仙 鹤 股 份 有 限 公 司 XIANHE CORPORATION
Address: No. 69 Tian Hu South Road Qujiang District Quzhou Zhejiang Province
Tel: 0570-2833055
Fax: 0570-2931631 PAPER MAKE IT HAPPEN
Website: www.xianhepaper.com Xianhe Co. Ltd. Sustainability Report
Email: zqb@xianhepaper.com 2025XIANHE CO. LTD 2025 Sustainability Report
REGARDING THIS REPORT
Overview Names and Abbreviations Used in This Report
The “Xianhe Co. Ltd. 2025 Sustainability Report” is the fifth consecutive sustainability report Xianhe Xianhe Co. Ltd. Xianhe Group Our
published by Xianhe Co. Ltd. and also the Company’s seventh non-financial information report. It Xianhe Co. Ltd. Company We
aims to systematically describe the Company’s principles and philosophies management Zhejiang Zhefeng New Materials Co. Ltd. Zhefeng New Materials
approaches and performance achievements in the field of sustainable development.Zhejiang Hefeng New Materials Co. Ltd. Hefeng New Materials
Report Scope Zhejiang Tangfeng Special Paper Co. Ltd. Zhejiang Tangfeng
The scope of this report is consistent with the Company’s annual report and covers Xianhe Co. Ltd. Henan Xianhe Special Pulp and Paper Co. Ltd. Henan Xianhe
and its subsidiaries within the consolidated group. This report is an annual report covering the
period from January 1 to December 31 2025. Some content extends beyond the above-mentioned Zhejiang Zhefeng Energy Development Co. Ltd. Zhefeng Energy
scope; such cases are noted where applicable. Zhejiang Xianhe New Energy Co. Ltd. Xianhe New Energy
Compilation Basis Guangxi Xianhe New Materials Co. Ltd. Guangxi Xianhe New Materials
Guangxi Xianhe Forestry Co. Ltd. Guangxi Xianhe ForestryThis report is prepared in accordance with the “Shanghai Stock Exchange Self-Regulatory GuidanceNo. 14 for Listed Companies Sustainability Reporting (Trial)” and the “Shanghai Stock Exchange Guangxi Xianhe Energy Development Co. Ltd. Guangxi Xianhe EnergySelf-Regulatory Guidelines No. 4- Preparation of Sustainability Reports” and draws upon the “GRISustainability Reporting Standards” issued by the Global Sustainability Standards Board (GSSB) the Hubei Xianhe New Materials Co. Ltd. Hubei Xianhe New Materials
standards of the Sustainability Accounting Standards Board (SASB)- namely the Containers & Hubei Xianhe Thermal Energy Co. Ltd. Hubei Xianhe Energy
Packaging Sustainability Accounting Standard and the Pulp & Paper Products Sustainability
Accounting Standard - as well as the IFRS Sustainability Disclosure Standard released by the Zhejiang Xianlu New Materials Co. Ltd. Xianlu New Materials
International Sustainability Standards Board (ISSB). In addition this report also incorporates select-
ed recommendations from the ISO 26000:2010 Guidance on Social Responsibility published by the Zhejiang Korai New Materials Co. Ltd. Korai New Materials
International Organization for Standardization (ISO).Kingdecor (Zhejiang) Co. Ltd. Kingdecor
Data Description
Availability of This Report
The data management mechanisms and case studies presented in this report are derived from
the Company’s original records or financial reports from its actual operations. All financial data in This report is issued in both printed and electronic formats. The printed version is archived in the
this report are expressed in Renminbi. In cases where there are discrepancies between the financial Company's securities department. The electronic version is available on the Company's official
data in this report and the Company’s annual financial statements the annual financial statements website (http://www.xianhepaper.com) and the Shanghai Stock Exchange website (http://ww-
shall prevail. w.sse.com.cn).Reliability Statement Contact Information
Xianhe Co. Ltd. hereby confirms that this report contains no false records misleading statements We encourage all stakeholders to provide suggestions or feedback on our Company's sustainable
or material omissions. The Company's board of directors assumes individual and joint liability for development and social responsibility management efforts. For any related inquiries please
the authenticity accuracy and completeness of the content. contact zqb@xianhepaper.com.CATALOGUE Environmental Management 21
Climate Action 24
GREEN AND LOW-CARBON Water Resources Management 33
CIRCULAR DEVELOPMENT
ABOUT THIS REPORT 01 Pollution Control 35
Resource Circularity 40
CHAIRMAN'S SPEECH 05 Ecological Protection 40
ABOUT US
Company Profile 07
Commitment to Innovation-Driven Development 43
Corporate Culture 08
Strict Quality Control 48
2025 Milestones 09
QUALITY FIRST
Key Performance Indicators for Sustainable 1 1 Provision of High-Quality Services 54
Development in 2025 WIN-WIN COOPERATION
Connecting to a Green Future 58
Supporting Industry Development 65
SUSTAINABILITY MANAGEMENT
Employee Benefits and Welfare 69
Sustainable Development Strategy 13
Sustainable Development Management 16 PEOPLE-ORIENTED AND Employee Growth and Development 77
Framework SHARED PROSPERITY Employee Health and Safety 84
Stakeholder Communication 17
18 Philanthropy and Social Contribution 89Materiality Analysis
Corporate Governance 93
KEY PERFORMANCE TABLE 107 Compliance Management 96
PRAGMATIC IMPLEMENTATION AND
SOLID FOUNDATION BUILDING Business Ethics 103
INDEX OF INDICATORS 114
Risk Management 106
FEEDBACK FORM 118XIANHE CO. LTD 2025 Sustainability Report
CHAIRMAN'S
SPEECH
Green development circular coexistence. We stead- provide various living amenities and diverse cultural
fastly uphold our environmental commitments and sports activities striving to foster a warm "family
actively promoting the comprehensive use of clean culture." Through school-enterprise cooperation
energy sources such as photovoltaics and biomass. models such as targeted training programs we
We promote low-carbon low-energy-consumption nurture emerging talent supported by a comprehen-
technologies and equipment across all production sive training system and clear career advancement
processes continuously optimizing energy efficiency paths helping employees realize their potential in their
and striving to reduce resource consumption and professional journeys. We adhere to a localized
greenhouse gas emissions thereby contributing to employment strategy promoting the coordinated
global climate goals. At our Guangxi and Hubei bases development of upstream and downstream industries
we closely integrate scientific forest management and effectively boosting regional economic growth
green production and the recycling and reuse of and public welfare. At the same time we actively
waste and pollutants building a circular industrial engage in charitable endeavors extending care and
ecosystem that enables efficient resource flow and warmth to society.promotes sustainable development.Sound Governance for Steady Growth. Sound and
Chairman of Xianhe Innovation-driven win-win future. We view innova- effective corporate governance is the cornerstone of
Corporation tion as a vital source of core competitiveness contin- our sustainable development. We continuously
Mr. Minliang Wang uously pursuing R&D in new products and technolo- optimize our governance structure and strengthen gies to enhance product value and competitiveness. internal control mechanisms to ensure compliance in
We work closely with global customers to deliver all business activities and maintain stable operations.high-quality sustainable product solutions. We have We have established a risk prevention and control
established a full-process quality control system system covering all business processes strengthening
covering raw material procurement production internal auditing and process monitoring to identify
processes and finished product testing and we lever- and mitigate various operational risks thereby
age digital and intelligent technologies to build smart enhancing business resilience. We resolutely oppose
workshops enabling real-time monitoring and scien- unethical business practices have established a
tific scheduling of production processes to ensure robust internal reporting mechanism and regularly
Dear stakeholders partners and colleagues : efficiency and stability. We continuously strengthen conduct anti-corruption training for employees
Xianhe Co. Ltd. has always adhered to the philosophy of sustainable development regarding it as a vital pillar of the supply chain risk management and safety mecha- upholding fair and just business order.Company’s long-term success. In 2025 we not only remained committed to building a green and efficient business nisms. Through deep collaboration across the value
system but also further advanced the integrated development of the “forest-pulp-paper” and “bamboo-pulp-paper” chain we work with upstream and downstream Looking ahead Xianhe Co. Ltd. will assume greater
industrial chains. This is not only a key strategy for enhancing control over raw material supply and strengthening partners to fulfill environmental and social responsi- responsibility continuously achieving breakthroughs
supply chain resilience but also a concrete step toward deeply integrating green management carbon sequestration bilities building a robust and sustainable industrial in green development technological innovation and
and emissions reduction and rural revitalization. We firmly believe that only by positioning corporate value within the ecosystem. industrial collaboration. Together with all partners we
broader context of environmental sustainability and social harmony can we achieve our long-term vision of sustain- will work together for mutual success and shared
able development. People Development and Social Contribution. We value making even greater contributions to the
respect and protect the legitimate rights and interests high-quality development of the industry and the
of every employee having established a fair and sustainable progress of society.equitable compensation and benefits system. We alsoXIANHE CO. LTD 2025 Sustainability Report
ABOUT US
COMPANY PROFILE
Xianhe Co. Ltd. is a leading domestic enterprise engaged in the R&D and manu-
facturing of high-performance paper-based functional materials. Its principal
business includes the R&D production and sales of high-performance
paper-based functional materials as well as their pulp-based raw materials and Company Name: Xianhe Co. Ltd.chemical raw materials. The Company’s paper-based functional material prod- Company Name in English:Xian-
ucts comprise more than 60 varieties across six major product series including he Co. Ltd.food and medical packaging materials supporting materials for the tobacco
industry home decoration materials (including products of its joint venture English Name Abbreviation:
Xianhe
Kingdecor) business communication and publishing and printing materials
electrical and industrial paper materials and daily consumer materials. At the Stock Code: 603733
same time with paper-based functional material R&D and manufacturing at its
Company Headquarters: Quzhou
core the Company has actively expanded into chemical materials industrial City Zhejiang Province China
water treatment solid waste treatment and clean energy driving the develop-
ment of its new materials and new energy businesses. It has also gradually
extended its operations into logistics and consumer-oriented products and is
committed to building an integrated industrial ecosystem across the upstream
and downstream value chain. The Company has six production bases across
China located in Qujiang Zhejiang; Changshan Zhejiang; Neixiang Henan; Laibin
Guangxi; Shishou Hubei; and Hejiang Sichuan (under construction).CORPORATE CULTURE Purpose Spirit
The Company adheres to the mission of "creating wealth and serving society" with the vision of "Century Xianhe Sustain-
able Development." Upholding the artisan spirit of "unity of knowledge and action and intelligent craftsmanship" it is Create wealth serve society Integrity efficiency innovation
guided by "family culture" and strives to become a global leader in the high-performance paper-based functional materi- and striving for excellence
als industry through sustainable and high-quality development.The Essence of Xianhe’s Core
"Family Culture" Value
Mission Vision Treat employees as family members allow them to share in the Com- People-oriented family as the pany's growth and success and take good care of this “small family” foundation
Leveraging the integrated "forest-pulp-paper" strat- Century Xianhe sustainable development Rely on managers and employees and advocate loyalty and dedica- Harmony as the priority virtue as
egy to deliver the best total solutions in the global tion discipline and order teamwork and independent innovation to the principle
high-performance paper-based functional materi- build the enterprise into a strong “big family”
als field and to establish ourselves as a world-class
pacesetter in the specialty paper industry Fulfill social responsibilities become an enterprise respected by
society and contribute to the nationXIANHE CO. LTD 2025 Sustainability Report
2025 MILESTONES
January 2025 April 2025 July 2025 October 2025
Zhefeng New Materials was awarded the title of 'Little Giant' Xianhe Co. Ltd. was honored with the titles of '2024 Zhefeng New Materials was included in the The artificial intelligence application scenario of Xianhe Smart Work-
by the Zhejiang Provincial Department of Economy and Private Enterprise Revenue Leader' and '2024 '2025 Municipal Manufacturing Enterprise shop won the "Outstanding Innovation Award" at the inaugural 2025
Information Technology. High-Quality Development Enterprise' at the 6th Technology Centers List of Quzhou City' AI+Industrial Scenario Application Competition across four provinces
The PM3 papermaking production line of Guangxi Xianhe Quzhou Human Development Conference. released by the Quzhou Municipal Bureau of and nine cities and was included in the "2025 Zhejiang Province AI
Phase I project has successfully commissioned and put into Economy and Information Technology. Application Scenarios Benchmark Enterprises AI Service Providers and Xianhe Co. Ltd. has been included in the eighth
operation. Digital Intelligence Excellence List" released by the Zhejiang Provincial batch of "Pacesetter" enterprises for domestic and
Department of Economy and Information Technology.foreign trade integration cultivation list released by July and August 2025
the Zhejiang Provincial Department of Commerce. The Xianhe Labor Union and the General Zhefeng New Materials was honored as a 'Seventh Batch of Specialized
February 2025 Labor Unions of Intelligent Manufacturing Refined Unique and Innovative Little Giant Enterprises' by the Depart-Hubei Xianhe New Materials was awarded the
Xianhe Co. Ltd. was awarded the Qujiang District 'Five Cities' ment of Economy and Information Technology.'Jingzhou May 1st Labor Certificate' by the Jingzhou New City jointly organized a two-phase
Construction Special Contribution Award by the Office of the Federation of Labor Unions. summer care program for children. The PM5 papermaking production line of Guangxi Xianhe Phase I project
People's Government of Qujiang District Quzhou City. August 2025 has successfully commissioned and put into operation.The PM1 papermaking production line of Guangxi
Xianhe Co. Ltd. met the requirements for establishing a new Xianhe Phase I project has successfully commis- Guangxi Xianhe New Materials has been awarded the three-systemworkstation and its filing for the establishment of a “Postdoc- Both Zhefeng New Materials' 5G fully connect-sioned and put into operation. certifications: Quality Management System (ISO 9001) Occupationaltoral Research Workstation” was approved by the Office of ed factory and Korai New Materials' 5G release Health and Safety Management System (ISO 45001) and Environmental
the National Postdoctoral Management Committee. Mr. Minliang Wang Chairman of Xianhe Co. Ltd. paper production facility have been included in Management System (ISO 14001).has been awarded the Special Government the '2025 5G Factory Directory' released by the
Xianlu New Materials was awarded the "Zhejiang Innovative Allowance by the State Council. Information and Communication Management Guangxi Xianhe New Materials obtained the FSC Forest Certification.SME" certificate by the Zhejiang Provincial Department of
Economy and Information Technology. Guangxi Xianhe New Materials participated in the
Bureau of the Ministry of Industry and Informa- Guangxi Xianhe New Materials has upgraded its employment poverty
5th Workers' Sports Meet organized by Laibin City tion Technology. alleviation workshop to a rural employment factory.
Korai New Materials was honored as one of the first batch of Labor Unions securing second place in the
'Industrial Investment Stars' by Changshan Outstanding mixed-gender tug-of-war competition within the September 2025
Contribution Enterprises. November 2025corporate division. Xianhe’s food-grade interleaving paper for
Zhefeng New Materials received the 2024 Special Prize for stainless steel sheets was awarded the "2025 The project on the development of high-efficiency energy-saving
Striving Progress by Quzhou Mayor specifically recognized for May 2025 Excellent New Industrial Product of Zhejiang magnetic levitation turbine intelligent vacuum system by Xianhe Co.its 'Openness Enhancement Award'. Province" certificate by the Zhejiang Provin- Ltd. and its application in large-scale paper machines was awarded Xianhe Co. Ltd. was awarded the title of '2025 cial Department of Economy and Information the "14th Five-Year Plan" Advanced Scientific and Technological
Zhejiang Provincial Advanced Intelligent Factory' by Technology. Innovation Achievement Certificate in Light Industry by the China
the Zhejiang Provincial Department of Economy
March 2025 National Light Industry Council.and Information Technology. Zhefeng New Materials has been awarded
Xianhe Co. Ltd. was awarded the title of 'National Civilized Unit' the EcoVadis Gold Certification. Xianhe Co. Ltd.'s magnetic suspension technology application was
for the seventh time by the Central Leading Group for Publicity June 2025 recognized as a "2024 Specialty Paper Industry Chain Innovation Case – To commemorate the great victory of the
Ideological and Cultural Work. Green and Low-Carbon Case" by the China Technical Association of the The project on key technologies for green manu- War of Resistance against Japan and Paper Industry (CTAPI).The Xianhe Party Committee was awarded the honorary title of facturing and industrial application of high-perfor- promote the great spirit of the War of
'Advanced Primary level Party Organization' in Quzhou mance medical packaging paper by Xianhe Co. Resistance the Xianhe Party Committee Xianhe Co. Ltd. was selected by the Zhejiang Provincial Department of
Intelligent Manufacturing New City for 2024 by the CPC Quzhou Ltd. was awarded the "Second Prize" honor certifi- organized all party members to watch the Economy and Information Technology as one of the "Third Batch of
Intelligent Manufacturing New City Working Committee. cate of the Innovation Award for Invention Entrepre- "September 3rd" military parade ceremony. Eagle Enterprises in Zhejiang Province."
neurship by the China Invention Association.The PM4 papermaking production line of Hubei Xianhe Phase I The Xianhe Party Committee organized the
project has successfully commissioned and put into operation. Xianhe Co. Ltd. and the People's Government of viewing of the film 'Unit 731' and conducted December 2025
Hejiang County Sichuan Province officially signed patriotic education activities.Hubei Xianhe New Materials Co. Ltd. established the Party Zhefeng New Materials has been selected for the "National Typical
the Investment Agreement for the Integrated
Branch Committee of Hubei Xianhe New Materials Co. Ltd. Cases of Power Demand-Side Management in the Industrial Sector
High-Performance Paper-Based New Materials (2025 List)" issued by the General Office of the Ministry of Industry and
Project for Bamboo Pulp Paper. Information Technology of the People's Republic of China.Guangxi Xianhe Forestry has obtained the Forest Management
Certification.Hubei Xianhe New Materials hosted the Xianhe 2025 Sublimation Base
Paper Distributors Exchange Conference.XIANHE CO. LTD 2025 Sustainability Report
KEY PERFORMANCE INDICATORS FOR
SUSTAINABLE DEVELOPMENT IN 2025
Financial Performance Quality First Win-Win Cooperation
R&D investment Product qualification rate
Operating revenue Total assets RMB 175.5161 Million 99.46%
RMB 12.3428822 Billion RMB 24.8864165 Billion
0 major safety and quality incidents related to
products and services
Net profit attributable to shareholders of the listed Company Average customer satisfaction
RMB 1.0126186 Billion score92.59 points
Green Development and Low-Carbon Transformation People-Oriented and Shared Prosperity
Renewable energy consumption Water recycling and reuse ratio Employee training coverage Total employee training
75513975.40 kWh 98.28% rate100% 1269480 hours
The compliance rate for wastewater 0 environmental pollution
waste gas and solid waste treatment/- Public Welfare and Charity Contri-
100% incident reported 0 work-related fatalitiesdischarge reached butions RMB 1485000XIANHE CO. LTD 2025 Sustainability Report
SUSTAINABILITY MANAGEMENT
United Nations Sustainable Company Actions
Development Goals
SUSTAINABLE DEVELOPMENT STRATEGY
Xianhe actively recruits local personnel in Guangxi and Hubei fully utilizing
local human resources to drive employment and inject vitality into regional
Xianhe’s Six Major Responsibility Strategic Initiatives economic development. Meanwhile in Henan the Company has established
poverty alleviation workshops helping people in need find employment
close to their homes increase their incomes and advance poverty reduction
End poverty in all its
forms everywhere efforts.Guided by the construction of "family culture"
Through annual ongoing donations Xianhe supports various public welfare
harmonious development
initiatives including assisting students from financially disadvantaged
families to complete their education caring for the elderly living alone to
improve their quality of life and delivering warmth and compassion. In doing
so the Company contributes to building a harmonious society.Utilizing digital management tools such as ERP (Enterprise
Resource Planning) and MES (Manufacturing Execution Ensure inclusive and The Company prioritizes the holistic development of its employees by
System) for precise control equitable quality providing an excellent learning platform formulating targeted training
education and promote programs tailored to the needs of different positions and actively support-
lifelong learning ing employees in continuing education to continuously enhance their
opportunities for all
professional skills and overall competencies.Leverage multi-system certification such as the
"three-in-one" approach to consolidate Adhere to the principle of gender equality respect women's rights and
foundational capabilities ensure that female employees enjoy equal treatment with male employees
in economic social and political spheres.Achieving gender
equality and A Women's Workers Committee was established to specifically safeguard
empowering all
Comprehensively implement the Operational the rights and interests of female employees. This committee was awarded women and girls
excellence mechanism to pursue excellence the honor of the second batch of "Distinctive Women's Workers' Work
Brands"by the Office of the Zhejiang Provincial Labor Unions Women's
Workers Committee.The Company consistently prioritizes the sustainable use of water resources
Innovation-driven development supported by strictly controls water consumption sets clear water-saving targets and
technology and talent establishes a red line for water usage to ensure rational water use across all
processes.Clean drinking water
and sanitation The Company continuously upgrades its wastewater treatment facilities
Guided by the 15th Five-Year Plan we aim to establish a leading strictly treats pollutants in accordance with environmental protection
enterprise in high-performance paper-based functional requirements implements full-process monitoring and conducts regular
materials that is "domestically first-class and internationally water quality testing to ensure compliance with discharge standards.advanced" contributing to the development of a manufacturing
powerhouse
The Company actively plans its new energy industry layout establishing
entities such as Xianhe New Energy Zhefeng Energy Guangxi Xianhe Energy
and Hubei Xianhe Energy which focus on distributed photovoltaic power
Ensure access to
affordable reliable generation electricity sales services and thermal energy supply to drive
sustainable and sustainable development.modern energy for all
Since 2014 the Company has utilized solar photovoltaic power generation
equipment deploying PV systems across all production parks to effectively
supplement production energy needs.XIANHE CO. LTD 2025 Sustainability Report
United Nations Sustainable
Development Goals Company Actions SUSTAINABLE DEVELOPMENT
The Company champions its "Family Culture" by creating employment MANAGEMENT FRAMEWORK
opportunities in the communities where it operates building a safe and Xianhe Co. Ltd. has integrated sustainable development into its corporate governance system establishing a gover-
Promote sustained livable working environment for employees and continuously enhancing
inclusive and nance framework in which the Board of Directors provides overall strategic direction and decision-making the manage-their sense of well-being and happiness in life.sustainable econom- ment team organizes and drives implementation and functional departments coordinate to execute initiatives. With
ic growth full and Over the years the Company has consistently promoted the flourishing of clearly defined responsibilities and working boundaries the Company has formed an operating mechanism featuring
productive employ- education and provided solid support for youth development through tiered accountability and step-by-step execution. Environmental social and governance (ESG) considerations are
ment and decent
initiatives such as establishing education funds awarding the Wang Bendao embedded into strategic planning and day-to-day operations ensuring that sustainable development efforts advance work for all
Scholarship and participating in charitable donation programs for finan- in synergy with core business activities and are implemented steadily.cially disadvantaged university students.Actively seizing the development opportunities presented by "replacing
plastics with paper" the Company continuously advances the R&D of new Board of Directors
eco-friendly paper-based products makes full use of raw materials and
Ensure sustainable Sustainable Development (ESG) Committeeenergy resources and adheres to responsible production principles.consumption and Supervise ESG vision strategy and targets; evaluate implementation.production patterns Specializing in the R&D and manufacturing of low-carbon environmentallyfriendly products such as “carbonless printing products" and "carbonless Governance Guide the ESG Working Group in identifying assessing and responding to ESGcopy paper” the Company promotes sustainable consumption through its Level risks; integrate ESG risks into the corporate risk management framework.core business initiatives. Guide the ESG Working Group in identifying and assessing ESG issues affecting
operations and stakeholder interests; prioritize material topics.The Company has established a systematic climate change management
framework. Based on internal energy consumption data it implements a Review ESG reports and key matters and submit them to the Board for approval.greenhouse gas emission monitoring program gradually conducts carbon
Take urgent action to inventories and formulates robust emission reduction plans driving Xianhe
combat climate
change and its toward its low-carbon transformation and development goals.impacts Focusing on building an integrated "forest-pulp-paper" industrial chain the
Company actively pursues forestry development and fully develops "carbon
sink" resources contributing positively to mitigating the impacts of climate ESG Working Group
change. Develop implementation pathways and specialized plans based on ESG
policies; coordinate cross-departmental resources.Protect restore and
promote sustainable Management Identify material ESG topics analyze their connection to strategy and
use of terrestrial The Company diligently practices sustainable procurement principles Level operations and propose risk controls.ecosystems
sustainably manage integrating ecological protection into supply chain management. It requires Decompose ESG targets into performance assessments; regularly report
forests combat suppliers to provide FSC or PEFC certification to ensure that raw materials progress.desertification and originate from sustainably managed forests thereby promoting biodiversity
halt and reverse conservation and the responsible utilization of forest resources. Assist in preparing the annual ESG report for Committee and Board review.land degradation
and halt biodiversity
loss
Promote peaceful
and inclusive Integrate compliance concepts into operational processes and employees' Business Units and Functional Departmentssocieties for sustain-
able development daily work fostering an honest efficient and stable operating environment. Implement ESG action plans to support overall ESG targets.provide access to Execution
justice for all and Fully implement the anti-corruption work philosophy establish an integrity Establish and maintain stakeholder communication channels.build effective management system covering all employees and promote the in-depth
Level
accountable and development of a corporate integrity culture through diverse integrity Regularly collect ESG data and practice information; drive continuous improve-
inclusive institutions management measures. ment; support corporate decision-making.at all levelsXIANHE CO. LTD 2025 Sustainability Report
STAKEHOLDER COMMUNICATION MATERIALITY ANALYSIS
The attention and support of stakeholders serve as the driving force behind Xianhe Co. Ltd. 's continuous progress. By This year considering both the Company's business development stage and external environmental changes we
establishing multi-dimensional and routine communication mechanisms we listen carefully to the voices of all stake- distributed stakeholder surveys to internal and external parties and performed data analysis. The impact materiality and
holders and gain a deep understanding of their expectations for the Company’s development. We regularly conduct financial materiality of relevant topics were dynamically updated to accurately reflect the Company's current operating
stakeholder surveys questionnaire discussions and ESG priority assessments integrating stakeholders' recommenda- profile and key sustainability priorities.tions into daily operations and strategic planning. This commitment drives our vision of sustainable development
through mutual benefits collaborative progress and win-win outcomes.High
Key Stakeholders Expectations and Demands Response Measures Addressing
Climate Change Corporate
Governance
Law-abiding operations Environmental
Comply with laws and regulations Anti-Commercial Bribery
Tax compliance Compliance Management
Pay taxes in good faith and Anti-Corruption
Government Job creation Stakeholder Communication
Contribute to improving people's livelihoods Energy Utilization
Regional economic development Circular Economy
Focus on pollution prevention and control
Environmental protection Water Resources UtilizationEmployee Compensation
and Benefits Occupational Product and Service
Health and Safety Quality and Safety
Improve corporate governance Protection of Employee Anti-Unfair Competition
Business performance Strengthen risk management and control Rights and Interests Research and
Return on investment Formulate business strategies Employee Training InnovationShareholders and Development
Steady operations Timely information disclosure Pollutant Emissions and Waste Disposal
Information transparency Conduct investor roadshows and organize
investor research Data Security and
Customer Privacy Protection Supply Chain Security
Rights protection Social Contribution
Compensation and benefits Legally sign labor contracts
Career development and Provide benefits and care
Employees advancement Share in development achievements Rural Revitalization
Safe and comfortable working Improve training mechanisms
environment
Implement workplace safety
Work-life balance
Low
Commit to independent R&D and innovation
High-quality diversified products Product quality management
Low Financial Materiality High
Clients
Premium service Improve customer service systems The topics of “Technology Ethics” “Equal Treatment of SMEs” and “Ecosystems and Biodiversity Protection” are consid-
Monitor customer satisfaction ered to have relatively limited relevance to the Company's current operations and have therefore not been prioritized
for assessment as key topics. Explanatory disclosures have been provided in the relevant sections of this Report inFair procurement accordance with Article 7 of “Shanghai Stock Exchange Self-Regulatory Guidance No. 14 for Listed Companies Sustain-Practice transparent procurementMutual benefit and win-win ability Reporting (Trial)”. In addition based on the Company's sustainability management practices during the year
Suppliers and Partners outcomes Fulfill contracts with integrity “Due Diligence” has not been included in the list of material topics for the current reporting period.Industry development promotion Conduct professional exchanges
Community development Make charitable donations
Communities promotion
Participate in volunteer activities
Charitable activities
Social Organizations Public participation Accept oversight from the public and media
and the Public Transparent operations Conduct external communications
Impact MaterialityXIANHE CO. LTD 2025 Sustainability Report
nment Secti
on
Enviro
Green and Low-carbon
Circular Development
Xianhe Co. Ltd. adheres to the concept of "Green China Clean
Factory" and actively promotes environmental governance and
sustainable development with a strong sense of social respon-
sibility and industry commitment. We are dedicated to trans-
forming environmental commitments into measurable and
verifiable tangible outcomes through management optimiza-
tion and technological innovation building a
resource-efficient and environmentally friendly
production and operation system aiming to
achieve close synergy and long-term
win-win outcomes among corporate
growth environmental protection and
social welfare.Environmental Management
Climate Action
Water Resources Management
Pollution Control
Resource Circularity
Ecological ProtectionXIANHE CO. LTD 2025 Sustainability Report
Xianhe Group consistently regards environmental compliance as the core principle
Environmental of its operational management. The Company focuses on establishing a compre-
Key Performance
hensive environmental management system with well-defined systems clear Xianhe Corp Zhefeng New Materials Xianlu New
Management division of responsibilities and robust execution capabilities. It strengthens environ- Xianhe Corp was among the first batch Materials Henan Xianhe Zhejiang Tangfeng
mental risk prevention and control mechanisms as well as routine inspection proto- of "Zhejiang Green Enterprises" in Korai New Materials Kingdecor Guangxi Xianhe
cols diligently fulfills its environmental protection obligations and ensures environ- Zhejiang Province and recognized as a New Materials and Hubei Xianhe New Materials
mental compliance throughout all production and operational processes. "National Green Factory" by the Ministry have obtained ISO 14001 Environmental Manage-
of Industry and Information Technology. ment System certification.Key Performance Environmental targets for 2025 have been met:
The compliance rate for wastewater waste gas and solid waste treatment/dis-
charge reached 100% with zero environmental pollution incidents. Environmental Risk Prevention and Control
Assessment of Significant Environmental Aspects
Environmental Management System
The General Manager's Office identifies and assesses environmental aspects involved in the full lifecycle of the Company's
The Company strictly complies with laws and regulations such as the Environmental Protection Law of the People’s Repub- business activities products and services. It prepares and dynamically updates the "List of Significant Environmental
lic of China and the Environmental Impact Assessment Law of the People’s Republic of China and has formulated internal Aspects" clearly identifying major environmental risk points requiring priority control. This provides a scientific basis for
regulatory documents including the Environmental Protection Management System the Environmental Operation Control resource allocation and management decision-making thereby effectively controlling environmental impacts and driving
Procedures and the Environmental Aspect Identification and Evaluation Procedures thereby ensuring that environmental continuous improvement.management activities are carried out in a systematic and standardized manner.The Company has established an environmental protection and cleaner production management framework covering
committees administrative departments and production plants clearly defining the responsibilities of each level. This Key Performance
framework promotes the implementation of environmental protection and cleaner production efforts at every stage
strengthens the supervision mechanism and ensures that all arrangements are carried out effectively. During the reporting period the Company experienced no major environmental incidents and was not subject
Environmental Protection and Cleaner Production Management Framework to significant administrative penalties or criminal liability from environmental protection authorities or other
relevant departments due to such incidents.Board of
Directors
Environmental Incident Emergency Management
Sustainable Development Following the principles of "prevention first self-reliance unified command
(ESG) Committee and divided responsibilities" the Company has developed a "Contingency
As the highest governing body responsible for imple- Plan for Environmental Emergencies" informed by its operations and input
Environmental Protection menting national environmental policies and regulations from employees and nearby residents. The plan outlines the emergency
Decision-making and Cleaner Production providing overall planning and leadership for the response structure incident classification criteria and response proce-
and Leadership Management Committee Company's environmental protection work and organiz- dures. Site-specific plans address potential accidental discharges or leaks
Level ing environmental monitoring and inspection activities.in key areas such as production workshops chemical warehouses waste-
As the standing office of the committee staffed with water treatment and flue gas systems - minimizing environmental impact
Environmental Protection and professional technical personnel responsible for daily and ensuring the safety of employees and neighboring communities.Management and Cleaner Production Office environmental supervision and inspection environmental
Supervision Level data collection and archiving and internal and external We provide organization-wide training on the contingency plan and
information reporting. conduct regular emergency drills including hazardous chemical leaks and
Sub-plant Environmental Each branch factory manager serves as the group fire safety exercises to strengthen the rapid response mitigation and
Protection and Cleaner
Execution and leader specifically responsible for the design organiza- recovery capabilities of its emergency teams. Furthermore based on Production Leadership Team
Implementation tion and implementation of environmental protection assessments of emergency resources and environmental risks the Com-
and cleaner production programs within the branch as Fire safety drillLevel pany continuously improves its emergency supplies enhances inspections
well as supervising the on-site implementation of all
Wastewater Treatment environmental measures. of critical areas and raises its overall emergency management standards.FacilityXIANHE CO. LTD 2025 Sustainability Report
In response to the profound impacts of climate change Xianhe Co. Ltd. has
Environmental Training integrated climate-related issues into its daily management and development
Climate Action strategies actively advancing energy utilization management and greenhouse gas
The Company regularly conducts environmental protection training and awareness campaigns covering topics such as emission reduction efforts. By leveraging industry-specific characteristics and
environmental regulations pollution prevention and resource conservation. By integrating practical operational scenarios operational realities the Company identifies potential risks and opportunities
of its facilities and equipment it organizes hands-on drills and case discussions to gradually enhance employees' aware- arising from climate change. It strengthens energy consumption process manage-
ness of environmental responsibilities and promote the implementation of eco-friendly concepts throughout corporate ment and data monitoring systems promotes energy-saving technologies and
operations. clean energy applications continuously optimizes energy structure and utilization
efficiency thereby providing robust support for low-carbon transition and green
development initiatives.Climate Change Management System
In compliance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) Xianhe Co.Ltd. has established a climate change management system focusing on four key dimensions: governance strategy risk
and opportunity management and indicators and objectives. The Company has clearly defined responsibilities closely
monitored the impact of climate-related risks and opportunities on its operations and implemented controls over energy
and emission indicators to continuously enhance its climate resilience capabilities.Environmental Training
Environmental Compliance Inspection Governance Strategy
The Company implements comprehensive management of environmental protection facilities and equipment establish- Under the sustainable development gover- The Company assesses the potential
ing and strictly enforcing management procedures for inspection maintenance and acceptance testing. Preventive nance framework the Company advances impacts of short- medium- and long-term
maintenance and hazard identification are carried out on critical equipment pipelines valves and other components to climate change-related matters. The Board climate-related risks and opportunities on
ensure that all environmental protection facilities and equipment remain in good condition and operate stably. of Directors provides oversight the Sustain- its operations and financial performance
able Development (ESG) Committee guides incorporating these considerations into
The Company regularly engages qualified third-party institutions to conduct comprehensive audits covering all relevant and coordinates climate impact assess- management decisions and business
areas including chemical warehouses production workshops and laboratories as well as supporting facilities such as ments and business and functional depart- planning.storage containers and transfer pipelines. The audit scope encompasses the loading and unloading handling use and ments execute specific measures.disposal of hazardous chemicals along with related management systems personnel training emergency response
plans and record-keeping. This enables the timely identification and mitigation of potential risks.Risk and Opportunity Management Indicators and Objectives
Key Performance In 2025
Based on regulatory requirements industry The Company regularly measures verifies
trends and expert advice - and taking full and discloses its total greenhouse gas
Number of emergency drills conducted for Coverage rate of personnel involved in environ- account of its current business context - the emissions and emissions per unit of prod-
sudden environmental incidents times mental emergency response drills Company systematically identifies and uct using this data to evaluate the effec-
evaluates climate-related risks and oppor- tiveness of its climate management efforts.tunities across its own operations and value
Actively responding to the national "dual
Coverage rate of environmen- Number of training sessions conduct- Total cumulative hours of environ- chain developing and regularly updating
carbon" strategy the Company aims to
tal protection and compli- ed on environmental protection and mental protection and compli- corresponding management measures. achieve carbon peak by 2030 and carbon
ance-related training environmental compliance times ance-related training hours neutrality by 2060 advancing its low-car-
bon transformation.XIANHE CO. LTD 2025 Sustainability Report
b.Climate Transition Risks
Risk Type Risk Description Possible Business Impact Possible Financial Impact Countermeasures Probability
The Company continues to advance its
Climate-related Risks and Opportunities Global integrated "forest-pulp-paper" strategy
carbon actively develops forestry carbon sinks and
pricing * Increased compli- carries out energy-saving and carbon-re-
a.Physical Climate Risks Policy and coverage * Daily production and ance and operational
duction retrofits on production processes and
costs equipment. The Company's securities and HighLegal Risks expands operations are affected legal department closely monitors and tracks
Risk Possible Possible with stricter * Higher carbon taxes changes in environmental laws and
Risk Type Countermeasures ProbabilityDescription Business Impact Financial Impact emission or environmental fines regulations to ensure that the Company's
standards operations remain in full compliance with
The Company plans alternative transpor- environmental requirements.Frequent * Delays in raw material *Increased transporta- tation routes in advance continuously
extreme or product transporta- tion costs The Company carefully assesses the monitors weather conditions at supplier Application of * R&D costs for green
weather tion *Additional raw and customer locations as well as along green
feasibility of low-carbon technologies
* Existing technology technologies
events such adopting a gradual upgrade approach in * Damage to goods and material procurement logistics routes and activates emergency
as typhoons High
technologies
Technical becomes obsolete * Costs for upgrading the short term by phasing in investments to Medium
vehicles costs logistics plans as appropriate. The to reduce
heavy rainfall Risk * Newly developed or replacing
update equipment and production lines.* Increased supply *Delivery delays and Company maintains a certain inventory of water and technology is immature high-emission
The Company actively collaborates with
chain instability revenue decline raw materials to prevent supply disrup- energy and or poorly implemented equipment and universities and research institutions to hailstorms tions caused by extreme weather events. material production lines advance the R&D and commercialization of
consumption low-carbon technologies.The Company enhances supply chain
Acute Risk diversification actively seeks alternative Shifts in * Changes in consumer The Company continues to develop and
High natural suppliers and ensures broad geographi- industry trends preferences lead to reduced * Loss of market share Market Risk produce low-carbon environmentally friendly High
disaster risk *Increased raw cal distribution to reduce reliance on any and customer demand for traditional and revenue decline products to meet customer demands.(e.g. material procurement * Raw material single supplier and mitigate the impact of
behavior high-carbon products
earthquakes costsshortage reduced weather disasters in concentrated areas.Medium The Company plans to expand the range of
fires) in major production *Production delays To secure raw material supply the Slow or poor * Damaged brand image products subject to full life-cycle carbon footprint
wood pulp and revenue decline Company is developing owned and tracking and evaluation and further research and
* Production plan Reputation performance * Negative feedback supplying *Default and penalty cooperative forestland in Guangxi from stakeholders * Customer churn and
analyze methods to reduce product carbon
regions such postponed building an integrated "forest-pulp-paper" in costs due to delayed Risk revenue decline
footprints and environmental impact. While High
as South project and further planning an integrat- climate action * Social and public taking active and effective actions to address deliveries pressure climate change the Company also makes timely America ed "bamboo-pulp-paper" project in information disclosures to respond to the
Sichuan to improve overall supply chain information needs of external stakeholders.efficiency.The Company conducts advance weather
monitoring and early warning and c.Climate Opportunities
provides adequate heat prevention and Opportunity Opportunity
cold protection facilities for employees to Type Description Possible Business Impact Possible Financial Impact Countermeasures Probability
* Personal injuries ensure suitable working temperatures. *Reduced dependence * Energy cost savings The Company actively invests in clean * Increased medical
such as heatstroke or During extreme weather work hours are Energy Application of on traditional fossil fuels * Additional govern- energy projects such as solar wind and expenses for
frostbite adjusted or shift rotations are implement-
High
personnel Low Transition
clean energy
*Lower carbon emissions ment subsidies or tax
biomass power as well as energy storage
ed to reduce employee exposure to projects to optimize its own energy mix.Persistent * Reduced production incentivesextreme heat or cold. The Company
extreme * Production delays safety and stability In response to market and customer develops comprehensive disaster
high or low and revenue decline demand the Company accelerates the emergency plans and regularly organizes
tempera- Demand for development of green products such as natural disaster emergency drills and Products biodegradable recyclable or products
Chronic tures low-carbon
*Expansion of green
training to enhance extreme weather and environmen- consumer base containing recycled content to support
Risk response capabilities. tally friendly *Enhanced brand low-carbon transformation across the
High
Services products and image * Revenue growth value chain. Through brand promotion The Company regularly maintains and services and green certifications the Company
* Reduced efficiency of inspects production equipment and increases market awareness and *Increased basic
equipment and facilities and performs equipment recognition of its low-carbon products.operating costs
facilities potentially protection and servicing before extreme The Company seizes market opportunities
leading to malfunctions *Increased asset weather arrives to prevent overheating or Low Widespread arising from growing demand by
and damage maintenance costs freezing. The Company develops adoption of *Increased product developing and producing paper straws
* Production delays emergency plans for equipment failures
New the "replacing appeal paper bags paper boxes and other
* Reduced production High
and revenue decline and promptly coordinates production Markets plastics with *New collaboration * Revenue growth products as substitutes for plastic items safety and stability resources to minimize the impact of paper" opportunities promoting the application of eco-friendly
extreme weather on business operations. concept paper-based materials in industries such
as food daily chemicals and packaging.XIANHE CO. LTD 2025 Sustainability Report
Carbon Emission Control Energy Management System
We actively respond to the requirements of regulatory authorities and downstream customers regarding carbon man- Xianhe Co. Ltd. adheres to the management principles of "compliance and innovation energy conservation and emission
agement. Since 2022 we have been conducting greenhouse gas emission accounting and systematically identifying and reduction green production and continuous improvement." It has established an energy management system with sound
inventorying emission sources within our production and operational scope. Currently the Company has completed regulations and a clear structure and has strengthened energy consumption monitoring through metering devices and
carbon inventories at its Quzhou headquarters and major subsidiaries and has preliminarily established a carbon emis- information systems thereby providing effective support for advancing energy consumption control efforts.sion data system laying the foundation for setting scientifically sound and reasonable emission reduction targets and
pathways in the future.Management Mechanism
Key Performance In 2025
In accordance with ISO 50001:2018 "Energy Management Systems - Requirements" RB/T118-2014 "Certification Require-
Scope 1 Greenhouse gas Scope 2 Greenhouse Gas Total greenhouse gas emissions in ments for Energy Management Systems in Pulp and Paper Enterprises" and relevant national energy laws and regulations
emissions Emissions Scope 1 and Scope 2 the Company has prepared the "Energy Management System Manual" and associated procedural documents clearly
defining the management and control requirements. The Company has established an Energy Management Leading
tons of CO equivalent tons of CO equivalent tons of CO equivalent
Group composed of heads of various branch plants and energy management officers which is responsible for the
coordinated management monitoring and control of resource and energy use. Under the Energy Management Leading
Xianhe Co. Ltd. (Factory at 69 Tianhu South Road) Zhefeng New Materials and Hefeng New Materials have conducted Group there is an Energy Conservation Management Team which formulates rules and regulations focusing on key
organizational-level greenhouse gas inventories and prepared inventory reports. In addition they have obtained green- energy-consuming areas such as electricity and steam usage and promotes the implementation of energy-saving and
house gas verification statements issued by third-party institutions in accordance with ISO 14064 standards supporting consumption-reducing measures at specific operational stages. In addition the Company conducts regular external
the standardization and verifiability of the carbon emissions data. energy audits to identify areas for improvement and continuously refine its energy management system.Carbon inventory results of Xianhe Co. Ltd.(Factory at 69 Tianhu South Road) unit：tons of CO equivalent
Measurement and Monitoring
Scope 1 Greenhouse Scope 2 Greenhouse Scope 3 Greenhouse Total Greenhouse
Gas Emissions Gas Emissions Gas Emissions Gas Emissions Energy Measurement System Energy Management System
Carbon inventory results of Zhefeng New Materials unit：tons of CO equivalent
The Company installed electricity and gas meters on The Company uses an EMS (Energy Management
key equipment such as boilers motors and drying System) to aggregate metered energy consump-
systems establishing metering coverage targets to tion data and applies big data analytics for trend fully capture energy use across major consumption analysis and comparative assessments identify-
points. Supporting procedures - including the "Energy ing potential opportunities for energy savings.Measurement Record Control Procedure" and the
Scope 1 Greenhouse Scope 2 Greenhouse Scope 3 Greenhouse Gas Total Greenhouse Gas "Procedure for the Configuration Use and Maintenance
Gas Emissions Gas Emissions Emissions Emissions of Energy Measuring Instruments" - standardize device
configuration data collection and statistical analysis. A
In addition the Company has continued to expand the coverage of its product carbon footprint assessments. By 2025 in dedicated metering room and full-time metering
collaboration with external professional institutions we have completed carbon footprint assessments for products such administrators further ensure the stability and effec-
as aluminum-free foil-laminated paper and specialty paperboard obtained carbon footprint certificates and achieveed tiveness of the overall energy measurement system.a comprehensive evaluation of the carbon emissions throughout the entire product lifecycle.unit：kg CO equivalent/kg paperProduct carbon footprint of aluminum-free foil-laminated
Product carbon footprint of specialty paperboard
Note：The carbon footprint assessment for the Company's products covers the stages of raw material procurement
transportation and manufacturing processes.XIANHE CO. LTD 2025 Sustainability Report
Energy Conservation and Carbon Reduction Practices Green Operations
The Company actively promotes a green and low-carbon operational model starting with everyday office details and
Green Production travel habits to turn environmental protection concepts into concrete practical actions.The Company implements energy-saving and efficiency-enhancing measures through its equipment and process Green Office
optimization systems continuously improving energy utilization efficiency and reducing energy consumption in produc- Promote paperless office practices by selecting
tion processes. energy-efficient air conditioning and lighting equip-
ment and utilize intelligent programs to automatically
regulate air conditioning operation thereby reducing
In new projects priority is given to high-efficiency equipment for key energy-consuming daily office energy consumption.processes.Energy-
Efficient Workshop buildings adopt daylighting designs to reduce lighting energy consumption.Design Low-Carbon Transportation
Promote green transportation by purchasing new
Key equipment in processes such as screening grinding mixing and material feeding is energy vehicles to replace fuel-powered vehicles and
upgraded and retrofitted to reduce energy consumption and material loss per unit of prod- construct supporting facilities such as new energy Company's New Energy Transportation Vehicles
uct improving resource utilization efficiency. vehicle charging stations on the factory premises to
The use of high-efficiency motors and variable-frequency motors is promoted to reduce facilitate low-carbon commuting for employees and
Equipment no-load and low-efficiency operation. visitors.Upgrades
Magnetic suspension vacuum pumps and magnetic suspension blowers are adopted to
improve system operating efficiency and reduce energy consumption.Energy Conservation Training
The Company regularly conducts specialized training and awareness campaigns on energy conservation and consump-
Through steam turbine extraction processes steam generated from power generation is tion reduction to enhance employees' energy-saving awareness and practical skills while boosting their initiative and
recovered and reused for deaeration and production heating achieving steam recycling. execution capabilities in energy-saving initiatives.Recycling A steam waste heat recovery network system is established to recover condensate and
and Reuse waste heat reducing energy waste.Equipment is regularly inspected and lubricated to enhance stability and operating efficien-
Operation and cy reducing downtime due to failures and abnormal energy consumption.Maintenance
Light Transmission Design of the Factory Building Steam Turbine Blowdown Process Energy Conservation and Carbon Reduction TrainingXIANHE CO. LTD 2025 Sustainability Report
Clean Energy Usage
Based on the actual production conditions and energy supply situation at each base Xianhe promotes the comprehen-
sive utilization of clean energy optimizes its energy mix gradually increases energy self-sufficiency and the share of green
energy and reduces dependence on traditional high-carbon energy sources.The Company is promoting distributed photovoltaic power generation
projects across production parks effectively utilizing rooftop spaces and
other spatial resources while equipping qualified bases with energy
storage facilities to enhance renewable energy integration capabilities
and power supply reliability. As of the end of the reporting period the
Company and its subsidiaries had installed a cumulative photovoltaic
capacity of over 126 MW with annual power generation exceeding 90
million kWh equivalent to approximately 27700 tons of standard coal. Photovoltaic Power Generation
The 42 MW/284.884 MWh energy storage project of the wholly owned
subsidiary Zhefeng New Materials and the 22.36 MW/44.72 MWh energy
storage upgrade project at the Company's Quzhou headquarters are in
stable operation providing effective support for on-site energy manage-
ment. Moving forward the Company will steadily advance wind power
project planning and deployment based on regional conditions at each
production base.Leveraging its industrial characteristics and resource advantages the
Company utilizes biomass resources generated during production-such Sludge Drying for Power Generation
as wood chips bark pulp residue and sludge-for combustion power
generation. In 2025 the Company further expanded its biomass fuel
sourcing channels. On the basis of fully utilizing its own biomass by-prod-
ucts it also used externally purchased agricultural and forestry waste as
auxiliary fuel to enhance energy supply capacity. Steam consumption unit：t Gas consumption unit：m3
Comprehensive energy Comprehensive energy 2025 7955279.22 2025 38536569.34
consumption unit：tce consumption density unit：tce / t of paper
2025870339.9120250.36
20243889151.51202431635665.18
2024648982.6620240.47
20232655563.97202326331553.74
2023469678.2020230.45
Purchased electricity unit：kWh Coal consumption unit：t
Renewable energy consumption Renewable energy share
2025 987627989.85 2025 639243.78 unit：kWh unit：%
202575513975.4020253.59
2024917360168.802024375351.84
202465089149.0020245.03
2023737115790.522023315173.72
Note: Comprehensive energy consumption and energy consumption by type increased compared with the previous year mainly due to 2023 18677832.00 2023 1.92
certain projects under construction remaining in the ramp-up phase with operations not yet fully stabilized.XIANHE CO. LTD 2025 Sustainability Report
The Company fully understands the water-intensive nature of the pulp and paper
Water Resources industry. By integrating its production characteristics it has systematically imple- Each production machine adopts an internal circulation system for cooling water which is cooled mented water resource management strategies. We continuously refine water in cooling towers before being recirculated. A temperature control system is installed at the outlet
Management usage planning and process control mechanisms enhance metering monitoring of the external drainage pipeline to effectively monitor circulating water temperature.and data analysis and promote tiered water utilization and recycling initiatives.Additionally we conduct water-saving improvements based on equipment opera- The Company and its holding subsidiaries continuously improve water recycling facilities
tion data to optimize water resource efficiency. constructing systems such as intermediate water treatment systems white water recovery
systems sand filtration units and steam condensate return systems to support the graded
treatment and recycling of production water.Water Resources Management System Hubei Base: Clean condensate is recycled to boilers reclaimed water is reused in the material preparation
process concentrated water from demineralized water production is reused and sealing water and
The Company strictly complies with laws and regulations such as the Water Law of the People's Republic of China and the Water cooling water are circulated. Total daily water savings amount to approximately 15900 cubic meters.Pollution Prevention and Control Law of the People's Republic of China. It has established internal systems including the Water
Usage Measurement Management System Planned Water Use Management System and Water Conservation Equipment Guangxi Base: Condensate from the ash extraction system and continuous blowdown system is recovered Recycling and reused in the pulping process with an annual reuse volume of approximately 800000 cubic meters.Management System which clearly define water management responsibilities measurement requirements and control
standards. A dedicated Water Conservation Management Office has been set up to oversee water resource management under and Reuse Guangxi Base: Concentrated water generated after pulping thickening is returned to the pulping process
the guidance of the Cleaner Production Management Committee. This office is responsible for setting water usage targets with an annual circulation volume of approximately 1.5 million cubic meters.breaking down annual tasks and monitoring the implementation of water-saving measures. Each subsidiary factory conducts Guangxi Base: A condensate quality-based separate recovery system has been established. Light-con-
production activities within predetermined water consumption quotas while strictly controlling total water usage. When water taminated condensate and heavily contaminated condensate are respectively reused in wood chip
consumption changes occur due to production plan adjustments equipment upgrades or process optimization the subsidiary washing and soaking processes with an annual reuse volume of approximately 1 million cubic meters.factory must submit advance reports detailing the reasons and anticipated impacts which are implemented only after review. Medium-contaminated condensate is sent to the causticizing and material preparation sections for use
replacing fresh water supply with estimated annual water savings of 90% and 80% respectively.Furthermore the Company has formulated the "Ten-Year Water Conservation Plan (2020-2030)" to provide Comprehen- Wastewater from the alkaline recovery boiler's scheduled blowdown and continuous blowdown expansion
sive guidance and actionable strategies for advancing water resource management and conservation efforts. The Com- vessels is used for raw material washing after cooling with an estimated annual water saving of 20%.pany has been systematically implementing phased tasks as scheduled and plans to commission qualified agencies to
conduct water balance testing by 2030. This initiative aims to accurately assess the operational status of the entire water
distribution network and current water consumption patterns across all processes thereby establishing a scientific
foundation for developing targeted water-saving measures. Cultivating Water Conservation
Conserve Water Resources Awareness
The Company installs water-saving reminder signs in key water-con-
With government approval the Company draws water from the suming areas and facilities conducts water conservation awareness
reservoir for production purposes ensuring that its water intake campaigns through pre-shift and post-shift meetings and regularly
complies with applicable laws regulations and water resource organizes water-saving promotional activities to enhance employees'
planning requirements. Using advanced water treatment and water conservation awareness.purification technologies the Company processes reservoir water Water conservation training
to meet industrial water standards thereby guaranteeing a
stable supply of water for production and preventing the appro- Key Performance In 2025
priation of drinking water resources intended for residential use. Water consumption unit：m3 / t of paper
Meanwhile the Company has established a water-saving equip- Total water consumption unit：t per unit output
ment management mechanism clearly defining the require-
ments for the use maintenance and inspection of water-saving 2025 49237258.65 2025 20.22
facilities. High-precision water-metering devices have been
installed in production areas to collect and transmit water-use 2024 21686645.58 2024 15.79
data in real time enabling monitoring of the production process. Pulping white water recovery equipment 2023 18307713.20 2023 17.56
Reasonably control the intermittent time and working time of cleaning equipment to reduce Total amount of water cycle
ineffective water consumption. unit：t Water cycle and reuse ratio unit：% and reuse
Discontinue high-pressure cleaning water supply for decommissioned standalone units and 2025 1613012593.37 2025 98.28
strengthen equipment runtime management.By reducing the number of nozzles decreasing nozzle diameters and optimizing the cleaning 2024 709225599.28 2024 98.11
Source device configuration the single water consumption was effectively reduced after the retrofit. 2023 591949393.47 2023 97.20
Reduction The new project replaces water-ring vacuum pumps with magnetic levitation vacuum pumps to
achieve water-free operation eliminating water consumption requirements at the process source. Note: Total water consumption and water consumption per unit output increased compared with the previous year mainly due to certain
projects under construction remaining in the ramp-up phase with operations not yet fully stabilized.XIANHE CO. LTD 2025 Sustainability Report
Xianhe Co. Ltd. strictly complies with national laws including the Water Pollution Waste Gas Treatment
Prevention and Control Law Air Pollution Prevention and Control Law Solid Waste
Pollution Control Pollution Prevention and Control Law and Noise Pollution Prevention and Control Law. Waste gas primarily originates from emissions during production or processing procedures volatilization of liquid raw
Following internal procedures such as the "Procedures for the Control of Wastewater materials and products kitchen fume extraction from canteens emissions from office vehicles and analytical laboratory
Exhaust Gas Solid Waste and Noise" the Company rigorously manages its emissions.It fully implements the "Three Simultaneities" system ensuring pollution control facili- operations. The Company has established an "Emission Management System for Waste Gas" which clearly defines
ties operate alongside main production facilities and holds a valid pollutant responsible departments and control measures for various emission sources. Concurrently advanced waste gas treat-
discharge permit. Real-time monitoring systems are installed at all discharge points ment technologies and processes are employed to continuously optimize waste gas purification efficiency.and third-party testing is regularly conducted to verify compliance with national and
local standards. During the reporting period the Company had no excessive pollutant Measures to enhance Disposal Efficiency
discharge incidents and received no major administrative penalties or criminal liabili-
ty related to pollutant emissions. Promote the ultra-low emission retrofit of solid waste incinerators upgrade the desulfuriza-
tion system and add a new SCR denitrification system.Wastewater Treatment
Implement a comprehensive upgrade and retrofit of the pulp-making alkali recovery
The Company carefully manages the potential environmental impact of its wastewater discharge. Based on process and system and upgrade the odor collection and incineration treatment facilities.water quality characteristics wastewater is classified as cooking waste liquor (from chemical pulping) intermediate water
(from washing and bleaching) and white water (from papermaking) each with dedicated treatment pathways. The Com-
pany has built its own wastewater treatment facilities and continuously upgrades treatment technologies. Cooking waste Implement an upgrade of the desulfurization and denitrification system for the alkali recov-
liquor is recovered via alkali recovery and black liquor utilization systems. White water is treated by air flotation or disc ery furnace to enhance its ability to control flue gas pollutants.vacuum filtration and directly reused. Intermediate water undergoes primary sedimentation anaerobic treatment biochem-
ical treatment sedimentation and sand filtration to remove solids and impurities before being discharged to the municipal The Company engages third-party entities for waste gas emission monitoring conducting monthly quarterly and annual
wastewater treatment plant. inspections at critical monitoring points to ensure compliance with emission standards. Additionally it has established an
equipment maintenance and operation support mechanism. In case of abnormal monitoring data the General Manager's
Following the special discharge limits of the "Discharge Standard of Water Pollutants for Pulp and Paper Industry" Office will oversee the process and dispatch specialized personnel to perform maintenance and debugging of purification
(GB3544-2008) the Company regularly monitors key indicators including pH color suspended solids COD BOD ammonia
nitrogen and phosphorus. Any exceedance triggers corrective actions under its established procedures to ensure compliant equipment ensuring continuous and stable operation of exhaust treatment facilities.and effective wastewater treatment. Moreover through its consultation and information exchange procedures the Company
actively solicits and responds to input from employees and local residents driving continuous improvement in water pollu- Emissions of the Company and Its Major Subsidiaries
tion prevention.Xianhe Co. Ltd.(Qujiang Plant)
Optimization of Wastewater Treatment Processes to Reduce Chemical Usage and
Case Study Pollutant Generation Air Pollutants Annual Emissions (t) Water Pollutants Annual Emissions (t)
In 2025 the Company adopted a self-developed and self-formulated modified composite ferric sulfate in its Compliance Compliance
wastewater treatment process replacing multiple chemical agents traditionally used in the Fenton process 2.55 154.66
such as ferrous sulfate hydrogen peroxide sulfuric acid and caustic soda. By reducing the dosage of iron salts
the amount of chemical iron sludge generated during treatment was correspondingly reduced by approxi- Particulate Matter Chemical Oxygen Demand
mately 30% to 40% significantly lowering pollutant generation and the subsequent burden of disposal. 0.02 1.85
Sulfur Dioxide Ammonia Nitrogen
0.4115.09
Nitrogen Oxides Total Nitrogen
Zhefeng New Materials
Air Pollutants Annual Emissions (t) Water Pollutants Annual Emissions (t)
Compliance Compliance
2.701553.95
Sulfur Dioxide Chemical Oxygen Demand
3.8517.39
Nitrogen Oxides Ammonia NitrogenXIANHE CO. LTD 2025 Sustainability Report
Annual Emissions (t) Annual Emissions (t)
Henan Xianhe Hegang Environmental Protection Zhefeng Energy
Approved Annual Approved Annual Emissions (t)
Air Pollutants Annual Emissions (t) Water Pollutants Annual Emissions (t) Water Pollutants
Emissions (t) Air Pollutants
278.97301.1321.9555.02
Compliance Compliance
25.00247.02
Chemical Oxygen Demand Sulfur Dioxide
Sulfur Dioxide Chemical Oxygen Demand
108.052.6230.1140.3978.6029.88
Nitrogen Oxides
Total Nitrogen Ammonia Nitrogen Nitrogen Oxides
6.2241.5060.232.8614.25
Smoke/Dust
Total Nitrogen Smoke/Dust
Hubei Xianhe New Materials
Zhefeng Environmental Protection Annual Emissions (t)
Approved Annual Emissions (t)
Air Pollutants Annual Emissions (t) Water Pollutants Annual Emissions (t) Water Pollutants
129.29456.25
Compliance Compliance
4.79110.23
Chemical Oxygen Demand
Particulate Matter Chemical Oxygen Demand 0.65 45.63
107.632.06
Ammonia Nitrogen
Sulfur Dioxide Ammonia Nitrogen
249.2213.378.10136.87
Nitrogen Oxides Total Nitrogen Total Nitrogen
3.030.270.584.56
Smoke/Dust Total Phosphorus Total Phosphorus
Hubei Xianhe Energy Annual Emissions (t)
Approved Annual Emissions (t)
Air Pollutants Water Pollutants
0.0245.86209.731025.04
Particulate Matter Chemical Oxygen Demand
0.09146.294.08102.50
Sulfur Dioxide Ammonia Nitrogen
0.69209.8925.16307.51
Nitrogen Oxides Total Nitrogen
0.0245.860.5210.25
Smoke/Dust Total PhosphorusXIANHE CO. LTD 2025 Sustainability Report
Standardized Waste Disposal Xianhe Co. Ltd. has actively advanced the integrated "forest-pulp-paper" layout in Laibin
Resource Guangxi and Shishou Hubei establishing a circular business model encompassing forest-
Following the "National Hazardous Waste List" the Company categorizes its operational waste into Non-hazardous waste ry cultivation pulp and paper production and waste resource utilization. The Company
(sludge household waste construction waste recyclable paper metal scrap general plastics) and hazardous waste (waste Circularity fully leverages local natural environmental advantages to promote forest cultivation and
oil waste batteries oil-containing waste). The "Solid Waste Management System" and "Hazardous Waste Management scientific harvesting rationally utilizing forest resources and achieving sustainable raw
System" govern waste storage and disposal. material supply. Pulp and paper production lines have been constructed within the bases
to enable on-site raw material conversion ensuring effective coordination among raw material supply pulping and paper
The Company pursues cleaner production to minimize waste generation and adopts a comprehensive utilization strategy manufacturing while reducing energy consumption and resource waste during transportation. For various by-products
based on resource conservation. Recyclable waste is recovered or sold for reuse. Non-recyclable waste — including generated during production the Company has simultaneously established circular utilization pathways. Preparation
non-hazardous waste such as sludge and hazardous waste such as oil — is handled by qualified third-party processors to waste residues and certain production by-products are used for combustion power generation to recover energy meet-
ensure safe standardized disposal. ing production energy demands. Sludge generated from wastewater treatment sedimentation is treated and used for
forest land fertilization to replenish soil nutrients while white mud is utilized as a raw material for cement production.Black liquor is evaporated into solid content Currently Phase I of the integrated
and incinerated in a recovery furnace. The Recycle White mud and green mud are treated and Resource Circulation Diagram of Integrated Project for "Forest-Pulp-Paper" "forest-pulp-paper" projects at Xianhe's
resulting thermal energy is used for power Utilization reused in the flue gas desulfurization system ApplicationGuangxi and Hubei bases has been fully
and steam generation while the alkali liquor Measures turning by-products into valuable resources. completed and put into operation. The
is returned to pulping. Company will continue to steadily Organic Matter Returning
Forestry Residues
Raw Materials such as
advance the related Phase II projects fully Biomass PowerEucalyptus and Reeds
leveraging the advantages of this layout to GenerationUsable Raw
enhance economic environmental and Materials
social value. At the same time leveraging
the "bamboo-pulp-paper" integrated Water for
project in Hejiang Sichuan the Company Production Use Black Liquor
Pulp and
will further explore the application of novel Wastewater Paper Making Concentration
plant-based raw materials promote more Sedimentation and Incineration
efficient resource utilization reduce Lime Mud
environmental impact and strengthen Lime
industrial chain coordination efficiency
laying a solid foundation for the Compa-
ny's future sustainable development. Calcination
The Company's business layout does not involve ecologically sensitive areas and its oper-
Black Liquor Alkali Recovery and Waste Heat Utilization System ational activities have no significant impact on ecosystems or biodiversity. During project
Ecological construction and operation the Company voluntarily pays the "forest vegetation resto-
Key Performance In 2025 Protection ration fee." Based on its integrated "forest-pulp-paper" business layout the Company effectively carries out forest cultivation and management actively fulfilling its ecological
Hazardous waste tons Non-hazardous waste tons protection responsibilities. Additionally the Company monitors the sustainability of raw
material sources during procurement avoiding the use of raw materials originating from
globally significant biodiversity areas and striving to achieve harmonious coexistence
between industrial development and the natural environment.*Note: In 2025 the integrated "forest-pulp-paper" projects (Phase I) in Laibin Guangxi and Shishou Hubei commenced
stable operation following their commissioning. Both projects are included in the scope of this year's hazardous and At the Guangxi base the Company actively promotes the development of its own forestland scientifically developing
non-hazardous waste data resulting in a corresponding increase in relevant data compared to the previous year. former barren mountains and infertile lands for eucalyptus planting thereby facilitating local vegetation restoration and
effectively enhancing soil and water conservation as well as carbon sequestration capacity. At the same time through
Noise Control cooperative projects such as contract forestland and national reserve forests the Company carries out professional
maintenance and rational utilization of dispersed forest areas strengthening the sustainable management of forest
The Company has established a "Noise Emission Management System" that specifies requirements for noise source identifi- resources. The Company has implemented a series of forest fire prevention measures including 24/7 monitoring satellite
cation and control. Corresponding measures are implemented in source control process management and personal surveillance and the establishment of firebreaks effectively reducing fire risks and ensuring the long-term sustainability
protection to minimize noise impacts on the surrounding environment and employees. Low-noise processes and equipment of its forestland.are prioritized to reduce noise generation. For operational high-noise equipment noise reduction is achieved through
soundproofing device installation and acoustic material application. Employees in noise-sensitive positions receive personal At the Hubei base the Company collaborates with the government to address the growth characteristics of reeds which
protective equipment (PPE) undergo regular occupational health examinations and participate in noise protection training "flourish and wither annually." By implementing periodic harvesting instead of allowing natural decay the Company not
to enhance safety awareness. Additionally the Company adheres to the Class III standards of GB12348-2008 "Industrial only avoids secondary water pollution caused by the collapse of withered plants but also provides sufficient light and
Enterprise Boundary Noise Emission Standards" for boundary noise management conducting quarterly on-site monitoring space for the growth of new shoots the following year effectively maintaining the self-purification capacity and ecological
with detailed records to ensure compliance with emission requirements. vitality of the wetland ecosystem.XIANHE CO. LTD 2025 Sustainability Report
Product Sec
tion
Quality First
Win-Win Cooperation
Against the backdrop of the "replacing plastics with paper"
trend and the deepening "dual carbon" policy demand is rapid-
ly growing for special functional consumable materials with
oil/grease resistance high strength biodegradability and other
advanced properties across both consumer and industrial
sectors. Xianhe Co. Ltd. remains committed to driving business
growth through R&D and innovation strengthening quality
control at critical points and delivering professional high-per-
formance paper-based functional material solutions
tailored to customer needs. Concurrently the Company
advances sustainable supply chain development
actively engages in industry exchanges and
standard-setting and collaborates with
partners to achieve mutual benefits and
win-win outcomes thereby supporting
the high-quality development of the
industry. Adhere to innovation-driven
development of the industry.Commitment to Innovation-DrivenDevelopment
Strict Quality Control
Provision of High-Quality Services
Connecting to a Green Future
Supporting Industry DevelopmentXIANHE CO. LTD 2025 Sustainability Report
Commitment to With its outstanding technical attributes and performance advantages specialty paper has demonstrated strong potential as a substitute material across a wide R&D Process
Innovation-Driven range of niche application scenarios making it one of the key segments of the new materials industry. Currently both the national and Zhejiang provincial govern- The Company has established a standardized R&D management mechanism that systematically oversees project initia-
Development ments have explicitly identified the new materials industry as a development priori-ty in their "15th Five-Year Plan" periods. Xianhe Co. Ltd. closely follows national and tion solution design trial production and validation and results review. Clear criteria at each stage ensure alignment with
regional policy directions focusing on the R&D and breakthrough of high-perfor- market needs technology trends and quality requirements.mance paper-based functional materials. Adhering to the innovation philosophy of
"independent design and collaborative development" and supported by a well-es-
tablished R&D innovation system the Company continuously advances product
development and technological iteration providing professional reliable and
environmentally friendly product solutions for diverse application fields.Research and Analysis & Decision-Making
Strengthening the Innovation System Focus on core dimensions such as market demand and share technology status and
development trends and resource efficiency. Conduct technical and economic
R&D Management System feasibility assessments analyze industry technology trends and provide targeted
The Company continuously improves its R&D institutions and governance systems to enhance internal innovation capabil- decision-making basis for new product development.ities. With a focus on R&D organization project development fund management and talent recruitment the Company has
put in place key policies such as the R&D Organization Management Measures New Product R&D Management System
Talent Recruitment Management Measures and R&D Fund Management Measures. These policies clarify workflows and
incentive structures strengthen the recruitment and retention of high-end talent and enable efficient allocation of R&D
funding ensuring that R&D activities effectively support technological innovation and business growth.The Company has also established an R&D governance structure where the R&D Director provides overall coordination
the R&D Institute and Technology Center lead execution and relevant departments collaborate to deliver outcomes there- Product Design Management
by increasing overall R&D efficiency. Strictly follow the "three-stage design" process sequentially completing
the technical design specification technical design plan and working
Personnel/Department Duty drawings for new products ensuring that design outcomes are clearly
defined and implementable.Oversees the formulation and implementation of the Company’s annual R&D plan coordi-
nates and resolves issues arising during plan execution
R&D Director
Organizes and conducts R&D project reviews and carries out approval procedures in
accordance with delegated authority
New Product Trial Production and Appraisal Management
Develops design implementation plans for R&D projects
Before full-scale production execute sample trial production and
Defines the role allocation of project team members and participates in project reviews
R&D Institute small-batch pilot production. Evaluate the economic and techni-Manages subordinate R&D teams responsible for the specific development of new products cal performance of trial products based on project characteris-
and new projects as well as the preparation and filing of patent and standards documen-
tation tics to determine whether they meet conditions for entering pilot
production or formal production.Responsible for quality inspection process tracking and documentation during R&D
design and trial production phases and provides timely quality feedback
Technology Center Manages the archiving of technical documentation related to design and development
Manages subordinate QC teams that assist in the development trial production and
testing of new products and projects New Product Results Review
Conduct results reviews based on the appraisal level refer-
Production Technology Collects and consolidates market demand and design-related information and proposes encing relevant national regulations on scientific and techno-
Department recommendations for design and R&D projects
logical achievements and technological progress awards
while also incorporating internal management requirements.Administration and Complete corresponding approval procedures as per estab-
Human Resources Responsible for the record-filing and management of R&D personnel allocation lished processes.Department
* The Company does not engage in scientific research or technological development in ethically sensitive fields such as life sciences or
artificial intelligence and therefore is not applicable to the topic of “Technology Ethics.”XIANHE CO. LTD 2025 Sustainability Report
Innovation Incentives Harvesting Innovation Results and Achievements
The Company encourages employees to actively participate in various innovation projects and activities establishing Supported by the established R&D system and management mechanisms the Company has systematically advanced its
incentive mechanisms for scientific research and development technological innovation and intellectual property. R&D and innovation efforts around core technologies and key products continuously consolidating its innovation
Recognition and rewards are provided for innovative contributions that yield results or lead to patents. At the same time outcomes in the form of patents.R&D achievements serve as a reference basis for employee promotions and professional title evaluations strengthening
an innovation-oriented evaluation system. The Company also gathers front-line experience through rationalization
suggestions and improvement proposals rewarding those that are adopted and generate tangible results thereby
continuously stimulating employee innovation enthusiasm. During the reporting period
R&D Investment The Company and its subsidiaries filed a total of patent applications including
invention patents and utility model patents; patents were granted including
The Company focuses its R&D investments on the core business area of high-performance paper-based functional invention patents and utility model patents.materials with priority support for new product development equipment and process optimization and talent team build-
ing thereby strengthening its technological accumulation and innovation momentum. As of the end of the reporting period
Closely monitor evolving downstream application demands systematically expand into The Company and its subsidiaries held a cumulative total of invention patents and
Product emerging markets and deepen collaborative development efforts with strategic customers utility model patents.to facilitate the launch of multiple new products thereby continuously reinforcing the
Company's product diversification advantages.Drive the iterative upgrading of papermaking processes and key machinery through a
Equipment combination of independent research and development and technology introduction
thereby enhancing automation and operational stability across production stages which
in turn improves production efficiency and product quality.Talent Recruit specialized technical professionals and domain-specific experts cultivate a highly In 2025 the Company’s independently developed high-perfor-skilled workforce and strengthen the team's professional competencies and innovation mance green specialty kraft paper for food-contact applications
potential. function-enhanced coated battery separator base paper new
naturally colored furniture protection paper and smart high-effi-
ciency one-step coated Bible paper all passed provincial-level
Key Performance 2025 new product appraisal. In addition its food-grade interleaving
paper for stainless steel sheets was recognized as one of the Food-grade Interleaving Paper for Stainless Steel
Sheets – Awarded the title of Excellent New
The proportion of R&D personnel is Research and development investment reached excellent new industrial products of Zhejiang Province. Industrial Products of Zhejiang Province
million yuan accounts for of main operating revenue
Key Performance 2025
The Company was honored with the titles of "Zhejiang Provincial
Innovation Platform Manufacturing Single Champion Enterprise" and "2025 Excellent
New Industrial Product of Zhejiang Province"
Industry-University-Research R&D Platform
Collaboration Platform The project "Key Technologies and Industrial Application of Green Manu-
facturing of High-Performance Medical Packaging Paper" by Xianhe Co.Established Xianhe Research Institute and Paper-Based Built upon the headquarters' Innovation Center includ-
Materials Industry College to drive key technology ing a National Enterprise Technology Center Provincial Ltd. was awarded the Second Prize of the Innovation Award for Invention
breakthroughs and research commercialization. In Enterprise Research Institute Provincial Industrial Design and Entrepreneurship by the China Association of Inventions.
2025 collaborated with Zhejiang University of Science Center and Provincial Postdoctoral Workstation provid-
and Technology on "High-Performance Thermal Trans- ing robust support for technology R&D and product
fer Base Paper" project. innovation.XIANHE CO. LTD 2025 Sustainability Report
Developing Green Products We are fully aware that our products as important basic materials directly impact the quality of downstream products and the performance of end-user applications. The
The Company actively incorporates environmental considerations during product design and solution demonstration Strict Quality Company places a strong emphasis on product quality management adhering to the
phases consistently advancing the implementation of green design principles. By integrating product application scenari- business philosophy that "customer requirements define our standards." Through
os with material properties we assess potential environmental impacts striving to reduce resource consumption and Control continuous improvement of our management systems enhanced process monitoring
environmental burden throughout the product life cycle while ensuring product functionality and quality. and rigorous inspection and verification we strictly control quality at every stage to
ensure product quality and an exceptional customer experience.Priority is given to wood pulp certified Full-Process Quality Management
from sustainable sources comple- Low-pollution processes are actively Leveraging a robust quality management system and organizational structure the Company has established clear quality
mented by self-produced pulp from adopted in line with production control standards and implementation measures fostering a management mechanism characterized by tiered responsi-
integrated forest-pulp-paper lines conditions and technical requirements. bilities and collaborative coordination. Building on this foundation the Company strengthens controls across key stages—
enhancing control over raw material Ongoing equipment upgrades and including R&D production and delivery—to meet product performance specifications and quality stability requirements
origins and associated environmental Green management refinements aim to ensuring that product quality remains consistently reliable.impacts. Local sourcing is practiced
Material Low-Impact reduce energy and water usage while for auxiliary materials to minimize Production minimizing waste generation.transportation-related energy Sourcing
consumption. Quality Management Framework
Sales Production Technology Quality Inspection
Product recyclability and biodegrad- Responsible Process innovations extend product Department Department Department
ability are carefully considered based Disposal Efficient Use lifespan and efficiency. For instance on material properties and application liner paper process optimization has
scenarios with strengthened manage- doubled product durability significant- Proposes specific production Develops production solutions Performs finished product inspec-
ment of end-of-life product phases. ly reducing base paper consumption requirements based on defines raw material specifica- tions in accordance with the quality
for downstream customers.customer needs and market tions and process standards standards established by the
information. During the product and ensures that the production Production Technology Department
development phase collabo- process complies with applica- providing data support for quality
rates with the R&D team and ble national industry and assessment.Annual Highlights: Green Products continuously participates in all customer standards. Oversees the Testing Center which
stages from prototype to mass Within key production is primarily responsible for the
production driving product processes—including pulp inspection of new raw materials
performance to progressively
Fluorine-Free Ultra-Lightweight Durable Interleaving feeding papermaking and from external samples R&D testing
Grease-Proof Paper Bible Paper Paper for Stainless
align with customer require- rewinding—decomposes and for new products and comparative
Steel ments and end-user application
Fluorine-free solutions Fiber raw material Enhanced durability executes steps according to quality testing of similar products.scenarios.replace traditional efficiency is improved by supports repeated use customer requirements and Manages the operation of the CNAS
fluorocarbon-based reducing basis weight and lowering material performs inspections and laboratory ensuring the accuracy of
oil-proofing agents increasing usable area per replacement frequency adjustments. test data and international
mitigating potential unit weight reducing virgin for downstream
environmental risks wood consumption while customers and recognition.from fluorinated meeting functional improving resource
chemicals. requirements. utilization efficiency.XIANHE CO. LTD 2025 Sustainability Report
Quality Management Process
The Company has developed and implemented management documents
including the Xianhe Co. Ltd. Quality Environment and Safety Manual the Key Performance 2025
Quality and Safety Control Procedures and the Product Recall Control Proce- Finished products are properly labeled and traceability is implemented in accordance with the "Product
dures which provide unified standards for the basic principles of quality Inventory Identification and Traceability Control Procedure." The stacking and storage of base paper are managed
management control requirements and abnormality handling mechanisms. Product qualification Management according to the "Management Regulations for Base Paper Stacking." Additionally production waste paper is
In addition based on the key management points across different business handled and reused in line with the "Procedures for the Use of Waste Paper" to reduce resource waste.functions—including raw material management R&D and design production rate
control inspection and testing as well as warehousing and transportation—
the Company has further established corresponding detailed regulations and Packaging and transportation of finished products are carried out in accordance with the "Process Notice"
operating procedures to ensure effective implementation of quality require- and the "Product Protection Control Procedure" with a focus on mitigating risks such as contamination and
ments. damage.Packaging and For long-distance transportation or when new packaging materials are to be used transport suitability
Transportation verification is conducted as needed to assess stability and reliability.The Company has established a comprehensive set of procedures for the whole-process control of raw and During the dispatch phase empty vehicle inspections and post-loading checks are performed. Reinforced
auxiliary materials including the "Procurement Plan Sheet" "Procedures for the Application Use and Manage- protective measures are applied to paper rolls with vulnerable edges and corners to reduce damage during
ment of Raw and Auxiliary Materials" "Raw Material Quality Standards" "Management Specifications for handling and transportation.Sampling Testing and Retention of Raw and Auxiliary Materials by the Quality Inspection Department"
"Procedures and Regulations for the Receipt Storage and Dispatch of Raw Materials and Finished Products"
Raw Material and "Regulations for Fixed-Position Storage of Auxiliary Materials." These govern the procurement testing
Control warehousing use and dispatch of raw and auxiliary materials. The quality standards for raw and auxiliary Quality Assurance Measures
materials are based on national and industry standards further refined in accordance with Company and
customer requirements and inspections are conducted accordingly to prevent substandard materials from
entering production. Intelligent System Applications
In daily management the Company places special emphasis on controlling key raw materials by tightening Industrial Internet of Things (IIoT) and Sensor Technology: Temperature pressure and level sensors are
the permissible deviation ranges for critical indicators thereby reducing the impact of material fluctuations installed in the pulping process while humidity sensors are deployed in the forming and drying sections.on finished product quality. In new product development additional testing of new materials is conducted for Relevant data are connected to the control system enabling automatic data acquisition and precise adjustment
newly developed paper grades and raw material procurement volumes are reasonably controlled during of key parameters thereby enhancing the stability and consistency of paper quality.small-batch trial production stages to avoid waste and quality risks arising from material mismatches. Process Control System (PCS) and Manufacturing Execution System (MES): The PCS precisely controls key
Product development adheres to the "three-stage design" principle progressing through sample trial parameters such as material flow rate speed and consistency during the papermaking process ensuring the
production small-batch pilot production and mass production ensuring that all critical milestones undergo uniformity of pulp composition. The MES manages production scheduling and process execution dynamically
Design and thorough evaluation and validation. optimizes production plans based on order requirements and monitors quality data in real time supporting issue traceability and continuous improvement.Development In terms of process design the production technology department is responsible for setting process condi-
tions managing process technologies and reviewing and supervising process records to ensure the imple- Automatic Weighing System: High-precision weighing and automated operations reduce human error and
mentation of process requirements. cost losses caused by measurement inaccuracies. The system also provides more reliable data support for
inventory management helping to optimize inventory levels and mitigate the risks of overstocking or shortages.In accordance with the "Process Operation Guidelines for Various Product Varieties" and the "Production OA System: The OA system supports daily business workflows and information transmission. Through online
Management Regulations for Paper Machine Product Variety Changes" standardized control of the production processes and information-sharing mechanisms it improves the efficiency of corporate transaction processing
Standardize process is implemented. The "Process Notice" specifies detailed parameter requirements including process
and reduces cross-departmental communication costs.Production flow diagrams operational specifications technical standards and process indicators.Implement an inspection model combining self-inspection by production staff with periodic inspections by Equipment Calibration
inspectors leveraging digital tools such as the "5G Smart Workshop" to enhance production process monitor-
ing capabilities through 3D modeling and dynamic data visualization systems. To ensure the reliability of equipment operation the Company has established a regular calibration mechanism.Equipment and instruments are calibrated annually by qualified third-party institutions to meet international and
The Company has established a range of procedures for quality inspection including the "Operating Proce- industry standards. Additionally internal quarterly inspections are conducted to continuously monitor equipment
dures for Physical Indicator Testing and Tracking" "Operating Procedures for Visual Defect Inspection" performance enabling the timely detection and correction of deviations."Inspection Work Instructions" "Control Procedures for Outgoing Inspection" and "Management Regulations for
Product Quality Inspection During Rewinding." These govern the inspection of pulping papermaking and On-Site Inspection
Quality rewinding processes as well as multi-dimensional inspection and control of finished product quality indica-tors and appearance.Inspection An inspection committee composed of the heads of the Production Technology Department Quality Inspection
For non-conforming products the "Isolation System for Non-Conforming Products in Finished Goods Ware- Department Power and Information Department along with branch factory managers conducts regular
house" is followed. Products are labeled and isolated by category according to the severity of defects to inspections of production sites and related records. These inspections are carried out on a monthly basis with a
prevent mixing. After evaluation based on actual conditions disposal methods such as rework alternative focus on standard implementation and record completeness allowing for the timely identification of potential
use or repulping are adopted to ensure that non-conforming products do not enter subsequent processes or quality risks and the implementation of corrective actions.the market.XIANHE CO. LTD 2025 Sustainability Report
Quality Culture Construction Quality Risk Analysis
The Company has implemented the PFMEA (Process Failure Mode and Effects Analysis) method in the production man-
agement of its electrolytic paper products. This approach systematically identifies and evaluates potential failure modes
and their underlying mechanisms across all production processes focusing on potential risk points to develop improve-
ment plans and track verification results. Through this process the Company continuously strengthens its process control
The Company actively conducts training activities to enhance job competency and capabilities and enhances product reliability.strengthen quality awareness. Training content is designed according to different positions
and levels and learning outcomes are assessed through on-site spot checks hands-on PFMEA Analysis Process
exercises or written tests to ensure that training results are applied in actual work.Onboarding training: Provides new employees with position-specific professional training Possible improvement Functions features or
to help them quickly familiarize with job requirements and key skills. Severity of measuresrequirements to be Consequences consequences
Regular Training: The Production Technology Department and Quality Inspection Depart- achieved * Process changes
ment conduct monthly training sessions covering raw material usage process flows * Special controls
Tiered Training equipment performance and safe operation procedures testing methods product
characteristics and quality management systems. These programs help frontline * Changes to standards
employees better understand and implement quality requirements. Weekly depart- procedures or guidelines
ment-level training sessions focus on key themes such as product quality improvement
customer complaint resolution and R&D needs ensuring management maintains
continuous attention to critical quality enhancement priorities.Ad Hoc Training: In cases of customer complaints or quality anomalies special training Causes Frequency of problems
and review sessions are organized to enhance targeted corrective capabilities and Improvement
prevent recurrence of similar issues. measures and
their effectiveness
Potential problems that may
The Company regularly organizes competitions on topics such as process and arise
safety to encourage employees to enhance their skill proficiency and awareness of * No function
standardized operations and to promote the dissemination of practical experience
Practice Through and best practices within the team. * Partial functionality/overpow- Existing prevention and Effectiveness of
Competition ered/Functionality downgraded detection procedures prevention and
detection methods
* Non-predictive functionality
Key Performance 2025
Total cumulative quality training hours hoursXIANHE CO. LTD 2025 Sustainability Report
Hazardous Substance Control Provision of Xianhe Co. Ltd. adheres to a direct sales business model of "production + service" taking high-quality products as the foundation for ensuring customer
The Company strictly implements hazardous substance control requirements across procurement R&D and design man- experience. Through regular communication research and feedback response
ufacturing and packaging and storage to mitigate the risk of introducing restricted substances and preventing leakage. High-Quality mechanisms the Company continuously improves its service system.The Company conducts compliance verification of raw materials auxiliary materials and finished products in accordance Services Additionally the Company continuously strengthens management measures
with the RoHS Directive and customer requirements while continuously monitoring potential hazardous substance leakage such as customer privacy protection and responsible marketing to safeguard
risks during production and storage. Additionally the Company engages qualified third-party organizations to perform customer rights and trust thereby enhancing long-term cooperative value.testing effectively safeguarding the health and safety of employees and customers.Customer Service Management System
Through management systems including the "Customer Visit Management
Management Structure Measures" "After-sales Service Management Measures" "Complaint and Key Performance 2025
Compensation Handling Procedures" and "Product Recall Control Program"
The Company established a hazardous substance management team with designated lead personnel where the Deputy the Company has clearly defined key service priorities for critical customer
General Manager of Production oversees overall management and resource coordination to ensure the effective imple- interactions. At the same time the Company has established internal The average customer
mentation of all management measures. coordination mechanisms whereby the Sales Department handles custom- satisfaction score was
er communication and consolidates feedback while the Production Tech-
nology Department provides technical support forming a service collabora- points
tion system with clear division of responsibilities and seamless coordination.Hazardous Substance Management Team
Customer Service A total of questionnaires
We continuously expand our service boundaries to establish a comprehen- were distributed and
sive service ecosystem covering material supply technology R&D process valid responses were received
optimization and market expansion. By enhancing internal resource
integration and industrial chain coordination capabilities the Company
General Manager's Sales Supply Chain Quality Inspection Production Technology provides end-to-end service support throughout the product lifecycle
Office Department Management Department Department Department helping customers enhance their market competitiveness while meeting
diverse and personalized needs.Customized Deeply understanding and accurately capturing customer needs providing customers with
Development technically robust and highly targeted product solutions enhancing customer loyalty and strength-Warehouse Manager Production Branch ening brand affinity.The production layout integrates key processes such as pulping papermaking and deep process-
Policies and Standards ing equipped with modern papermaking production lines and multi-specification specialty paper machines enabling stable production and smooth changeover across multiple categories of
paper-based functional materials.The Company has formulated and implemented management documents such as the "Hazardous Substance Control Flexible A comprehensive production logistics and warehousing system has been established facilitating
Procedure" "Hazardous Substance Management Standards" and "Hazardous Substance List" to clarify the scope of control Production the integration of information flow and business processes improving cross-functional collabora-
and implementation requirements ensuring that products comply with regulatory requirements at the production and tion efficiency and providing support for stable manufacturing and efficient delivery.operation sites as well as customer standards. Leveraging the advantages of flexible production and system integration the Company quickly
responds to market dynamics and changing customer needs flexibly accepting orders featuring
multiple varieties small batch sizes and short delivery lead times.Training and Awareness A traceable chain has been established through "unique identification per product" (one product
Product one code) enabling end-to-end tracking from product inbound to outbound. At the same time
The Company conducts training activities on hazardous substance control for relevant departments and personnel Traceability monitoring and recording throughout the product lifecycle are strengthened enhancing process
enhancing their understanding and implementation capabilities of key control measures. This initiative promotes the transparency and customer trust.adherence to hazardous substance management requirements throughout all stages from product design production to
delivery continuously improving the effectiveness and compliance of substance control. Rapid Leveraging its own logistics team to coordinate transportation arrangements combined with
Delivery multiple modes such as sea rail and road transport to optimize routes and delivery times improv-ing delivery efficiency and shipment stability.Services cover order fulfillment technical support and after-sales response. The Company main-
tains continuous communication with customers through visits conference calls and technical
Accompany- exchanges providing on-site technical training and guidance services when necessary.ing Service Customized solutions are delivered based on customer needs and preferences and through regular
communication potential changes in requirements are promptly identified enhancing customer
satisfaction and cooperation affinity.Conduct in-depth customer satisfaction assessments regularly focusing on dimensions such as
Satisfaction product quality delivery performance after-sales experience flexibility and adaptability and
Survey transportation services. Continuously optimize product quality and service quality based on
evaluation results.XIANHE CO. LTD 2025 Sustainability Report
After-Sales Support Product Recall Control Program
The Company collects customer feedback through multiple channels including customer service hotlines fax websites
and written surveys while establishing response timelines requiring resolution within 24 hours for all inquiries. For major
quality incidents the Company promptly conducts root cause analysis and implements corrective measures deploying Problem
technical support teams when necessary to ensure timely resolution of customer concerns. Internally regular review Identifica- Regularly conduct product quality and safety risk assessments to
sessions are conducted with relevant departments to analyze complaint patterns driving continuous optimization of tion and promptly identify potential risks and rapidly organize relevant depart-
production processes and service protocols through targeted improvements addressing recurring issues. Notification ments to carry out hazard investigations and impact analyses.Recall
Key Performance By 2025 the Company Decision Clearly define the batches and scope of affected products develop a
and tiered recall plan based on the severity of the issue and issue recall notices or announcements to distributors or customers.No product recall incidents have occurred Initiation
Product Clearly label and segregate recalled products conduct inspection and
No major liability incidents related to product and service safety and quality have occurred. Disposal and verification to identify root causes and implement corrective measures;
Corrective depending on the nature of the issue take appropriate actions such as
Action return rework or scrap disposal.Follow-up After the recall is completed implement follow-up measures such as
Tracking replacements and compensation to protect customer rights and
interests.Customer Complaint Management Procedure
Information Receive complaints via online/offline channels; issue "Quality Feedback Key Performance
Collection Form" to technical department; conduct monthly satisfaction surveys 2025
customer complaint handling rate
Root Cause Quality Inspection Department + branch factories analyze feedback; The average customer complaints handing time per complaint is days
Analysis identify and categorize key causes.Corrective Complete correction within two working days; develop follow-up and
Action preventive measures; create "Corrective and Preventive Action Record"
Customer Privacy Protection
The Company strictly respects and safeguards customer privacy. The technical department oversees the operation
Follow-Up Continuous follow-up; confirm effectiveness with customers; retain docu- maintenance and security management of information systems with the "Information Management System" serving as
and Review mentation; prepare comparative analysis reports to track improvement. the governing framework. Additionally the Company has implemented multiple technical safeguards tailored to business
needs ensuring secure information exchange and data protection during operational integration. During the reporting
period no incidents of customer privacy breaches occurred.Data Management Access Management
Customer information is centrally managed Access is controlled via identity authentication and
within the ERP system. Privacy-sensitive data is role-based permissions. Departmental access is
encrypted and all access modification and tiered according to responsibilities with sales
deletion activities are systematically logged to personnel limited to viewing information relevant to
enable traceability and ensure standardized their business scope. Furthermore system access
management. and operations are confined to the Company's
internal network environment to strengthen
perimeter control.XIANHE CO. LTD 2025 Sustainability Report
Responsible Marketing The Company establishes its management framework based on key documents including the “Supplier Management System” “Supplier Evaluation and AssessmentThe Company actively upholds the principles of responsible marketing with a focus on compliance and personnel capa- Connecting to Procedures” “Procurement Control Procedures and Sustainable Procurement Policy”.bility development as core priorities in marketing management. This approach supports long-term stable growth and a Green Future These documents define critical operational requirements for supplier qualification
helps foster a well-regulated orderly market environment. reviews comprehensive evaluations sample verification and trial deliveries as well as dynamic audits thereby creating a comprehensive management system covering the
entire supplier lifecycle. Simultaneously the Company is committed to building a
sustainable and resilient supply chain ecosystem. By actively guiding suppliers to
adopt ESG principles through clear behavioral standards and enhanced process
controls the Company fosters a stable efficient and collaborative supply chain
partnership environment.Management System Training System Supplier Management
We have established a comprehensive supplier management system with the board of directors overseeing supplier
The Company has implemented Marketing training is delivered through a management operations. The Supply Chain Management Department leads supplier evaluations and field inspections
marketing policies and procedures tiered role-based approach. New sales while departments including Quality Inspection Production Technology Power Information and R&D conduct material and
to govern information release personnel receive systematic training on equipment verification. Additionally the Company implements stringent supplier screening and assessment criteria that
reviews and promotional activities relevant laws and regulations business integrate environmental social and governance factors alongside business-related indicators to ensure supply chain
ensuring that all external commu- overviews product knowledge and operational efficiency and business stability.nications are truthful accurate market development. Additionally in line
and complete free from mislead- with market dynamics and regulatory Supplier Screening and Evaluation Dimensions
ing or false content. changes the Company organizes Business Relevance Environmental Performance
targeted sessions on marketing compli-
ance contract law sales techniques and Quality level delivery capability price Energy and water resource utilization
case studies to continuously enhance technical capability after-sales service climate impacts and generation of
team professionalism. and historical cooperation records pollutants and waste
Governance and
Social Responsibility Compliance Level
Prohibition of forced labor and child labor Law-abiding and compliant opera-
occupational health and safety manage- tions environmental and social
Key Performance ment anti-discrimination employee responsibility management mecha-
rights protection nisms business ethics
Indicator Unit 2025
Supplier Management Process
Number of Responsible Marketing Training Sessions Times 30 Admission Assessment Exit
Total Participants in Responsible Marketing Training Person-times 1800 Require suppliers to submit a "Supplier Conduct annual performance reviews In the event of quality issues
Survey Form" and relevant compliance of key suppliers evaluating dimen- identified during irregular quality
documentation including RoHS reports sions such as quality delivery pricing assessments suppliers that fail to
from qualified third-party institutions and after-sales service based on the effectively improve after receiving a
Coverage Rate of Relevant Personnel in Responsible Marketing Training % 100 FSC/PEFC certification materials as well "Supplier Performance Evaluation warning notice shall have their supply
as certificates related to food safety and Form." qualification immediately revoked.environmental protection. The Company Implement tiered management If during the annual comprehensive
Average Responsible Marketing Training Hours per Person Hours per person 2.5 reviews and evaluates the above based on evaluation scores. Suppliers evaluation a supplier's overall score materials in accordance with industry with low scores are given a or quality score falls below the
standards and conducts annual updates three-month rectification period after baseline its qualified supplier status
and re-verifications. which a re-assessment is organized shall be revoked. If retention is
Number of Customer-oriented Training Sessions Times 30 Sign documents with suppliers including to determine subsequent cooperation necessary due to special circum-
the "Supplier Code of Conduct" and ordering arrangements. stances approval must be obtained
"Guarantee Letter for Non-Use of Develop a "Supplier Audit Plan" and from the Deputy General Manager of
Hazardous Substances" "Raw Material
Total Customer-oriented Training Hours Hours 150 as needed arrange personnel with
Production and acceptance
Composition Declaration Form" and second-party audit qualifications to inspections shall be conducted under
"Investigation Form for Environmentally conduct on-site supplier audits stricter criteria. Suppliers that fail the
Hazardous Substances" to clearly define verifying production conditions evaluation twice consecutively shall
environmental and compliance quality control and environmental have their supply qualification
requirements. and compliance management to permanently revoked.Require suppliers to provide samples. ensure continued compliance with
After successful verification proceed to Company requirements.the small-batch trial supply stage.Suppliers that pass the trial supply
assessment are included in the
"Qualified Supplier Directory."XIANHE CO. LTD 2025 Sustainability Report
Key Performance 2025
Number of Wood Pulp Number of Wood Pulp
Suppliers in Mainland Suppliers Outside Mainland
China Suppliers China Suppliers
On-site supplier evaluation
In the process of selecting and managing key suppliers the Company places special emphasis on risks related to coun-
tries industries and products. Through measures such as diversified procurement sourcing sustainable forest manage- Percentage of Wood Pulp Suppliers with FSC/PEFC
ment and raw material quality control the Company mitigates the impact of external uncertainties on raw material Certifications
supply and product quality.Number of Suppliers with Number of Suppliers with Environ-
Risk Type Potential Impact Mitigation Measures Quality Management System mental Management System
Certification Suppliers Certification Suppliers
The Company diversifies its supply
Some of the Company's wood pulp channels by expanding procurement
raw materials are sourced from from multiple countries including Brazil
overseas regions. Factors such as Chile Indonesia and Canada thereby Number of Suppliers with OHS Number of Suppliers with Country-Related
Risks trade frictions and changes in reducing reliance on any single country.Management System Other Sustainability-related
regional political situations may At the same time the Company Certification Suppliers Recognitions Suppliers
lead to increased tariffs and higher continues to advance its domestic
supply costs. self-produced pulp substitution strategy
to enhance raw material supply security.The acquisition and processing of Total Suppliers Audited (Written Percentage of Key Suppliers
wood pulp raw materials are highly or On-site) Suppliers Covered by Audits
dependent on natural resources
and ecological conditions. Risks The Company actively promotes
related to forest management sustainable forestry practices
Industry-Related supply chain traceability water
expands the scale of its owned and
resource stress and pollution and cooperative plantations regulates Number of Suppliers Assessed as Having Significant Risks
greenhouse gas emissions may harvesting activities and progres-
sively builds a more mature and Actual/Potential Negative Impacts Suppliersaffect raw material availability and
sourcing compliance thereby controllable raw material resource
impacting the stability of raw system.material supply and production
continuity.The Company conducts testing of
raw materials before they are put
Fluctuations in raw material quality into use to prevent substandard
may affect key paper properties
Product-Related materials from entering the produc-and product consistency thereby tion process ensuring the stability of
Risks impacting end-product quality finished product quality at the
and customer experience. source.XIANHE CO. LTD 2025 Sustainability Report
Supply Chain Security Assurance Sustainable Procurement
Building on risk identification and control during supplier onboarding the Company conducts comprehensive analysis of In compliance with international conventions and initiatives national laws and regulations as well as industry standards
potential risk factors across the supply chain landscape and implements targeted countermeasures to ensure operation- the Company has formulated and implemented the "Sustainable Procurement Policy" to promote sustainable supply
al safety and stability. chain development and mitigate ESG risks. The Company prioritizes suppliers with strong ESG performance in its selection
process and contract awarding while clearly defining collaboration requirements through documents such as the "Suppli-
er Code of Conduct."
The Company regularly conducts relevant reviews to facilitate the implementation of established policies during procure-
ment processes and monitor suppliers' compliance with commitments. Additionally we encourage all parties to report
Supply Chain Supply Chain Risk Affected
Supply Chain Security
Business Assurance Measures potential violations of policies or collaboration requirements through public reporting channels enabling timely identifica-Risk Types Description Segment tion of issues and continuous improvement.By advancing its integrated "forest-pulp-paper"
The Company's wood layout the Company has established a supply Sustainable Procurement Strategy
pulp suppliers are chain security assurance system while strengthen-
primarily located ing sustainable forestry management
International overseas and Suppliers shall ensure employees' rights to rest and leave provide fair compensation and
Policy Risk changes in interna- Forest: Enhance forestry resource layout and raw benefits and comply with applicable laws and standards regarding working hours. Working
tional environmental material base development strengthen control Fair Working hours and overtime shall be reasonably arranged with overtime being voluntary and
protection policies and over wood sources and reduce the impact of raw Environment compensated in accordance with legal requirements.trade regulations may material price fluctuations on supply chain
operations. Suppliers shall prohibit discriminatory practices guarantee employees' rights to assembly impact its raw and freedom of association adopt a zero-tolerance policy toward forced labor and strictly
material supply chain. Raw Material Pulp: Establish self-produced pulp production lines
Procurement prohibit the use of child labor.to effectively connect forest raw materials with
papermaking processes strengthen raw material
quality control and production coordination The design and operation of suppliers' production facilities and manufacturing processes
Environmental events capabilities and reduce reliance on uncertain shall ensure safety. Regular risk assessments shall be conducted and identified risks shall
Natural such as earthquakes external supply. be addressed with timely corrective and preventive measures to ensure the safety of
Disaster Risk and fires damage Paper: Leverage a large-scale intelligent manu- Factory and employees the public and surrounding communities.plantation forests. facturing system to enhance production schedul- Process Safety Suppliers shall establish and rigorously implement occupational health and safety
ing and management improve delivery efficiency management systems and operating procedures provide necessary protective equip-
and strengthen adaptability to changes in market ment and sanitary facilities and ensure that workplaces meet health and safety require-
demand. ments.Application: Strengthen coordination with down-
Changes in the stream customers improve demand matching
and order response efficiency and reduce The products provided by suppliers and their intended use should comply with health and performance of
downstream inventory and delivery risks.environmental safety requirements and meet relevant requirements such as responsible
Downstream Product forest sourcing and traceability.industries may lead The Company has entered into long-term
Demand Safetyto market demand agreements with major raw material suppliers Suppliers shall provide necessary safety handling and product usage information with Production
Fluctuation fluctuations thereby specifying procurement quantities and prices to particular attention to products containing hazardous substances and their safety shall and Sales
Risk affecting the enhance supply stability and cost predictability. be assessed during the risk assessment procedure.Company's produc- Concurrently the Company actively expands
tion arrangements. alternative suppliers to optimize the supply Suppliers shall uphold the principles of fair competition and honest transactions comply
structure and reduce dependence on single Fair Competition and with applicable laws and regulations related to anti-monopoly fair competition
suppliers. Anti-Corruption anti-fraud anti-bribery and anti-corruption and maintain a fair and orderly business
The Company strengthens communication with environment.suppliers industry associations and traders to stay
informed of changes in domestic and international
policies and market conditions thereby enhancing The Company is committed to reducing environmental impacts in terms of energy water
Impacts and
Logistics risk anticipation capabilities. and waste promoting the development of a circular economy and expects suppliers to collisions during Finished Environmental support our efforts to reduce our environmental footprint by establishing and pursuing Transportation transportation may The Company has established long-term cooper-Product environmental protection goals similar to those of Xianhe.Risk cause product ation mechanisms with logistics service providers
Impact Reduction
Delivery defining transportation standards and service The Company pays attention to biodiversity and land use risks and requires suppliers not deformation.requirements to ensure the stability of raw material to engage in illegal deforestation or improper land development practices.procurement and finished product delivery.Supply Chain Work closely with suppliers to jointly build a transparent and traceable supply chain
Transparency system effectively assess and monitor potential risk factors and ensure that raw material
procurement complies with the Sustainable Procurement Policy.XIANHE CO. LTD 2025 Sustainability Report
Supplier Communication Green Logistics
The Company continues to advance initiatives such as material substitution packaging reduction and recycling. At the
We prioritize communication with suppliers conducting same time by reasonably arranging transportation methods and routes it promotes the development of greener and
awareness campaigns and experience sharing based on more efficient logistics and transportation processes thereby supporting the low-carbon transformation of the supply
practical needs during collaboration to help them chain.enhance business capabilities and ESG performance.Application of Eco-Friendly Packaging Materials
Priority is given to the use of renewable and biodegradable materials such as
wooden boards and kraft paper. The use of plastic packaging materials is reduced
Supplier Communication Event within feasible limits to lower environmental impact.Packaging Structure Improvement
Key Performance Under the premise of ensuring product protection and transportation safety continu-
ously optimize packaging solutions to reduce unnecessary use of packaging materials:
In the finished product packaging stage the number of kraft paper layers is reduced
Indicator Unit 2025 based on product strength and transport conditions thereby lowering material
consumption and waste generation.For the transportation of raw and auxiliary materials such as starch traditional
Number of Suppliers Signed with ESG Clauses Suppliers 6 single-layer packaging is replaced with a "bulk bag" structure where large-capacity
containers enhance loading/unloading efficiency and transport stability.Number of Internal Procurement Training Sessions Times 10
Packaging Material Recycling
Coverage Rate of Internal Procurement Training % 100 Reusable packaging is adopted and the service life of packaging materials is extended
through recycling and return systems to improve resource circularity:
Vehicle compartment protection and securing measures for finished product transport
have been improved with reusable transport protection facilities replacing single-use
protective materials.Old wooden pallets are repaired and refurbished to extend their service life reducing
the consumption of new wood materials.Waste materials such as paper cores woven fabrics and kraft wrapping paper are
collected sorted and reused in appropriate scenarios improving packaging material
efficiency.Promotion of Green Transportation
For nearby suppliers the Company uses energy-efficient and environmentally
friendly transport vehicles for cargo delivery effectively reducing exhaust emissions
and noise pollution during transportation.Key Performance 2025 Optimization of Transport Routes
Guangxi Xianhe New Materials Co. Ltd. has obtained FSC Chain of Through scientific planning of transport routes and logistics network layout transporta-
Custody (FSC-CoC) certification tion organization efficiency and delivery accuracy are improved.In certain transport segments priority is given to waterway transportation using inland
Guangxi Xianhe Forestry Co. Ltd. has obtained FSC Forest Manage- river barges as substitutes for long-distance road transport thereby reducing transpor-
ment (FSC-FM) certification tation costs and lowering energy consumption per unit.Zhefeng New Materials Received Gold Medal in EcoVadis Sustain-
ability Rating Equal Treatment for Small and Medium-sized Enterprises
Xianhe Co. Ltd. Zhefeng New Materials Guangxi Xianhe New Adhering to the core principle of "promoting equal opportunities in supply chains" the Company prohibits discriminatory
Materials and Hubei Xianhe New Materials have all established due practices based on supplier size or ownership structure actively fosters a fair and transparent competitive environment
diligence systems in compliance with EUDR requirements which and ensures equal procurement participation for small and medium-sized enterprises (SMEs). At the reporting period's
have been evaluated and certified by qualified third-party institu- end the Company's accounts payable balance (including notes payable) did not exceed RMB 30 billion representing less
tions than 50% of total assets. Neither the Company nor its subsidiaries have disclosed overdue payments to SMEs through the
National Enterprise Credit Information Publicity System.XIANHE CO. LTD 2025 Sustainability Report
Supporting Industry
Development
Industry Collaborative Development
While steadily advancing its own business development Xianhe Co. Ltd. actively plays a demonstrative and driving role
within the industry. Leveraging its leading advantages in product R&D manufacturing capabilities and market application
the Company proactively participates in the development of standard systems and industry exchange activities. Through
standard-setting experience sharing and technical exchanges it promotes industry standardization and technological
innovation.Standard Development
The Company has taken the lead in formulating the national standard for Bible paper and has also participated in the
development of national standards for products such as carbonless copy paper interleaving paper for cold rolled metal
sheets electrolytic capacitor paper super calendered paper medical packaging paper and board as well as testing
methods including the determination of dichloromethane extractives in pulp and the determination of titanium dioxide
content in paper and board. In addition the Company has led the development of the industry standard for baking paper
and participated in the formulation and revision of industry standards for bookbinding paper vacuum aluminum coating
base paper sublimation base paper tipping base paper and supercapacitor paper. Six "Zhejiang Made" standards have
been officially released including those led by the Company for sublimation base paper single-sided glazed tipping base Exhibition participation
paper baking base paper and Bible paper as well as those participated in by the Company for negative ion wallpaper
and tipping paper. In 2025 the Company participated in the revision of the standard "Research on Key Technical Indicators
of Electrolytic Capacitor Paper." Digital Transformation
The Company actively embraces the convergence trend of informatization and industrialization. As a national pilot unit for
the integration of informatization and industrialization management system certification it adheres to the "Digital Xianhe"
Exhibition Participation Industry 4.0 management innovation strategy continuously enhancing its digital management capabilities and smart
manufacturing standards.Leveraging industry exhibitions as a platform the Company actively shares its practical experience and innovative
approaches in the field of high-performance paper-based functional materials. It continuously strengthens communica- The Company has comprehensively implemented ERP data management and OA collaborative office systems achieving
tion and collaboration with customers partners and other stakeholders across the industrial chain to facilitate business digital transformation and paperless operations across business processes including human resources procurement
and technical exchanges thereby contributing to the sustainable development of the industry. manufacturing processes finance and administrative approvals. These initiatives provide essential data foundations for
intelligent manufacturing systems. The Company's "Smart Workshop" integrates digital twin technology AI-powered visual
monitoring and 5G solutions. By leveraging comprehensive production data collection and analysis it enhances lean
Exhibition Name management capabilities significantly improves product quality rates and reduces production anomalies. Pilot work-
shops have adopted 3D modeling and dynamic data visualization systems to enable digital mapping and visual man-
agement of critical production stages. Through system integration workshops are progressively deploying digital twin
Labelexpo Asia 2025 Labelexpo Europe 2025 systems and AI-powered dust cap monitoring solutions. Real-time data interoperability between production systems and
ERP platforms strengthens unified production management and collaborative coordination providing robust support for
2025 Paper-based Materials Exhibition ICDM Autumn 2025 resource allocation and flexible manufacturing operations.
The Company will integrate production layout planning to continuously advance the development of intelligent manufac-
ICDM Spring 2025 Labelexpo Southeast Asia 2025 turing systems promote the widespread application of smart equipment and digital systems in production processes
enhance overall manufacturing efficiency and management capabilities and provide practical experience for the intelli-
gent transformation in the field of high-performance paper-based functional materials.World Tobacco Middle East 2025 ITMA ASIA + CITME Singapore Expo 2025
2025 Guangxi International Forest Products World Tobacco Asia 2025
and Wood Products Exhibition Key Performance
ALLPRINT INDONESIA exhibition
2025 APPP EXPO Shanghai International Xianhe's "Smart Workshop Artificial Intelligence Application Scenario" was selected for the 2025
Printing Exhibition Zhejiang Provincial Artificial Intelligence Application Scenario list.XIANHE CO. LTD 2025 Sustainability Report
Partnership
Section
People-Oriented and Shared
Prosperity
Xianhe Co. Ltd. regards every employee as a member of the
"family" and is committed to making everyone feel warmth and
a sense of belonging. We advocate the core values of
"people-oriented family as the foundation harmony as the
priority and virtue as the principle." We effectively protect
employee rights and health provide a fair and just welfare
system and career development opportunities and let the
"family culture" become the main theme of Xianhe's devel-
opment. Furthermore Xianhe holds a strong sense of
social responsibility embarking on the path of
shared development in rural areas enthu-
siastically supporting students in need
through public welfare initiatives and
conveying the warmth of "home" to
society.Employee Benefits and Welfare
Employee Growth and Development
Employee Health and Safety
Philanthropy and Social
ContributionXIANHE CO. LTD 2025 Sustainability Report
Protecting employees' rights and welfare is an inherent part of Xianhe's
Employee Benefits 'family culture.' In accordance with relevant laws and regulations we Payment of Living Wage
have established a comprehensive employee rights and compensation
and Welfare benefits system adhering to a diversified talent policy to provide Timely and full payment of employee salaries ensuring that wage levels meet the basic living
employees with fair and equitable salaries and benefits. needs of employees.Rights Protection Equal Pay for Equal Work
The Company adheres to internationally recognized human rights Key Performance In 2025 Regularly monitor basic salary gaps between employees of different genders to ensure equal pay
standards and complies with relevant laws and regulations including for equal work.the "Labor Law of the People's Republic of China" and the "Labor The Company was awarded the title
Contract Law of the People's Republic of China." It has established the of "Labor Harmonious Relations
"Labor Management Policy" and the "Anti-Discrimination and Anti-Ha- Enterprise in Quzhou City".rassment Management Policy" to regulate employment practices and Working Time Management
protect the legitimate rights and interests of its employees.Set maximum working hours limits to avoid excessive working hours reduce the negative impact
of overtime on employee health and ensure that employees receive corresponding overtime
Respect for Human Rights compensation.We hereby commit: "The Company pledges to adhere to internationally recognized human
rights standards in all business and management activities respecting and safeguarding Health Protection
the fundamental human rights of employees and relevant stakeholders. We explicitly
prohibit all forms of human trafficking forced labor and child labor practices. Employees Provide social insurance and paid annual leave to ensure employees have necessary protection
are guaranteed their lawful rights to freedom of association and collective bargaining. Our and adequate rest promoting their physical and mental well-being.employment management practices uphold principles of equality and non-discrimination
actively preventing discrimination based on gender age ethnicity religion or any other
unjustifiable grounds." Personnel Adjustment Management
Establish minimum negotiation and notice periods for large-scale layoffs to ensure a smooth
transition for employees. The Company does not involve such scenarios in its operational
Anti-Discrimination and Anti-Harassment processes.Xianhe has established the "Anti-Discrimination and Anti-Harassment Management
Policy" which explicitly prohibits both sexual and non-sexual harassment. Through
onboarding training sessions the Company helps employees understand discriminato-
ry and harassing behaviors as well as the reporting procedures. Corrective actions or Key Performance In 2025
disciplinary measures are taken against any acts of discrimination or harassment. In
2025 the Company recorded no incidents of discrimination or harassment.
Total employees Persons
Thereof: employees from ethnic minorities Persons
Standardized Employment
Employee labor contract signing rate
Xianhe consistently upholds the principles of fairness and equality in employee manage-
ment dedicated to safeguarding employees' fundamental rights and interests.XIANHE CO. LTD 2025 Sustainability Report
Democratic Management Employee Compensation and Benefits
Employees are our core partners in business development. Xianhe Co. Ltd. not only provides competitive compensation
The building of a "family" relies on the collective wisdom and efforts of all employees. The Company has established the packages but also focuses on building a comprehensive care system striving to create a supportive and caring work
"Rationalization Suggestion (Improvement Proposal) Management Policy" calling on employees to actively communicate environment that enhances employees' sense of fulfillment and belonging.provide timely feedback and suggestions and participate together in democratic management. Through diverse com-
munication channels the Company listens to employees' voices and fosters a harmonious and stable working atmo-
sphere. Compensation Management
The Company has established the "Rationalization Suggestion (Improvement
Proposal) Management Policy" to encourage all employees to propose improve- We adhere to the principle of "putting the right people in the right roles and sharing benefits together." The Company has
ment plans in areas such as production operations safety and environmental established employee compensation-related policies including the "Employee Handbook" "Compensation Management
Rationalization protection. Employees who submit valid suggestions receive a basic reward. Policy" and "Talent Incentive Policy." The Company's compensation management body led by the Chairman of the Board
Suggestions Proposals that are adopted and implemented receive additional rewards and are is responsible for reviewing compensation adjustment plans and employee incentive measures.eligible for annual excellence recognition. At the year-end evaluation three award
levels are established: one first prize three second prizes and six third prizes.Compensation The Company adheres to the principles of fairness competitiveness incentive alignment
Management economic viability and legal compliance in compensation management. A compensation
Employee Each department holds regular or ad-hoc employee communication meetings
management body has been established to review and approve compensation adjustments.Communication allowing employees to stay informed about the Company's business develop-
Meeting ment direction and updates addressing employee concerns and creating a
platform for mutual communication. Compensation Base salary + allowances and subsidies + bonuses + overtime pay + various additional Structure subsidies
The Company posts updated documents such as event announcements rules
Bulletin Board and and regulations on various bulletin boards in the workshops making it convenient Overall Adjustment: Adjustments are made based on macroeconomic conditions industry
Display Board for employees to stay updated on Company developments. Compensation and regional competitiveness Company strategy and corporate performance.Adjustment Individual Adjustment: Includes periodic adjustments based on annual performance evalua-
Face-to-Face Employees may directly communicate with managers at various levels for quick tions as well as ad-hoc adjustments based on skill improvement job changes promotions
Meetings and effective communication. and other factors affecting employee compensation.When employees feel that face-to-face communication is not appropriate they Xianhe not only focuses on the fairness and justice of its compensation system but also places great emphasis on recog-
Phone and SMS may communicate with responsible personnel of relevant departments via nizing and encouraging outstanding employees. Each year the Company allocates 0.5% of its total annual sales as an
Communication mobile phone telephone or text messages. Responsible personnel of relevant annual talent incentive fund establishing Special Prizes First Prizes and Second Prizes to reward teams or employees who
departments shall provide timely and appropriate responses. have made significant contributions to the Company's business operations and development.To ensure the diversity fairness and continuity of performance evaluation the Company conducts team performance
The Company has set up employee suggestion boxes on the OA system or at the assessments in the form of monthly regular meetings. Through annual summaries it comprehensively evaluates team
Party Building Activity Center. Employees may submit written suggestions
Suggestion Box and individual performance in areas such as goal completion work achievements innovations in work or management feedback or appeals. The Director of the Administrative and Human Resources methods and rationalization suggestions thereby fully affirming employees' personal contributions and value creation.Department is responsible for responding.Employee The Company conducts anonymous online surveys to solicit employee opinions
Satisfaction on business operations management and other aspects understanding
Survey employees' overall satisfaction with work pressure work meaning work environ-
ment and other dimensions.Key Performance In 2025
Employee union membership rate Collective agreement coverage rateXIANHE CO. LTD 2025 Sustainability Report
Welfare System Caring for Employee Well-Being
Xianhe's "Family Culture" initiative strives to extend the warmth of home
Key Performance In 2025
Performance Allowance to every employee's personal life. Each base features dedicated talent
Various Subsidies apartments offering two-bedroom one-living-room suites ready for
Including position allowances technical skill allow-
Including wedding gifts childbirth immediate occupancy by married employees. The facilities also The Company was awarded the title ances and education background allowances
gifts condolence money birthday include a provincial second-class standard "Xianhe Kindergarten" of "Child-Friendly Enterprise"
Material gifts apartment allocation employ- wellness pavilions breastfeeding rooms billiard rooms and fitness Social insurance and Housing Fund
Benefits ee health check-ups meal subsi- centers. During summer vacations the Company regularly hosts chari-
Including pension insurance medical insurance dies night shift allowances phone table childcare programs and provides family support positions to help
unemployment insurance work-related injury charges travel expenses or special employees balance work and family life.insurance maternity insurance and housing position allowances etc.provident fund
Employee Living Service Facilities
Team Building Activities Physical and Mental Care
Material Including employee tours speech Providing a health management room equipped
Benefits contests skill competitions etc. with medical testing equipment; collaborating with
hospitals to organize periodic health seminars
Provide a clean and comfortable living environment equipped with air conditioning hot water
private bathroom and balcony with a view meeting employees' daily living needs.Dormitory
Apartment
Organizing Recreational and Sports Activities
The Company actively cares about the physical and mental health as well as the holistic development of its employees. Sports and Equipped with table tennis tables billiards tables treadmills and other fitness equip-
It regularly organizes a variety of recreational and sports activities to improve employees' physical fitness and psycho- Fitness Area ment as well as a standard basketball court providing a multi-purpose space for
logical well-being while enriching their after-work lives. physical exercise and stress relief.Equipped with various chess sets allowing employees to play chess make friends and
Recreational Chess Room enrich their after-work cultural life.Spaces
Library Create a tranquil reading space to enrich employees' spiritual and cultural lives and
facilitate personal growth.Convenience Features daily necessities and fresh food sections meeting employees' daily shopping
Spring Festival Speech Store needs.Blessing Event Competition
Barbershop Haircut vouchers are distributed monthly to employed staff to enhance their quality of
Basketball life and sense of well-being.Competition Women's Health
Science Popu-
larization for Supporting Charging Equipped with new energy vehicle charging areas meeting employees' daily commut-
Tug-of-War International Services Stations ing charging needs.Friendship Women's Day
Competition
Parcel Locker / Provides convenient parcel pickup and delivery services improving employees' daily
Children's Day Series Employee Sports Courier Station convenience.Activities GamesXIANHE CO. LTD 2025 Sustainability Report
Employee living facilities
Dormitory Rooms Activity Room (Table Tennis Area) Leisure and Communication Area Parking Area Convenience Store
Recreation Room (Billiards Area) Sports Ground Electric Vehicle Charging Facilities
Hairdressing Room Service Station
Care for Female Employees Employee Support
The Company fully respects and protects the legitimate rights and interests of its female employees providing them with Xianhe firmly believes that the "Family Culture" stems from mutual help and joint progress among all employees. The
a safe and comfortable working environment. We respond to the needs of female employees and care for their health Company actively assists employees facing difficulties helping them apply for government subsidies and carries out
through measures such as establishing a Women Workers' Committee providing special leave and organizing activities. "Warmth Delivery" activities. The Xianhe Labor Union staff deeply care about employees' lives show concern for frontline
production workers visit employees hospitalized due to illness and offer condolences to deceased employees or their
Establish the Women Workers' Committee to Provide special areas for female employ-
protect the rights and interests of female families conveying the warmth and support of "home."ees such as mother-and-baby rooms and
employees and organize recreational activities warm caring mommy rooms.tailored to them.Provide a health management room Provide special leave for female employees Key Performance In 2025
equipped with medical testing equipment to Care for including marriage leave maternity leave Female
safeguard employee health. Employees and breastfeeding leave. Number of employees receiving assistance Total investment in assisting employees in
Conduct training courses on mental health Organize annual Women's Day health Persons need Yuan
and first aid knowledge for female employees. knowledge lectures and distribute gifts.XIANHE CO. LTD 2025 Sustainability Report
Xianhe adheres to the philosophy of attracting top talent nurturing exceptional
Employee Growth professionals leveraging their potential and retaining them long-term consis-
Institution-Enterprise Cooperation
tently aligning employee growth with corporate development. We actively
and Development expand recruitment channels and provide employees with extensive career Institution-enterprise cooperation serves as a vital channel for recruiting new talents at Xianhe and is a crucial step in
opportunities. Through ongoing training programs we empower staff to realize cultivating industry newcomers. Xianhe has established partnerships with numerous educational institutions to facilitate a
their full potential thereby strengthening the Company's intrinsic drive for two-way exchange of theoretical knowledge and practical experience. Through initiatives where Company employees
sustainable growth and innovation. teach practical skills on campus and faculty/students visit Xianhe for internships we foster a responsible corporate image
among educators and students laying a solid foundation for campus recruitment.Talent Acquisition Xianhe has built stable cooperative relationships with institutions such as Quzhou Technician College Guangxi Vocational & Technical College Guangxi Vocational College of Water Resources and Electric Power Guangxi Science & Technology
Xianhe fully recognizes that talent serves as the core driving force for sustainable corporate growth. We have established Normal University Guangxi Light Industry Technician College and Hubei Industrial Automation Technician College. By
the "Talent Acquisition Management System" and "Recruitment and Employment Management System" to meet our talent establishing targeted classes and "order-based" training programs we provide faculty and students with hands-on
needs through both internal and external recruitment channels. The Company provides promotion opportunities and opportunities on the front lines and offer students priority for employment ensuring that what they learn can be effectively
career development paths for existing employees while attracting external talent via campus recruitment social recruit- applied in practice.ment and internal referrals. Additionally we actively collaborate with universities by launching the "Xianhe Targeted
Program" which offers financial support specialized professional training and internship opportunities to students thereby
cultivating and attracting outstanding new talent to join our organization.Case Study Hubei Xianhe New Materials: Opening a New Chapter in Institution-Enterprise Collaboration
The Xianhe production bases are distributed across multiple regions including Zhejiang Guangxi Hubei and Henan. We
adopt a localized employment strategy with employees at each production base predominantly being local residents
Hubei Xianhe New Materials has established a "Three-Dimensional System" comprising targeted training special-
thereby assisting in addressing employment issues and promoting regional economic development.ized training and internship practice. The targeted classes in collaboration with Hubei Industrial Automation Tech-
To address the demand for senior talent we adopt a "flexible recruitment mechanism" employing diversified approaches nician College have expanded to cover five major disciplines including Fine Chemical Engineering Electrical Tech-
such as intellectual introduction part-time employment temporary hiring technical cooperation projects or undertaking nology Application and CNC Machining. Through a "dual-mentor mechanism" involving both corporate and
research projects to attract high-level professionals with specialized expertise under the principles of fairness and justice. academic mentors we ensure that training outcomes are seamlessly translated into practical work capabilities.In 2025 through this targeted class model Hubei Xianhe provided full-process mentorship to 30 students. During
their internships the students achieved a 100% rate in both job suitability and skill compliance. This initiative effec-
Internal Recruitment tively replenishes core positions in production lines and R&D injecting fresh blood into the sustainable develop-
ment of the base.Referral Announcement
Employee referral or self-recommendation Post announcements to inform all employees of job vacan-
cies and select candidates through competitive selection
External Recruitment
Job Recruitment
Recruit talents through provincial municipal and Online Recruitment
district-level job fairs. Publish job postings through platforms
such as Talent Network 58.com and
Campus Recruitment Quzhou Direct Recruitment.Participate in campus recruitment fairs organized by univer-
sities coordinate with career services staff to secure event Employee Referral
venues or post Company job openings on the university's Recruitment through employee referrals
graduate employment portal. or self-nomination.Key Performance In 2025
In 2025 the proportion of local employees in the Company was approximately
Xianhe Electrician Technician Training ProgramXIANHE CO. LTD 2025 Sustainability Report
Key Performance In 2025 Career Development
A well-defined career development plan serves as the foundation for employees' sense of purpose and professional fulfill-
ment. Xianhe has established the "Employee Promotion and Advancement Management Measures" providing clear career
Total number employees Persons pathways for technical staff administrative personnel and business employees. The Company employs examinations as
the sole evaluation method conducting targeted assessments tailored to different job levels and positions. By encourag-
ing continuous self-improvement through work experience and training programs the Company fosters mutual growth
between employees and the organization.Under 25 years
Over 55 years old Promotion Path
Female employee of age
Manager / Factory Director / Department Head
Male employees Technical Path 1 2 3 4
Junior Title Intermediate Title Senior Title
25 to 55
years old Manager / Factory Director / Department Head
Management Path 1 2 3 4
Team Leader Section Chief Deputy Chief Engineer (Assistant)
Manager / Factory Director / Department Head
Sales/Business Path 1 2 3 4
Sales Representative Sales Supervisor Deputy Chief Engineer (Assistant)
Master's Degree Sales staff
Administrative staff
Bachelor's Degree Financial staffOthers
Procurement staff
Technical and Progression PathMiddle school
and below R&D staff
Associate
Degree Trainee Worker Monitor Deputy Section Chief
1234
Secondary vocational Production staff
school and high school
Deputy Director - Section Chief + Section Chief Deputy Section Chief +
8765
Deputy Director Deputy Director + Assistant Plant/Department Head Level
9 10 11 12XIANHE CO. LTD 2025 Sustainability Report
Talent Development and Training
Xianhe adheres to the talent philosophy of "attracting capable individuals enabling each person to realize their full poten-
tial and ensuring every talent is put to optimal use." The Company provides training for current students during the target-
ed and order-based class phases and employs a combination of internal and external training methods to deliver
pre-job on-the-job and job-transfer training for both new hires and existing employees. Additionally Xianhe places
strong emphasis on leadership development organizing site visits and study tours as well as performance excellence
management training to further enhance the decision-making capabilities and team management proficiency of mid-
and senior-level managers.To ensure training effectiveness the Company has established a training record system that documents each employee's
participation and examination results. These records serve as a reference for future considerations regarding employee
regularization salary adjustments and promotions and are also linked to year-end bonuses thereby motivating employ- OEX Training for Production Personnel OEX Training for Management Personnel
ees to actively engage in training initiatives.Talent Development System
The Company recruits outstanding talent through both internal and external hiring channels.Attracting The Company collaborates with universities to establish targeted classes or order-based
Capable classes jointly cultivating new industry talent.Individuals
Newly hired employees are required to participate in pre-job training and undergo assess-
ment upon completion with a bottom-rank elimination system in place.Seminar with Intellectuals
Employee skills competitions are held to select technical experts and pacesetters encourag-
ing employees to continuously improve through healthy competition.Xianhe has keenly recognized the challenges posed by climate change and industrial transformation. The Company
Based on job requirements the Company organizes professional skills and theoretical knowl- actively provides employee training programs to help staff adapt to emerging industry demands transition to low-carbon
edge training to help employees enhance their vocational capabilities. production methods and address the impact of external trends on job adaptability and employment stability. In 2025 we
Enabling A "One-on-One" mentorship model is adopted utilizing guidance instruction and assistance launched a training initiative titled "Automating and Intelligentizing Paper Manufacturing Processes" equipping employees
Each Person to elevate skill levels and professional competency. with expertise in automated production systems supporting energy conservation and emission reduction efforts while
to Realize enhancing their understanding of industry transformation trends and their strategic significance for future development.The Company actively cultivates employees with professional technical capabilities and
Their Full independent innovation capacity and recommends them for professional technical title
Potential accreditation.Mid- and senior-level managers are regularly scheduled for site visits and study tours in
various regions to acquire advanced management philosophies and practical experience.Performance excellence management training is conducted for Company leadership to
enhance team management capabilities.For university graduate development a "rotation before placement" approach is used. Final
positions and grades are assigned based on individual development preferences job fit and
Ensuring vacancy status to ensure optimal talent utilization.Every Talent Independent evaluation is carried out in an orderly manner. Aligned with actual production
Is Put to needs the Company independently assesses occupational types and grade ranges focus-
Optimal Use ing on evaluating professional ability work performance professional ethics and craftsman-
ship spirit. This process helps identify employees' technical strengths and place the right
people in the right positions.Automation and Smart Manufacturing Training for Paper EnterprisesXIANHE CO. LTD 2025 Sustainability Report
Xianhe Co. Ltd. has always prioritized the protection of employees' life safety
Case Study Continuous skills training to enhance employees' job competencies Employee Health and health as its paramount duty. Adhering to the principle of "Safety First Prevention-Oriented and Comprehensive Governance" the Company has
established an occupational health and safety management system and has
Hubei Xianhe New Materials and Guangxi Xianhe New Materials have implemented multi-level skill training and Safety successfully obtained ISO 45001 Occupational Health and Safety Management
programs aligned with core business development needs and industry technological trends. The training System certification.focuses on key areas including special operation standards equipment operation and maintenance safety
production management and digital skill applications while incorporating specialized skill enhancement We have established a Safety Production Committee led by the General Manager integrating safety management into every
programs tailored to departmental job requirements. For key positions such as low-voltage electrical work and aspect of daily production and operations. The effective operation of the occupational health and safety management
fusion welding with hot cutting the Company implements certified training and qualification reviews. A total of system requires the full participation of all employees. We cultivate safety awareness and behavioral habits through safety
48 new personnel obtained special operations certificates throughout the year further strengthening the inspections safety promotions safety drills and dedicated safety meetings thereby fostering a corporate culture where
foundation of safety management. "Everyone Prioritizes Safety."
In 2025 the Company conducted a total of 442 sessions of various skill training programs with a cumulative Deputy General Manager
attendance of over 8300 participants. By combining internal and external training methods the Company General Manager Assistant to the General Plant Managers /
continuously enhances employees' professional skills and hands-on operational capabilities thereby ensuring Manager Department Heads
robust support for production operations. Reviews the Company's Studies and supervises the Implements safety produc-
safety production policies implementation of safety tion-related laws regulations
objectives management production-related laws and the Company's internal
plans rules and regulations regulations and the Company's safety management systems.safety technical measures internal safety management Organizes regular safety meet-
and safety production plans. systems. Monitors the execution ings. Promptly addresses safety
Provides comprehensive of safety production across the risks and incidents and reports
leadership for Compa- entire Company. Organizes them to higher management.ny-wide safety production Safety Committee meetings Each plant has a designated
fire prevention and disaster safety promotion campaigns Safety Officer. Each Plant
mitigation and emergency and training activities. Manager serves as the Safety
management efforts. Responsible Person and holds the
corresponding certification(s).Key Performance In 2025
Key Performance In 2025
Number of Employee Training Sessions Employee training coverage rate
Total employee training expenditure amount
The Company is certified to the Occupational The Company has obtained the Level 2
Total employee training hours hours Health and Safety Management System Enterprise Certification for Work Safety
yuan standard GB/T 45001-2020 / ISO 45001:2018. StandardizationXIANHE CO. LTD 2025 Sustainability Report
Safety System Development Occupational Disease Prevention and Control
The Company has established comprehensive management systems Xianhe has formulated a comprehensive set of occupational disease prevention
including the "Safety Production Target Management System" "Occupa- Key Performance In 2025 policies in accordance with the Law of the People's Republic of China on the
tional Health and Safety Control Procedures" "Occupational Health and Prevention and Control of Occupational Diseases. These policies include the Occu-
Safety Hazard Identification and Risk Assessment Procedures" "Labor 2025 Safety Production Goals: pational Disease Hazard Prevention Responsibility System Occupational Disease
Protection and Protective Equipment Control Procedures" and "Occupa- Hazard Monitoring Detection and Evaluation Management System Occupational
tional Disease Prevention Responsibility System". These systems compre- Zero serious personal injury Disease Hazard Warning and Notification System Emergency Response Plan for
hensively cover all production processes and job positions strengthening accidents or above; Occupational Disease Incidents Occupational Disease Prevention Education and
safety production constraints through multiple aspects such as hazard Training System and Occupational Disease Protective Equipment Management
source control operational protection measures and emergency drills. Zero fire and explosion accidents. System. This framework enables the Company to achieve end-to-end prevention
This ensures standardized management practices with detailed imple- and control of occupational diseases across management structure hazard moni-
mentation protocols in place. toring risk notification emergency response training health surveillance and
Occupational Disease
facility/equipment management. Prevention Publicity and Training
Safety Risk Management Furthermore we have established the 2025 Annual Occupational Disease Prevention Work Plan and Implementation Program setting "Zero new cases of occupational disease or suspected occupational disease" and "Compliance of dust and
toxic substance concentrations with national standards" as the annual objectives for occupational disease prevention
The Company has established an occupational health and safety hazard identification and risk assessment system. This ensuring the effective implementation of all control measures.system covers the entire workflow of operational activities including production processes hazardous substances equip-
ment and facilities laboratories and offices. The MES quantitative method is employed to evaluate the risks associated with
identified hazards categorizing risks into five levels: Minor Risk General Risk Significant Risk High Risk and Extreme Risk. Occupational Disease Prevention Specific Details
For hazards classified as Extreme Risk the Company implements corresponding measures including the formulation of and Control
management protocols restriction engineering controls training and education on-site supervision and the development The Company has established an Occupational Health Management Leading Group headed by the General
of emergency response plans. These measures are designed to minimize both the frequency of incidents and the severity Management Manager. Members include Deputy General Managers heads of relevant functional departments
of potential harm. Structure full-time/part-time occupational health management personnel and trade union representatives.The Company engages third-party professional occupational health technical service agencies to conduct
Safety Inspection occupational hazard detection evaluation and management. Should any occupational hazard factors exceed Hazard Monitor national standards the Company will investigate the cause implement rectification within a specified
timeframe and arrange for the technical service agency to conduct a re-assessment.Xianhe adheres to the fundamental principle that "Everyone is responsible for safety production." The Company cascades
safety production indicators down to every team and individual employee implementing a system of graded manage- When signing employment contracts the Company fully informs employees of potential occupational disease
ment level-by-level accountability and quantitative breakdown. By refining responsibilities and assessment require- hazards their consequences and the corresponding protective measures and benefits. These details are
ments the Company ensures that safety management standards are effectively implemented on the ground. explicitly stated in the labor contract.We have designated the 16th of each month as "Safety Inspection Day." On this day management personnel conduct Risk Notification Bulletin boards are installed within the facility to publicize Company policies on occupational disease preven-
on-site inspections at the production front line promptly summarizing and rectifying identified issues. Furthermore the tion and to display workplace hazard factors.Company regularly holds safety production analysis meetings to review the status of safety management and the prog- Warning signs mandatory instruction signs warning lines notification cards and Chinese-language warning
ress of hazard rectification thereby promoting continuous improvement. descriptions are placed in prominent locations. All occupational health signage is inspected at least once every six
months. Any sign found to be damaged deformed discolored peeling or faded is promptly repaired or replaced.The Company established an occupational disease hazard accident emergency response team with the general
Emergency manager serving as the team leader and the deputy general manager as the deputy leader. The team members
Response include the office director and heads of various workshops. Regular emergency drills are organized and emergen-
cy response supplies are provided.The Company provides regular occupational health training for employees prior to commencing work and
during their employment. This training ensures employees are aware of workplace hazards and master
Training and relevant policies operating procedures emergency measures correct usage of protective facilities and
Awareness personal protective equipment (PPE) and the meaning of warning signs. Employees are only permitted to work
after passing the relevant assessments.The Company regularly organizes pre-placement periodic and exit occupational health examinations for
Occupational employees engaged in operations involving occupational disease hazards. The results of these examinations
Health Surveillance are communicated in writing to the employees themselves.The Company implements a system of routine inspections and periodic checks. During patrols special
Facility and attention is paid to verifying the integrity and effectiveness of protective facilities; any abnormalities are
Equipment
Management immediately reported for mechanical/electrical repair. The Company conducts specialized inspections of
protective facilities at least once per month to verify their operational status and protective efficacy.Work Safety Monthly MeetingXIANHE CO. LTD 2025 Sustainability Report
Work-related Injury Management Key Performance In 2025
The Company has formulated the "Work-related Injury Management Policy" which provides detailed provisions on the
emergency treatment process medical expense reimbursement work injury benefits and care/escort expenses. This Number of new occupational disease cases Number of Work-Related Fatalities
ensures that employees receive timely treatment and proper arrangements in the event of a work-related injury. Persons Persons
The branch factory or Company's designated driver shall immediately drive the injured
Work-Related employee to the hospital for treatment. For more serious work injuries emergency Number of work-related injury incidents Number of Safety Emergency Drills Conducted
Injury Treatment services (120) shall be contacted directly and the Company shall assist with hospital- Incidents Times
ization or transfer procedures.Medical Expense Medical expenses incurred by the injured employee during the treatment period can be Number of safety accidents Number of OHS Training Sessions Conducted
Reimbursement submitted to the Company for reimbursement with relevant receipts. The Company will Incidents Times
file the claim with the insurance provider on the employee's behalf.The Company provides work-related injury benefits during the treatment period for
Work Injury Benefits Number of Non-Fatal Work-Related Injuries OHS Training Coverage Rate injured employees including work injury wages reimbursement of medical expenses
during the treatment period and disability compensation. Persons
During the period when an injured employee's family member provides care the Com-
Lost Workdays Due to Work Injury Average OHS Training Hours per Employee
Care/Escort pany shall pay care/escort expenses in accordance with the relevant provisions of the
Expenses "Regulations on Work-Related Injury Insurance." If the Company designates an employ- Days Hours/Person
ee to provide care their original wage standard shall apply.Lost Time Injury Frequency Rate (LTIFR) Employee Physical Examination Coverage Rate
Per Million Hours Worked
Safety Education
Employee safety awareness serves as the fundamental safeguard for workplace safety. Guided by this principle Xianhe Total Recordable Injury Rate (TRIR) Work-Related Injury Insurance Expenditure
has established a tiered and categorized safety education system. New hires are required to complete three mandatory Per Million Hours Worked thousand RMB
phases: onboarding safety training general safety education and on-site job-specific training. Monthly safety meetings
are conducted with each subsidiary factory conducting employee safety briefings. Production teams utilize weekly team
meetings for safety education to reinforce workplace vigilance. Additionally the Company organizes annual initiatives
including fire drills confined space operation simulations and safety knowledge competitions to deeply embed safety
awareness into employee consciousness.Production Safety Training Safety Production Promotion Banner Fire DrillXIANHE CO. LTD 2025 Sustainability Report
Xianhe upholds the core value of "Creating Wealth Serving Society" and is Boosting Local Employment
Philanthropy and actively engaged in rural revitalization. While establishing production bases职业发展
across various regions the Company creates employment opportunities for
Henan Xianhe has strategically located production lines that are labor-intensive and require relatively low technical skills
Social Contribution local residents and leverages its business expansion to foster industrial cluster in rural areas establishing village-level workshops to promote local employment. The Company provides residents with
development thereby driving the coordinated progress of upstream and production skills training and offers flexible working arrangements that accommodate individual living situations thereby
downstream industries. Furthermore Xianhe actively participates in charitable effectively meeting the local demand for jobs.and philanthropic activities provides support to disadvantaged groups and
contributes to the construction of a harmonious society.Rural Revitalization 职业Inc发rea展sing Income for Fruit Farmers
Guangxi and Sichuan are rich in fruit resources. Leveraging the
opportunity of its investment and factory construction in these
Driving Regional Development regions Xianhe purchases local fruits in large quantities helping
farmers convert their year-long labor into tangible economic
Xianhe has established two major production bases in Laibin Guangxi and Shishou Hubei fully leveraging the economic returns. In 2025 Xianhe procured a total of approximately RMB 1.5
value of local forestry resources. These initiatives have filled the gap in the specialty paper industry within the region million worth of fruit from local farmers.providing income opportunities and employment for local residents while boosting the development of related supporting
industries. Moving forward the Company will continue advancing the construction of its production base in Hejiang Key Performance In 2025
Sichuan driving rural revitalization through industrial localization and injecting new vitality into regional economies.Total investment in rural revitalization RMB million
Number of beneficiaries in rural revitalization Persons
Case Study Hubei Xianhe New Materials Received "Jingzhou May 1st Labor Award"
Philanthropy and Charity
In April 2025 Hubei Xianhe New Materials
was awarded the "Jingzhou May Day Xianhe Co. Ltd. consistently upholds a strong sense of social
Labor Award" by the Jingzhou Federation responsibility. The Company actively supports public welfare initia-
of Labor Unions for its outstanding contri- tives including student assistance programs elderly care services
butions in fulfilling corporate social teacher appreciation events and the sponsorship of community
responsibility promoting local economic activities sharing the fruits of its development with society at large.development and maintaining harmoni- Furthermore Xianhe organizes blood donation drives for its employ-
ees contributing to the construction of a harmonious society and Employee Blood Donation Activity
ous labor relations. demonstrating the warmth of Xianhe's corporate spirit.Key Performance In 2025
Total Yuan
Guangxi Xianhe Base Supports Employment for Poverty-Relief Households
Xianhe Co. Ltd. Henan Xianhe
In 2025 Guangxi Xianhe New Materials Donation to Elderly Care Charity Yuan College Student Scholarship / Bursary
upgraded its Employment Assistance
Workshop to a Rural Employment Factory Wang Bendao Scholarship Yuan Yuan
while Guangxi Xianhe Energy established
an additional Employment Assistance One-day Charity Donation (Qujiang District
2025 Teachers' Day Appreciation Fund Workshop. To date the Company has Charity Federation) Yuan
provided job opportunities for 146 Yuan
employees from poverty-alleviated Charity Assistance Program (Quzhou Charity
households through its assistance Federation) Yuan
program helping them further stabilize Condolence Payment Yuan
their livelihoods and income sources. 99 Giving Day (The Amity Foundation )
YuanXIANHE CO. LTD 2025 Sustainability Report
r
Governance
Chapte
Pragmatic Implementation
and Solid Foundation Building
Xianhe Co. Ltd. is committed to establishing a standardized
and robust corporate governance system. The Company clear-
ly defines the powers and responsibilities across all organiza-
tional levels to ensure scientific decision-making and effective
oversight. Adhering to lawful and compliant operations the
Company strengthens the development of business ethics and
intensifies risk identification and control across all operational
stages thereby solidifying the foundation for long-term
sustainable development.Corporate Governance
Compliance Management
Business Ethics
Risk ManagementXIANHE CO. LTD 2025 Sustainability Report
Corporate governance serves as the foundation for stable business operations and
Corporate sustainable development of enterprises. Xianhe Group continuously improves its gover- Shareholders' Meeting
nance mechanisms strictly fulfills information disclosure obligations and enhances inves-
Governance tor communication to promote the effectiveness and transparency of governance thereby
strengthening market trust.Securities
Board of Directors
Department
Governance Structure
The Company strictly complies with the Company Law of the People's Republic of China the Securities Law of the People's
Republic of China the Code of Corporate Governance for Listed Companies and other applicable laws regulations and
regulatory requirements. It has established and continuously optimizes its governance structure. During the reporting
period based on practical operational and management needs the Company dissolved the Board of Supervisors and
transferred its duties and authority to the Audit Committee of the Board of Directors. Corresponding revisions were made Remuneration
to the Articles of Association and other key management policies to enhance overall governance efficiency. Strategy and Appraisal Nomination Audit Committee ESG Committee
Committee Committee Committee
The Shareholders' Meeting is the supreme authority of the Company. The Company
convenes shareholders' meetings in accordance with the Rules of Procedure for Sharehold- Internal Audit
ers' Meetings and other relevant provisions. The Shareholders' Meeting exercises its statutory General Manager Department
Shareholders' powers deliberating and passing resolutions on major matters including the appointment
Meeting and removal of directors amendments to the Articles of Association profit distribution
capital changes mergers and divisions and equity incentive plans.Key Performance In 2025
The Board of Directors is the operational decision-making body of the Company. The Total Number of Directors Including: Independent Directors Including: Female Directors
Company convenes board meetings in accordance with the Rules of Procedure for the
Board of Directors and other provisions. Directors diligently fulfill their duties as entrusted Persons Persons Person
by the Shareholders' Meeting playing a guiding and supervisory role in major
decision-making and operational management while safeguarding the legitimate rights
Including：Employee Repre-
and interests of the Company shareholders and other stakeholders. Number of Shareholders' Meetings Number of Board Meetings
Board of sentative Director Person Times Times
The Board of Directors has established five special committees: the Strategy Committee Directors
the Audit Committee the Nomination Committee the Remuneration and Appraisal Com-
mittee and the Sustainable Development (ESG) Committee. Each committee performs its
duties in accordance with its respective working rules. Meetings of Board Audit Meetings of Board Strategy Meetings of Board Nomination
Committee Times Committee Times Committee Times
Senior Management is the executive body of the Company appointed by the Board of Direc-
tors and accountable to the Board. In accordance with the corporate governance policies Meetings of Board Remuneration and Appraisal Meetings of Board Sustainability (ESG) Committee
and the authority delegated by the Board Senior Management is responsible for executing
Senior resolutions and organizing the implementation of the Company's daily production opera- Committee Times Times
Management tions and business activities.XIANHE CO. LTD 2025 Sustainability Report
Investor Communication Xianhe Co. Ltd. consistently adheres to the principles of integrity and law-abiding oper-
Compliance ation. By strengthening institutional frameworks standardizing procedures and
In compliance with applicable laws regulations normative documents and the Company's Articles of Association we enhancing oversight the Company continuously improves its compliance and internal
have established and implemented the Investor Relations Management Measures. Guided by the principles of transpar- Management control systems intellectual property protection and information security manage-
ency fairness and impartiality we have built a stable and trustworthy communication framework. Through performance ment. These efforts solidify the foundation for compliant operations and provide a
briefings timely financial disclosures and investor research engagements we actively maintain constructive engagement robust safeguard for the Company's high-quality development.with the market. Additionally leveraging platforms such as the Shanghai Stock Exchange e-Interaction platform dedicat-
ed hotlines and email channels we enhance communication with existing and potential investors effectively deepening
their understanding and recognition of our Company. Compliance Management System
In accordance with the requirements of policies such as the Internal Audit Management Policy and the Internal Accounting
Control Regulations the Company has established a management process encompassing prevention review and reme-
Key Performance In 2025 diation. The Company strengthens the execution of internal controls to comprehensively enhance its compliance man-
agement standards.Performance Briefings Investor Questions Answered on Interactive Response Rate on Interactive
Held Times Platform Times Platform
Internal Control Management Process
Prevention Stage Audit & Review StageAnnouncements on Institutional Investor Total Announcements Disclosed on Designated Remediation Stage
Research Announcements Channels Announcements
Develop and continuously improve internal Conduct annual internal The Board of Directors and
policies and regulatory documentation. audits utilizing a cross-de- Senior Management
Leverage OA (Office Automation) and ERP partmental review model. receive audit reports and
(Enterprise Resource Planning) systems to provide directive guidance
standardize processes and enable risk early Engage qualified third-par-
warning thereby enhancing internal control for corrective actions.Information Disclosure ty professional firms to efficiency. perform external audits. Coordinate relevant
The Company has established the "Information Disclosure Management Measures" to create standardized disclosure Foster a culture of compliance and conduct internal departments and
employee training programs. Carry out annual retro-
procedures adhering to the fundamental principles of "timeliness fairness truthfulness accuracy and completeness" business units to ensure the
while strictly fulfilling its disclosure obligations. Directors and senior executives assume responsibility for the accuracy of Guide supervise and periodically review the
spective reviews of key
timely implementation of
institutional development and policy construc- special projects and
disclosed information ensuring clear and objective statements free from false records misleading statements or material tion of all subsidiary plants and departments. remediation requirements.activities.omissions thereby guaranteeing all investors' access to comprehensive and timely information. Promote standardized operations at subsidiaries
through monthly on-site compliance reviews.Investor Site Visits and Research Activities Investor Site Visits and Research ActivitiesXIANHE CO. LTD 2025 Sustainability Report
Key Performance In 2025 Intellectual Property Management
The Company adheres to the core principle of "Innovative Development IP Protection and Competitiveness Enhancement."
Number of Compliance-oriented Total Participants in Compliance Compliance Training Coverage While comprehensively safeguarding its own proprietary innovations the Company fully respects the intellectual property
Training Sessions Times Training Person-times Rate rights of others and is committed to maintaining a sound and orderly industry environment. We strictly comply with the
Intellectual Property Protection Law of the People's Republic of China and other relevant laws and regulations. The Compa-
ny has established a robust framework of internal policies including the General IP Management Guidelines Patent
Management Policy Trademark Management Policy Software Copyright Management Policy and IP Reward and Disci-
Total Hours of Compliance Training Number of Internal Audits Conducted Times plinary Policy. These policies clearly define management responsibilities at all levels and standardize the procedures for
the application maintenance and utilization of various types of intellectual property thereby ensuring the effective man-Hours
agement of innovative achievements. Furthermore the Company regularly conducts specialized IP training programs to
help employees understand relevant knowledge and management requirements thereby strengthening awareness of IP
protection and enhancing practical capabilities.Management Architecture
General Manager
The Chief Intellectual Property Officer is responsible for formulating intellec-
tual property policies objectives and related strategies as well as regularly
conducting evaluations to assess the effectiveness of the review system.Intellectual Property Department
Undertake the primary responsibilities Other Functional Departments
for intellectual property management The executive body for intellectu-
including formulating the Company's al property work collaborates to
intellectual property objectives and accomplish tasks related to the
implementation plans as well as moni- acquisition maintenance utiliza-
toring evaluating and assessing the
Compliance Training tion and protection of intellectual achievement of these objectives by property rights.various functional departments.Key Performance In 2025
Participants in IP Protection Training Average IP Training Hours per Person
Person-times Hours
Completed the filing and update of patent-intensive products
Awarded the titles of "National Intellectual Property Advantage Enterprise" "Third Prize of Zhejiang Provin-
cial Intellectual Property Patent Award" and "Second Batch of Zhejiang Provincial Intellectual Property
Demonstration Enterprise"
Sales and Procurement OEX TrainingXIANHE CO. LTD 2025 Sustainability Report
Information Security Management Key Performance In 2025
The Company strictly complies with the requirements of laws and
The Company has obtained multiple
regulations including the Cybersecurity Law of the People's Republic of
authoritative system certifications:
China and the Data Security Law of the People's Republic of China and
has formulated the Information Management Policy. By enhancing the ISO/IEC 27001 Information Security
management structure strengthening technical safeguards and Management System Certification
implementing emergency management measures the Company
ISO/IEC 20000-1 Information Technology
ensures that information security requirements are integrated into
Service Management System Certification
business operations data management and daily office activities
thereby safeguarding the stable operation of information systems and Data Management Capability Maturity
the security of data assets. During the reporting period the Company (Party A) Level 2 Certification
experienced no data security incidents.Information Security Management Architecture
Decision- Data Security Formulates the Company's data security strategy and policies and
Making Strategy Steering deliberates on major security decisions. Chaired by the Group General
Manager it comprises regional heads and executives in charge of
Level Committee information technology.Manage- Data Security Coordinates the development of security management policies and
procedures. Organizes the implementation of data classification and
ment Management grading risk assessments and security project construction. Led by
Level Center regional IT heads.Implements security measures in daily operations and provides timely
Execution Business Unit Data feedback on departmental security status. Standardizes the anomaly
Level Security Liaison reporting process via the OA system ensuring issues are promptly routed
Group to the IT departments of respective sites for resolution.Internal Audit and Conducts regular audits of the data security governance system's oper-
Risk Management ation examining the execution of data security policies processes and
Department technical measures.Oversight
Level
Continuously monitors domestic and international data security laws
Compliance and regulations and industry regulatory trends. Provides timely interpretation
Legal Department and drives the translation of external compliance requirements into
internal corporate management standards.Intellectual Property TrainingXIANHE CO. LTD 2025 Sustainability Report
Information Security Technology Safeguards Information Security Emergency Response Mechanism
Data Security To effectively address sudden information security incidents and enhance emergency response capabilities the Compa-
ny has established the "Data Center Information System Emergency Response Plan". The plan defines the organizational
Data Encryption: Sensitive data is stored using hybrid encryption algorithms. A centralized key management structure and responsibilities of the emergency leadership team while standardizing response procedures and recovery
platform has been established to strictly control the full lifecycle of keys including generation storage distribution measures for various event types including natural disasters equipment failures and cyberattacks. These measures
renewal and destruction. ensure the secure and stable operation of critical systems minimizing the negative impact on business continuity and
Transmission Encryption: Content transmitted over networks is encrypted using SSL/TLS protocols to ensure the information assets caused by unexpected incidents.confidentiality and integrity of data in transit.Access Control Attack and Defense Drill
Identity Authentication: A multi-factor authentication (MFA) platform has been deployed supporting passwords
dynamic verification codes and biometric identification. Critical systems utilize "Password + Hardware Token" The Company actively participates in cybersecurity attack and defense drills organized by government cybersecurity
two-factor authentication. authorities. These exercises are designed to test the effectiveness of the existing protection infrastructure. Based on the
feedback reports generated from these drills the Company systematically investigates potential risks and vulnerabilities
Authorization Management: An information security accountability system is implemented applying the continuously optimizes its information security systems and enhances its proactive defense capabilities to ensure the
Role-Based Access Control (RBAC) model. Permissions are precisely allocated based on job responsibilities and long-term security and stable operation of its information systems.user operational behavior is logged in detail and monitored in real-time.Network Isolation: A strict internal/external network segregation strategy is enforced. The internal network access-
es the external network via NAT (Network Address Translation) while external access to internal resources requires Key Performance In 2025
passage through specific authorized gateways.Information Security Training Coverage Rate
Business Continuity
Total Hours of Information Security Training hours
Multiple Backups: Primary systems operate on a dual-replica mechanism with off-site offline backups enhancing
system stability and data reliability.Load Balancing: Real-time dynamic load balancing mechanisms prevent single-point server overload and ensure
sustained stable system operation.Data Recovery: Daily independent off-site backups are performed with hourly backups for certain critical databas-
es. A rapid restoration mechanism is established to mitigate the impact of emergencies on business operations.Operation Monitoring
Comprehensive Monitoring: Security probes are deployed at network perimeters server clusters and key business
nodes to establish a full-coverage security monitoring system. All business systems retain searchable operation
and access logs which can be used for cross-verification incident reconstruction and root cause analysis in the
event of anomalies.Intelligent Early Warning: Big data and AI technologies are leveraged to analyze monitoring data in real-time
swiftly identifying security threats such as data breaches malicious attacks and abnormal traffic. Early warning
notifications are sent to the Security Operations Team for immediate response.Security Detection
Active Scanning: Perimeter firewall appliances possess vulnerability analysis and scanning capabilities to identify
potential security risks and configuration weaknesses providing a basis for continuous improvement.Anomaly Reporting: A dedicated process for reporting software and hardware anomalies has been established
within the OA system. Employees can report incidents vulnerabilities or suspicious activities which are then routed
to the IT departments of respective sites for handling.Compliance Checks: The Company cooperates with government agencies in conducting monthly cybersecurity
inspections undergoes security reviews and technical assessments and implements rectification measures based
on inspection findings.XIANHE CO. LTD 2025 Sustainability Report
The Company upholds the core principle of "Building an Incorruptible Xianhe with the The Company conducts regular identification and assessment of business ethics risks across all departments and
Highest Professional Integrity." We resolutely resist corruption bribery unfair competition business units applying tiered management measures accordingly. Furthermore the Company has established a routine
Business and other conduct that violates business ethics. Through institutional development tiered anti-corruption self-inspection mechanism conducting periodic internal audits and cross-departmental reviews of key
Ethics risk control and cultural advocacy we integrate integrity requirements into every aspect operational areas such as procurement sales and finance. Any issues identified are subject to immediate rectification of our operations and decision-making processes. To safeguard the rights and interests of thereby reinforcing the defense against integrity risks.employees and external stakeholders the Company has established a whistleblowing
mechanism and maintains open supervisory channels thereby promoting a fair and Strengthen Aware-
transparent business environment. ness of Primary The Chairman signed and issued the "Integrity Declara-
Responsibility tion" which was posted in key areas of the Company.Key Performance The "Twenty Positive and Negative Lists for a New Type of
Highlight Manage- Close and Clean Government-Business Relationship"
During the reporting period the Company recorded zero incidents of commercial bribery embezzlement unfair ment's Demonstra- were issued and "Integrity Commitment Letters" were
competition conflicts of interest money laundering or insider trading. The Company was not subject to any tive Role signed with officials at all levels.related litigation or significant administrative penalties.Enhance Internal
Restraint Mecha- Integrate integrity performance into annual employee
nisms evaluations and directly link it to individual interests.Anti-Commercial Bribery and Anti-Corruption
The Company places the utmost importance on anti-commercial bribery and anti-corruption efforts. To this end we have All employees sign the Integrity and Self-Discipline
established a comprehensive policy framework and management structure clearly defined responsible departments and Acknowledgment. Regular integrity reminders are issued
oversight mechanisms and ensured the effective implementation of all management measures. Elevate Com- to reinforce disciplinary consciousness. Integrity policies
Low Risk pany-Wide are incorporated into new hire orientation programs
Integrity along with the provision of an "Integrity Toolkit." The Com-
Bribery and corruption prevention and Awareness pany periodically organizes Company-wide educational
control measures
Code of Business Ethics activities such as "Quarter-Hour Integrity Sessions" and
Gift and entertainment management "Incorruptible Xianhe Education Week."
Integrity Management Policy regulations
institu- Prohibition of political contributions Established an "Integrity Culture Bulletin Board" and
Integrity Prevention and Cover Cultivate a developed the "Five-Ones" Integrity Main Front—compris-
Control Policy tional content
system Regulation of charitable donations
Clean Working ing the Heart Purity Bar Gentle Breeze Pavilion Integrity
and sponsorships Environment Wall Integrity Corridor and Integrity Training Room—to
Integrity Supervision Policy foster a positive and ethical corporate atmosphere.Company-wide anti-bribery training
Anti-Corruption and Gift
Management Policy Procedures for handling violations and Building an Integrate integrity-related clauses into agreements and
disciplinary action mechanisms Integrity Chain contracts with suppliers and clients and implement
Across the measures such as on-site visits and background checks
Supply Chain to promote compliance with integrity requirements
across the supply chain.Deci-
sion-mak- Execution Oversight
ing Level Level Level
Strengthen Conducts regular supervisory inspections of medium-risk
Medium Supervision and departments and business activities. Identifies risk points
Risk Inspection in conjunction with business process reviews and audits
Board of Directors Risk Management Committee Internal Audit Department critical control nodes.Formulates integrity policies Develops specific anti-bribery Regularly audits the effectiveness of Implements continuous monitoring and comprehensive
and oversees their implemen- and anti-corruption procedures integrity policy implementation identifies Continuous Moni- auditing for high-risk business operations. Utilizes trace-
tation; deliberates and decides conducts routine monitoring and management gaps and proposes High Risk toring and Com- able business records and stringent oversight to ensure
on major compliance violations. drives policy implementation. improvement recommendations. prehensive Auditing process transparency and prevent misconduct.XIANHE CO. LTD 2025 Sustainability Report
Xianhe fully recognizes that risk management is not only a critical safeguard for enter-
Risk prises to address external challenges but also a key support for seizing development opportunities and achieving strategic objectives. By integrating our own circumstanc-
Management es we continuously monitor internal and external risk factors promptly identify poten-
tial risks and implement effective countermeasures to enhance organizational
resilience and sustainable development capabilities.Risk Management System
The Company has established a risk management framework consisting of "Board of Directors-Risk Management Com-
mittee-Audit Department" adopting a combination of integrated planning and hierarchical control. The Board of Directors
is responsible for strategic oversight and decision-making the Risk Management Committee coordinates risk assessment
Integrity Corridor and response while the Audit Department drives the implementation and optimization of measures to enhance overall risk
management effectiveness.The Company has established and implemented the "Risk and Opportunity Response Control Procedures" which outlines
Furthermore the Company regularly conducts specialized anti-commercial bribery and anti-corruption training for all detailed management processes for risk identification assessment response and monitoring while providing clear
employees and personnel in key positions. This training covers policy interpretation typical case warnings and compliance implementation standards for risk avoidance mitigation transfer and acceptance. Moving forward building on its existing
operation guidelines. Combined with integrity culture promotional activities these efforts continuously strengthen the aware- risk management framework covering operational compliance financial and legal aspects the Company will further
ness of clean practice among all employees and reinforce the ideological defense against corruption and misconduct. integrate ESG factors into its risk management system. This approach ensures stable operations while fully leveraging
development opportunities.Anti-Unfair Competition
We strengthen internal controls based on institutional norms supplemented by process audits and compliance training to Risk Identification and Response
effectively prevent unfair competition practices. The Company conducts regular compliance inspections across all
business lines to promptly identify potential risks and implement corresponding rectification measures. In conjunction with Financial Risk
anti-commercial bribery training arrangements the Company promotes awareness of anti-unfair competition require-
ments to ensure that every employee is familiar with and complies with relevant regulations. The Company has established the "Financial Risk Control Management System" which is regularly evaluated by
a dedicated risk management department based on principles such as comprehensiveness materiality checks
Reporting and Whistleblower Protection and balances adaptability and cost-effectiveness. Additionally the department has implemented a financial risk management early warning system to ensure the stability of the Company's financial operations through
The Company adheres to a zero-tolerance principle regarding violations of business ethics and implements a mechanism timely risk prevention and mitigation.whereby all reports are investigated and all substantiated violations are sanctioned. The Company provides employees
with a reporting system accessible via the OA platform and encourages upstream and downstream business partners to
report potential misconduct thereby collectively safeguarding a fair and just business environment. During investigations Legal Risk
the Company strictly maintains the confidentiality of the whistleblower's identity and the details of the reported incident. The Company's full-time legal staff are responsible for managing legal risks by conducting compliance audits
Whistleblowers may also choose to submit reports anonymously. issuing risk assessment reports and providing professional references for decision-making to mitigate legal risks.For violations substantiated through investigation the Com- They regularly organize training sessions on contract law and risk control for sales personnel to enhance legal risk
pany will pursue accountability in accordance with the law awareness across relevant departments.and impose disciplinary measures - including termination Key Performance In 2025
of employment - based on the severity of the misconduct.Employee Integrity Agreement Signing Rate ESG-Relevant Risk
To protect the rights and interests of whistleblowers the
Company strictly prohibits any form of retaliation in accor- Supplier Integrity Agreement/Clause Coverage Rate The Company established a dedicated Sustainability (ESG) Committee to systematically identify assess and
dance with the Code of Business Ethics. Violators will be held Customer Integrity Agreement/Clause Coverage Rate manage ESG-related risks ensuring the effective implementation of sustainable development strategies. Lever-
accountable along with their supervising managers. In aging a comprehensive ESG governance framework the Company formulated clear management policies
cases where there is a genuine and severe threat to a Total Anti-corruption Training Sessions times optimized workflows strengthened accountability and continuously enhanced ESG management capabilities
whistleblower's rights and interests the matter will be Employee Coverage Rate for Anti-bribery Training through internal audits.referred to judicial authorities for legal action. Additionally The Company regularly conducts ESG training programs to enhance sustainability awareness among employees
the Company requires all employees to sign an acknowl- Management Coverage Rate for Anti-bribery Training and management fostering a deep integration of corporate culture with ESG principles.edgment and commitment letter to ensure they fully under- Board Coverage Rate for Anti-bribery Training The Company actively maintains communication with stakeholders incorporates best industry practices and
stand the reporting mechanism and the non-retaliation continuously optimizes its governance model to drive long-term growth through responsible operations.policy thereby further facilitating open reporting channels.XIANHE CO. LTD 2025 Sustainability Report
Key Performance Table Indicator Unit 2025
Climate Change Response
Scope 1 GHG Emissions tCO2e 1695184.46
Environmental Performance
Scope 1 GHG Emissions Intensity tCO2e/t of paper 0.70
Indicator Unit 2025 Scope 2 GHG Emissions tCO2e 820117.03
Water Resource Utilization Scope 2 GHG Emissions Intensity tCO2e/t of paper 0.34
Total Water Withdrawal t 49237258.65 Total Scope 1 and 2 GHG Emissions tCO2e 2515301.49
Comprehensive Water Consumption per Unit Product m3 / t of paper 20.22 Environmental Compliance Management
Comprehensive Water Consumption per Unit Revenue t/RMB 10000 39.89 Waste Water Waste Gas and Solid Waste Emission %
Compliance Rate 100
Total Volume of Water Recycling and Reuse t 1613012593.37 Environmental Pollution Incidents cases 0
Water Recycling and Reuse Rate % 98.28 Environmental Penalties (Events and Amounts) due to 0
Exceeding Standards or Illegal Discharge CNY
Energy Utilization
Number of Emergency Drills for Environmental Incidents times 2
Natural Gas Consumption m3 38536569.34
Coverage Rate of Personnel in Environmental Emer- %
Coal Consumption t 639243.78 gency Drills
90
Steam Consumption t 7955279.22 Number of Environmental Protection and Compliance times
Training Sessions 12
Purchased Electricity kWh 987627989.85 Coverage Rate of Environmental Protection and %
Compliance Training 100
Electricity Self-sufficiency Rate % 49.50
Total Duration of Environmental Protection and hours 4616
Renewable Energy Consumption kWh 75513975.40 Compliance Training
Proportion of Renewable Energy Use % 3.59
Total Direct Energy Consumption tce 499002.06
Social Performance
Total Indirect Energy Consumption tce 371337.85
Clean Energy Consumption tce 21370.46 Indicator Unit 2025
Comprehensive Energy Consumption tce 870339.91 Employee Composition
Comprehensive Energy Consumption Intensity per
Unit of Product tce / t of paper 0.36 Total Number of Employees persons 7071
Comprehensive Energy Consumption Intensity per
Unit of Revenue tce / RMB 10000 0.71
Including: Ethnic Minority Employees persons 1205
Waste Disposal Percentage of Local Employees % approx. 70
Hazardous Waste t 71.73 By Gender
General Waste t 340963.54 Male Employees persons 5530
Note 1: The data on general and hazardous waste covers all companies included in the list of enterprises required by law to disclose environ-
mental information including Xianhe Co. Ltd. Hegang Environmental Protection Zhefeng New Energy Zhefeng Energy Zhefeng Environmental Female Employees persons 1541
Protection Henan Xianhe Hubei Xianhe New Materials and Hubei Xianhe Energy.Note 2: In the calculation of greenhouse gas emissions emission factors for natural gas coal and steam are sourced from the Guidelines for By Age Group
Accounting and Reporting of Greenhouse Gas Emissions for Pulp and Paper Enterprises (Trial). The emission factor for electricity is based on
the 2023 Announcement on CO2 Emission Factors for Electricity by the Ministry of Ecology and Environment and the National Bureau of Under 25 years old persons 1069
Statistics (Announcement No. 47 of 2025).XIANHE CO. LTD 2025 Sustainability Report
Social Performance Social Performance
Indicator Unit 2025 Indicator Unit 2025
25 to 55 years old persons 5726 Occupational Health and Safety
Over 55 years of age persons 276 Number of New Occupational Disease Cases persons 0
By Education Level Number of Work-Related Injury Incidents incidents 0
Master's Degree persons 4 Number of Safety Accidents incidents 0
Bachelor's Degree persons 417 Number of Non-Fatal Work-Related Injuries persons 0
Associate Degree persons 1568 Lost Workdays Due to Work Injury days 0
Secondary vocational school and high school persons 3048 Lost Time Injury Frequency Rate (LTIFR) per million hours worked 0
Middle School and Below persons 2034 Total Recordable Injury Rate (TRIR) per million hours worked 0
By Function
Number of Work-Related Fatalities persons 0
Production Staff persons 5926
Number of safety emergency drills conducted times 2
Sales Staff persons 102
Number of OHS Training Sessions Conducted times 12
Technical Staff persons 635
OHS Training Coverage Rate % 99
Financial Staff persons 28
Average OHS Training Hours per Employee hours/person 1.5
Administrative Staff persons 111
Employee Physical Examination Coverage Rate % 100
Procurement Staff persons 53
Work-Related Injury Insurance Expenditure RMB 10000 220.12
Others persons 216
Innovation-Driven Development
Employee Training and Development
R&D Investment RMB 10000 17551.61
Number of Training Sessions times 621
Employee Training Coverage Rate % R&D Investment as a Percentage of Main Business Revenue % 1.48100
Total Training Hours hours Percentage of R&D Personnel % 8.981269480
Total Training Expenditure CNY New Utility Model Patents patents 171374418.12
Employee Rights Protection New Invention Patents patents 3
Employee Labor Contract Signing Rate % 100 Accumulated Utility Model Patents patents 135
Employee Union Membership Rate % 100 Accumulated Invention Patents patents 54
Collective Contract Coverage Rate % 100 Product and Service Quality and Safety
Incidents of Discrimination or Harassment cases 0 Total Quality Training Hours hours 35728
Employee Welfare and Care Product Qualification Rate % 99.46
Number of Assisted Employees in Difficulty persons 36 Product Recall Incidents cases 0
Total Investment in Assisting Employees in Difficulty CNY 72000 Major Safety & Quality Liability Accidents cases 0XIANHE CO. LTD 2025 Sustainability Report
Social Performance Social Performance
Indicator Unit 2025 Indicator Unit 2025
Customer Service Social Contribution
Number of Customer Satisfaction Surveys Distributed copies 115 External Public Welfare Donations RMB 10000 148.50
Number of Valid Customer Satisfaction Surveys Returned copies 92 Rural Revitalization
Average Customer Satisfaction Score points 92.59 Total Investment in Rural Revitalization RMB 10000 1282.46
Customer Complaint Handling Rate % 100 Number of Beneficiaries in Rural Revitalization persons 439
Average Complaint Handling Time days 2
Number of Responsible Marketing Training Sessions times 30
Total Participants in Responsible Marketing Training person-times 1800 Corporate Governance
Coverage Rate of Relevant Personnel in Responsible Marketing Training % 100 Indicator Unit 2025
Average Responsible Marketing Training Hours per Person hours/person 2.5 Corporate Governance
Number of Customer-oriented Training Sessions times 30 Total Number of Directors persons 9
Total Customer-oriented Training Hours hours 150
Including: Independent Directors persons 3
Supplier Management
Including: Female Directors persons 1
Number of Wood Pulp Suppliers in Mainland China suppliers 4
Number of Shareholders' Meetings times 5
Number of Wood Pulp Suppliers Outside Mainland China suppliers 15
Number of Board Meetings times 9
Percentage of Wood Pulp Suppliers with FSC/PEFC Certifications % 100
Meetings of Board Sustainability (ESG) Committee times 1
Number of Suppliers with Quality Management System Certification suppliers 26
Meetings of Board Strategy Committee times 3
Number of Suppliers with Environmental Management System Certification suppliers 20
Meetings of Board Nomination Committee times 4
Number of Suppliers with OHS Management System Certification suppliers 10
Meetings of Board Remuneration & Appraisal Committee times 1
Number of Suppliers with Other Sustainability-related Recognitions suppliers 2
Total Suppliers Audited (Written or On-site) suppliers 25 Meetings of Board Audit Committee times 4
Percentage of Key Suppliers Covered by Audits % 100 Performance Briefings Held times 3
Number of Suppliers Assessed as Having Significant Actual/Potential suppliers 0 Investor Questions Answered on Interactive Platform times 54Negative Impacts
Number of Suppliers Signed with ESG Clauses suppliers 6 Response Rate on Interactive Platform % 100
Number of Internal Procurement Training Sessions times 10 Announcements on Institutional Investor Research announcements 1
Coverage Rate of Internal Procurement Training % 100 Total Announcements Disclosed on Designated Channels announcements 144XIANHE CO. LTD 2025 Sustainability Report
Corporate Governance Index of Indicators
Indicator Unit 2025
Compliance Management Shanghai Stock Exchange Self
Report Regulatory Guidelines for Listed
Number of Compliance-oriented Training Sessions times 380 Framework GRI Standards Companies No. 14- Sustainable
Development Report (Trial)
Total Participants in Compliance Training person-times 4224
Report Introduction
Compliance Training Coverage Rate % 98.99
GRI 2-2：Entities included in the organization’s sustainability reporting
About the Article 4
Total Hours of Compliance Training hours 8760 Report Article 6GRI 2-3：Reporting period frequency and contact point
Number of Internal Audits Conducted times 12 Chairman's GRI 2-22 Statement on sustainable development strategy
Speech
Intellectual Property Protection GRI 2-1：Organizational details
About Us
Participants in IP Protection Training person-times 2261 GRI 2-6：Activities value chain and other business relationships
Average IP Training Hours per Person hours 1.77 GRI 2-12：Role of the highest governance body in overseeing the
management of impacts
Updated Filings for Patent-intensive Products Items 7 GRI 2-13：Delegation of responsibility for managing impacts
Information Security Protection GRI 2-14：Role of the highest governance body in sustainability reporting
Article 5
Information Security Training Coverage Rate % 100 GRI 2-22：Statement on sustainable development strategy Article 9
Sustainability
Total Hours of Information Security Training hours 59.5 Management GRI 2-29：Approach to stakeholder engagement
Article 12
Article 13
GRI 3-1：Process to determine material topics
Business Ethics
GRI 3-2：List of material topics
Incidents of Bribery Corruption Unfair Competition Conflict of
cases 0
Interest Money Laundering and Insider Trading GRI 3-3：Management of material topics
Environment Section: Green and Low-carbon Circular Development
Violations Involving Litigation or Significant Administrative Penalties cases 0
Environmental GRI 2-25：Processes to remediate negative impacts
Employee Integrity Agreement Signing Rate % 100 Article 33Management
GRI 2-27：Compliance with laws and regulations
Supplier Integrity Agreement/Clause Coverage Rate % 100
GRI 302-1：Energy consumption within the organization Article 12
Customer Integrity Agreement/Clause Coverage Rate % 100 Article 22
GRI 302-2：Energy consumption outside of the organization
Article 23
Total Anti-corruption Training Sessions times 50 GRI 302-3：Energy intensity Article 24
Climate Action
Employee Coverage Rate for Anti-bribery Training % 84.26 GRI 302-4：Reduction of energy consumption Article 25
Article 27
Management Coverage Rate for Anti-bribery Training % 100 GRI 305-1：Direct (Scope 1) GHG emissions Article 28
Board Coverage Rate for Anti-bribery Training % 100 GRI 305-2：Energy indirect (Scope 2) GHG emissions Article 38XIANHE CO. LTD 2025 Sustainability Report
Shanghai Stock Exchange Self Shanghai Stock Exchange Self
Report Regulatory Guidelines for Listed Report Regulatory Guidelines for Listed
Framework GRI Standards Companies No. 14- Sustainable Framework GRI Standards Companies No. 14- Sustainable
Development Report (Trial) Development Report (Trial)
GRI 305-3：Other indirect (Scope 3) GHG emissions GRI 308-1：New suppliers that were screened using environmental criteria
Climate Action
GRI 305-4：GHG emissions intensity GRI 308-2：Negative environmental impacts in the supply chain and
Article 37
Connecting to actions taken
a Green Future Article 45
GRI 303-1：Interactions with water as a shared resource
Water GRI 414-1：New suppliers that were screened using social criteria Article 46
Resources GRI 303-2：Management of water discharge-related impacts Article 36 GRI 414-2：Negative social impacts in the supply chain and actions taken
Management
GRI 303-5:Water consumption Supporting Industry
Development Article 42
GRI 303-4：Water discharge
Partnership Section: People-oriented and Shared Prosperity
GRI 305-7：Nitrogen oxides (NOx) sulfur oxides (SOx) and other
significant air emissions GRI 2-7：Employees
GRI 306-1：Waste generation and waste-related impacts GRI 2-23：Policy commitments
Pollution GRI 306-2：Management of waste-related impacts Article 29 GRI 2-30：Collective bargaining agreements
Control
Article 30 Article 49
GRI 306-3：Waste generated Employee GRI 401-1：New employee hires and employee turnover
Article 31 Benefits and Article 22
GRI 306-4：Waste diverted from disposal Welfare GRI 401-2：Benefits provided to full-time employees that are not provided
to temporary or part-time employees
GRI 306-5：Waste directed to disposal GRI 405-1：Diversity of governance bodies and employees
Resource
Article 37 GRI 406-1：Incidents of discrimination and corrective actions taken
Circularity
GRI 101-2：Management of biodiversity impacts GRI 404-1：Average hours of training per year per employee
Ecological Employee GRI 404-2：Programs for upgrading employee skills and transition
Protection GRI 101-4：Identification of biodiversity impacts
Article 32 Growth and assistance programs Article 49
Development
GRI 101-5：Locations with biodiversity impacts GRI 404-3：Percentage of employees receiving regular perfor-
mance and career development reviews
Product Section: Quality First Win-Win Cooperation
GRI 403-1：Occupational health and safety management system
Commitment to
Innovation-Driven Article 42 GRI 403-2：Hazard identification risk assessment and incident
Development investigation
GRI 416-1：Assessment of the health and safety impacts of product Employee GRI 403-3：Occupational health services
and service categories Health and
Safety GRI 403-5：Worker training on occupational health and safety Article 50
Strict Quality GRI 416-2：Incidents of non-compliance concerning the health and Article 47
Control safety impacts of products and services GRI 403-6：Promotion of worker health
GRI 417-1：Requirements for product and service information and
labeling GRI 403-7：Prevention and mitigation of occupational health and safety
impacts directly linked by business relationships
Provision of High-
Quality Services Article 47 Article 48 GRI 403-8：Workers covered by an occupational health and safety
management systemXIANHE CO. LTD 2025 Sustainability Report
Shanghai Stock Exchange Self
Report Regulatory Guidelines for Listed
Framework GRI Standards Companies No. 14- Sustainable
Development Report (Trial)
Employee GRI 403-9：Work-related injuries
Health and Feedback Form
Safety GRI 403-10：Work-related ill health
Philanthropy and GRI 203-2：Significant indirect economic impacts Article 39 Article 40
Social Contribution
Governance Chapter: Pragmatic Implementation and Solid Foundation Building Thank you for reading the "Xianhe Co. Ltd. 2025 Sustainability Report". To provide more
GRI 2-9：Governance structure and composition valuable information to you and other stakeholders and to enhance our Company's
sustainability management capabilities and future ESG disclosure quality we sincerely
GRI 2-11：Chair of the highest governance body welcome your feedback and suggestions on the report.Corporate
GRI 2-14：Role of the highest governance body in sustainability reporting
Governance
GRI 2-16：Communication of critical concerns
GRI 405-1：Diversity of governance bodies and employees
Compliance
Article 48
Management
GRI 205-1：Operations assessed for risks related to corruption
GRI 205-2：Communication and training about anti-corruption policies
Article 55
Business Ethics and procedures
Article 56
GRI 205-3：Confirmed incidents of corruption and actions taken
GRI 206-1：Legal actions for anti-competitive behavior antitrust
and monopoly practices
Risk
Management
Party Building
Leadership Article 2 Scan
Fill Out The Reader Feedback Form
Appendix
Key Performance
Article 6
Table
Index of Article 57
Indicators
Feedback Form
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