate Governance

Proportion of managers receiving training 2-18 Performance assessment of the highest governing body /

on anti-commercial bribery and anti-corruption % 100 2-19 Remuneration policy Protect Employees' Rights and Interests

Proportion of employees receiving training % 30 2-20 Procedures to determine remuneration Protect Employees' Rights and Interests on anti-commercial bribery and anti-corruption 2-21 Annual compensation ratio /

Number of board meetings held throughout the year Time 10 Strategy policy and practice

Number of investor communication activities / 5 2-22 Statement on sustainable development strategies Chairman's Speech

Number of roadshows Time 3 2-23 Policy commitments Chairman's Speech

Number of investor visits received Time 5 2-24 Integration policy commitments Chairman's Speech

Number of investor communication meetings held Time 3 2-25 Procedures for remedying adverse effects /

2-26 Mechanisms for seeking advice and raising concerns Communication with Stakeholders

2-27 Compliance with laws and regulations Standardizing Corporate Governance

2-28 Membership in the Association /

53 54Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

Disclosure items Corresponding chapters Disclosure items Corresponding chapters

Stakeholder Participation Saving energy reducing consumption

302-5 Reduction of energy demand for products and services

2-29 Participatory approach of stakeholders Analysis of material topics and increasing efficiency

2-30 Collective bargaining agreement / GRI 303: Water and Effluents 2018

GRI 3: Material Topics 2021 303-1 Mutual impact between the organization and water as common resources Promoting water conservation

3-1 Process to determine material topics Analysis of material topics 303-2 Management of drainage-related impacts Promoting water conservation

3-2 List of material topics Analysis of material topics 303-3 Water taking Promoting water conservation

3-3 Management of material topics Analysis of material topics 303-4 Water draining Promoting water conservation

GRI 201: Economic Performance 2016 303-5 Water consumption Promoting water conservation

201-1 Economic value directly generated and distributed About Luen Mei GRI 304: Biodiversity 2016

201-2 Financial impact of climate change and other risks and opportunities Climate change tackling 304-1 Operation points owned leased managed by organization in or near protected areas and Not involved

biodiversity-rich areas outside protected areas

201-3 Defined benefit plan obligations and other retirement plans Protect Employees' Rights and Interests

304-2 Significant impacts of activities products and services on biodiversity Not involved

201-4 Financial subsidies from the government /

304-3 Protected or restored Hhabitat Not involved

GRI 202: Market Presence 2016

304-4 Species in habitats affected by operation that have been listed in the IUCN Red List and

202-1 Ratio of standard starting salary by gender to local minimum wage / Not involved National Protection List

202-2 Proportion of senior executives hired from local communities / GRI 305: Emissions 2016

GRI 203: Indirect Economic Impacts 2016 305-1 Direct (Scope 1) greenhouse gas emission Climate change tackling

203-1 Infrastructure investment and supporting services Climate change tackling 305-2 Direct (Scope 2) greenhouse gas emission of energy Climate change tackling

203-2 Significant indirect economic impact / 305-3 Other direct (Scope 3) greenhouse gas emission /

GRI 204: Procurement Practice 2016 305-4 Greenhouse gas emission intensity /

204-1 Proportion of expenditures for purchase from local suppliers / 305-5 Emission reduction of greenhouse gas /

GRI 205: Anti-corruption 2016 305-6 Emissions of ozone depleting substances (ODS) Not involved

205-1 Operational points for conducting corruption risk assessments Upholding business ethics 305-7 Nitrogen oxides (NOX) Sulfur oxides (SOX) and other significant air emissions Key performance table

205-2 Communication and training for anti-corruption policies and procedures Upholding business ethics GRI 306: Waste 2020

205-3 Confirmed corruption and actions taken Upholding business ethics Strengthening Environmental

306-1 Waste generation and significant waste related impacts

GRI 206: Anti-competitive Behavior 2016 Management

206-1 Legal proceedings against anti-competitive behavior antitrust and anti-monopoly practices Upholding business ethics Strengthening Environmental 306-2 Management of significant waste related impacts

GRI 207: Tax 2019 Management

Building a Harmonious Society Strengthening Environmental

207-1 Tax policies 306-3 Wastes generated

Together Management

207-2 Tax governance control and risk management / Strengthening Environmental 306-4 Wastes transferred from disposal

Management

207-3 Stakeholder participation and management related to tax concerns /

Strengthening Environmental

207-4 Country reports Not involved 306-5 Waste entering disposal Management

GRI 301: Materials 2016 GRI 308: Supplier Environmental Assessment 2016

301-1 Weight and volume of material used / 308-1 New suppliers screened by environmental assessment dimensions Create a sustainable supply chain

301-2 Recycled incoming materials used / 308-2 Negative environmental impacts of supply chains and actions taken Create a sustainable supply chain

301-3 Recycled products and their packaging materials / GRI 401: Employment 2016

GRI 302: Energy 2016 401-1 New employee hiring rate and employee turnover rate Protect Employees' Rights and Interests

Saving energy reducing consumption

302-1 Energy consumption within the organization 401-2 Benefits provided to full-time employees (excluding temporary or part-time employees) Protect Employees' Rights and Interests

and increasing efficiency

401-3 Parental leave /

302-2 Energy consumption outside the organization /

GRI 402: Labor/Management Relations 2016

Saving energy reducing consumption

302-3 Energy intensity

and increasing efficiency 402-1 Minimum notice period for operation change /

Saving energy reducing consumption GRI 403: Occupational Health and Safety 2018

302-4 Reduction of energy consumption

and increasing efficiency 403-1 Occupational health and safety management system Protect Employees' Rights and Interests

403-2 Hazard identification risk assessment and accident investigation Protect Employees' Rights and Interests

55 56Entering ESG Connecting Together for Protecting and Beautifying Benefiting Thousands of Household Luen Mei Quantum Co. Ltd.

Luen Mei Management Co-governance and Co-growth the Environment Jointly Creating Better Future Together Appendix 2024 Environmental Social and Governance (ESG) Report

Disclosure items Corresponding chapters Disclosure items Corresponding chapters

403-3 Occupational health services Protect Employees' Rights and Interests GRI 417: Marketing and Logo 2016

403-4 Occupational health and safety affairs: Participation consultation and communication of Stick to strict quality control optimize

Protect Employees' Rights and Interests 417-1 Requirements for information and logo of product and service

workers service experience

403-5 Occupational health and safety training for workers Protect Employees' Rights and Interests 417-2 Violations involving information and logo of product and service Not involved

403-6 Promoting the health of workers Protect Employees' Rights and Interests 417-3 Violations involving marketing communications Not involved

403-7 Prevention and mitigation of OHS impacts directly related to business relationships Protect Employees' Rights and Interests GRI 418: Customer Privacy 2016

403-8 Workers covered by the OHS management system Protect Employees' Rights and Interests 418-1 Substantiated complaints involving invasion of customer privacy and loss of customer data Not involved

403-9 Work-related injuries Protect Employees' Rights and Interests

403-10 Health problems associated with work-related injuries Protect Employees' Rights and Interests

GRI 404: Training and Education 2016

404-1 Average number of hours of training per employee per year Protect Employees' Rights and Interests

404-2 employee skill upgrading program and transition assistance program Protect Employees' Rights and Interests

404-3 Percentage of employees accepting the performance and occupational development

/

assessment regularly ▼ Index of Guidelines No. 14 of Shanghai Stock Exchange for

GRI 405: Diversity and Equal Opportunity 2016

405-1 Diversification of governance organization and employees Protect Employees' Rights and Interests Self-Regulation of Listed Companies—Sustainability Report (Trial);

405-2 Ratio of basic wages and remuneration of male and female /

Topic Article Corresponding sections

GRI 406: Non-discrimination 2016

Environment

406-1 Incidents of discrimination and corrective actions taken Protect Employees' Rights and Interests

Climate change tackling Article 21 to 28 Climate change tackling

GRI 407: Freedom of Association and Collective Bargaining 2016

Pollutant discharge Article 30 Strengthening Environmental Management

407-1 Operators and suppliers whose freedom of association and collective bargaining rights may

/

be at risk Waste disposal Article 31 Strengthening Environmental Management

GRI 408: Child Labor 2016 Ecosystem and biodiversity protection Article 32 Not involved

408-1 Operational points and suppliers with significant risk of child laborer incidents / Environmental compliance management Article 33 Strengthening Environmental Management

GRI 409: Forced or Compulsory Labor 2016 Energy usage Article 35 Optimizing Service Experience

409-1 Operational points and suppliers with significant risk of forced or compulsory labor events / Usage of water resources Article 36 Optimizing Service Experience

GRI 410: Security Practice 2016 Circular economy Article 37 Optimizing Service Experience

410-1 Security personnel who have been trained in human rights policies or procedures Not involved Society

GRI 411: Rights of Indigenous Peoples 2016 Rural revitalization Article 39 Building a Harmonious Society Together

411-1 Incidents involving violations of indigenous rights Not involved Contribution to the society Article 40 Building a Harmonious Society Together

GRI 413: Local Communities 2016 Innovation-driven Article 42 Innovation-driven Transformation

413-1 Operating points with local community participation impact assessment and development Ethics of science and technology Article 43 Not involved

/

plan Supply chain security Article 45 Create a sustainable supply chain

413-2 Operating points with actual or potential significant negative impact on local communities Not involved Equal treatment to small and medium-sized Article 46 Create a sustainable supply chain

GRI 414: Supplier Social Assessment 2016 enterprises

414-1 New suppliers selected using social evaluation criteria Create a sustainable supply chain Safety and quality of products and services Article 47 Stick to strict quality control optimize service

experience

414-2 Negative social impacts of supply chains and actions taken Create a sustainable supply chain

Data security and customer privacy protection Article 48 Optimizing Service Experience

GRI 415: Public Policy 2016

Employees Article 50 Protect Employees' Rights and Interests

415-1 Political donation Not involved

Sustainability-related governance

GRI 416: Customer Health and Safety 2016

Due diligence Article 52 Communication with Stakeholders

Stick to strict quality control optimize

416-1 Evaluation of the health and safety impacts of product and service categories

service experience Communication with stakeholders Article 53 Communication with Stakeholders

416-2 Violations involving health and safety impacts of products and services Not involved Anti-commercial bribery and anti-corruption Article 55 Upholding business ethics

Anti-unfair competition Article 56 Upholding business ethics

57 58Reader Feedback Form

Dear readers：

Thank you for reading the Luen Mei Quantum Co. Ltd. 2024 Environmental Social and Governance (ESG) Report We expect to receive your

valuable feedback on our environmental social and corporate governance report. Your comments and suggestions are crucial for us

to continue to promote the management and practice of sustainable development of enterprise. We earnestly look forward to your

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to put forward your valuable opinions.Multiple-choice questions (please tick √ in the corresponding position)

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If you have any questions or comments about the report please contact us through the following ways:

Email: zhangyao@luenmeichina.com

Address: No. 1 Yuanhang Middle Road Hunnan New District Shenyang

Postal Code: 110168

Contact Tel.: 024-23784835

59Luen Mei Quantum Co. Ltd.

Address: No. 1 Yuanhang Middle Road Hunnan New District Shenyang 024-23784835

Postal Code: 110168 www.luenmeilz.com