Stock Code:601100
Jiangsu Hengli Hydraulic Co. Ltd.2023
Annual Social
Responsibility Report
www.henglihydraulics.comAbout this Report
Reporting Period Data Sources
January 1 2023 to December 31 2023. In consideration of the continuity and comparability of disclosure matters The report uses data sources including publicly available data from government departments relevant internal
some information content is appropriately extended forward or backward. company statistical reports administrative documents and reports etc.Reference Standards Terminology Explanation
This report refers to the Listed Companies Environmental Information Disclosure Guidelines of Shanghai Stock For ease of expression Jiangsu Hengli Hydraulic Co. Ltd. is abbreviated as "Hengli Hydraulic" "the Company" or
Exchange. "we" in the report.Preface About Us Development Corporate Future Key Quantitative
Responsibilities Responsibility Prospects Performance
Practices Indicators
01 Preface 2.1 Corporate Overview 08-09 Major Events 12 Shareholder Responsibility 21 Future Prospects 22-23 Key Quantitative
02 Company Profile 10-11 Corporate Honors 13 Supplier Responsibility Performance Indicators
03 Corporate Strategy 14-15 Social Responsibilities
04-05 Industrial Layout 16-17 Environmental Responsibility
18-20 Employee Responsibility
2.2 Corporate Governance
06-07 Corporate GovernanceChairman's Address
Jiangsu Hengli Hydraulic Co. Ltd. was established in 2005 formerly known as Jiangsu Hengli High-Pressure
The year 2023 is the first year to fully implement the spirit Cylinder Co. Ltd. with its entrepreneurial history tracing back to the early 1990s.of the 20th National Congress of the Communist Party of
China and it marks a crucial year for the implementation Over the past 30 years Hengli has always adhered to the corporate vision of "eternal foundation aspiring future"
of the "14th Five-Year Plan." Looking back we have and upheld the cultural concept that "social responsibility outweighs corporate interests." With a commitment to
experienced extraordinary few years from the peak of the innovation and actively fulfilling social responsibilities it has developed into a leading enterprise in China's
construction machinery industry in 2021 to the current
market downturn. We have expanded our product line to high-end hydraulic manufacturing sector. In the future the company will continue to create more value for the
grasp both international and domestic markets transi- Chinese capital market.tioning from a focus on excavator business to entering
industries such as high-end machinery and agricultural As a socially responsible enterprise while constantly growing and developing we never forget the social
machinery. With the collective efforts of all Hengli
employees we finally achieved growth against the odds responsibilities that the company should bear. We adhere to the win-win concept of achieving common prosperity
last year with significant improvements in product for society employees customers and investors promoting the coordination harmony and sustainable
research and development production quality and development of the enterprise and society.market service systems.Bold Exploration New Chapters in Overseas Layout
In 2023 due to the continued downturn in the domestic
江苏恒立液压股份有限公司董事长：汪立平 market and the unpredictable international environment
Hengli accelerated its globalization layout. We promoted
organizational changes overseas formed a global elite
talent team and invested in building the largest overseas
Chairman of Jiangsu Hengli Hydraulic Co. Ltd. factory in Mexico the region with the highest demand for
Wang LiPing hydraulic components globally. The Mexico factory will
be a top priority for Hengli's overseas development in the
coming decades.Continuous Investment Diverse Products Boost Growth
The company closely grasps industry technological trends and changes in customer demands adhering to a man-
agement philosophy that combines applied and forward-looking research. We actively expand into diverse new Preface
product areas with continuous breakthroughs such as hydraulic pumps valves motors and new products like linear
sensors high-precision ultra-high-speed cylinders high-pressure heavy-duty torque dual-screw swing actuators
and threaded cartridge valves which have been mass-produced and applied in multiple industries such as industrial
agricultural machinery aerial work vehicles and cement pump trucks.Strategic Vision Building the Future with Green Electric Drive
To meet the trends of industrial automation and electrification of construction machinery the company focuses on
the development direction of "electrification digitization and intelligence." We have intensified our efforts in the linear
actuator project and in 2022 we established Hengli Precision the largest domestic investment project in nearly 8
years. After two years of effort by the new team it will officially start operation in March 2024. Hengli will have its first
major factory producing non-hydraulic products including precision ball screws precision guides and electric
cylinders contributing to the new era of industrial automation and electrification of construction machinery.We define 2024 as the year of "management and R&D innovation breakthroughs" for Hengli. While continuing to
improve lean production we will devote full energy to management and innovation establishing an enterprise opera-
tions management department to undertake group management responsibilities. The future of Hengli must rely on
further development through research and development innovation and scientific management.Despite our achievements we must continue to strive on the path of development. We the Hengli team must dare to
revolutionize ourselves be courageous in breaking old habits and innovating and bravely lead the way towards the
great dream of creating a century-old Hengli.-- ?? ?? --ABOUT US Hengli Hydraulics Annual Social Responsibility Report ????02
2.1
Corporate
Overview
Company Profile Corporate Strategy
Jiangsu Hengli Hydraulic Co. Ltd. was founded in 2005 with a registered The company will be driven by the vision of becoming a century-old shop with international influence in the field of
capital of 1340.82 million yuan. It is a listed company on the A-share main hydraulic components and hydraulic systems. "Having international influence" is the corporate position we pursue
board (SH601100). Hengli Hydraulic is a leading enterprise that integrates the "hydraulic components and hydraulic systems" are the industrial directions we pursue and "century-old shop" is the
research and development production and sales of series products including brand inheritance and accumulation we pursue.Has established high-pressure hydraulic cylinders hydraulic pumps hydraulic valves hydraulic
systems and high-precision hydraulic castings. It is a champion demonstra- In the future the company will continue to deepen and consolidate the development strategy of the leading domestic
7 tion enterprise of the Ministry of Industry and Information Technology a key brand of excavator high-pressure cylinders increase research and development investment maintain absolute advan-major research project in the "One-stop" base project of the Ministry of Industry and Informa- tages in technology and quality strengthen and consolidate the company's leading position in domestic brand excava-
tion Technology a national high-tech enterprise a national intellectual property tor high-pressure cylinders gradually increase the company's market share in foreign brand excavator high-pressure
and development demonstration enterprise a Chinese green casting demonstration enterprise cylinders and accelerate internationalization. At the same time the company will increase its efforts in R&D and invest-
centers worldwide and a unit for formulating national and industry standards. ment in special cylinders maintain technological leadership ensure the continuous and steady growth of special cylin-
der production and sales and rely on the company's high-precision hydraulic casting hydraulic components and
Hengli Hydraulic has established seven major research and development system research and production bases to continuously increase the market share of main control pumps and valves
centers worldwide including the Hengli International Research Center (Chang- for excavators.zhou China) Hengli Chicago Research Center (USA) Hengli Berlin Research
Center (Germany) Hengli Shanghai Research Center (China) Hengli France At the same time the company will increase its efforts in outbound mergers and acquisitions fully implementing the
Research Center Hengli Japan Research Center and Hengli Mexico Research "going global" strategy and seeking international high-quality hydraulic resources for continuous integration. It will also
Jiangsu Province's Center. The company has established Asia's leading hydraulic cylinder enhance the construction of comprehensive integrated design and application capabilities in the fields of machinery
Only research center and Jiangsu Province's only "Jiangsu Provincial Ultra-high electronics and hydraulics especially focusing on the research and development of electromechanical-hydraulic Pressure Cylinder Miniaturization and Lightweight Design Engineering Tech- integrated control technology and the application of intelligent motion control technology for complex electromechani-
nology Research Center" as well as Jiangsu Province's high-pressure cylinder cal-hydraulic systems. The company strives to become a top-notch domestic and globally renowned high-end Research Center
engineering center enterprise technology center and post-doctoral worksta- hydraulic equipment supplier and provider of hydraulic technology solutions.tion graduate workstation and foreign expert workstation.It has become a leading enterprise in the domestic hydraulic industry after Hydraulic Cylinder & Electric Cylinder Hydraulic Motor & Orbital Motor
more than 30 years of innovative development and is the first listed company
on the A-share market with hydraulic components as its main business. Hengli
Hydraulic is the only independent brand among the top four brands of excava- High-precision Casting
Products are sold to tor hydraulic cylinders in China. Currently Hengli has built a leading global Hydraulic Piston Pump
30 high-pressure cylinder production base and a special hydraulic cylinder production enterprise for shield machines. Its products have expanded from Control Componentsmore than single cylinder products to extended industries such as hydraulic valves
countries and regions hydraulic pumps hydraulic systems and precision castings. Hengli has invest- Hydraulic Control Valve for
ed in the construction of three major bases: Hengli Cylinder Hengli Foundry Mobile Machinery Industrial Valve Ball Screw & Linear Slider
and Hengli Hydraulic and has established overseas sales and service compa-
nies in Europe the United States Japan India and Indonesia to expand its
overseas market. Hengli's products are sold to more than 30 countries and Threaded Cartridge Valve Integrated System
-- ?? regions and serve more than 1200 global units. ?? --02 About Us
Hengli Hydraulics Annual Social Responsibility Report ????
Hengli has always invested a large amount of energy hydraulic test benches. In early 2017 the Shanghai
and capital in technology and product research and LiXin Hydraulic System Division was merged into the
development and has set lofty development goals: Changzhou production base opening a new journey
focusing on the main business with hydraulics as the of system integration design and manufacturing. The
core and expanding into various categories of division has also achieved remarkable results in
hydraulics. After stabilizing the development of various fields:
high-pressure cylinders Hengli began to enter the
pump and valve sector which has high technical ? Providing various types of TBM and shield machine
difficulty and added value aiming to master the "key" hydraulic system assemblies for domestic and inter-
technology of high-end hydraulic components national markets.monopolized by foreign brands. ? In the marine engineering field it has the capability
In the year of listing Hengli invested 594 million yuan to integrate a 2800T offshore platform pin-lifting
to build the first domestic scale production base for hydraulic control system and develop a 450T-class
high-precision hydraulic castings aiming to grasp the dredger hydraulic system.key core points of high-end hydraulic components.This also echoes the saying "Those who have hydrau- ? The successful development of EHA system
lics have casting." integration demonstrates the strength in developing
high-precision servo actuators.With the formal production of the foundry company in
December 2012 Hengli met the quality and capacity Hengli has successively overcome the technical
requirements of high-precision hydraulic castings difficulties of core components such as high-pressure
2.1 required for high-pressure cylinders and hydraulic cylinders and hydraulic pumps and valves establish-
Corporate Overview pumps and valves. It also indicates that Hengli has
ing the R&D and manufacturing capabilities of
gradually possessed the industrial foundation for the high-end hydraulic components and systems and
large-scale production of pumps and valves. There- becoming a domestic leading enterprise capable of
—Industrial Layout fore in 2013 the company established Jiangsu Hengli
competing with foreign brands. In order to highlight
Hydraulic Technology Co. Ltd. focusing on high-per- the nature of the main business since 2016 the
formance hydraulic piston pumps and multi-way parent company's name has changed from "Jiangsu
control valves. Hengli High-Pressure Cylinder Co. Ltd." to "Jiangsu
Hengli Hydraulic Co. Ltd." demonstrating the deter-
Hengli Hydraulic has successively hired dozens of mination to become an excellent supplier of high-end
experts in the field of hydraulic pumps and valves hydraulic components and system integration.from Germany Japan the United States and other
countries. It has invested in equipping globally leading Currently the excavator-specific cylinder series prod-
research facilities and technological processes. After ucts developed by Hengli are widely matched with
more than two years of efforts it successfully devel- well-known construction machinery manufacturers
oped 6T/8T excavator-specific high-pressure axial such as Caterpillar Hitachi Construction Machinery
piston pumps and multi-way control valves. This Sany Heavy Machinery and XCMG Excavator making
achievement revitalized the Chinese construction Hengli the only enterprise in Asia to win the Platinum
machinery industry market making the localization of Quality Award from Caterpillar for five consecutive
high-end hydraulic components a reality. After years. Hengli's non-standard cylinders are also used
supplying batch orders to supporting units such as in the construction of the hydraulic actuator support-
Sany Heavy Industry XCMG Group and LiuGong ing the construction of the National Astronomical
Group the product performance has met and exceed- Observatory's FAST (Five-hundred-meter Aperture
ed the level of international mainstream products Spherical radio Telescope) super-large spherical radio
according to customer feedback. telescope project. The corrosion-resistant and
wear-resistant composite coating cylinders are used
In 2015 with the establishment of the Hydraulic in the construction of the "Wanshan" wave compen-
System Division Hengli gained the capability to inde- sation power generation device and the "Nanhai 8"
pendently design and manufacture high-performance offshore oil drilling platform.-- ?? ?? --About Us Hengli Hydraulics Annual Social Responsibility Report ????02
2.2 Corporate Governance During the reporting period the company continuously improved its corporate governance structure and enhanced its internal control management level in accor-dance with the requirements of the Company Law Securities Law Guidelines for Articles of Association of Listed Companies Corporate Governance Guidelines for
Listed Companies Shanghai Stock Exchange Listing Rules Basic Norms for Enterprise Internal Control as well as other relevant regulations of the China Securities
Regulatory Commission and the Shanghai Stock Exchange ensuring the company's standardized operation and steady and rapid development.Shareholders and Shareholders' Meeting Supervisors and Supervisory Board Internal Control Construction
During the reporting period the company held one shareholders' meeting. The company currently has three supervisors with two of them serving
The company convened and held shareholders' meetings in accordance as employee representatives in compliance with legal regulations and The company effectively implements the provisions of the Basic Norms
with relevant regulations and requirements such as the Company Law the the company's Articles of Association regarding the number and compo- for Enterprise Internal Control and its supporting guidelines as well as
Company's Articles of Association and the Rules of Procedure for Share- sition of supervisors. During the reporting period the company convened the internal control system established by the company. The supervisory
holders' Meetings combining on-site voting and online voting to ensure a total of four supervisor meetings primarily discussing regular reports board oversees the establishment and implementation of internal
that all shareholders especially small and medium-sized shareholders and profit distribution. The members of the supervisor board diligently controls by the board of directors while the management is responsible
enjoy equal rights and fully exercise their voting rights. The shareholders' fulfill their duties demonstrating a responsible attitude towards for organizing and leading the daily operation of internal controls to
meeting strictly reviewed related-party transactions in accordance with the shareholders by overseeing the performance of the company's directors ensure lawful and compliant business operations as well as to enhance
prescribed procedures with related parties abstaining from voting ensur- and senior management as well as ensuring the legality and compliance the company's management level and risk prevention capabilities.ing that related-party transactions comply with the principles of fairness of the company's operations. The procedures for convening and
impartiality and transparency and do not harm the interests of small and conducting supervisor meetings adhere to the Company Law the
medium-sized shareholders. The company's lawyer witnessed the company's Articles of Association and the Rules of Procedure for Super-
shareholders' meeting and issued relevant legal opinions; the resolutions of visor Meetings ensuring that meetings are conducted according to
the shareholders' meeting were promptly and fully disclosed after the specified procedures.meeting.Integrity Management and Anti-Corruption
Controlling Shareholders and Listed Companies Senior Management To promote lawful operation and uphold the integrity of employees
The controlling shareholder of the company is Changzhou Hengyi Intelligent safeguarding the interests of the company and the legitimate rights of
Equipment Co. Ltd. It exercises shareholder rights through shareholders' employees the company has established various anti-corruption
meetings in accordance with the law and assumes corresponding obliga- All senior management members of the company diligently performed measures including the Employee Integrity System Anti-Corruption and
tions without interfering in the company's normal production and operation. their duties in accordance with shareholder mandates relevant regula- Anti-Bribery Control Procedures Fair Trade Advertising and Competition
The company has independent business and operational autonomy tions and company rules and regulations during the reporting period. Management System Whistleblower Management Measures and
completely separate from the controlling shareholder in terms of business Sensitive Transaction Gift System. These measures enhance compli-
personnel assets organization and finance. Related-party transactions ance management in behavior standards gift acceptance and
between the controlling shareholder and the company strictly followed the whistleblower rewards. Additionally the company organizes integrity and
approval procedures of the board of directors and the shareholders' meeting self-discipline training for departments such as procurement outsourc-
in accordance with relevant regulations. Independent directors expressed Information Disclosure and Transparency ing marketing finance and warehousing at least once a year. The
their pre-approval opinions and consented to opinions and related directors training covers common types of corporate crimes such as bribery of
and related shareholders abstained from voting. Major related-party The company adheres to the relevant regulations such as the Measures non-state personnel bribery of non-state personnel embezzlement
transactions were subject to review opinions by the audit committee; for the Administration of Information Disclosure of Listed Companies of misappropriation of funds infringement of trade secrets and breach of
related-party transactions meeting disclosure standards were disclosed in the China Securities Regulatory Commission the Listing Rules of the trust harming the interests of listed companies supported by specific
accordance with the law. During the reporting period the company did not Shanghai Stock Exchange the company's Articles of Association and case studies to analyze the triggering factors and legal consequences of
have any instances of the controlling shareholder or its affiliates improperly the company's Information Disclosure Management System for corporate crimes. This training serves as a warning and enhances
using the company's funds. information disclosure. It designates the Shanghai Securities News and employees' awareness of integrity and anti-corruption.the Shanghai Stock Exchange website as the newspapers and websites To establish a fair just and transparent cooperative environment the
for information disclosure. The company conducts insider information company requires suppliers and outsourcing partners to sign a Respon-
Directors and Board of Directors recipient registration in accordance with the provisions of the Manage- sibility Pledge at the beginning of cooperation. During the reporting
ment System for Registration of Insider Information Recipients to period the signing rate of suppliers and outsourcing partners reached
ensure that all shareholders have equal opportunities to access
The company currently has seven directors three of whom are independent 100%.directors complying with legal requirements regarding the number and information. The company has established official channels such as the integrity
composition of directors. During the reporting period the company hotline and integrity email for reporting conducts integrity publicity
convened a total of four board meetings primarily discussing regular through various means and encourages employees suppliers and other
reports profit distribution related-party transactions and changes in
accounting policies. The directors of the company have demonstrated business partners to participate in the integrity compliance supervision
diligence integrity and familiarity with relevant laws and regulations Investor Relations Management system. The company strictly follows the investigation and handling
effectively safeguarding the interests of the company and all shareholders. mechanism of reported matters stipulated in the Employee Integrity
The procedures for convening and conducting board meetings adhere to the System Anti-Corruption and Anti-Bribery Control Procedures and
Company Law the company's Articles of Association as well as relevant
regulations such as the Rules of Procedure for Board Meetings and the The company places great importance on investor relations manage-
Whistleblower Management Measures with the General Administration
Independent Directors' Work System. The board of directors has established ment providing a dedicated investor mailbox responding to shareholder
Office being the sole department responsible for handling reports of
fraud and complaints ensuring the independence and impartiality of
four specialized committees: the Strategic Committee the Nomination emails and directly communicating with investors through methods
such as on-site surveys brokerage forums hotline calls and online investigation results. The company advocates and encourages all Committee the Compensation and Assessment Committee and the Audit employees to supervise and report violations providing rewards for
Committee. Each committee operates according to its respective rules of exchanges receiving over a thousand investors throughout the year.procedure ensuring that the company's decision-making processes are substantiated reports while ensuring confidentiality.-- ?? more efficient standardized and scientific. ?? --Development Responsibilities Hengli Hydraulics Annual Social Responsibility Report ????03
3.1 Major Events of the Company in 2023 Continuous introduction of new products to support diversification strategy
In the field of hydraulic cylinders 2023 witnessed a surge of new products. For example in the field of construction machinery a new type of sensor
cylinder capable of real-time collection of the position and speed of working devices has emerged. This cylinder enables auxiliary driving and
remote precise control and has already been validated on a 20-tonnage construction vehicle. Moreover ultra-high-speed cylinders characterized
Expansion of Subsidiaries and Steady Progress in Globalization Strategy by lightweight design and produced with high machining precision have been delivered to customers. In 2023 three new series of high-pressure heavy-duty double helical swing actuators namely "HBM-95 HBH-180 HBK-105 series" developed by the company successfully passed the new
product production appraisal organized by the Jiangsu Provincial Department of Industry and Information Technology. The expert panel appraised
The construction of Hengli's factory in Mexico made new progress with the hydraulic component production factory nearing that these products broke the monopoly of foreign companies in this field achieved import substitution and overall technology reached interna-
tional advanced levels. Performance indicators such as output torque and comprehensive energy consumption are leading internationally.Aligned
completion after the topping-out ceremony on March 18. It is about to enter full trial operation. Additionally Mexican university with the trend of industrial automation and the electrification of mobile machinery Hengli has launched eight series of electric cylinders and
students who came to China for studies completed their programs and returned to Mexico on September 23. With their contribu- numerous series of controllers. These products harnessing the achievements of electrification and digitalization efficiently empower various
tion Hengli Mexico is expected to have a brighter future. mechanical equipment to embark on a new era of electric drive. To cater to different industries customers and working conditions Hengli has
In the South American market Hengli successfully established Hengli Brazil Ltd. in 2023 further improving the company's developed six major series of spiral swing cylinders with over a hundred specifications significantly improving the technological level of domestic
customer service network in the Americas and demonstrating the localization of the company's global strategy. swing cylinder processing.In the Southeast Asian market Hengli established Hengli Singapore Company to further enhance its business coverage in the In April 2023 Hengli's CAN bus electro-hydraulic drive obtained the TüV Süd Greater China Functional Safety Certification after rigorous testing.region. Integrated with Hengli's multi-way valve this drive provides more precise and intelligent digital control solutions enhancing product competitive-
ness and signaling Hengli's commitment to technical innovation and providing customers with superior and reliable products and services.The newly developed V90C series closed-circuit double pumps by Hengli offer a wide range of control options and can be combined with DA valves
and emergency brake valves. Building upon the mature application experience of the original series the HM7XE series axial piston quantitative
motors provide even stronger shock resistance capabilities.Multi-point efforts in corporate infrastructure construction have In 2023 Hengli Transmission launched 6 new axial piston motors 4 radial piston motors and 1 brake with several being industry-first designs with
solidified the foundation for development independent intellectual property rights. These products focus on emerging application areas to consolidate Hengli's advantages and expand into global markets.The Industrial Valve division also introduced several new products notably the 4WRPE10 servo performance direct-acting proportional valve
In March 2023 the Compact Hydraulic Division's new factory was completed and began production in April. In September the catering to industries such as wind power and injection molding that demand precise speed and position control while also being suitable for
intelligent warehouse project was completed. Advanced automated production lines and high-performance testing benches pressure control.ensure product quality with an annual capacity of 12 million thread-inserted valves 2 million flange-inserted valves and 600000 In 2023 the Casting Technology division developed 411 new products including 103 non-engineering machinery products mainly distributed
plate valves. across industries such as industrial new energy automotive components and high-speed rail.Construction of the new factory for Jiangsu Hengli Precision Industry Co. Ltd. entered its final stage in December with a total
area of 118000 square meters. It will have the capacity to produce 660000 meters of standard ball screws 422000 meters of
precision ball screws 10000 meters of planetary ball screws 1 million meters of linear guides 104000 standard ball screw Emphasis on research and development investment and enhanced
electric cylinders 25000 heavy-duty ball screw electric cylinders and 1750 planetary ball screw electric cylinders annually. intellectual property management
The company closely follows industry technological trends and changes in customer demands adhering to a management
philosophy that combines applied and forward-looking research. While continuously improving and upgrading existing leading
products it is increasing investment in research and development for new products and technologies to break foreign monopo-
The Research and Development Building successfully topped out lies on relevant hydraulic technologies. In 2023 research and development investment reached 694 million RMB accounting for
fostering domestic and international innovation collaboration: 7.73% of operating income.As of December 2023 Hengli Hydraulic has 681 valid patents in China including 99 invention patents 12 international invention
Hengli now boasts over 1200 global research personnel with an annual research investment exceeding 650 million RMB. The patents and has received 3 China Patent Excellence Awards 1 Changzhou Patent Gold Award and 5 Changzhou Patent Excel-
Hengli International Research Center project initiated in February 2023 successfully topped out on November 8 with a building lence Awards. Hengli Hydraulic also holds 71 valid registered trademarks with the trademark "hengli" registered under registra-
area of nearly 82000 square meters and expected completion by the end of 2024. This comprehensive research building tion number 7675837 and protected in over 30 countries via the Madrid route. The main Hengli trademark was shortlisted in the
integrates research innovation small-batch trial manufacturing product performance testing centers and comprehensive first batch of "Thousand Enterprises Hundred Cities" trademark brands by the National Intellectual Property Administration and
service centers. It will conduct applied research in hydraulic pumps valves and motors while delving into foundational and was also shortlisted in the Jiangsu Provincial Department of Commerce's list of key cultivated and developed international
forward-looking research contributing to industry theoretical research and establishing a solid innovative technology advantage. famous brands for 2023-2024 earning the title of Jiangsu Provincial High Well-known Trademark.The Hengli International Research Center will work in clear collaboration with research centers in the United States Germany
France and others forming a synergistic force. In 2023 the company actively invested resources to conduct comprehensive patent searches and analyses. We systematically
conducted patent searches tailored to our business direction and technological fields followed by detailed analysis of the
In the fields of basic materials and processes the company has established substantial industry-academia-research coopera- retrieved patent information. From patent application trends technological hotspots to application areas we delved into the
tion with expert teams from Tsinghua University Yanshan University Qingdao University of Science and Technology among value of patent information from multiple dimensions. These analyses not only provided insights into the latest industry technolo-
others. In the future efforts will continue to strengthen the development of cutting-edge foundational technologies and further gy trends but also uncovered potential market opportunities and competitive risks. The results of these analyses served as
solidify the industrial foundation. important references for the company in formulating market strategies and optimizing product layouts.-- ?? ?? --03 Development Responsibilities
Hengli Hydraulics Annual Social Responsibility Report ????
3.2 Corporate Honors
January 2023 February 2023 June 2023 July 2023 August 2023
National Industrial Award Star Enterprise of the Manitowoc Excellence Key Backbone Enterprise in Model Party Organization of
(National Level) Year 2022 Supplier Award Machinery Industry Brand Benchmarking Enterprises
(Enterprise) in Changzhou City (Municipal Level) (Industry)
(Municipal Level)
October 2023 November 2023 December 2023 December 2023
Excellent Labor Union Organi- SVP Special Award at the Third Prize of Jiangsu Science Model Unit of Happiness
zation of Changzhou City for Caterpillar China Supplier and Technology Award for 2022 Enterprise Demonstration in
the Years 2018-2023 Leadership Summit 2023
(Provincial Level) Changzhou City
(Municipal Level) (Enterprise) (Municipal Level)
December 2023 December 2023
Caterpillar Excellence National-level Intelligent
Supplier 2023 Manufacturing Demon-
(Enterprise) stration Factory
(National Level)
-- ?? ?? --Corporate Responsibility Practices Hengli Hydraulics Annual Social Responsibility Report ????04
4.1 Shareholder Responsibility 4.2 Supplier Responsibility
Interacting with investors in a positive manner to enhance market transparency. Hengli Hydraulics attaches great
importance to investor relations management facilitating effective interaction with investors to enhance the com-
Hengli Hydraulic adheres to the
pany's transparency. long-term cooperative concept of
"co-creation sharing win-win and
During the reporting period the company placed significant emphasis on communicating with investors patiently prosperity" with suppliers helping
addressing daily inquiries from investors through emails investor hotlines and other channels. It strengthened suppliers overcome difficulties shar-
communication with shareholders regulatory authorities analysts securities service agencies media and the ing resources optimizing costs and
maintaining a steady and positive
public to convey the company's investment value and maintain the company's image in the capital market. development trend with suppliers.· Organizing departments such as quality safety and internal audit to
Mutual Assistance with visit suppliers regularly to provide on-site guidance on quality control
Suppliers for safety management and site management.· Faced with the continuous increase in market raw material and labor
Sustainable Growth costs the company together with some suppliers strictly controls inter-
nal costs to achieve cost reduction and efficiency improvement.First Financial Radio led a research team for discussions Investors participating in on-site research visits
Shared Environmental The company continues to adopt new technologies new processes and
innovative management methods to achieve resource conservation and
Responsibility to Build environmental friendliness. Energy conservation and environmental
a Green Supply Chain protection are one of the most important factors for evaluating suppliers
and building a supply chain ecosystem.Incorporating Suppliers From March to June 2023 according to the service agreement signed by
into Synchronized the company and the Wujin District Human Resources and Social Securi-
Management for Precise ty Bureau the company organized two batches of supplier safety man-
Control and Optimization agement training with more than 100 suppliers participating in on-site
of the Supply Chain safety management training. Specialists were sent to the suppliers' com-
panies to conduct hazard investigations and safety training.-- ?? ?? --Corporate Responsibility Practices Hengli Hydraulics Annual Social Responsibility Report ????04
4.3 Social Responsibilities
For many years Hengli Hydraulic has adhered to the ideal of serving the country
with industry and the spirit of hard work and innovation never forgetting the
social responsibilities that the company should bear and actively participating Cumulative value exceeding
in various public welfare activities.
50 million yuan
Demonstrating Responsibility Dedicated to Public Welfare
While pursuing its own development the company actively engages in public
welfare undertakings adhering to a high sense of social responsibility and grati-
tude to give back to society. Continuously expanding the radiation of corporate Major labor safety accidents
culture Hengli Hydraulic contributes its strength to promote social develop-
ment.Public welfare activities are an important part of corporate culture. By partici- 0
pating in such activities companies can demonstrate their sense of social
responsibility and care for employees embodying corporate values and social
missions. Through public welfare activities the company can cultivate employ-
ees' sense of teamwork innovation spirit and social responsibility thereby
enhancing the overall competitiveness of the enterprise.Hengli Hydraulic is always full of love and actively carries out various public Safety in Production Training for Prevention
welfare charity undertakings. Adhering to the concept of "giving back to society
and sustainable operation" Hengli Hydraulic never forgets to give back to The company strictly abides by laws and regulations such as
society and benefit the masses. Through organizations such as the Guangcai the People's Republic of China Production Safety Law and the
Fund and Charity Association the company has long been donating money and Jiangsu Province Production Safety Regulations taking safety
goods to support impoverished students and contribute to local education. In production as the basic starting point for fulfilling social respon-
2023 it paired up with Wujin Special School and communities for assistance sibilities. It has established a special safety management Team leader specialized
with a cumulative value exceeding 50 million yuan. At the same time the com- department and safety committee to implement the concept training on workplace safety
pany organizes a series of public welfare activities among employees such as and action of safety production in all aspects of production and
blood donation drives community volunteering and activities to honor the operation through perfecting systems strengthening manage-
elderly on the Double Ninth Festival which have received enthusiastic respons- ment and enhancing training. By conducting regular inspec-
es from employees. tions and rectification of safety hazards it effectively prevents
and avoids safety accidents caused by hidden dangers. The
Community Free Medical
Consultation and Volun- company also arranges firefighting drills in various factory
teering Activities areas to improve employees' ability to respond to safety
accidents. In 2023 a total of 10 firefighting training sessions
and 2 special training sessions for team leaders were conduct-
ed as well as activities such as Safety Month gas safety
lectures and dormitory fire safety lectures. In 2023 the compa-
ny's safety production situation was relatively stable with no
major labor safety accidents occurring.Community Anti-Fraud
Volunteer Activity Fire drill training
Blood Donation Drive
-- ?? ?? --Corporate Responsibility Practices Hengli Hydraulics Annual Social Responsibility Report ????04
4.5 Environmental Responsibility
Practicing Low-Carbon Energy Conservation and
In recent years Hengli Hydraulic has focused Introducing Photovoltaic Power Generation Systems
on the national dual-carbon plan and the In 2023 a large-scale rooftop photovoltaic canopy was built on the top floor of the company's super-large hydraulic
process of green low-carbon and high-quality cylinder production workshop fully utilizing the roof space to achieve the dual value of vehicle parking and the development
development. It has actively promoted the of clean energy. The project started in August and was delivered in November with a photovoltaic system installed capacity
of 5.5MW. It is expected to generate an average of 4.88 million kWh per year and reduce CO2 emissions by approximately
deep integration of intelligence digitization 4869 tons annually. The annual electricity generation revenue is estimated to reach 3.85 million yuan. As of March 31 2024
and greening using environmental innovation the total photovoltaic power generation was 1339100 kWh saving approximately 993000 yuan in electricity costs.as the driving force and the industrial chain as The company has implemented multiple measures to promote energy conservation and emission reduction such as
the carrier. It aims to enhance the green analyzing discussing and verifying narrow-gap welding processes and controlling the opportunity for secondary
protective gas injection in narrow-gap welding to reduce the use of welding gas and thereby reduce greenhouse gas
content of industries to boost the quality of
emissions. After various efforts the total greenhouse gas emissions in 2023 were 250675 tons of carbon dioxide
development accelerate the formation of new equivalent a decrease of 2% compared to 2022 despite an increase in company production.productive forces and stimulate the dynamic
energy of high-quality development.Actively Practicing Environmental Protection Concepts
The company has always taken energy conservation consumption reduction safety and environmental
protection as its responsibilities continuously advancing environmental protection work. In terms of produc-
tion in 2023 the company obtained environmental impact assessment approvals for projects such as the tech-
nology insertion valve project Hengli Precision 110kV substation and Hengli Precision Industrial Integrated
Project. The annual environmental protection investment exceeded 19 million yuan.From promoting green production to implementing green management and building energy-saving and
environmentally friendly green factories Hengli Hydraulic guided by the new development concept relies on
industrial layout and professional advantages to actively promote the integration of environmental protection
efficiency intelligence and scientific research and development production and operation management.Carefully Managing Water Resources
In 2023 the company improved its water balance work investing 150000 yuan in purchasing third-lev-
el water metering equipment to promote the rational use of water resources.Additionally the company invested 500000 yuan in purchasing testing equipment such as ICP and
Hash conducting daily tests on various indicators of wastewater and strictly controlling wastewater
discharge. Various measures were taken to dispose of hazardous waste outsource work and promote
the standard discharge of wastewater and the reduction of hazardous waste.-- ?? ?? --Corporate Responsibility Practices Hengli Hydraulics Annual Social Responsibility Report ????04
4.4 Employee Responsibility Strengthening Cultural Construction Efforts to
Enhance the Leading Role of Culture
The company has always adhered to the concept of "people-oriented building bridges of communication with trust
and letting employees feel at ease" taking the realization and maintenance of the interests of all employees as the The methods for enterprise cultural construction are becoming increasingly diverse including the selection of
starting point and foothold of its work. It safeguards the various rights and interests of employees promotes the reali- role models such as model workers skill competitions and popular employee sports events. Through these
zation of employee value and comprehensive development protects the physical and mental health of employees forms with the efforts of cultural coordinators more and more employees are participating in enterprise cultur-
enhances the cohesion of the enterprise and achieves common growth of employees and the enterprise. al construction.As of 2023 Hengli Hydraulic has held the "Worker Pioneer" and "Model Worker" selection activities for up
Focusing on Humanized Management to the third session selecting 16 Worker Pioneer teams and 36 model workers. They are distributed in
Providing Differentiated Corporate Benefits various positions of the company influencing their colleagues with the power of example to move
forward together. Among the selected "Hengli Model Workers" there are craftsmen rooted in the front
In recent years Hengli Hydraulic has continuously improved employee welfare projects to enhance the happiness line as well as technical leaders who adhere to innovation-driven development and brave the peaks of
index of employees and strengthen internal cohesion. In addition to providing free meals four sets of work clothes per technology. There are also "breakthroughers" who won the district-level competition championship for
year shuttle services health check-ups family visit subsidies wedding bonuses holiday allowances talent apart- the company for the first time and are indispensable pillars in their departments. They are practicing
ments and employee dormitories the company provides a million-dollar medical insurance project for all employees. their original mission with action and interpreting dedication with practical responsibility.The premium is borne by the company and employees can enjoy zero deductible medical insurance eliminating
worries about medical expenses and improving both the safety and happiness indices of employees. The claims ratio
increased in 2023 and the claims threshold was lowered again. According to statistics 167 employees had accidents
"Worker Pioneer"
in 2023 with a total payout of 740700 yuan. In 2023 the company's trade union also purchased employee mutual aid
"Model Worker"
insurance for all employees as another supplement: in 2023 144 people successfully applied for employee mutual aid
insurance receiving a subsidy of 209000 yuan. With three layers of guarantees including medical insurancemillion-dollar medical insurance and employee mutual aid insurance the issue of employee hospitalization expenses “Hengliwas comprehensively resolved fully realizing the principle of "not spending a penny when getting sick."
Craftsman TypicalCup” Representatives
The company not only nurtured a large
number of typical representatives who can
represent the company's advanced culture
As of 2023 the Hengli Craftsman Cup skill com- internally but also sent out outstanding talents
A total of ? million yuan was invested in the early stage to establish petition has been held for up to the fifth session. such as Ma Yandong a delegate to the 18th
an employee childcare center in the employee dormitory area truly invested in the early stage Over the past five years Hengli Hydraulic has National Congress of the Chinese Trade Union
helping employees achieve the ideal state of "sending children to ?，?????? solidly promoted the reform of the constructionand Pan Hongbo a delegate to the 14th Jiang-
the nursery before work and picking them up after work." The park yuan of industrial workers' teams continuously su Provincial People's Congress showcasing
is operated by a third-party professional childcare institution promoted the construction of high-quality tech- the company's social image.commissioned by the company. The childcare class does not charge nical and skilled talents in the new era. The 2023
any fees to enterprise employees and all expenses related to Annual operating costs exceeding skill competition set up seven projects including
caregiving education and daily meals are borne by the company forklift CNC welding painting product inspec-
with annual operating costs exceeding ?.? million yuan. ?，?????? yuan tion flaw detection and fitter. The fitter competi-tion is a new addition this year. Nearly 320 people
In August ???? ?? full-time daycare children successfully graduated signed up to participate in this session a 63%
from the childcare center and entered kindergarten. However they increase from last year's registration number. In
did not completely leave the childcare center. They continued to the end 66 skilled talents were awarded first
enjoy this service as temporary students every Saturday. second and third prizes.-- ?? ?? --Corporate Responsibility Practices Hengli Hydraulics Annual Social Responsibility Report ????04
Establishing Training Systems to Support Talent Growth 2024 marks the 75th anniversary of the founding of the People's Republic of China a crucial year for achieving the
goals of the "14th Five-Year Plan" and a critical year for Hengli Hydraulic to firmly advance its internationalization
Creating Career Advancement Channels Strengthening Talent Development and Facilitating Employee Growth.diversification electrification and greening strategies as well as management and R&D innovation.Hengli's talent philosophy is: "Virtue and talent are used regardless of seniority" "Fair competition appoints the capable" "Match-
ing talent to positions" and "Reasonable personnel deployment." To build a talent development pipeline for Hengli employees Facing a new year full of opportunities and challenges Hengli will adhere to its original aspiration persist in revitalizing
especially to cultivate "excellent" talents the company has conducted a series of systematic projects through a combination of the company's vitality with technological innovation firmly follow the path of independent innovation adapt to the
internal and external training. For example there's the "Innovation Unlimited" design capability enhancement project for technical situation seize the opportunity and become one of the most competitive companies in the global hydraulic industry
personnel the team leader training program for team leaders and skill enhancement programs for front-line employees. The
company has also established the Liangjian Cloud University providing exclusive courses tailored to Hengli's needs. contributing to global sustainable development.For newly hired employees the company conducts targeted university student training programs and "Hengli Class" vocational At the same time adhering to the business philosophy of "focusing on customer needs and creating value for custom-
college student training programs. In terms of employee career development planning the company has established different ers shareholders employees and society in the hydraulic industry" continuously enhancing core competitiveness
promotion channels for different groups of people. Employees in functional departments and production departments can
and making the company stand out in the fierce market competition striving to build itself into a high-quality cost-ef-
choose between management and technical promotion channels while sales personnel enjoy a unique promotion channel. This
comprehensive approach helps employees achieve personal growth. fective and internationally leading enterprise trusted by investors.School-enterprise cooperation is also an important means of talent cultivation and input. Our company has deeply collaborated
with prestigious universities such as Zhejiang University and Yanshan University. In 2023 we held the 21st edition of the univer-
sity recruitment and training program. Now there are students from various departments of these universities in our company
and many of them have grown to become department heads or technical backbones. Additionally in 2023 the company jointly
organized two sessions of the "Hengli Class" recruitment and training program for vocational college students with the School
of Light Industry and the School of Mechanical and Electrical Engineering. This initiative has cultivated more than 90 high-quality
production line workers for the manufacturing site infusing fresh blood into grassroots management personnel.Enriching Cultural Activities to Demonstrate Care for Employees
In 2023 various cultural activities at Hengli continued to be carried
out with highlights in cultural work. Activities such as the Spring
Festival series Women's Day celebrations heat wave condolenc- Future Prospects
es and employee sports meetings were diverse ingenious and
commendable creating a cultural feast for employees.These cultural activities enriched the cultural life of the employees
demonstrated their spirit of learning unity and hard work which
further promoted corporate culture making everyone feel more
fulfilled proud and happy.--??
?? --Key Quantitative Performance Hengli Hydraulics Annual Social Responsibility Report ????06
Economic Performance Research and Development Performance
2023 2022 2021 Quantitative Performance Indicators Unit
202320222021
Major Accounting Data Unit
10000 Amount of Research and Development 10000 Operating Income yuan 898464.04 819671.39 930921.81 Investment yuan 69436.99 64995.34 63606.18
Net Profit Attributable to Share- 10000
holders of Listed Companies yuan 249872.91 234272.22 269360.00 Ratio of Research and Development Expenses to Operating Income % 7.73 7.93 6.83
Net Profit Attributable to Share-
holders of Listed Companies 10000 244653.35 223154.28 255750.05 Number of R&D Personnel person 1265 1203 736after Deducting Non-recurring yuan
Gains and Losses Proportion of R&D Personnel % 19.42 19.85 12.69
Net Cash Flow from Operating 10000
Activities yuan 267714.71 206362.68 279565.04
Basic Earnings per Share yuan/share 1.86 1.79 2.06
Weighted Average Return on Resource Utilization Performance
Net Assets % 18.69 22.60 32.83
Quantitative Performance Indicators Unit 2023 2022
Electricity Consumption MWh 289，525.07 269372.54
Corporate Governance Performance Natural Gas Consumption m
310，514，39710951101
Water Consumption m3 946，810 935210
Quantitative Performance Indicators Unit 2023 2022 2021
Number of Board Members person 7 7 7
Number of Independent Directors person 3 3 3
Number of Male Directors in the Board person 7 7 7 Greenhouse Gas Emission Management Performance
Number of Female Directors in the Board person 0 0 0
Number of Board Meetings time 4 5 4 Quantitative Performance Indicators Unit 2023 2022
Number of Audit Committee Meetings time 4 3 4 Total Greenhouse Gas Emissions tCO2e 250，675.16 256，524.74
Number of Strategy Committee Meetings time 4 4 4 Scope 1 Greenhouse Gas Emissions tCO2e 34，572.95 31，759.73
Number of Shareholders' Meetings time 1 3 3 Scope 2 Greenhouse Gas Emissions tCO2e 216，102.21 224，765.01
Number of Supervisory Board Meetings time 4 5 4 *Note: Total greenhouse gas emissions include both scope 1 and scope 2 greenhouse gas emissions where scope 1 represents direct
emissions and scope 2 represents energy indirect emissions.-- ?? ?? --Jiangsu Hengli Hydraulic Co. Ltd.ADD: No.99 Longqian Road Wujin District Changzhou 213167
TEL: +86 400101 8889
E-mail: hengli@henglihydraulics.com
Website: ww.henglihydraulics.com
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