Environmental Social and Governance

Hangzhou Hua Guang Advanced Welding Materials Corporation Limited

No.8 Fengyun Road Yuhang Economic Development Zone Yuhang District Hangzhou Zhejiang China 2025 (ESG) Report

No.82 Qihang Road Renhe Street Yuhang District Hangzhou Zhejiang China

Sale’s Office：(+86)571-88779191 / 88777528 Hangzhou Hua Guang Advanced Welding Materials Co. Ltd.Company Official Wechat AccountHUA

GUANG

ADVANCING INDUSTRIAL CONNECTIVITY AND

BUILDING A SHARED VALUE

CREATION ACROSS INDUSTRIAL CHAIN01 Deepening Environmental Performance Report 63About This Report 03 Management 17 Economic Performance 63

Reporting Scope 03 Strictly Upholding the Compliance 19 Environmental Performance 63

Baseline

Preparation Principles 03 Social Performance 65

Addressing Climate Change 20

Data Statement 03 Governance Performance 69

Improving Resource Efficiency 23

Access to the Report 03

Controlling Pollutant Emissions 24

Feedback 03

Promoting Circular Development 26

Chairwoman 04 Protecting Biodiversity 28

Shanghai Stock Exchange

About Hua Guang 05 02 Fulfilling Social Self-Regulatory Guidelines Responsibility 29 No. 14 for Listed Company Profile 05 Companies — Sustainability Report (Trial) Index 70

Company Culture 05 Safeguarding Occupational Health 31

Honors and Recognition 06 Empowering Employee Development 37

Continuing to Contribute to Society 43 Global Reporting Initiative (GRI Standards 2021) 71

Advancing Sustainable Upholding the Quality Assurance Line 46

Development 07 Customer Service and Information 48

Security

ESG Development Policy 07 Building a Balanced Supply Ecosystem 50

ESG Governance System 08

Materiality Analysis 09

Improving Corporate

Stakeholder Engagement and Due Diligence 10 03 Governance 53

Special Topic Three Decades of Technological Advancing the Governance System 55

Innovation Intelligent Upholding Integrity 58

Manufacturing for the Future 11 Strengthening Internal Control and 60

Compliance

Thirty Years of Technological Innovation 11

Paint the future with Steady Development Improving Risk Management 62

Strengthening the Foundation Through R&D 13

System Development

Technological Breakthroughs and Intelligent 15

Manufacturing Upgrades

TABLE OF CONTENTAbout This Report Chairwoman

Hangzhou Hua Guang Advanced Welding Materials Co. Ltd.(hereinafter referred to as“Hua Guang” the“Company” or“we”) has On behalf of the Board of Directors of Hua Guang Advanced Welding Materials Co. Ltd. I

published annual Social Responsibility / Environmental Social and Governance (ESG) reports since 2018. The purpose is to integrate would like to extend my sincere gratitude to all stakeholders for your long-standing atten-

sustainable development into corporate governance and present ESG practices and performance to stakeholders. tion to and support for the Company’s development and its sustainable development

endeavors.At present the global manufacturing industry is accelerating its transformation toward low-carbon and intelligent development. Guided by

the philosophy of“Safeguarding Green Industry through Welding and Connecting a Sustainable Future” Hua Guang integrates ESG princi-

ples across the entire value chain including research and development production supply chain and customer service. Through concrete

Reporting Scope actions we actively fullfill our social responsibilities and support a low-carbon industrial ecosystem. We are pleased to officially release

our ESG Report presenting to all caring and supportive partners our reflections practices and explorations in sustainable development

Organizational Scope: unless otherwise specified this report covers Hangzhou Hua Guang Advanced Welding Materials Co. Ltd. and its showing our commitment to advancing green connectivity and empowering advanced manufacturing.wholly owned subsidiaries consistent with the consolidated financial statements.Time Scope: January 1 2025 to December 31 2025 (“Reporting Period”). Some content extends beyond this period. Strengthening Governance Building A Strong Foundation For Sustainable Growth. We continue to optimize our corporate governance

Reporting Cycle: Annual. Last report released April 3 2025. structure. We have established an effective independent and diverse Board of Directors and improved the performance of Board commit-

tees and independent directors. Following the “prevention-first” principle we reinforce the foundation of business compliance promote

the orderly implementation of internal control evaluations and improve the “three lines of defense” risk management system. We fully

leverage the independent oversight role of internal audit to ensure the Company’s high-quality and sustainable development.Preparation Principles Driving Innovation and Industrial Upgrading. We remain committed to our technological innovation strategy of “developing current capabilities preparing for future technologies and leading industry advancement.” We continue to integrate multiple R&D resources and

Shanghai Stock Exchange Guidelines No.14 — Sustainability Report (Trial) work toward building a first-class R&D team. In 2025 we further deepened industry-academia-research collaboration working with

Global Reporting Initiative (GRI) Standards renowned universities. We have lead or participated in the formulation of six national standards and two industry association standards.UN 2030 Sustainable Development Goals We were successfully selected as a pilot enterprise for Zhejiang Province’s “Future Factory” program in 2025 and passed the evaluation

for Hangzhou Smart Factory. Our Green High-Fluidity Flux-Cored Silver Brazing Filler Metal was included in the Zhejiang Province Green and

Low-Carbon Technology Promotion Catalogue (2025 Edition) leveraging technological innovation to drive low-carbon industrial upgrading.Advancing Green and Low-Carbon Development. We consistently prioritize environmental protection steadily increase environmental

investment and strengthen climate risk management while steadily advancing carbon reduction and verification initiatives. We have

Data Statement completed the Phase II solar photovoltaic power generation project in Renhe further optimizing our energy structure. We also actively

The data and case studies disclosed in this report are derived from the official documents and statistical reports of the Company participate in green electricity trading and drive photovoltaic power generation achieving a green electricity usage ratio of 69%. We contin-

and its subsidiaries. Unless otherwise specified all monetary amounts presented in this report are denominated in Renminbi ue to advance water resource management and waste recycling efforts improving resource utilization efficiency. Hua Guang has obtained

(RMB). ISO 14001 Environmental Management System certification and has been recognized as a national-level Green Factory demonstrating our

commitment to protecting the ecological environment through tangible actions.Putting people first to Unite Development Strength. We are committed to a “people-oriented” development approach. We have conduct-

ed in-depth inspections for production safety risks and improved occupational health management. No major safety accidents or occupa-

tional disease incidents occurred throughout the year. We continue to enhance our compensation and benefits framework to better

Access to the Report engagement and motivate our employees. Through the implementation of the “Si Hua Plan” we have built talent development program

to drive both individual growth and organizational development. In addition we provide supportive working facilities and diverse culture

As an independent Environmental Social and Governance (ESG) report this report is available in both Chinese and English versions for and sports activities to ensure that every Hua Guang employee feels valued and supported.readers’reference. The electronic version of this report can be downloaded from the Shanghai Stock Exchange website (http://ww-

w.sse.com.cn/) and the official website of Hangzhou Hua Guang Advanced Welding Materials Co. Ltd. (https://www.cn-huaguang.com/- Fullfill Social Responsibilities to Deliver Value to Society. We are committed to act as a responsible corporate citizen taking proactive and

Investor.html). responsible actions. In rural revitalization we actively support local development initiatives and contribute to shared prosperity through

targeted programs. In the field of social welfare we give back to society with compassion through a serious of programs such as event

sponsorship school donations and volunteer services. In 2025 charitable donations exceeded RMB 900000 and investments in rural

revitalization initiatives exceeded RMB 400000. In community development we pursue mutual growth with local communities by promot-

ing income growth through local procurement and enhancing regional workforce competitiveness through local employment and job

Feedback training achieving synchronized progress between corporate development and community prosperity.If you have any questions or feedback regarding this report and its contents please feel free to contact us through the following Looking ahead Hua Guang will continue to uphold its commitment to sustainable development further strengthen ESG governance and

channels: practices and drive development through responsibility and diligent execution. We will fulfill our mission with higher standards and strive

Tel: 0571-88764399 to become a global benchmark for sustainable development in the industrial connection sector continue to contribute Hua Guang’s

Website: https://www.cn-huaguang.com/ strength to high-quality industry development.Email: bdo@cn-huaguang.com

Address: No. 8 Fengyun Road Yuhang Economic Development Zone Yuhang District Hangzhou Zhejiang Province China Chairman of Hua Guang Advanced Welding Materials Co. Ltd.

3 4About Hua Guang

Company Profile

Hangzhou Hua Guang Advanced Materials Co. Ltd. was established in 1995. It is a national high-tech enterprise specializing in intelligent

efficient and green welding solutions. The Company is always committed to the research and development of brazing technologies and the Wind ESG Ratingmanufacturing of high-quality brazing materials. Through 30 years of continuous innovation and development it has become a leading Honors and “Top 100 Best ESG Practices of Chineseenterprise in China’s brazing materials industry. Recognition Listed Companies 2025”Certificate

Hua Guang serves as the Vice Chairman unit of the Brazing Materials Equipment and Process Branch of the China Welding Association. It is

also a member of the Sub-Technical Committee on Brazing of the National Technical Committee on Welding Standardization and a standing

member of the Brazing and Special Joining Committee of the Welding Institution of the Chinese Mechanical Engineering Society.The Company operates a Zhejiang Provincial Key Enterprise Research Institute a provincial R&D center and a provincial technology

center. It has led or participated in the formulation of 19 national standards 8 industry standards and 14 group standards and has been

granted a total of 48 invention patents 79 utility model patents 1 design patent and 1 U.S. patent. Hua Guang has received numerous

honors and certifications including“ Second Prize of the National Science and Technology Progress Award”“ National Key High-TechEnterprise”“ Manufacturing Single Champion Demonstration Enterprise”“ National Green Factory”“ Zhejiang Famous Trademark”“ Zheji-ang Green and Low-Carbon Factory”“ Zhejiang Green Enterprise”“ Zhejiang Industrial Circular Economy Demonstration Enterprise”“ Zhe-jiang Manufacturing‘ Pin Mark’ certification”“ Zhejiang Future Factory Pilot Enterprise” and“ Hangzhou Smart Factory.”

The Company offers core technological products such as environmentally friendly brazing materials silver-saving brazing materials

vacuum brazing materials composite brazing materials preform brazing materials silver paste and solder paste. It has the capability to

design and manufacture thousands of product specifications in various forms including rods wires rings strips sheets foils powders

cores flux-coated materials and solder pastes forming a diversified product system overing a broad and diversified product portfolio.Looking ahead the Company aims to become a globally leading provider of functional connection materials and related solutions. In recent

years while consolidating its leading position in medium-temperature brazing materials the Company has actively expanded into new

technologies and products such as electronic pastes low-temperature brazing materials and high-temperature brazing materials achiev- Huazheng ESG Rating “Annual Outstanding Brand” Award 2025 Yunfan Cup ? Best Thermaling comprehensive coverage across major categories of brazing materials and gradually accumulating successful application solutions. “Top 100 Best Improvement in ESG Ratings of at the Cooling & Heating Intelligent Management Material SupplierHua Guang Welding adheres to a development strategy driven by technological innovation carrying out industry-academia-research A-share Listed Companies 2025” Certificate Manufacturing Awards Ceremony for Data Centers

cooperation with leading domestic universities to steadily develop new connection materials and technologies. This approach drives the

rapid development of advanced equipment manufacturing enhances industrial connection capabilities and achieves balanced value

across the industrial chain. Upholding the Hua Guang spirit of“ Integrity Diligence Innovation and Dedication” the Company persists in

market-oriented technological innovation and strives to develop the“ HUAGUANG” brand of brazing materials into a globally recognized

and preferred brand.Company CultureVision Values Corporate Spirit “Talent Attraction and Recruitment Outstanding Contribution Award for Demonstration Enterprise forExcellence Award” of Yuhang Economic High-Quality Development Yuhang Innovative Development in

Enhance industrial connection Deliver products appreciated by cus- Development Zone Zhejiang Economic Development Zone Zhejiang Manufacturing Yuhang District Integrity Diligence

capabilities and achieve balanced tomers through focus and the pursuit Innovation Dedication.value across the industrial chain. of craftsmanship excellence.Mission Quality Culture

Selected for the Zhejiang Province

Zhejiang Province Future Factory Green and Low-Carbon Technology Promotion

Pilot Enterprise (2025)

Focus on customer needs commit to intelligent low-carbon and efficient welding Focus Standardization Full Par- Catalogue (2025 Edition)

solutions build a collaborative industrial chain platform and enable customer value ticipation Execution.realization.

5 6Advancing Sustainable Development ESG Strategic Pillars

Excellence in Corporate Establish an ESG Committee under the Board of Directors forming a hier-

Governance: Governance archical management and closed-loop execution mechanism.ESG Development Policy Standardization Compliance and Strengthen anti-corruption business ethics and information security to

Transparency Risk Control safeguard investor rights and interests.Performance Incorporate ESG indicators into management and departmental perfor-

Hua Guang fully integrates ESG governance into its governance framework. Based on its positioning in brazing technology R&D and the and Long-Term Value Integration mance evaluations to ensure effective implementation of ESG strategies.manufacturing of high-quality brazing materials the Company has established an overarching ESG strategy from which ESG strategic

pillars and objectives are derived. The Company is committed to achieving balanced and sustainable outcomes among economic perfor-

mance environmental protection and social responsibility supporting sustainable long-term growth. ESG Strategic Targets

Overarching ESG Strategy Target 2025 Performance 2028 Goal

Sustainable Empower low-carbon development and lead intelligent manufacturing drive high-quality develop- Energy Consumption per Unit of Output (tce/RMB 1000000) 1.15 1.05

Development Blueprint ment of advanced manufacturing through comprehensive low-carbon transformation and strive to

become a global benchmark for sustainable development in the industrial connection sector. Carbon Emissions (tCO2e) 44279.61 42964.46

Focus on innovation in green connection technologies and the transformation and upgrading of Number of Green Product Technology Patents (cumulative as of reporting period end) 45 55

ESG Mission intelligent manufacturing with low-carbon innovation low-carbon manufacturing and responsible

governance at the core to drive value co-creation across the industrial chain and contribute to the EHS Compliance Rate (%) 100 100

achievement of the“ dual carbon” goals and high-quality development.Guided by the philosophy of“ Building Green Manufacturing and Creating a Low-Carbon Future”

Core Positioning for integrate ESG into every aspect of R&D production supply chain and customer service and strive

Sustainable Development to advance sustainable development practices across all factors the entire industrial chain and

the full value chain. ESG Governance SystemESG Strategic Pillars Hua Guang has established a full-chain ESG governance system of“ top-level decision-making ? mid-level execution ? grassroots imple-mentation ? supervision and improvement.” ESG principles are embedded into all business processes including R&D production supply

low-carbon Develop environmentally friendly brazing materials that are lead-free chain and customer service ensuring the effective implementation of the sustainable development strategy supporting the achievement

Products cadmium-free and low-silver driving carbon reduction throughout the of“ dual carbon” goals and creating long-term value for stakeholders. The Company has established a three-tier ESG governance struc-

product lifecycle. ture with Decision-making level composed by Board of Directors ESG Committee composed by the management level and execution level

Green Environment: low-carbon Continue building low-carbon factories and future factories promote the formed by Board Office Audit and Legal Center and ESG Working Group. This structure ensures the effective implementation of ESG stra-

Low-Carbon Manufacturing establishment of the ISO 50001 Energy Management System and reduce tegic priorities. ESG performance is closely integrated with business performance and strategic development while the Company upholds

Manufacturing and emission intensity. the responsibility of a manufacturing single champion enterprise to promote low-carbon upgrading in the brazing materials industry and

Resource Circularity Resource Circularity Strengthen the recycling and reuse of precious metals improve standard- achieve coordinated development of the economy society and the environment.ized disposal rates of hazardous waste and build a“ zero-waste factory.”

Climate Action Collaborate with the industrial chain to address climate change steadily Communication /Level Function Responsibilities

reduce carbon emission intensity and gradually increase the proportion Reporting Frequency

of green electricity usage.Decision-making Board of Holds ultimate responsibility for sustainable development strategy

Customer Provide green connection solutions to leading customers in HVAC power and information disclosure; oversees plans and guides the Compa- AnnuallyLevel Directors

Collaboration and electrical equipment electronics and new energy vehicles support- ny’s sustainability work.Sustainable Value ing their low-carbon product upgrades.Supply Chain Establish supplier admission and evaluation mechanisms promote Focuses on the decomposition and implementation of ESG targets; Chain:

Responsibility low-carbon transformation across upstream and downstream partners Management ESG regularly evaluates key issues and progress; strengthens target Leadership and Quarterly

Quality Co-creation and ensure supply chain stability and compliance.Level Committee achievement monitoring and risk management to ensure effective

Quality and Uphold the quality benchmark of a manufacturing single champion enter- strategy execution.Safety prise strictly implement full-process EHS management and control and

achieve 100% compliant pollutant discharge. Board Office; Leads the implementation of ESG Committee decisions; conducts

ESG performance monitoring; responsible for ESG data collection

Talent Development Improve training incentive mechanisms and career pathways to create a Audit and Monthly

People-Centric Legal Center consolidation analysis and improvement tracking; leads the prepa-safe healthy and equitable workplace.Society: ration of the annual ESG report.Technological Drive breakthroughs in low-carbon technologies through R&D investment Execution

Employee Development Innovation participate in industry standard setting and lead the low-carbon upgrad- Level

and Social ing of the brazing materials industry. ESG Working Implements sustainability tasks in detail closely aligned with ESG

Responsibility MonthlySocial Responsibility Engage in community development rural revitalization and public welfare Group strategic objectives ensuring efficient execution and outcome

initiatives fulfilling corporate citizenship responsibilities. delivery.

7 8Materiality Analysis Stakeholder Engagement and Due Diligence

To effectively identify understand and respond to stakeholder concerns regarding ESG practices Hua Guang conducts regular and com- Hua Guang recognizes that stakeholder engagement is a critical pathway for identifying ESG risks and opportunities and improving man-

prehensive ESG materiality assessments. agement performance. The Company has established an open and transparent due diligence and communication mechanism enabling

in-depth understanding of stakeholder expectations and feedback on ESG issues through regular engagement.Double Materiality Assessment Process Based on industry context and the scope of sustainability impacts the Company has identified key stakeholder groups including govern-

ment and regulatory authorities shareholders customers employees suppliers and partners industry associations and communities.Stakeholder expectations and reasonable suggestions are incorporated into daily operations and decision-making processes to enhance

Step 1: Based on the Company’s ESG management level and in accordance with the Guidelines the management practices and promote the effective achievement of sustainable development goals.Global Reporting Initiative (GRI Standards) and other mainstream domestic and internation-

Background Analysis and al ESG standards and frameworks as well as benchmarking against leading industry peers

Issue Identification Stakeholder Expectations and Demands Response and Communicationand ESG rating requirements 24 material issues were identified to form an issue database.Corporate governance;

compliant operations;

Impact Materiality Issues are categorized by positive or negative impact and actual or potential impact to

Shareholders’ meetings;

risk management;

determine evaluation dimensions. Expert scoring is used to assess the magnitude and likeli- Shareholders / financial reports; Assessment anti-corruption and business ethics;

hood of impacts. Investors performance reports;

Step 2 investor rights protection; roadshowsR&D and innovation;

Financial Materiality Internal financial experts and ESG specialists evaluate the likelihood of risks and opportuni- business performance and development planning

Assessment ties and their financial impact. R&D and innovation; Customer meetings;

product quality and safety; customer satisfaction surveys;

Customers

Step 3: customer service and rights; global service network; Quantitative analysis is conducted on both impact and financial materiality results and a low-carbon products exhibitions forums and conferences

Double Materiality Analysis matrix is used to present the overall priority of each issue.Procurement activities;

Compliant operations;

websites and social media;

R&D and innovation;

Environmental Dimension Social Dimension Hua Guang Double Materiality Matrix Suppliers forums conferences training and evaluations; sustainable supply chain;

site visits and on-site research;

industry communication and cooperation

supplier satisfaction surveys

Environmental Compliance Employee Rights and

Management Benefits Trade unions and employee representative congresses;

Climate Change Response Talent Development employee forums; Occupational health and safety;

training;

Energy Management Occupational Health employee development and training; Employees activities;

and Safety employee rights protection;

Water Resource performance evaluation and promotion; 13 compliant operations

Management Product Quality and Safety 14 11 satisfaction surveys;

WeChat culture groups

Pollutant Emissions Customer Service and 72

Privacy Protection 204 10

12

Waste Management Inspections; Compliant operations;

R&D and Innovation official correspondence;

Circular Economy 15 5 anti-corruption and business ethics;

3 Government /

special investigations and on-site meetings;

Sustainable Supply Chain low-carbon products;

Biodiversity 21 6 Regulators policy implementation; environmental management systems;

Fair Treatment of SMEs 22 19 information disclosure; climate change response

websites and social media

Rural Revitalization 23

Social Contribution 24 Resource and energy management;

16 1 pollutant and waste management;

Public and compliant operations; Public welfare projects;

Governance Dimension Communities anti-corruption and business ethics; community volunteer activities

18 9 social welfare;

Corporate Governance Anti-Unfair Competition 17 8 product safety and quality

Compliance and Risk Stakeholder Frontier technologies;

Management Communication industry challenges;

Business Ethics and Due Diligence Financial Materiality Industry Experts

Industry forums;

R&D and innovation;

Anti-Corruption and Scholars industry-academia-research cooperationpromotion of new products and technologies;

basic research

910

Impact MaterialitySpecial Topic Three Decades of Technological InnovationIntelligent Manufacturing for the Future Major Milestones in Hua Guang’s 30-Year Development

New Journey

On December 5 2025 Hua Guang grandly held a series of events in Hangzhou to celebrate its 30th anniversary. The Company gathered Global Expansion

with representatives from all sectors of society to witness its achievements over three decades of innovative development and to jointly

look ahead to a renewed journey toward the future. 2024-2025 Renhe Phase II project commenced oper-

Leap Forward ations in 2024 bringing total production

Diversified Empowerment capacity to 10000 tons.

2020-2023 Relocated headquarters in 2025 estab-Listed on the STAR Market of the Shanghai Stock lished a production base in Thailand and

Exchange in 2020 becoming the first STAR Market-listed was selected as a Zhejiang Province

company in the industry and Yuhang District. “Future Factory” pilot enterprise steadily

Obtained IATF 16949 certification in 2021 entering the advancing toward becoming a globally

new energy vehicle sector. leading provider of functional connection

Achieved breakthroughs in solder materials technology materials and solutions.in 2022 expanding into the microelectronics field.Export revenue exceeded RMB 100 million in 2023;

established the Electronic Connection Business Division

to cultivate new growth drivers.

30th Anniversary Celebration of Hua Guang

Innovation · Fruitful

Achievements

2015-2019 Renhe Phase I project commenced operations in 2015 and won

Thirty Years of Technological Innovation for a Long-term Sustainable growth the First Prize of China Machinery Industry Science and Tech-

nology Award.Awarded the Second Prize of the National Science and Technol-

Reflecting on the 30-year journey of Hua Guang it is a remarkable chapter of perseverance and achievement. These three decades repre- ogy Progress Award in 2016 and hosted the first International

sent dedication innovation and the collective wisdom and hard work of countless Hua Guang employees. Every step reflects their cour- Forum on Green Connection.age determination and relentless pursuit of progress.Breakthrough Led the formulation of the national standard for“ Silver BrazingDiversified Leadership Filler Metals” in 2018. Recognized as a“ Manufacturing Single Champion Demonstra-Foundation BuildingStandardized Development 2001-2007 tion Enterprise” in 2019.Succe s s f u l l y de ve lop e d

1997-1998 silver-based brazing materials Reorganized into a limited liability in 2001 expanding into valve

Inception · Embarking company in 1997 marking a key step and compressor sectors.on the Journey toward market-oriented operations. Achieved the largest market

Became the first enterprise in the share in China’s refrigeration Gouzhuang plant commenced operations in 2008 and

1995 industry to pass ISO 9002 certification industr y segment in 2007 was recognized as a National Key Supported High-Tech Hangzhou Hua Guang Materials in 1998 embedding quality awareness establishing a benchmark Enterprise.

Factory was established initiat- into its development DNA. position in the industry. Launched the OA system in 2010 introducing compre-

ing its entrepreneurial journey hensive digital management.focused on brazing materials Completed shareholding reform in 2011 and introduced

and technological innovation. strategic investors to support future growth.Upgrade · Enhancing

Quality and Efficiency

11 12Strengthening the Foundation Through R&D System Development Industry Collaboration

The Company recognizes the importance of industry exchange and collaboration for the high-quality development of the brazing materi-

als industry. It maintains an open and collaborative approach actively organizing and participating in various industry exchange activities

R&D Innovation System to promote the transformation and industrial application of technological achievements.The Company adheres to the technological innovation strategy of“ Develop one generation reserve one generation and lead one genera-tion” positioning technological R&D as the core engine for cultivating and developing“ new quality productive forces.” Hua Guang has

established an R&D innovation system centered on its research institute integrating multi-level platforms such as the Zhejiang Provincial Case Hosting the Green Connection and Manufacturing 2025 Summit Forum

Key Enterprise Research Institute provincial enterprise technology center provincial R&D center and provincial postdoctoral research

workstation. This system enables full-process innovation management from project selection and initiation to implementation and

acceptance.The Company has built a high-level R&D team and invited multiple professor-level experts and scholars to form an expert advisory com- In December 2025 the Company hosted the 9th China (Hangzhou) Green Connection and Manufacturing 2025 Summit Forum. The

mittee providing forward-looking guidance for the implementation of its technological innovation strategy. As of the end of the reporting forum brought together more than 300 renowned experts scholars and corporate representatives to discuss trends in green

period the Company’s R&D team comprised 99 personnel. In addition the Company has introduced advanced equipment and estab- connection technology innovation explore pathways for integrating intelligent manufacturing and promote the advancement of

lished technologically advanced engineering laboratories and pilot-scale workshops providing a professional R&D environment for green connection and intelligent manufacturing industries.researchers.Based on its overall development plan the Company formulates annual R&D plans clarifying the direction and objectives of technologi-

cal innovation for the following year. It has also established a clear R&D investment budgeting mechanism allocating funds annually

based on R&D plans and incorporating budget execution into the annual performance evaluation of the research institute and responsi-

ble personnel. The Company requires that R&D investment intensity be maintained at no less than 3% ensuring sufficient resources for

continuous technological innovation. During the reporting period the Company’s R&D investment amounted to RMB 85.2952 million

accounting for 3.34% of operating revenue.In addition the Company continue to improve its innovation incentive mechanisms by implementing the Reward Application Process for

Government Projects and Intellectual Property Applications providing incentives for successfully completed R&D projects patent autho-

rizations and high-quality academic publications. It also organizes annual events such as the Science and Technology Festival to promote

internal collaboration and technical exchange continue to stimulate employees’ enthusiasm for innovation.Green Connection and Manufacturing 2025 Summit Forum

The 6th Science and Technology Festival of Hua Guang

Industry?Academia?Research Integration

The Company actively promotes collaborative innovation through industry?academia?research integration establishing in-depth part- Intellectual Property Protection

nerships with well-known domestic and international universities and research institutions to steadily strengthen its R&D capabilities

and advance cutting-edge industry technologies. Hua Guang has established cooperative relationships with institutions such as Harbin The Company fully recognizes the importance of intellectual property (IP) for technological innovation and core competitiveness and has

Institute of Technology Zhejiang University of Technology North China University of Technology China Jiliang University and Zhengzhou established a comprehensive IP management system. It strictly complies with relevant laws and regulations including the Patent Law ofResearch Institute of Mechanical Engineering. It has jointly established platforms including the“ Metal New Materials and Processing & the People’s Republic of China the Trademark Law of the People’s Republic of China and the Copyright Law of the People’s Republic ofWelding Technology R&D Center” and the“ New Welding Materials R&D Center.” At the same time the Company partner with research China and has formulated and implemented the Intellectual Property Management System to standardize patent and IP-related work.institutions such as the National Key Laboratory of High-Performance New Welding Materials conducting technical exchanges and collab- Hua Guang has established an Intellectual Property Management Center responsible for planning future project patent and standards

orative R&D to consolidate its leading position in both theoretical and applied aspects of brazing material manufacturing technologies. layouts and actively carries out IP protection activities such as patent applications and trademark registrations. In addition the Company

During the reporting period the Company signed an industry?academia?research cooperation project with China Jiliang University and conducts regular IP protection training to steadily enhance employees’ awareness and professional capabilities in IP protection thereby

participated in the formulation of 6 national standards and 2 group standards. strengthening internal safeguards for protecting innovation achievements.

13 14Technological Breakthroughs and Intelligent Manufacturing Upgrades

The Company continues to deepen technological innovation and has achieved multiple achievements. During the reporting period its

scientific research achievements were included in the Zhejiang Province Green and Low-Carbon Technology Promotion Catalogue (2025

Edition). The Company was also selected as a Zhejiang Province Future Factory pilot enterprise and passed the Hangzhou Smart Factory

evaluation.High-Tech Enterprise Certification

Zhejiang Province Future Factory Pilot Enterprise

Digital twin system established with full connectivity of production line equipment

The Company continues to advance intelligent

manufacturing focusing on production auto-

mation and equipment digitalizat ion to

enhance overall production capabilities.During the reporting period phased achieve-

ments were made in areas such as material

handling warehouse management and pro-

duction line control effectively reducing reli-

ance on manual labor and laying a solid hard-

ware foundation for building an intelligent

production system.Robotic palletizing replacing manual operations

Automated high-bay warehouse replacing traditional material storage yards AGV automated transport replacing traditional manual forklifts

15 16Deepening

Environmental

Management

Supporting the United Nations Sustainable Development Goals:Strictly Upholding the Compliance Baseline Environmental Protection Training

The Company continues to drive the development of an environmental and low-carbon culture. Through systematic environmental pro-

Environmental Management System Development tection training and awareness activities it effectively enhances employees’ environmental awareness and practical capabilities further strengthening the Company’s overall ability to respond to environmental risks. In terms of environmental training the Company organiz-

es environmental training on“ required knowledge and skills” as well as specialized training on environmental law and regulation andHua Guang follows the environmental management policy of“ complying with laws and regulations meeting emission standards conserv- energy management covering all employees. The training focuses on strengthening understanding of environmental laws and regula-ing resources advocating green practices protecting the environment and pursuing continuous improvement” and integrates the con- tions standardized pollutant disposal and practical energy-saving and consumption-reduction measures thereby enhancing environ-

cept of sustainable development into the core of its corporate strategy. The Company continue to improve its environmental protection mental literacy and compliance awareness across the workforce. In terms of environmental communication the Company actively fosters

management and has established an environmental management structure with clear responsibilities and efficient operations. As the a positive atmosphere of“ everyone talks about environmental protection and low carbon is visible everywhere” by posting environmen-

highest decision-making body the Board of Directors is responsible for the overall supervision of the formulation and implementation of tal slogans in offices workshops and other public areas and by advocating energy-saving behaviors thereby embedding the concept of

environmental strategies and regularly reviews the achievement of environmental targets and major environmental issues. The EHS Man- green development into daily awareness and action.agement Department is responsible for the overall coordination of the Company’s day-to-day environmental operations covering key

matters such as full-lifecycle environmental monitoring emergency management of unexpected incidents intensive utilization of water

and energy resources operation and maintenance of pollution control facilities compliant emission control and full-process waste man-

agement. All functional departments and subsidiaries strictly fulfill their primary environmental protection responsibilities implementing

layered accountability and tiered control in accordance with their respective duties to ensure that all environmental indicators are effec-

tively decomposed fully executed and closed-loop implemented thereby ensuring compliant orderly and risk-controllable environmen-

tal management.The Company strictly complies with laws regulations and administrative measures such as the Environmental Protection Law of the Peo-

ple’s Republic of China and the Administrative Measures for the Legal Disclosure of Enterprise Environmental Information and adheres to

lawful and compliant operations and lawfully disclosure of environmental issues. The Company has formulated and implemented rele-

vant management systems and procedural documents such as the Quality Environment Occupational Health and Safety Management Addressing Climate Change

System Manual thereby establishing a long-term environmental management mechanism and achieving full-process closed-loop control

from source prevention to end-of-pipe treatment. During the reporting period the Company did not experience any major environmental

emergencies nor was it subject to any administrative penalties due to environmental incidents.The Company continues to deepen the development of its environmental man- Climate Governance

agement system and drive management standardization and internationaliza-

tion. As of the end of 2025 both the Company and its subsidiary Fujing Welding

had successfully passed ISO 14001 Environmental Management System certifica- Hua Guang has always regarded addressing climate change as an important responsibility in promoting high-quality and sustainable

tion and annual audits and the certified entities accounted for100% of the Com- development. By establishing a governance system with clear responsibilities and efficient coordination the Company integrates climate

pany’s total operating revenue. action into strategic decision-making and daily operations. As the highest decision-making body the Board of Directors is responsible for

The Company strictly implements the“ three simultaneities” system for environ- overseeing the formulation and implementation of climate-related strategies and regularly reviews climate-related risks and opportuni-

mental protection in construction projects. For all new modified and expanded ties target progress and key performance indicators to ensure that climate factors are embedded throughout the Company’s overall

projects the Company conducts environmental impact assessments in accor- development strategy and major investment decisions.dance with the law. At the same time pollution prevention and control facilities At the execution level the Company has established a working mechanism in which strategic coordination and operational execution

are designed constructed and put into operation simultaneously with the princi- support one another. The ESG Project Team is responsible for coordinating the strategic assessment of climate risks and opportunities

pal project. Upon project completion acceptance procedures are promptly com- integrating ESG factors into the Company’s strategic planning production and operations and industrial investment decisions and con-

pleted pollutant discharge permits are obtained to ensure compliant emissions tinuously optimizing the business management system to ensure the implementation of sustainable development goals. The EHS Man-

and all pollution prevention measures are strictly implemented and effectively agement Department focuses on specific execution taking green operations as its core and promoting green management throughout

executed. Environmental indicators are regularly monitored and pollutants are product design manufacturing and application while embedding the concept of sustainable development into daily operations and em-Emergency drill for flood and

discharged and disposed of in compliance with applicable requirements. In 2025 typhoon prevention ployee behavior.the Company’s total environmental protection investment reached RMB 2.9804 To ensure the standardization and long-term effectiveness of its climate response efforts the Company has formulated internal manage-

million reinforcing the foundation for green manufacturing and promoting envi- ment systems such as the Control Procedure for Policies Objectives Indicators and Plans and the Risk Management Control Procedure

ronmental management from“ compliance” to“ operational excellence.” incorporating climate-related requirements into the standardized processes of target management risk control and operational control.At the same time the Company has established and improved its emergency

response system for environmental incidents and formulated and implemented

procedural documents such as the Emergency Preparedness and Response Con-

trol Procedure and the Emergency Response Plan for Environmental Incidents to Climate Risk and Opportunity Management

standardize emergency response processes and handling measures. In addition

the Company scientifically formulates environmental emergency drill plans and The Company fully recognizes the various challenges that climate change may pose to manufacturing operations and social development.organizes their implementation on a regular basis. Through practical drills cover- It actively assumes its social responsibility in addressing climate change carries out internal identification and management of

ing multiple scenarios such as typhoon and flood prevention and hazardous climate-related risks and opportunities and remains committed to enhancing its climate resilience. With reference to IFRS S2 Climate-re-

waste leakage the Company strengthens employees’ emergency response capa- lated Disclosures issued by the International Sustainability Standards Board (ISSB) the Company identifies environmental and climate-re-

bilities and continue to improve its capacity to handle sudden environmental Emergency drill for chemical leakage lated risks and potential opportunities arising from climate change and fully incorporates them into its overall risk management system.incidents.

19 20The Company has incorporated climate change risk management into its overall risk control system and established a systematic process

Risk Type Risk / Opportunity Description Time Horizon Response Measures for risk identification analysis and response. Through regular climate risk identification and assessment the Company reviews various

risks and evaluates their potential impacts to form a risk register. For identified key risks targeted response strategies are formulated

Physical Risk and translated into specific action plans which are then integrated into daily operational management. At the same time a dynamic mon-

itoring and feedback mechanism has been established to continue to track implementation results and ensure the effectiveness and

Extreme heat: Changes in climate patterns may Continue to improve employees’ working envi- adaptability of climate risk management.lead to more frequent extreme heat events Short term ronment through innovation and transformation

posing potential health threats to production Medium term in production processes thereby effectively

workers who operate continuously in high-tem- Long term reducing the adverse impact of temperature

perature environments. changes on production operations. Targets and Indicators

Acute

Risk Establish an emergency command team to coor- The Company attaches great importance to carbon emissions management and continues to undertake carbon emissions verification. By

Flood disasters: Flooding caused by climate dinate emergency rescue work for flood preven- establishing and improving a carbon emissions data monitoring statistical and accounting system covering the entire value chain the

change may result in water accumulation in Short term tion flood control and typhoon prevention; regu- Company ensures the accuracy completeness and transparency of carbon data. Supported by regular third-party independent verifica-

factory areas disrupting normal operations Medium term larly undertake flood and typhoon prevention tion and rigorous internal audit mechanisms the Company has identified its carbon emissions baseline providing solid data support for

and directly threatening the safety of produc- Long term drills to enhance emergency coordination capa- scientifically setting emission reduction targets and effectively implementing emission reduction measures.tion facilities and materials. bilities and improve employees’ emergency During the reporting period the Company's total greenhouse gas emissions amounted to 12095.92 tonnes of carbon dioxide equivalent.response under severe weather conditions. At the same time the Company set a 2026 emission reduction target of reducing greenhouse gas emissions (Scope 1 and Scope 2) by 1.5%

compared with 2025 thereby promoting continuous improvement in operational energy efficiency.Global warming: Resource shortages caused by Implement energy management; advancer elec-

Chronic global warming may interrupt the supply of tricity-saving measures in production and office Indicator Unit 2025 2024 2023

Risk water electricity and other energy sources

Long term operations; advance innovation in energy-saving

thereby affecting the Company's normal pro- and emission-reduction processes and energy Direct (Scope 1) greenhouse gas emissions tCO2e 212.15 212.53 158.79

duction and operations. recycling to effectively reduce operating costs.Indirect (Scope 2) greenhouse gas emissions tCO2e 11883.77 12296.18 13115.00

Transition Risk

Total greenhouse gas emissions (Scope 1 and Scope 2) tCO2e 12095.92 12508.71 13273.79

The Company's performance in addressing Other indirect (Scope 3) greenhouse gas emissions tCO e 32183.69 30509.11 23929.74

Reputational climate change is receiving increasing attention

While actively taking climate action disclose to 2

Medium term stakeholders in an open and transparent manner

Risk from stakeholders. Failure to actively respond Greenhouse gas emissions reduced tCO2e 980.11 133.60 117.00

to stakeholder expectations may affect the Long term the Company’s measures and future plans for

Company’s reputation. addressing climate change.Opportunities

Leveraging the Company's R&D capabilities Respond to downstream customers’ demand for

Green continue to provide downstream customers greener more flexible more efficient and more

products and with green welding and connection products

Medium term material-saving brazing materials by continuous-

services and technical services that contribute to Long term ly developing new products and technologies

energy saving and emission reduction thereby enhancing customer loyalty and maintaining

expanding market opportunities. industry leadership.As global carbon reduction goals advance

renewable energy application scenarios and

Energy technologies are becoming increasingly wide- Medium term Actively drive the use of various renewable

efficiency spread and renewable energy is expected to energy sources in production and operations to Long term

become more accessible and cost-effective in achieve energy cost savings.the future.Low-carbon development has become a broad Actively formulate carbon neutrality plans

social consensus requiring enterprises to have Short term advance the replacement of traditional energy

Adaptation rapid response and adaptation capabilities in Medium term with renewable energy adopt energy efficiency

order to manage climate risks more effectively improvement measures build a sustainable value Long term

and seize climate opportunities. chain and continue to enhance the Company's

integrated solutions and service capabilities.

21 22Improving Resource Efficiency Energy Management

Hua Guang implements comprehensive and refined energy management. By improving institutional systems strengthening organization-

al support clarifying target control and advancing energy-saving upgrades the Company continuously improves energy efficiency strict-

Water Resources Management ly controls unnecessary consumption and steadily transitions toward a low-carbon efficient and sustainable energy utilization model.The Company strictly complies with relevant laws regulations and industry standards and has formulated and implemented a series of

management systems and procedural documents such as the Energy Management System Manual clarifying the direction and basis for

Hua Guang attaches great importance to the efficient use and protection of water resources. In strict compliance with relevant laws reg- energy management. At the same time it has established and improved its energy management system and as of the end of the report-

ulations and administrative measures such as the Water Law of the People’s Republic of China the Company has established a full-pro- ing period had successfully obtained ISO 50001 Energy Management System certification and passed the annual audit.cess water resource control mechanism deepened recycling and reuse practices and is committed to achieving harmony between eco- To further enhance refined management the Company established an Energy Section added the position of Energy Engineer who is

nomic and ecological benefits. responsible for coordinating the supervision and inspection of energy use and carbon asset management thereby providing an organiza-

In terms of water resources management system development the Company has established a water-saving leading group as the highest tional foundation for achieving energy-saving and carbon-reduction targets.decision-making and coordinating body for water resource management fully responsible for organizing coordinating and supervising In accordance with relevant procedural documents the Company formulates annual energy baseline targets and management plans

water-saving efforts within the Company. The Company has formulated the Water Use Management System clarifying the water use man- defines energy performance parameters and baselines and sets management targets for reducing comprehensive energy consumption

agement responsibilities and operating standards of each department and workshop. Each year the EHS Management Department formu- by 2%?5%. When significant changes occur in major energy use the Company updates and adjusts energy baselines in a timely manner

lates departmental water-saving target plans and regularly compiles analyzes and discloses information on water use and water conser- and completes the approval procedures to ensure dynamic optimization of the system. During the reporting period the Company fully

vation. Each department further breaks down these targets to individual water-use units and establishes statistical ledgers for water use. met its targets for annual comprehensive energy consumption comprehensive energy consumption per unit of output and comprehen-

By assessing performance against water usage target the Company ensures that water-saving responsibilities are implemented at every sive energy consumption per unit of output value.level and that management objectives are effectively achieved. In terms of specific measures for energy saving and carbon reduction the Company actively drives the transition to a cleaner energy

The Company’s main source of water is municipal tap water which is primarily used in production process for cooling tower make-up and structure and vigorously advances the replacement of traditional energy with clean energy such as solar power. Among these efforts the

product cleaning and everyday usage. All water withdrawal activities strictly comply with relevant national and local laws and regulations newly installed solar photovoltaic power generation equipment at Renhe Phase II was connected to the grid and put into operation gen-

to ensure legality and compliance. To effectively fulfill its responsibility for water source protection the Company strictly controls waste- erating a cumulative annual on-grid power output of 4580 kWh. At the same time the Company continues to tap into energy-saving

water discharge. Wastewater generated in the production process is first pre-treated at the self-built wastewater treatment station within potential through renovation projects such as replacing conventional lighting with energy-efficient LED lighting and implementing waste

the plant and is then discharged into the municipal sewage pipe network after meeting the required standards. Domestic sewage is heat recovery. During the reporting period the Company’s renewable energy consumption reached 2017.08 tonnes of standard coal

discharged directly into the municipal sewer network. The Company’s wastewater discharge outlets have been incorporated into the equivalent and the proportion of green electricity used reached 68.70%.online monitoring system of the environmental protection authorities and a dedicated monitoring room has been established to conduct

24-hour real-time monitoring of key indicators such as chemical oxygen demand (COD) ammonia nitrogen total phosphorus and PH

thereby ensuring stable and compliant wastewater discharge and effectively reducing impacts on downstream water environments and

ecological safety of water sources.To advance the recycling and reuse of water resources the Company is actively constructing a reclaimed water reuse system. It plans to During the reporting period

reuse treated reclaimed water in production workshops as a substitute for tap water in product cleaning and other processes thereby the Company’s renewable energy consumption reached the proportion of green electricity used reached

significantly reducing the consumption of fresh municipal water. At the same time the Company continues to optimize the cooling tower

circulation system strengthen the recycling of cooling water and carry out water-saving upgrades to cleaning line equipment. A self-cir-

culating cleaning line system has been established through which the cleaning water from the final stage of the cleaning line is recycled

to the first stage for reuse. The Company has implemented reclaimed water reuse with a total of 8362 tons of reclaimed water reused 2017.08 tonnes of standard coal equivalent 68.70%

during the reporting period. Focusing on source reduction the Company is also actively promoting the development of no-clean process-

es in an effort to reduce water demand in production through technological innovation.During the reporting period the Company actively advanced water-saving action plans such as construction of the reclaimed water reuse

system development of no-clean processes reuse of water on cleaning lines and replacement of smart remote-reading water meters.During the reporting period the Company’s recycled water volume reached 42989.8 tonnes and the water recycling rate reached 24.83%.Controlling Pollutant Emissions

The Company strictly complies with laws and regulations such as the Environmental Protection Law of the People’s Republic of China the

Law of the People’s Republic of China on the Prevention and Control of Atmospheric Pollution as well as the requirements of pollutant

discharge permits. It has formulated pollutant emission management systems such as the Pollution Control Procedure and the Wastewa-

ter and Waste Gas Treatment Management System to ensure that emissions comply with national and local environmental standards. At

the same time the Company attaches great importance to the standardized operation of environmental protection facilities. Through

technological upgrades and process optimization it effectively reduces pollutant emissions generated during production and regularly

maintains and inspects environmental protection equipment to ensure stable operation and effective maintenance. As of the end of the

Reclaimed water reuse system reporting period the Company had not been subject to any major administrative penalties or criminal liability for pollutant emissions.

23 24The Company places great emphasis on compli- Waste Management

ant pollutant discharge. All operating plants

have lawfully obtained pollutant discharge per-

mits and in accordance with permit require- The Company attaches great importance to waste management. In strict compliance with laws and regulations such as the Law of the

ments have established a dual verification People’s Republic of China on the Prevention and Control of Environmental Pollution by Solid Waste it has formulated internal systems

mechanism combining self-monitoring and such as the Waste Management System and the Hazardous Waste Management System. These are managed by the EHS Management

third-party testing. The Company regularly con- Department to ensure comprehensive coverage of all processes including office operations production transportation and inventory

ducts comprehensive monitoring to ensure the management. Based on the nature and type of waste the Company accurately classifies it into hazardous waste recyclable waste and

authenticity and accuracy of data and strictly general waste and adopts corresponding disposal measures for each category.discloses the results as required proactively With respect to non-hazardous waste management the Company

accepting public supervision. has set up dedicated collection points and assigned professional

Online monitoring equipment management personnel to supervise and guide waste disposal During the reporting period

prevent mixing of different types of waste and avoid cross-con- the total amount of non-hazardous waste

Atmospheric Pollutant Management tamination. In the waste treatment process the Company strictly generated reached follows environmental protection requirements and entrusts qual-

ified third-party institutions to handle non-hazardous waste

Hua Guang strictly complies with legal requirements such as the Law of the People’s Republic of China on the Prevention and Control of thereby minimizing environmental impact. During the reporting 89.76 tonnes

Atmospheric Pollution to ensure compliant waste gas emissions. Waste gas generated during the Company’s operations mainly includes period the total amount of non-hazardous waste generated

particulate matter sulfuric acid mist and non-methane total hydrocarbons. The Company has formulated relevant emission concentra- reached 89.76 tonnes achieving the target of 100% compliant

tion targets in accordance with the Emission Limits of Air Pollutants for the Foundry Industry and the Integrated Emission Standard of Air disposal.Pollutants and ensures compliant emissions through effective waste gas treatment measures. For hazardous waste management the Company implements spe-

cialized management and standardizes the full process of genera- achieving the target of

Waste Gas Treatment Measures tion collection storage transfer and disposal to ensure compli-ance with environmental protection and safety standards. The

Company has a dedicated hazardous waste storage warehouse

For production processes that generate waste gas pollutants a gas collection hood is installed above each medium-frequency 100% compliant disposalmaintains detailed hazardous waste ledgers and conducts regular

furnace with long flexible curtains arranged around it. Except for the feeding side the flexible curtains on all other sides extend checks to ensure consistency among accounts materials and

to the bottom of the medium-frequency furnace and the slag tank is also enclosed within the curtain range. Open operations labels. In accordance with relevant regulations the EHS Manage-

are avoided as much as possible to reduce fugitive emissions. ment Department promptly transfers hazardous waste to qualified

Waste gas is discharged in an organized manner through exhaust stacks that fullfill industry height requirements and compli- During the reporting period disposal entities for safe and effective disposal. During the report-

ance is ensured prior to discharge. the Company’s hazardous solid waste wasing period 100% of the Company’s hazardous solid waste was

For gases and dust contained in collected waste gas the part that contains residual value is recycled and reused. disposed of legallydisposed of legally and in compliance with applicable require-

ments achieving the relevant target. 100%

Wastewater Management

The Company strictly complies with national standards such as the Integrated Wastewater Discharge Standard the Water Quality Stan-

dard for Sewage Discharged into Urban Sewers and the Indirect Discharge Limits for Nitrogen and Phosphorus Pollutants in Wastewater

from Industrial Enterprises. It has established discharge concentration targets for key pollutants such as chemical oxygen demand (COD)

PH suspended solids and total copper. The Company adopts refined management measures for product cleaning wastewater analytical

testing wastewater and domestic sewage. Wastewater that meets standards after treatment is discharged to the Liangzhu Wastewater

Treatment Plant. At the same time the Company actively implements measures such as rainwater-sewage separation and compliant

wastewater discharge and conducts daily sampling and testing of external wastewater discharge to ensure compliance.In addition the Company has built a wastewater

treatment station equipped with a reclaimed water

treatment process. Through the treatment process During the reporting period Promoting Circular Developmentof“ workshop wastewater ? raw water tank at the the Company achievedwastewater station ? pretreatment system ?reclaimed water reuse system” filtered high-quali-ty water is supplied back to workshop production Hua Guang integrates the concept of the circular economy throughout the entire product lifecycle. Guided by the principles of“ reductionlines for reuse. During the reporting period the 8362 tonnes of reused water. reuse and recovery” the Company has established a closed-loop management system covering raw material procurement production

Company achieved 8362 tonnes of reused water. processes packaging and logistics and waste recycling. During the reporting period the Company continued to improve resource effi-

ciency and reduce its environmental footprint through institutional improvement technological innovation and digital upgrading.

25 26The Company has established a governance structure for raw materials and packaging management involving coordinated participation

from multiple departments including procurement quality warehousing production EHS and finance thereby forming a closed-loop Protecting Biodiversity

control mechanism with clear division of responsibilities from source to end-of-life. At the institutional level the Company has formulat-

ed and strictly implemented management policies such as the Supplier Management Policy the Supplier Performance Evaluation and

Assessment Procedure the Raw Material Standard Inspection Guidelines and the Raw Material Warehouse Material Management Policy

ensuring quality safety and environmental compliance in all links including procurement acceptance storage requisition and packaging Hua Guang strictly complies with national and local laws regulations and policy requirements related to biodiversity protection in its

use. During the reporting period the Company revised the Supplier Performance Evaluation and Assessment Procedure to increase the operating locations. At the project siting stage the Company adheres to the principle of ecological priority and conducts comprehensive

weighting of suppliers’ performance in packaging recycling and scrap buyback thereby guiding the supply chain to jointly participate in environmental impact assessments in compliance with applicable regulations resolutely avoiding ecological redline zones where devel-

circular economy development. opment is prohibited ecologically sensitive areas and nature reserves thereby preventing disturbance to important habitats at the

source. In daily operations the Company incorporates the reduction of ecological impact into its environmental management objectives.By establishing a rigorous environmental management system it ensures that production activities do not cause irreversible damage to

Raw Material Management surrounding wildlife or their habitats thereby effectively fulfilling its responsibility as a protector of the ecosystem.Control inventory levels and implement first-in first-out material management to reduce resource For new modified and expanded projects the Company strictly conducts environmental impact assessments in accordance with laws

waste caused by slow-moving inventory. and regulations including ecological impact assessments. The Company entrusts professional institutions to investigate the biodiversity

Implement lightweight design and structural optimization to reduce packaging material usage per conditions in operating areas and surrounding regions identifying baseline flora and fauna resources and distribution characteristics.unit and drive the use of renewable resources such as bio-based materials and recycled plastics to Based on detailed environmental impact assessment findings the Company scientifically formulates biodiversity risk control strategies

replace traditional packaging materials. deploys environmental monitoring equipment and protective facilities in a targeted manner and implements dynamic monitoring and

Establish an internal process for recycling and reusing scrap materials. Based on system formulas early warning mechanisms to effectively identify and manage potential risks thereby ensuring ecological safety throughout project con-

calculate the input quantity and proportion of virgin materials for each product type and after test- struction and operation.ing and quality assessment reintroduce them into production. The Company adheres to technology-driven green development and is committed to reducing the impact of its products on ecosystems

Establish a scrap buyback mechanism with key customers to realize reverse logistics and drive the throughout the product lifecycle through process optimization and product upgrades. The Company actively develops and advances envi-

circular flow of resources throughout the upstream and downstream industrial chain. ronmentally friendly brazing materials to reduce hazardous substance emissions from the source of the industrial chain and lower the

risks of contamination to soil water bodies and the biological chain. In the manufacturing process the Company continue to improve its

processes enhances resource and energy efficiency reduces waste generation and emissions and alleviates pressure on the surrounding

ecological environment. At the same time the Company actively builds a green supply chain and guides upstream and downstream part-

Packaging Management ners to jointly pay attention to ecological impacts working together to drive biodiversity protection across the entire industrial chain.Implement lightweight design and structural optimization to reduce packaging material usage per

unit and drive the use of renewable resources such as bio-based materials and recycled plastics to

replace traditional packaging materials.Drive standardized plastic turnover boxes and establish a customer recycling mechanism. During the

reporting period approximately 39200 welding wire spools were recovered from customers and after

cleaning and repair were reused for packaging effectively controlling packaging costs and reducing

waste generation.Production Process Optimization

Source reduction is achieved through multiple technological innovations:

The surplus metal briquetting and block-forming no-remelting project uses self-developed equip-

ment to directly compress surplus materials into blocks and feed them into the continuous casting

process reducing the smelting and cutting stages.The strip continuous casting project introduced a horizontal thin-strip continuous casting furnace to

replace the traditional casting process eliminating sawing and shot blasting processes and signifi-

cantly improving material utilization efficiency.Optimization of the solder sheet cleaning process reduced the use of volatile cleaning agents while

an online filtration system was added to the solder strip cleaning line extending the cleaning solu-

tion replacement cycle from daily to semi-monthly and significantly reducing chemical consumption

and emissions.At the same time the Company has advanced the development of an intelligent warehousing and logistics system to provide digital sup-

port for the circular economy. Through the integrated application of the raw materials automated high-bay warehouse silver ingot and

wire drawing flat warehouses line-side flat warehouses and finished goods automated high-bay warehouse combined with systems such

as WMS MES and AGV the Company has achieved first-in first-out material management and full-process traceability. Circular economy

processes such as scrap reuse packaging material recovery and reintroduction of surplus materials are incorporated into a unified digital

management platform ensuring quality control and clear flow tracking of circular materials and achieving precise full-process control

from resource recovery to reinvestment in production.

27 28Fulfilling

Social

Responsibility

Supporting the United Nations Sustainable Development Goals:Safeguarding Occupational Health continue improving the level of occupational health and safety management and align with the latest laws regulations regulatory requirements and ESG development concepts during the reporting period the Company revised and improved the Occupational Disease

Protective Equipment Management Policy the Occupational Disease Protective Facilities Maintenance and Repair Policy and the Occupa-

tional Disease Prevention and Control Publicity Education and Training Policy. These revisions further refined the division of occupational

health and safety responsibilities optimized protection procedures and strengthened risk control ensuring that institutional content

Governance remains aligned with national policies and ESG disclosure requirements steadily consolidating the foundation of occupational health

management and effectively integrating the concept of“ safeguarding employees’ occupational health” into every aspect of the Compa-

ny’s management systems.Hua Guang consistently adheres to the occupational health management policy of“ people-oriented caring for the physical and mental In the future the Company will continue to deepen the integration of ESG concepts into occupational health management continue tohealth of employees obeying laws and disciplines steadily reducing safety risks; scientific management prevention first and continuous optimize its occupational health protection system increase investment in health protection resources enhance the level of occupation-improvement” and places employees’ occupational health and safety rights and interests in an important position in corporate develop- al health protection for employees fulfill corporate social responsibility and achieve mutual empowerment between employee health

ment. The Company has established a top-down occupational health management structure with clear responsibilities and efficient coor- and corporate development.dination ensuring that occupational health responsibilities are cascaded and assigned to specific individuals.As the highest decision-making and supervisory body for occupational health management the Strategy

Board of Directors Board supervises the strategic deployment and implementation effectiveness of occupational

health work across the Company.Risk Description Response Measures

Work Safety Coordinates occupational health management in a comprehensive manner studies and deploys key

Committee occupational health protection tasks and guides and coordinates departments and subsidiaries in

Implement equipment safety protection devices standardize operating procedures and

advancing occupational health work. Operational risks such as mechanical strengthen on-site supervision.injury electric shock falls from Require the use of safety harnesses for work at height and ensure proper protection of

As the department responsible for the daily execution and supervision of occupational health man- height and struck-by objects edges and openings.agement it leads routine work such as occupational health risk identification occupational disease

EHS Management Conduct regular safety training and warning education.prevention and control health monitoring and safety training; tracks the effectiveness of occupa-

Department Risks of fire explosion and hazardous Strictly control special operations such as hot work and confined space work. tional health management throughout the process; promptly rectifies various hazards; and ensures

the standardized operation of the system. chemicals leakage

Standardize the storage use and transportation of hazardous chemicals.Ensure adequate firefighting equipment is in place and conduct regular emergency drills.Work Safety Assists the EHS Management Department in organizing and coordinating departments to implement Risks from aging equipment and

Establish equipment ledgers and implement daily inspections regular repairs and maintenance.Leadership Group specific occupational health work and promotes the implementation of occupational health protec- facilities and failure of safety devices

Replace aging components in a timely manner to ensure the effectiveness of safety inter-

tion measures at every position and in every process. locks and alarm devices.Improve the safety management system and strengthen on-site supervision and assessment.Fulfill the primary occupational health and safety responsibilities of their respective units imple- Risks of unsafe operations and

Departments and ment occupational health and safety protection measures in light of departmental and job charac- inadequate managementImplement the all-employee work safety responsibility system and eliminate the“ threeSubsidiaries violations” behaviors.teristics organize employee health training and identify job-specific safety risks.Safety risks arising from Strictly review the qualifications of outsourced units and apply unified safety management.cross-operations involving Clarify the safety responsibilities of all parties and strengthen pre-job briefings and pro-

Upholding high standards the Company has established contractors cess supervision.and improved its occupational health and safety manage-

ment system. During the reporting period the Company Chemical hazard risks such as dust Strengthen ventilation dust removal and purification treatment.and its subsidiary Fujing Welding passed ISO 45001 Occu- and toxic and hazardous gases Regularly monitor the concentration of hazardous factors and provide suitable anti-toxic

pational Health and Safety Management System certifica- and dust-proof protective equipment.tion and annual audits. The certified entities accounted Physical hazard risks such as noise Install sound insulation noise reduction cooling and heat insulation facilities.for 100% of the Company’s operating revenue. high temperature and vibration Arrange working hours reasonably to reduce exposure to high-temperature and

In terms of system development focusing on the core of high-noise environments.occupational health protection the Company formulated

a series of special policies including the Occupational Risks from failure to carry out Implement pre-employment in-service and exit occupational health examinations

Disease Hazard Prevention and Control Responsibility occupational health examinations as establish employee health records and promptly intervene in abnormal situations.Policy the Occupational Disease Hazard Warning and required

Notification Procedure and the Occupational Disease Risks from missing protective facilities Install occupational disease protection facilities in accordance with standards assign

Prevention and Control Publicity Education and Training or inadequate maintenance dedicated personnel for management and conduct regular inspections and maintenance

Policy. These policies cover key areas such as occupation- to ensure normal operation.al disease hazard prevention and control work-related Risks from non-standard provision Provide qualified protective equipment according to job requirements train employees in

injury handling health monitoring and job protection and use of labor protective equipment correct wearing methods and strengthen on-site supervision and inspection.and clarify full-process requirements from risk identifica-

tion to hazard rectification and from health training to Set up warning signs in workplaces. ISO 45001 Occupational Health and Safety Management System Risks from insufficient hazard

emergency response thereby providing solid institutional Truthfully inform employees of occupational disease hazards in labor contracts and carry certification certificates of Hua Guang and Fujing Welding notification and warning

support for occupational health protection. out occupational health training.

31 32Impact Risk and Opportunity Management Emergency Management

The Company has established a normalized occupational health and safety risk identification and assessment mechanism and regularly To enhance employees’ emergency response capabilities the Company establishes emergency plans and annual drill plans and strictly

conducts comprehensive analyses of production and operation sites to identify occupational health and safety risks in process flows raw organizes special drills on-site disposal drills and comprehensive emergency drills according to the plans covering key areas such as

material use chemical use and other aspects and classify them according to risk level. For identified risks the Company formulates and work safety chemicals management and natural disaster response. After each drill the Company promptly carries out summary reviews

implements corresponding control measures while also establishing a dynamic tracking and review mechanism to regularly evaluate the and effectiveness evaluations assessing personnel and materials readiness organizational coordination and practical results and

effectiveness of the measures and make timely adjustments and optimizations ensuring the continuous and effective control of all types formulates rectification measures for identified issues. In 2025 the Company organized a total of 20 emergency drills all of which were

of risks. successfully completed effectively testing the feasibility of emergency plans and strengthening employees’ rapid response information

transmission and on-site disposal capabilities in emergencies.Safety Inspection and Hazard Rectification

In accordance with the Safety Hazard Inspection 7S and Governance Management System and the Work Safety Inspection Policy the

Company routinely carries out safety inspections and hazard rectification. By identifying hazardous factors in the production process

implementing safety rectification measures and timely controlling and eliminating accident hazards the Company effectively safeguards

employee safety and health.EHS Management Department: Responsible for the organization and management of occupational

health inspections and supervision of the rectification process.Inspection Departments and production units: Conduct daily occupational health and safety inspections and

Responsibilities hazard rectification.Company-wide comprehensive inspections: no fewer than once per month

Inspection EHS Management Department: no fewer than once per week

Frequency Frontline workshops and teams: daily safety self-inspections

Emergency plan for Conducting various

Inspection Forms Routine inspections seasonal inspections special inspections holiday inspections etc. production safety accidents emergency drills

Inspection Content Safety records and ledger completion status · Implementation of occupational health and safety train-

ing physical examinations issuance and use of labor protective equipment and other related work Fire Safety Management

The Company continues to improve its fire safety management system to strictly prevent fire accidents. To further strengthen the fire

In the hazard management process the Company has established a safety and park management system the Company established a“ Fire Control Safety Management Office” under the EHS Management

sound closed-loop control mechanism. For issues identified during Department to coordinate and take responsibility for fire safety work. Firefighting facilities and equipment are installed in all plants in

inspections the Company clarifies the responsibility party for recti- accordance with relevant standards and a regular inspection and maintenance mechanism has been established to ensure that equip-

fication formulates a Comprehensive Inspection Rectification Form ment remains in good condition. For areas with relatively high fire risk the Company designates key fire prevention zones sets up clear

and requires relevant inspection departments to follow up and warning signs and strengthens daily control. The Company strictly implements the hot work permit system ensures that firefighting facil-

supervision. Relevant responsible entities must complete rectifica- ities are maintained in accordance with regulations and continuously improves the standardization and effectiveness of fire safety man-

tion tasks within the prescribed time limit to ensure that rectifica- agement. At the same time the Company has established an emergency firefighting team and organizes annual fire safety training and

tion measures are effectively implemented. For safety hazards practical drills covering all employees continue to improve employees’ fire safety awareness and fire response capabilities.involving a wide scope long rectification periods or large capital

investment the Company establishes special rectification project

teams and after full discussion formulates dedicated rectification

plans to achieve precise management. After rectification is com-

pleted acceptance procedures are implemented to ensure that haz-

ards are thoroughly eliminated achieving full-process closed-loop

management from inspection and rectification to acceptance.During the reporting period the Company carried out extensive

hazard identification work identified 1204 safety hazards of various

types and achieved a rectification completion rate of 100%.In addition the Company established the Award for“ IdentifyingSafety Hazards Around Us” to actively encourage employees to

identify occupational health and safety hazards in their daily work.For hazards reported by employees the Company makes timely rec-

tifications and grants commendations enabling every employee to Commendation for the Award Conducting the training activity Organizing fire safety

become a participant in and guardian of safe production. for“ Identifying Safety Hazards Around Us” of“ Fire Safety for All Life First” emergency drills

33 34Contractor Safety The Company continues to carry out occupational health

training to effectively enhance employees’ awareness and

The Company incorporates contractor safety management into its overall safety management system and clarifies contractor safety man- skills in preventing occupational hazards. New employees

agement requirements in accordance with the Related Party Management Policy. At the access stage when contractors sign project must complete occupational skills and occupational health

agreements they must also sign the Supplier Environment and Safety Management Agreement to clarify the safety responsibilities and training and may only take up their posts after passing the

management requirements of both parties. Before construction begins the Company requires contractors to formulate practical and fea- assessment. Employees in service must receive occupa-

sible safety measures. At the same time safety education is provided to contractor employees and those who have not passed the train- tional health training at least once a year. Training is divid-

ing are not permitted to enter the construction site for work. During the construction process the Company applies approval-based man- ed into collective training and specialized training. Collec-

agement to hazardous operations such as hot work and work at height and requires contractors to provide labor protective equipment tive training covers all operating personnel and includes

for workers properly install fences protective nets and safety warning signs and designate dedicated personnel for on-site manage- general occupational health knowledge and emergency

ment thereby effectively safeguarding the safety of contractor employees. skills for the workplace while specialized training is target-

ed at personnel in specific positions and focuses on pro-

fessional knowledge and protective skills required in the

Safety Training work process continue to enchance employees’ occupa-

Occupational hazard notification signage tional health management awareness and building a solid

Through a systematic and tiered training system the Company enhances em- health protection line.ployees’ safety awareness and skill levels. The Company formulates and strictly

implements an annual work safety training plan. All new employees must com- Indicators and Targets

plete level 3 safety education and training before taking up their posts and may

only begin work after passing the examination. For frontline production units

daily training is organized by workshop directors or department heads covering During the reporting period the Company formulated occupational health and safety management targets and continue to improve its

practical skills such as hazard identification and self-rescue and mutual rescue health and safety management level by clarifying responsible entities and breaking down responsibilities for implementation across

methods. At the same time targeted specialized training is provided to special departments.operations personnel and employees engaged in chemicals-related work.Through diverse forms of safety training the Company has fostered a strong Hua Guang’s 2025 Occupational Health and Safety Targets

safety culture atmosphere and continue to improve the safety quality of all em- Conducting training on standardized

ployees. work safety regulations No major safety accidents vedie

No occupational disease incidents Ach

Safeguarding Occupational Health

Indicator Unit 2025 2024 2023

The Company has always attached great importance to employees’ occupational health and minimizes occupational health risks through

a series of effective control measures. Safety Investment

Occupational Health Management Measures Work safety investment RMB 10000 497.65 402.86 -

Work-related injury insurance investment RMB 10000 62.77 57.11 -

Strictly implement the“ three simultaneities” principle for construction projects to ensure that occupational

disease protection facilities are designed constructed and put into production and use simultaneously with Employee coverage rate of work-related injury insurance % 100 100 -

the principal project. Work safety liability insurance investment RMB 9589.62 14304.36 -

Pre-contro Set up warning signs in areas where occupational hazard factors may arise with content including hazard fac-

tors health impacts and preventive measures. Employee coverage rate of work safety liability insurance % 18.30 17.80 -

When signing labor contracts with employees truthfully inform them of the occupational disease hazards they Work-Related Injury and Occupational Disease Management

may face at work ensuring that employees fully understand the occupational disease risks of their positions.Number of work-related injuries with serious consequences (excluding fatalities) persons 0 0 0

Number of work-related fatalities persons 0 0 0

Regularly engage qualified occupational health technical service institutions to conduct occupational hazard

testing and evaluation in workplaces and organize routine monitoring of occupational hazard factors in all Incidence rate of occupational diseases % 0 0 -

workplaces to ensure that air quality noise levels lighting conditions and other factors comply with national Number of recordable work-related injuries cases 14 7 3

standards and hygiene requirements.Organize all employees to undergo pre-employment in-service and exit occupational health examinations and Recordable injury rate / 1.52 0.86 -

Process establish health records.Control Injury rate per million working hours / 7.60 4.30 -For health issues identified during examinations promptly take intervention measures to prevent deterioration.Install effective protective facilities in workplaces where occupational hazard factors are present to ensure that Lost workdays due to work-related injuries days 587 215 -

the content of occupational hazard factors in the workplace complies with national occupational health stan- Safety Training

dards while assigning dedicated personnel to conduct daily inspection and maintenance of such facilities.Provide employees with labor protective equipment suitable for their positions and guide and supervise them Total duration of safety training hours 4302 194.50 -

in wearing it correctly to effectively safeguard their occupational health. Average safety training duration per employee hours 6 0.31 -

Note data collecting scope and method was improved in 2025 safety training hours has increased from 2024

35 36Empowering Employee Development Performance Incentives

To further motivate employees the Company adopts a model that combines both material and non-material incentives continuously

enhancing employees’ enthusiasm for work.Employee Rights and Interests Employee Incentive Measures

Employee Recruitment Material Talent selection incentives incentives for key research projects science and technology festival-related incentives incentives Outstanding Innovation Award provincial/municipal honorary allowance incentives etc.Hua Guang adheres to the recruitment principle of“ fairness openness and merit-based selection” has established a sound recruitment

process and formulates annual recruitment demand plans to carry out various recruitment activities in an orderly manner. The Company Non-material Advanced individual commendations Annual Rising Star Award Hua Guang Party and Mass Pioneer

adopts multiple channels including social recruitment campus recruitment talent introduction and headhunting services and recruits incentives Award Advanced Collective Award General Manager Award Hua Guang Craftsman commendation etc.talent at different levels through both offline and online channels providing reliable talent support for the Company’s high-quality

development. To retain and motivate core personnel and advance the joint growth of employees and the Company the Company has launched an em-

ployee stock ownership plan effectively stimulating employees’ intrinsic motivation. At the same time in order to establish a long-term

Compliant Employment incentive mechanism the Company closely aligns the interests of shareholders the Company and employees. Since 2022 the Company

has repurchased shares each year through centralized bidding for use in subsequent employee stock ownership plans and equity incen-

Through institutional development and management practices the Company firmly opposes any form of discrimination forced labor and tives.child labor. The Company has formulated the Anti-Discrimination Control Policy providing all employees with fair and reasonable employ-

ment opportunities and humane treatment and opposing any discriminatory behavior based on ethnicity religion gender age or other

factors. Anti-discrimination requirements are strictly implemented throughout all stages of employment including recruitment hiring Democratic Communication

and promotion. The Company has formulated the Special Protection Policy for Female Employees requiring that female employees’ The Company respects employees’ rights to democratic management and collective bar-

wages shall not be reduced nor shall they be dismissed due to pregnancy or childbirth. The Company strictly follows the principle of gaining has established a labor union and convenes employee representative congresses

gender equality and supports women’s career development and personal growth. The Company strictly complies with relevant laws reg- in accordance with laws and regulations. The Company always places employee demands

ulations and international labor conventions and has formulated the Control System on Prohibition of Child Labor and Remedial Mea- in an important position and widely listens to employees’ voices through diversified com-

sures which explicitly prohibits the employment of child labor. During recruitment the age information of applicants is strictly verified to munication channels such as employee symposiums thematic interviews and the Chair-

identify and eliminate child labor at the source. At the same time the Company firmly opposes forced labor and ensures that all employ- man’s mailbox promptly understanding the practical difficulties employees encounter in

ment relationships are based on the voluntary consent of both parties. work and life and promoting effective solutions.Compensation and Benefits The Company regards employee satisfaction surveys as a key means of proactively under-

standing employees’ opinions. It regularly conducts satisfaction surveys for all employees

Advocates the concept of“ contributor-oriented” management and has formulated and implemented the Compensation Management as well as special satisfaction surveys regarding dormitories and canteens. For deficiencies

Policy and the Performance Appraisal Management Measures. Based on job nature the Company has established a differentiated com- identified in the surveys the Company conducts systematic analysis and assessment

pensation system and determines compensation levels according to employees’ positions capabilities performance and other factors formulates corrective measures and requires responsible departments to implement

ensuring that employee compensation is fair and reasonable. Employee compensation consists of base salary monthly performance them within a specified time limit. During the reporting period the Company conducted an

bonuses additional allowances year-end performance awards and equity incentives. Certain categories of positions are also entitled to employee satisfaction survey covering all employees issuing a total of 681 questionnaires

skill-based pay project rewards and excess sales performance rewards. At the same time the Company adjusts compensation annually and receiving 650 responses with employee satisfaction reaching 97.15%.according to industry and market conditions to maintain competitive employee remuneration.The Company organizes employees to sign the Personal Per-

formance Commitment Letter every year records the final During the reporting period

appraisal results in the Summary of the Company’s Year-end issuing a total of questionnaires receiving responses employee satisfaction reaching

Employee Appraisal and uses the performance appraisal

results as the basis for decisions on employee promotion

demotion and year-end benefits. Employees may appeal the 681 650 97.15%

results of their per formance evaluations. The Human Employee satisfaction

Resources and Administration Center will respond within survey poster

three working days upon receipt of the appeal and provide

timely feedback after the matter has been handled.The Company has formulated the Company Allowance and Employee Care

Benefits Policy providing employees with extensive benefits

protection. The Company strictly purchases five social insur- The Company always practices the“ people-oriented” philosophy and provides comprehensive care for employees’ physical and mental

ances and one housing fund for employees in accordance health life and development. In terms of material support the Company has established a charity fund for employees in need providing

with legal requirements and on this basis provides a variety targeted financial assistance to employees’ families facing difficulties. In terms of leisure life the Company has built supporting recre-

of additional benefits including quality dormitories staff ational facilities such as a sports center gym and book bar for employees and extensively carries out cultural and sports activities to

canteens supplementary medical insurance and annual foster a healthy positive warm and harmonious corporate atmosphere. Through a series of practical initiatives the Company effectively Staff canteen and dormitories

medical check-ups. enhances employees’ sense of belonging happiness and security allowing every employee to feel the Company’s respect and care.

37 38Case Care for Retired Employees Case Xinhua Class Team-Building Activity

The Company has established a sound care In May 2025 the Company organized

mechanism for retired employees conveying the Xinhua Class team-building

respect and recognition for their contribu- ac t iv i t y ar ranging a ser ies of

tions during employment through sustained team-building activities for trainees

emotional connection and welfare. The Com- encouraging them to share growth

pany has organized Double Ninth Festival experiences and providing multidi-

hiking activities for retired employees for 23 mensional guidance ranging from

consecutive years invites retired employees business skills and professional

to annual gala gatherings every year and qualities to interpersonal relation-

joins them in witnessing major celebratory ships. Through an approach that

events enabling retired employees to feel combines education with enjoy-

the Company’s respect and warmth. ment the activity helped trainees

Inviting retired employees to participate complete the t ransi t ion f rom

in the anniversary celebration Xinhua Class team-building activitycampus to the workplace.The Company values employees’ physical and mental health and enables employees to feel the Company’s care and warmth outside of

Case Hosting the 30th Anniversary Family Day Event work through multidimensional and normalized care initiatives.In August 2025 the Company held its 30th Anniversary Family Day event inviting employees and their children to visit the Com-

pany and jointly experience its transformation and achievements over the past 30 years. Through interactive activities such as

fun games and calligraphy and painting exhibitions family members shared in the Company’s development achievements. The

event not only conveyed the warmth of the enterprise but also deepened employees’ and their families’ sense of belonging

and emotional connection.Distribution of Dragon Boat Festival gifts Health consultation at the Convenient Services Day

The Company places great importance on employees’ cultural and recreational life. By creating platforms for showcasing talents and

organizing diversified activities such as sports competitions knowledge contests and outdoor development programs the Company

effectively stimulates employee enthusiasm and enhances teamwork and trust.Hua Guang 30th Anniversary Family Day Event

Tug-of-war competition Basketball game Management team hiking event

39 40The Company continues to improve employee living facilities and is equipped with various leisure venues to meet employees’ needs for Employee Training

physical exercise mental relaxation and health management effectively enhancing employees’ sense of happiness and belonging.The Company has established a scientific and comprehensive training management system. Through measures such as needs identifica-

tion plan formulation training implementation effectiveness evaluation and continuous improvement it has formed a closed-loop

training mechanism that enhances employees’ professional skills and overall capability.The Company uses methods such as analysis surveys talent review and 360-degree evaluation to identify training needs at both the

organizational and individual levels from multiple dimensions. Based on the analysis results the Company formulates the Annual Training

Plan which is implemented upon approval by the General Manager. The training plan provides diversified courses for different job levels

and is supported by advanced teaching facilities and an internal trainer team. During the training process the Company evaluates training

effectiveness from four dimensions: reaction learning behavior and results and promptly tracks trainee satisfaction knowledge mas-

Employee sports center Employee library Employee gym tery work behavior improvement and achievement transformation. Based on evaluation results the Company continue to optimize train-

ing processes improves institutional norms establishes an HRBP team and drives the standardization and refinement of training to

ensure that the training system dynamically adapts to the Company’s development needs.For employees at different levels the Company has established the tiered“ SiHua Plan” development system. Through theoretical

Employee Development instruction on-site practical training layered and graded development and job rotation training the Company has established and

improved its talent development mechanism and formed a development ecosystem covering the entire employee career cycle.Career Development Year

The Company has formulated the Measures for Employee Position Promotion Management providing a clear institutional basis for em- 6-10

ployee career development and ensuring that promotion evaluations are carried out in an orderly manner each year. The Company has year Guanghua Plan

established a career development system that combines vertical promotion with horizontal development In terms of vertical promotion

the Company has established a“ dual-track” career development system. The management track is structured in tiers of“ junior manage- 3-8 F or midd le - le ve l andment ? middle management ? senior management” and strictly follows cadre appointment standards to ensure that selected managers year Jinghua Plan above managers external experts are introduced forpossess outstanding leadership and comprehensive qualities. The professional and technical track follows the path of“ assistant ? inter-For grassroots managers long-term coaching focus-mediate ? senior ? principal ? senior principal” encouraging technical personnel to deepen their expertise in professional and technical 2-5year Fenghua Plan and domain exper ts this ing on strategic imple-

fields and lead teams in tackling complex technical challenges. In terms of horizontal development the Company has divided career paths plan enhances their profes- mentation process opti-

into five occupational groups:“ management group ? sales group ? technical group ? professional group ? operations group” providing 0-1 Focuses on enhancing the sional depth and manage-

mizat ion per formance

employees with opportunities for lateral job rotation and supporting qualified employees in expanding their career space based on their year Xinhua Plan professional skills of in-ser- m e n t q u a l i t y t h r o u g h management and other

capabilities and job requirements. v ice employees through in-company guidance from

topics and benchmarking

For newly recruited university gradu- specialized training in APQP experts small-class practi- study tours are organized In terms of supporting measures the Company provides all employees with fair opportunities for internal competition and lateral mobili- ates a half-year development plan is processes sales intelligent cal combat training and to cultivate a core man-

ty encourages and supports employees in participating in national provincial municipal and district talent evaluations professional title provided covering military training manufacturing and other management capabi l i t y agement team with an

assessments and vocational skill certifications and provides policy interpretation and application guidance to help employees enhance cultural integration job rotation train- areas improving their prac- training. overall strategic vision.their professional competence and achieve a balanced outcome for both the Company’s interests and employees’ professional value. ing and team-building activities help- tical job capabilities from

ing them quickly identify with the Com- multiple dimensions.pany culture and become competent in

Employee Career Development Path their positions.Job Grade Role Channel Diagram

Grade 10 Case Mentorship-Based Coaching Model in Frontline Workshops

Grade 9 …… ……

Grade 8 Senior Expert Vice President Senior Expert The Company drives a mentorship-based coaching model for

frontline employees. When new employees join the workshop

Grade 7 Advanced Expert Director Advanced Expert director assigns experienced employees with strong skills and

good teaching ability as coaches. Through hands-on instruction

Grade 6 Expert Department Head Expert follow-up guidance and recorded feedback new employees are

Grade 5 Backbone Employee Section Chief Backbone Employee helped to quickly master operational skills and meet the

requirements for formal job placement.Grade 4 Experienced Employee Experienced Employee

Grade 3 Beginner Beginner On-site“ master-apprentice” job teaching

41 42Social Welfare

Case Hosting the Manufacturing Department Skills Competition During the reporting period

The Company’s senior management attaches great impor-

tance to public welfare and integrates social responsibility the Company’s cumulative charitable donations amounted

into its corporate development strategy. Each year it allo-

In October 2025 the Company hosted the Yuhang Dis- cates a dedicated public welfare budget and actively gives

trict Skills Competition actively organizing employees back to society through multiple channels. During the 904900RMB

to participate and achieve excellent results. Through reporting period the Company’s cumulative charitable

using competition to promote learning and practice donations amounted to RMB 904900.the event provided employees with a platform to

showcase their skills and engage in external exchang- Social Welfare Practices in 2025

es effectively stimulating enthusiasm among all staff

to learn and compare skills fostering a strong atmo-

sphere of professional study and research and pow- The Company actively supported the Hangzhou Tennis The Company has always cared about and supported

erfully promoting the cultivation of skilled talent and 2025 Manufacturing Department Skills Competition Association in organizing the Mixed Doubles Tennis regional education. Since 2021 it has made donations to

the innovative development of the enterprise. Championship vigorously advocating a healthy and posi- Tianyuan School · Hangzhou Huilan Future Sci-Tech City

tive sports culture. Since 2024 the Company has spon- School on an ongoing basis with a focus on supporting

sored this event on an ongoing basis using sports as a the development of aesthetic education and science edu-

bond to further enhance its brand image and social influ- cation thereby contributing through practical actions to

ence. the high-quality development of education in Yuhang.Continuing to Contribute to Society

Rural Revitalization

Hua Guang actively participates in rural revitalization initiatives and contributes to common prosperity through practical actions. During

the reporting period the Company invested a total of RMB 402800 in rural revitalization-related activities and steadily carried out a

number of rural assistance and co-development initiatives.Each year the Company continues The Company actively participated The Company organized Par ty

Rural Revitalization Practices in 2025 to carry out summer visiting activ- in the“ Zhechuan Mountain-Sea members to participate in a series ities delivering cooling fruits and Affection” donation and caring of volunteer activities such as thecare to frontline public security initiative for schools in Tibetan “Jingshan Ancient Trail Hiking andThe Company actively participated in The Company ac t ively carried out The Company supported the Liangzhu police officers traffic police offi- areas. The Chairman personally Mountain Cleaning Volunteerthe Common Prosperity Demonstration Spring Festival care initiatives visiting FBB Triple Crown League for Beautiful cers and fire rescue personnel traveled to Tibetan regions to Activity” and the“ Into the Moun-Project in the Xiajiaqiao area of Xingang families in difficulty in Gangnan Village and Harmonious Villages organized by who remain at their posts. deliver books and warmth to chil- tains Leave No Trace” mountain

Village Liangzhu Subdistrict Yuhang Liangzhu and Fengkou Village Renhe Liangzhu Subdistrict enriching rural dren suppor ting educational cleaning volunteer service activity

District contributing to the improve- delivering corporate warmth and festive cultural and sports life and contributing equity with compassion serving society and protecting the

ment in quality and efficiency of public greetings while also caring for children to the development of spiritual civiliza- sound ecolog ical landscape

welfare initiatives for rural revitaliza- in extreme hardship in the local area. tion in harmonious rural communities. through practical actions.tion in the northern Liangzhu area.

43 44Community Development Upholding the Quality Assurance Line

The Company has always integrated its own development into the broader local context and fulfills its corporate social responsibility

through practical actions. The Company strengthens communication with local communities gains an in-depth understanding of resi-

dents’ needs and concerns and provides targeted support. In terms of local procurement the Company actively purchases local agricul- Governance

tural products to help residents increase their income and achieve prosperity. In terms of local employment it actively recruits local resi-

dents and regularly carries out vocational skills training pre-job training and employment guidance services to continue improving the

overall quality and employability of the local workforce. As of the end of the reporting period the number of locally employed staff Robust quality management is the foundation for maintaining market reputation and achieving steady development. Hua Guang has

reached 188 accounting for 26% of the total. established a Quality and Systems Management Center which is responsible for product quality control and quality system management.In compliance with relevant laws and regulations and benchmarking against advanced domestic and international quality standards the

Company has formulated and implemented normative documents such as the Rigid Quality Management Measures the Hua Guang

Inspection Management Policy the Product Audit Management Policy and the Process Inspection Guidelines laying a solid institutional

foundation for quality management.As of the end of the reporting period The Company consistently fulfills its commitment to product quality and actively carries out external management system certifications

the number of locally employed staff reached accounting for the total and audits. During the reporting period the Company passed the annual surveillance audits of ISO9001 Quality Management System cer-

tification and IATF 16949 Automotive Quality Management System certification as well as ISO 10012 Measurement Management System

188 26% certification the annual audit of the Australian Watermark product certification and Zhejiang Manufacturing certification. In addition the Company’s self-established chemical laboratory passed CNAS accreditation.

Strategy

Company has established a risk identification mechanism covering product quality and safety. Each year it conducts assessments and

Community Development Practices in 2025 analyses of quality management-related risks and formulates and implements response measures for identified risks to ensure that qual-ity risks remain under control at all times.The Company actively practiced the model of“ supporting through purchasing and promoting production through sales” by signing an Risk Description Response Measures

agricultural products subscription agreement with Puning Village Renhe under the Yuren Common Prosperity Assistance Group effec-

tively broadening channels for increasing the collective village economy and farmers’ income. Risks in production process control: Deviations in Introduce digital quality management tools to enable real-time monitoring and data collec-

process execution and parameters and inadequate tion at key production process nodes.process quality monitoring may lead to substan- Strengthen standardization of process execution and in-process inspection shifting quality

dard product quality. control from post-inspection to process prevention.Supply chain source risks: Fluctuations in the quali- Establish a full lifecycle supplier management mechanism covering supplier access evalua-

ty of upstream raw and auxiliary materials and tion and dynamic assessment; strengthen incoming material inspection and batch control;

components or inadequate supplier management and embed quality requirements throughout the supplier cooperation process.may be transmitted to end products creating qual- Drive upstream suppliers to improve their own quality control systems and achieve coordi-

ity and safety risks. nated prevention and control of supply chain quality risks.Compliance and standards adaptation risks: Upgrading Establish a full-chain product quality traceability system to ensure traceability of product

industry quality supervision standards and increasingly origin and destination.stringent product compliance requirements may lead to Establish a rapid response mechanism for quality risks to enable precise identification and

compliance risks if not updated in a timely manner. swift handling of quality issues.Comply with national and industry quality and safety laws regulations and standards;

Traceability and emergency response risks: Incom- establish and improve internal quality management systems and operational procedures;

plete full-process traceability systems and insuffi- and clarify quality responsibilities at each stage.cient response and recall efficiency for quality Track updates to regulatory standards in real time and promptly optimize production and

issues may expand risk impacts and harm consum- control processes to ensure full-process compliant operations.er rights and brand credibility. Conduct regular company-wide quality training and ESG responsibility awareness programs

to strengthen overall quality and safety awareness.Measurement and data control risks: Non-standard Utilize the QMS module to conduct full-process quality data analysis identify root causes of

calibration of measuring equipment and missing quality issues establish closed-loop quality improvement and continuously optimize

process quality data may hinder accurate control production processes and control procedures.of key quality points and increase blind spots in Conduct regular internal quality audits and risk inspections establish early warning mecha-

quality management. nisms and proactively identify and mitigate potential quality risks.

45 46Impact Risk and Opportunity Management Customer Service and Information Security

Based on the characteristics of the brazing materials industry and its own technological advantages the Company has established a

quality management model driven by dual engines of“ technological innovation” and“ digital and intelligent manufacturing” covering the

entire product lifecycle. Customer Service

Raw Materials and Suppliers Production Process Finished Product Shipment After-Sales Service

Hua Guang is committed to providing customers with high-quality products and comprehensive services continuously optimizing cus-

tomer experience and safeguarding customer rights through various measures. The Company has formulated internal systems such as

Implement strict supplier Integrate AI-based auto- Implement strict OQC full Establish an efficient cus- the Customer Satisfaction Monitoring and Control Procedure and the Customer Complaint Handling Control Procedure to ensure stan-

access and dynamic grad- mated inspection and spe- inspection processes cov- tomer complaint handling dardized and efficient pre-sales in-sales and after-sales services.ing systems and conduct cial characteristic manage- ering performance reli- mechanism to ensure all The Company continue to monitor customer satisfaction. The sales department interfaces with customers and regularly understands

audits of key raw material ment to establish a quality ability and export compli- complaints are properly their satisfaction with the Company’s products technology delivery and after-sales services and conducts analysis and improvement

suppliers. monitoring network cover- ance testing. addressed. based on feedback. During the reporting period customer feedback was collected through satisfaction surveys: 80 responses were

Rely on the measurement ing the entire production Use unique batch coding to Conduct regular manage- received from domestic customers with a satisfaction rate of 97%; 4 responses were received from international customers with a satis-

management system to line. achieve full-dimensional ment reviews based on cus- faction rate of 100%.carry out automated full Use the QMS system to traceability from raw ma- tomer satisfaction data to The Company has established a dedicated after-sales service team composed of sales technical support and quality management per-

inspection of key incom- collect process data in real terials to customers. drive optimization of quality sonnel. Customer complaints are received through sales channels and transmitted to relevant departments via the OA system. After anal-

ing material indicators time strictly control SPC costs and product iteration ysis rectification plans are formulated and feedback is promptly provided to customers. During the reporting period the Company

ensuring“ zero-defect” fluctuations and ensure continuously enhancing received a total of 47 customer complaints with a resolution rate of 100% and maintained customer trust in the Company’s brand

raw material entry. stable process capability. customer loyalty. through continuous improvement.The Company actively participates in various exhibitions to showcase its latest products while engaging in in-depth exchanges with cus-

tomers to gain valuable market insights thereby driving continuous innovation in products and services.The Company has established a product quality and safety traceability system covering the entire lifecycle achieving“ traceable sourcestraceable destinations accountable responsibilities and controllable risks.”

Source Traceability: Estab- Production Traceability: Inspection Traceability: Logistics and Sales Trace-

l ish qual ified supplier Assign unique QR codes to Archive inspection data for ability: Record warehous-

archives; implement batch products to record pro- incoming materials in-pro- ing outbound transporta-

management for raw ma- duction processes equip- cess checks and finished tion and sales flow infor-

terials with one code per ment personnel process products; link inspection mat ion to enab le fu l l

batch; and record all key parameters and in-pro- reports to product batches; tracking of product circu-

information in the system cess inspection status and strictly prohibit ship- lation.to strictly control quality enabling full traceability of ment of non-conforming

at the source. the production process. products.The Company actively advances the digitalization of quality management. By introducing the MES system and QMS quality management Participation in electronica China Participation in electronica China

modules it has realized automatic collection analysis and early warning of process quality data effectively improving process quality (Munich Shanghai Electronics Fair) (Munich Shanghai Electronics Fair)

control capability and the efficiency of handling quality issues.The Company conducts multi-dimensional quality training programs. For frontline employees it provides job skills and quality awareness

training; for external technical support personnel it organizes welding technology and application training; for quality management per-

sonnel it conducts VDA 6.3 specialized training; and for all employees it delivers training on quality system and procedure training.Through training activities that combine theory and practice and cover multiple levels the Company has effectively improved employees’

overall quality awareness and practical capabilities fostering a strong culture of quality.Indicators and Targets Hua Guang’s 2025 Quality

Management Target

The Company consistently advances quality management with high standards

and strict requirements steadily improving product stability reliability and

consistency. During the reporting period the Company achieved a 100% batch

inspection coverage rate a 99% product sampling pass rate and a 99.90% No major product safety or ieve

d

product ex-factory pass rate. No major product safety or quality liability inci- quality liability incidents Ach

dents occurred throughout the year and quality and safety management Participation in China Participation in Thailand NEPCON

remained stable and orderly. Refrigeration Expo Electronics Exhibition

47 48Information Security and Customer Privacy Protection Building a Balanced Supply Ecosystem

The Company has established and improved its informa-

tion security management system and has formulated

and strictly implemented internal systems such as the Supplier Management

Information Data Security Management System the Em-

ployee Information Security Management System and the

Confidential Document Management System. The Compa- Full Lifecycle Supplier Management

ny strengthens technical protection and compliance man-

agement. As of the end of the reporting period it had

passed the Level 3 Certification of the Multi-Level Protec- Effective supply chain management is an important foundation for Hua Guang to achieve high-quality development and a key driver for

tion Scheme (MLPS) for cybersecurity. collaborative innovation and shared growth across the industrial chain. In compliance with laws and regulations such as the Tendering

and Bidding Law of the People’s Republic of China the Company has formulated and implemented a series of internal systems including

the Supplier Management Policy. The Company has established a full lifecycle supplier management system covering key stages such as

supplier qualification review performance evaluation and exit/elimination ensuring supplier quality while enhancing risk resilience and

Cybersecurity MLPS Level 3 Certification supply chain flexibility.The Company has established a comprehensive information security and customer privacy protection mechanism. At the internal gover- Supplier full life-cycle management model

nance level information security responsibilities are incorporated into the Employee Handbook with clearly defined management red

lines and an annual dynamic update mechanism to ensure that employees’ compliance awareness remains up to date. In supply chain Conduct qualification reviews basic information verification and on-site inspections of

management the Company requires all suppliers to sign Confidentiality Agreements clearly defining confidentiality responsibilities and potential suppliers and issue audit conclusions.effectively safeguarding patented technologies technical secrets and commercial secrets. In terms of customer privacy protection the Supplier Incorporate ESG factors such as management system certifications (e.g. ISO 9001 ISO

Company strictly follows the principles of“ minimum necessity” and“ authorized consent” implementing full lifecycle data encryption Admission Review 45001 ISO 14001) environmental impact assessment reports and energy-saving and envi-

management and hierarchical access control to reduce the risk of customer privacy leakage at the source. ronmental protection certifications into the review to ensure suppliers fullfill the Compa-

The Company conducts systematic information security risk assessments annually classifies risks according to their impact levels and ny’s sustainability requirements.formulates targeted emergency response procedures to ensure timely and effective responses to risk incidents. The Company continues

to strengthen the management of confidential documents by implementing graded control based on the nature of information and con- Implement monthly and annual performance evaluations of suppliers focusing on core Supplier

sequences of leakage assigning dedicated personnel for management and requiring all employees to strictly follow procedures when Performance dimensions such as quality performance delivery capability and cooperation level.accessing and using confidential information. At the same time the Company regularly organizes professional training for information Evaluation For suppliers with unsatisfactory performance issue formal notices requiring rectification

security management personnel to continuously enhance their awareness and professional capabilities. During the reporting period the within a specified timeframe and track the implementation of corrective measures.Company did not experience any penalties related to information security nor any incidents of customer privacy breaches.Initiate elimination procedures for suppliers rated as“ unqualified” for three consecutive

months in performance evaluations.Supplier Other triggers for elimination include major incidents related to quality delivery confiden-

Elimination tiality breaches or integrity violations; serious financial problems; or insufficient technical

development capability to meet the Company’s requirements.Prior to elimination assess the impact follow approval procedures and carry out deactiva-

tion and account settlement operations.During the reporting period the Company actively drived the development of a supplier whitelist mechanism and formulated the Global

Supplier Whitelist Management Procedures and Standards providing clear criteria for selecting high-quality strategic suppliers that meet

the standards of“ long-term cooperation shared risk and prioritized resource allocation” thereby further enhancing overall supply chain

operational efficiency and competitiveness.Supply Chain Risk Management

Strong supply chain risk control capability is an important safeguard for stable business operations. The Company has formulated the

Supplier Risk Assessment and Emergency Management System and continuously identifies and manages unstable factors in the supply

chain through scientific and systematic management approaches. A supply chain crisis response team led by the supply chain manage-

ment team has been established with the Procurement Management Department serving as the central unit for risk management

responsible for annual supplier risk assessments formulation of response plans and supervision of implementation.In the risk analysis phase the Company identifies potential supplier risks and conducts quantitative assessments based on the likelihood

of occurrence and degree of impact providing a basis for hierarchical risk control. In the risk rectification phase analysis results are

incorporated into the Procurement Risk Management Countermeasure Table with targeted response strategies formulated responsible

departments and rectification deadlines clarified and progress tracked through the Supplier Risk Management Tracking Table.

49 50The Company continue to strengthen its proactive supply chain risk management capabilities. At the early warning level it has estab-

lished a procurement risk early warning mechanism covering areas such as policy market conditions natural disasters quality and integ-

rity enabling dynamic monitoring of potential risks. After each risk event the Company prepares summary reports to review lessons

learned and improve management processes. At the prevention level the Company signs documents such as Procurement Framework

Agreements Confidentiality Agreements and Quality Assurance Agreements with suppliers actively deploys multiple supply sources

optimizes inventory management and provides training to address improvement areas of suppliers thereby ensuring a stable and effi-

cient supply chain.Sustainable Supply Chain

Responsible Supply Chain

A responsible supply chain is a cornerstone for achieving long-term value and effective risk management as well as a key measure for

promoting healthy industry development and global sustainable development goals. The Company has formulated the Supplier CSR

Guidelines requiring suppliers to provide a safe working environment safeguard employees’ basic rights and fulfill environmental

responsibilities during production. All suppliers are required to comply with these guidelines and the Company conducts periodic on-site

visits to supplier factories. Through verification of wage payments working hour records employee rosters and related documentation

the Company evaluates supplier compliance. For suppliers that violate the guidelines the Company will take measures based on the

severity of the situation including termination of procurement contracts or legal action.Key Topics of the Supplier CSR Guidelines

Oppose employment discrimination

Oppose forced labor

Prohibit child labor

Labor Rights and

Human Rights Protect young workers

Ensure reasonable and lawful working hours

Provide compliant wages and benefits

Respect freedom of association

Occupational Health Prevent occupational injuries

and Safety Prevent chemical exposure

Emergency prevention preparedness and response Conflict Minerals Management

Conflict minerals governance is an important issue in global supply chain responsibility management. The Company places great impor-

tance on the compliance and transparency of raw materials is committed to avoiding the use of conflict minerals from high-risk regions

and drives sustainable development and social responsibility. The Company requires suppliers to sign the Conflict Minerals Control Com-

Manage hazardous substances mitment Letter ensuring that metals used in products and packaging do not originate from conflict-affected regions and comply with

Regulate solid waste disposal regulatory requirements for key metals such as tin tantalum tungsten and gold. In the event of violations the Company will take mea-Environmental

Manage wastewater and rainwater discharge sures including product returns claims for liquidated damages or contract termination and require compensation for economic and rep-Impact

Control air emissions utational losses. Through audits and inspections of suppliers’ raw material metal sources the Company continuously optimizes its con-

Ensure environmental compliance flict minerals control system and ensures responsible supply chain practices.Fair Treatment of Small and Medium-Sized Enterprises (SMEs)

In addition regarding suppliers’ environmental and occupational health and safety performance during delivery and service processes

the Company requires suppliers to sign the Environmental Occupational Health and Safety Commitment Letter. This commitment requires

suppliers to ensure compliant vehicle emissions standardized storage and transportation of hazardous materials and proper installation The Company complies with legal requirements such as the Law of the People’s Republic of China on the Promotion of Small and Medi-

of safety protection facilities at construction sites while complying with the Company’s internal environmental and safety management um-sized Enterprises and treats all partners equally in cooperation. The Company has established a sound contract management system

systems in all activities involving direct contact with the Company. By extending management boundaries from supplier factories to the that clearly defines payment terms amounts and methods ensuring timely and full payment to SMEs. During the reporting period the

delivery end the Company achieves full-process control over environmental and safety risks in the supply chain. Company did not have any overdue payments to SMEs.

51 52Improving

Corporate

Governance

Supporting the United Nations Sustainable Development Goals:Advancing the Governance System The Company strictly regulates the procedures for the convening proposal submission holding and voting of the Shareholders’ Meeting in accordance with laws and regulations such as the Company Law of the People’s Republic of China as well as the Articles of Association

and the Rules of Procedure for the Shareholders’ Meeting. The Company has established effective communication channels with share-

holders treats all shareholders equally ensures shareholders’ rights to be informed of and participate in major corporate matters and

guarantees that shareholders are able to fully exercise their rights in accordance with the law. During the reporting period the Company

Governance Structure convened 5 Shareholders’ Meetings and reviewed and approved 18 resolutions.To further enhance governance effectiveness and optimize management processes the Company abolished the Supervisory Board during

the reporting period. The relevant powers originally exercised by the Supervisory Board have now been transferred to the Audit Commit-

The Company strictly complies with laws and regulations such as the Company Law of the People’s Republic of China the Securities Law tee of the Board of Directors.of the People’s Republic of China and the Code of Corporate Governance for Listed Companies as well as the Articles of Association to

clarify the powers and responsibilities of each governing body and steadily improve its corporate governance standards. The Company

has established a governance structure centered on the Shareholders’ Meeting the Board of Directors and senior management ensuring Board of Directors

clear allocation of powers and responsibilities standardized operations mutual coordination and effective checks and balances among

the authority body decision-making body supervisory mechanisms and management thereby providing strong organizational support In accordance with the Articles of Association the Rules of Procedure for the Board of Directors and other systems the Company has

for the Company’s efficient and stable operations. made clear provisions on the Board’s appointment mechanism composition duties and powers and meeting procedures providing insti-

Corporate Governance Structure tutional support for the standardized performance of the Board’s duties. Directors are elected or replaced by the Shareholders’ Meeting for a term of three years and may be re-elected upon expiration of their term. Employee directors are elected by the employee represen-

tative congress or employee assembly. During the reporting period the Company convened an employee representative congress and

upon approval by the attending employee representatives added one employee director to the Board of Directors.Shareholders’Meeting

Board Effectiveness

Board of Directors The Company has established a normalized mechanism for evaluating Board effectiveness and steadily optimizes its governance struc-

ture based on assessment results. During the reporting period the Board operated efficiently and in a standardized manner with scien-

Strategy Committee Board Office tific decision-making and effective oversight: 12 Board meetings were convened reviewing matters including business decisions financial

reports related-party transactions and the unlocking of the employee stock ownership plan. Directors’ participation rate reached 100%

Remuneration and and the follow-up implementation rate of all resolutions reached 100% fully demonstrating the standardization and effectiveness of the

Assessment Committee

Expert Committee Board’s performance of duties.Nomination Committee Board Independence

Audit Committee The Company has formulated the Administrative Measures for Independent Directors clearly acknowledging the independence of the

independent directors proportional requirements and full-process oversight procedures. In terms of appointment independent direc-

tors are nominated by the Board of Directors or by shareholders individually or collectively holding more than 1% of the Company’s

Audit and Legal Center Management Team issued shares and are elected by the Shareholders’ Meeting. The term of service of independent directors shall not exceed six years. The (General Manager EMT Team) Company requires that independent directors account for no less than one-third of the Board and that at least one of them be an

accounting professional. In principle independent directors may serve as independent directors in no more than three domestic listed

companies to ensure they have sufficient time and energy to perform their duties. As of the end of the reporting period the Company had

Governance Body Responsibilities 3 independent directors accounting for 43% of the Board.As the Company’s highest authority it exercises important powers in accordance with the Board Diversity

Shareholders’Meeting law including determining the Company’s business policies reviewing and approving Board

reports and investment plans and serves as an important pillar of the Company’s gover- The Company takes compliance as its foundation governance as its framework and professional competence as its core. In selecting

nance system. directors it considers diversity factors such as ethnicity nationality gender age and professional background ensuring that Board mem-

bers have diverse backgrounds and capabilities while aligning with regulatory requirements and the Company’s development strategy.As the Company’s decision-making body it convenes the Shareholders’ Meeting implements Through the Articles of Association and the Working Rules of the Nomination Committee of the Board of Directors the Company has

resolutions of the Shareholders’ Meeting determines the Company’s business plans and established an institutional system for diversity management.Board of Directors investment proposals and is accountable to the Shareholders’ Meeting. The Board has

As of the end of the reporting period the Board consisted of 7 members including several directors with experience in welding materials

established four specialized committees: the Strategy Committee the Audit Committee the business management accounting and law. There were 5 female directors accounting for 71% of the Board. The age structure is balanced

Remuneration and Assessment Committee and the Nomination Committee. Each specialized combining experience with innovation and aligning with the Company’s internationalization and R&D strategy thereby support

committee operates independently and efficiently in accordance with its rules of procedure. high-quality decision-making in long-term.Gender of Directors Age of Directors

Senior management consists of the General Manager Deputy General Managers the Financial Male Female 40 and below 41-50 51 and above

Senior Management Officer and the Board Secretary. It is responsible for implementing Board resolutions driving

business development and internal management and ensuring the continuous and stable

development of the Company’s operations. 29% 71% 29% 14% 57%

55 56Specialized Committees of the Board Information Disclosure and Investor Relations

The Board has established four specialized committees: the Strategy Committee the Audit Committee the Remuneration and Assess- The Company strictly complies with relevant laws and regulations such as the Administrative Measures for Information Disclosure by

ment Committee and the Nomination Committee. All committee members are directors who conduct research on professional matters Listed Companies and has formulated the Information Disclosure Management System clarifying the principles content management

and provide professional recommendations for Board decision-making. During the reporting period the Company held a total of 15 spe- matters and procedures for information disclosure. During the reporting period the Company carried out information disclosure work in

cialized committee meetings including 7 Audit Committee meetings 3 Remuneration and Assessment Committee meetings and 5 Strate- a compliant and orderly manner with no material disclosure errors or violations thereby providing a solid basis for rational deci-

gy Committee meetings effectively fulfilling the responsibilities of the specialized committees. sion-making by shareholders.The Company attaches great importance to shareholders’ rights to express opinions and participate in corporate governance. It has

Committee Name Responsibilities formulated the Investor Relations Management System which clearly defines communication channels methods division of responsibili-

ties and feedback mechanisms for shareholder communication. The Company incorporates shareholder communication into its annual

Study and make recommendations on the Company’s long-term development work plan and integrates it with information disclosure and investor rights protection to form a long-term mechanism. During the report-

Strategy Committee strategy and planning. ing period the Company communicated with investors through channels including the Shareholders’ Meeting online interactive plat-

Study and make recommendations on major investment and financing plans forms institutional research and briefing sessions and direct contacts responding promptly to investor concerns and effectively main-

major capital operations and major asset operation projects. taining relationships with a broad base of investors.Exercise the powers of the Supervisory Board as stipulated in the Company Law

Audit Committee of the People’s Republic of China. Hua Guang’s Investor Communication in 2025

Review the Company’s financial information and related disclosures.Supervise and evaluate internal and external audit work and internal controls.Online Responded to 145 investor inquiries on the SSE e-Interaction platform.Formulate assessment standards for directors and senior management and Communication Held results briefing sessions through the SSE Roadshow Center and P5W.net.Remuneration and conduct assessments.Assessment Committee Formulate and review remuneration policies and plans for directors and senior Actively received securities analysts fund managers and individual investors.management including remuneration determination mechanisms deci- Offline

sion-making procedures payment arrangements and clawback arrangements. Activities Conducted institutional surveys reverse roadshows and other activities covering different types

of shareholder groups.Formulate standards and procedures for the selection of directors and senior

Nomination Committee management.Select and review candidates for directors and senior management and their

qualifications.Executive CompensationThe Company has established a diversified executive compensation structure of“ fixed compensation + performance-based compensa-tion + long-term incentives” ensuring that executive remuneration is closely linked to both Company performance and individual contri-

butions while balancing short-term and long-term incentives. Executive remuneration plans are drafted by the Remuneration and

Assessment Committee reviewed by the Board of Directors and ultimately approved by the Shareholders’ Meeting. Executive remunera-

tion consists of fixed salary performance salary bonuses and long-term incentives. Long-term incentives are linked to the core manage-

ment team through the employee stock ownership plan and equity incentives with unlocking conditions tied to the Company’s net profit

and individual performance thereby achieving“ benefit sharing and risk sharing.” The Company has also established a clawback and with- Upholding Integrity

holding mechanism for executive compensation to ensure strict compliance by executives with laws regulations and the Articles of Asso-

ciation and to ensure their loyal performance of duties. The relevant proposals for this mechanism were reviewed and approved by the

5th Board meeting and 28th Shareholders’ Meeting and have been formally implemented after approved by 2025 annual Stakeholder

Meeting. Business Ethics

Conflict of Interest Management Hua Guang strictly complies with laws and regulations such as the Anti-Unfair Competition Law of the People’s Republic of China and the

Anti-Monopoly Law of the People’s Republic of China and has established the Anti-Monopoly and Fair Competition Management SystemThe Company has established a full-chain conflict of interest governance mechanism covering“ identification ? recusal ? review ? supervi- which clearly defines unfair competition behaviors such as false advertising monopolistic practices and infringement of trade secretssion ? disclosure.” Through systems such as the Related-Party Transaction Management Policy the Independent Director Working Policy and regulates the Company’s activities in business development investment and mergers and market transactions. The Company con-

and the Articles of Association the Company clarifies the criteria for identifying related-party relationships strictly implements recusal tinue to track developments in laws and regulations related to anti-unfair competition and assesses business ethics risks in the activities

procedures for related directors and related shareholders in voting and sets graded review authorities according to transaction amounts it undertakes. At the same time it integrates anti-monopoly and fair competition compliance into daily management practices and con-

ensuring that all related-party transaction decisions are objective and fair. The Company’s independent directors Audit Committee and tinuously strengthens employees’ awareness of anti-monopoly and fair competition through activities such as interpretation of anti-mo-

Nomination Committee conduct professional and independent reviews of related-party transactions and director conflict of interest mat- nopoly laws and compliance training. During the reporting period the Company was not involved in any litigation or administrative penal-

ters forming effective oversight. ties resulting from monopoly or unfair competition.

57 58Anti-Corruption and Anti-Bribery Strengthening Internal Control and Compliance

The Company has established and operates an effective anti-corruption and anti-bribery management mechanism forming an anti-cor-

ruption framework characterized by top-down coordination and full employee participation.In terms of system development the Company has formulated the Provisions on Employee Integrity and Honest Practice which apply to Compliance Management

all employees and business activities of the Company. These provisions clarify standards for employee integrity and define corrupt and

bribery-related conduct while also establishing procedures for handling violations. Once a violation is identified the Company will take

action according to the nature of the violation; where suspected illegal or criminal conduct is involved the matter will be resolutely trans- The Company always takes compliant operations as its bottom line and promotes the transformation of compliance management from

ferred to judicial authorities for investigation and accountability in accordance with the law. At the same time the Company requires all “post-event supervision and correction” to“ prior rule establishment and in-process standardized guidance” striving to build a

employees to sign the Integrity Commitment Letter further implementing integrity management responsibilities. high-standard compliance management system adapted to the needs of international development.The Company regularly assesses corruption risks and formulates and implements corresponding solutions for identified risks. In addition In terms of document standardization the Company has integrated existing resources to build a legal document template library covering

each department is required to regularly carry out integrity inspections and conduct self-examination and self-correction against the multiple business scenarios continuously improving document quality and compliance. At the same time it has established an informa-

Provisions on Employee Integrity and Honest Practice while proactively reporting any violations or abnormal situations. During the tion-based archive management system to realize visualized and categorized management of archived materials providing more efficient

reporting period the Company did not experience any litigation or major penalties arising from commercial bribery or corruption and the compliance information support for business operations across departments.effectiveness of its integrity risk prevention and control was significant. For overseas business during the reporting period the Company completed the review of the organizational structure and allocation of

The Company extends integrity requirements to supply chain management by embedding integrity covenants into the procurement con- powers and responsibilities of overseas subsidiaries and formulated the Statement of Powers and Responsibilities of Subsidiary Legal

tract framework clearly prohibiting partners from providing gifts gratuities agency fees rebates or free travel invitations to Company Representatives Signing Directors and Corporate Representatives promoting the standardized implementation of governance structures

employees and their relatives. For partners who violate these covenants the Company reserves the right to terminate contracts and for overseas subsidiaries. At the same time the Company provides full-process compliance support for cross-border investment and

pursue legal liability ensuring a transparent and compliant supply chain. transactions in overseas business including legal due diligence registration compliance funding compliance and customs compliance to

The Company continues to strengthen its culture of integrity through anti-corruption and anti-bribery training continuously enhancing ensure that overseas business expansion complies with local laws and regulations.employees’ self-discipline awareness and establishing a healthy and positive corporate culture. In addition the Company carried out diversified compliance training activities to strengthen compliance awareness across all employees.Through training courses such as Special Training on Legal Documentation the Company enhances the document drafting capabilities

and legal literacy of professionals. During the reporting period the Company organized 3 cross-department legal awareness activities

Whistleblowing Mechanism and 10 routine legal interpretation and training sessions covering key areas such as integrity and compliance labor relations and intel-

lectual property with cumulative training provided to more than 400 participants.The Company has established and improved a whistleblowing and supervision mechanism opening diversified reporting channels to all

employees and other stakeholders including mail email telephone and Enterprise WeChat to ensure that reporting channels are

smooth and convenient. The Audit and Legal Center as the department primarily responsible for whistleblowing management strictly

implements procedures for the acceptance investigation and feedback of reports ensuring that all reported matters are handled in a

timely and standardized manner.The Company implements whistleblower protection in accordance with laws and regulations establishes and improves internal confiden-

tiality mechanisms and clearly defines confidentiality management requirements for whistleblowing information. The Company strictly

protects the whistleblower’s personal information such as name and address as well as the content of the report. The Company firmly

opposes the disclosure of whistleblower information and retaliation against whistleblowers. Once verified such conduct will be dealt with

seriously to effectively protect the lawful rights and interests of whistleblowers.Whistleblowing Channels

Conducting confidentiality warning Conducting special training

education and training on legal documentation

Telephone Email Mailing Address Internal Control

0571-88777538 jimeilai@cn-huaguang.com Audit and Legal Center No. 8 In accordance with the Basic Norms for Enterprise Internal Control the Guidelines for the Application of Enterprise Internal Control and

Fengyun Road Renhe Subdistrict the Guidelines for the Evaluation of Enterprise Internal Control Hua Guang has formulated the Administrative Measures for Internal Con-

Yuhang District Hangzhou trol Evaluation to objectively and fairly evaluate the internal control status of the Company and its branches and subsidiaries promptly

identify internal control deficiencies and risks and advances continuous improvement in internal control across all units.

59 60The Board of Directors is the highest decision-making body for internal control evaluation while the Internal Audit Department is respon-

sible for organizing and guiding all units in carrying out self-evaluation of the internal control system. Based on unified standardized and Improving Risk Management

modular internal evaluation techniques and tools the Company assesses the effectiveness of internal control design and implementa-

tion forms evaluation conclusions and issues evaluation reports. The Company conducts internal control evaluations annually covering

the headquarters branches and subsidiaries. The evaluation content is organized around the five elements of internal environment risk

assessment control activities information and communication and internal supervision. Risk Management

Internal Control Evaluation Process Hua Guang has formulated the Risk Management Control Procedure which stipulates the management process for the identification

assessment and response of various types of risks clarifies the responsibilities of each department and establishes a sound risk man-

Determine the internal control evaluation work plan. agement system and operating mechanism. The Company has built a three lines of defense model for risk management with each line

Preparation Prepare working papers for internal control evaluation. operating efficiently and in coordination to form organizational synergy and effectively manage various internal and external risks.Stage

Hold a kick-off meeting for the internal control effectiveness evaluation.Three Lines of Defense for Risk Management

Implementation Organize and conduct internal control effectiveness testing.Stage Communicate with the evaluated units to confirm internal control deficiencies. Business Departments (First Line of Defense)

Conduct regular annual risk identification in conjunction with the Company’s strategy and

Summary Summarize evaluation results. carry out ad hoc risk identification according to changes in the Company’s operations and

Stage Prepare the internal control self-evaluation report. production.In addition the Company regularly provides professional training to internal control evaluation personnel promoting capability building Risk Analysis Group and Management Committee (Second Line of Defense)

in internal control evaluation and steadily improving the professionalism and standardization of the evaluation work.Conduct qualitative analysis of identified risks determine the severity and likelihood of risk

consequences and then determine risk levels. The Company classifies all risks into five

levels: extremely high risk high risk medium risk low risk and extremely low risk and eval-

uates risk acceptance based on these levels.Based on identified risks formulate strategic initiatives and management measures estab-

lish corresponding risk management indicators and targets integrate them into departmen-

tal KPIs and monthly work plans conduct monthly reviews by the Management Committee

and establish corresponding emergency mechanisms to ensure timely response when risks

occur with regular drills and reviews.Audit and Legal Center (Third Line of Defense)

Review the effectiveness of risk control measures require relevant departments to take

improvement and corrective actions when issues are identified and re-evaluate risk

response plans when major changes occur in the external environment.Internal Audit

The Company has established an Internal Audit Department under the Audit Committee of the Board of Directors as its dedicated internal

audit body. In the course of performing its duties the Internal Audit Department independently exercises its audit supervision authority

in accordance with the law and is free from interference by any other department or individual. In accordance with the Audit Law of the

People’s Republic of China the Articles of Association and other relevant regulations the Company has formulated the Internal Audit

System to guide and regulate the work of the Internal Audit Department.The Internal Audit Department conducts comprehensive audits focusing on lawful and compliant operations implementation of internal

control systems standardized operational management and risk prevention and mitigation while also promoting specialized audits such

as performance audits departure audits and audits of raised funds management. Relying on audit reports audit communication meet-

ings and other mechanisms the Internal Audit Department conducts comprehensive inspections supervision and professional evalua-

tions of audited projects and relevant departments transforming audit results into management effectiveness and fully leveraging the

dual role of audit in supervision and value enhancement.

61 62Energy Management

Performance Report Indicator Unit 2025 2024 2023

Total energy consumption tonnes of standard coal equivalent 2940.02 2939.21 2296.89

Electricity consumption 10000 kWh 2389.19 2386.21 1864.25

Natural gas consumption cubic meters 11113 12130 13363

Economic Performance Gasoline tonnes 11.63 26.71 45.52

Waste heat energy consumption tonnes of standard coal equivalent 37.93 35.12 32.69

Renewable energy consumption tonnes of standard coal equivalent 2017.08Note1 38.32 37.47

Indicator Unit 2025 2024 2023

Total energy consumption per RMB 10000

Operating revenue RMB 10000 255588.51 191782.82 141516.41 tce/RMB 10000 0.0115 - -

of revenue

Total profit RMB 10000 20737.61 8425.72 4103.20

Note 1: In 2025 the Company promoted the use of green electricity and photovoltaic power generation projects resulting in an increase in renewable energy consumption

Total assets RMB 10000 295987.08 237307.13 194910.21

compared with the previous year.Greenhouse Gas Emissions

Environmental Performance

IndicatorNote1 Unit 2025 2024 2023

Direct (Scope 1) greenhouse gas emissions tCO2e 212.15 212.53 158.79

Environmental Management Indirect (Scope 2) greenhouse gas emissions tCO2e 11883.77 12296.18 13115.00

Total greenhouse gas emissions (Scope 1 and Scope 2) tCO e 12095.92 12508.71 13273.79

Indicator Unit 2025 2024 2023 2

Total greenhouse gas emissions per RMB 10000 of

Amount of fines imposed for violations of environ- tCO e/RMB 10000 0.0473 - -

RMB 10000 0 0 0 revenue (Scope 1 and Scope 2)

mental protection laws and regulations

Other indirect (Scope 3) greenhouse gas emissions Note 2 tCO2e 32183.69 30509.11 23929.74

Number of incidents resulting in penalties for

Greenhouse gas emissions reduced tCO2e 980.11 133.60 117.00

violations of environmental protection laws and cases 0 0 0

regulations Note 1:Greenhouse gas emission calculation methods and emission factors refer to ISO 14064 Greenhouse Gases the Ministry of Ecology and Environment’s China Product Life

Cycle Greenhouse Gas Emission Factor Database (2022) and the Greenhouse Gas Protocol—Corporate Accounting and Reporting Standard (Revised Edition) etc. The types of

Total environmental protection investment RMB 10000 298.04 147.09 205.82 greenhouse gases covered include CO2 CH4 N2O and HFCs.Note 2:The accounting scope of other indirect (Scope 3) greenhouse gas emissions includes transportation employee commuting business travel and other indirect greenhouse gas

emissions generated from solid waste disposal.Water Resources Management

Emissions Management

Indicator Unit 2025 2024 2023

Total water consumption tonnes 216128.80 180670.80 155481.00 Indicator Unit 2025 2024 2023

Freshwater consumption tonnes 173139.00 150559.00 149836.00 Total annual air emissions cubic meters 136448 119766 -

Of which: municipal water tonnes 173139.00 150559.00 4716.00 Particulate emissions tonnes 3.23 2.55 0.86

Freshwater consumption per RMB 10000 of revenue tonnes/RMB 10000 0.6774 - - Total wastewater discharge cubic meters 69719 63234 75924

Total recycled and reused water tonnes 42989.80 30111.80 5645.00 COD (chemical oxygen demand) in discharged wastewater tonnes 4.76 9.54 20.59

Water recycling and reuse rate % 24.83 20.00 3.77 Ammonia nitrogen in discharged wastewater tonnes 0.18 0.31 0.19

63 64Waste Management Employee Recruitment and Employment

Indicator Unit 2025 2024 2023 Indicator Unit 2025 2024 2023

Total waste generated annually tonnes 338.22 392.45 641.62 Percentage of local employees % 26.25 - -

Total hazardous waste generated tonnes 248.46 279.58 521.53 Number of employees with disabilities persons 5 7 -

Hazardous waste generated per RMB 10000 of revenue tonnes/RMB 10000 0.0010 0.0015 0.0037 Percentage of employees with disabilities % 0.70 1.07 -

Total non-hazardous waste generated tonnes 89.76 112.87 120.09 Number of demobilized veterans persons 13 - -

Non-hazardous waste generated per RMB 10000 of revenue tonnes/RMB 10000 0.0004 0.0006 0.0008 Percentage of demobilized veterans % 1.90 - -

Total waste recycled and reused tonnes 89.76 112.87 - Total number of employees taking parental leave persons 25 16 -

Percentage of waste recycled and reused % 27 29 - Total number of management employees persons 61 60 59

Waste recycled and reused per RMB 10000 of revenue tonnes/RMB 10000 0.0004 0.0002 - Percentage of management Female % 32.79 35.00 55.93

General industrial solid waste disposed tonnes 89.76 112.87 - employees by gender Male % 67.21 65.00 44.07

Hazardous waste disposed tonnes 248.46 279.58 - 30 and below % 11.48 8.33 40.68

Percentage of management

employees by age 31?50 % 78.69 83.34 50.84

51 and above % 9.83 8.33 8.47

Total number of new hires persons 170 144 -

Percentage of new hires by Female % 25.88 30.56 -

gender Male % 74.22 69.44 -

Social Performance Below 30 % 52.35 49.30 -

Percentage of new hires by age 30?50 % 42.94 45.14 -

Above 50 % 4.71 5.56 -

Employee Recruitment and Employment Total employee turnover persons 185 293 -

Indicator Unit 2025 2024 2023 Employee turnover rate % 20.53 29.97 -

Total number of employees persons 716 652 662 Employee turnover rate by Female % 22.70 29.35 -

Regular employees persons 710 645 - gender Male % 77.30 65.88 -

Number of employees by

Labor dispatch employees persons 6 7 - Below 30 % 42.70 43.34 -contract type

Part-time employees persons 0 0 - Employee turnover rate by age 30?50 % 48.11 46.08 -

Female persons 246 231 245 Above 50 % 9.19 10.58 -

Number of employees by gender

Male persons 470 421 417

Percentage of employees by Female % 34.36 35.43 37.01

gender Male % 65.64 64.57 62.99

30 and below % 31.15 27.00 25.08

Percentage of employees by age 31?50 % 52.37 55.83 58.16

51 and above % 16.48 17.17 16.77

Number of ethnic minority employees persons 46 44 -

Percentage of ethnic minority employees % 6.42 6.75 -

Number of local employees persons 188 - -

65 66Employee Training Occupational Health and Safety

Indicator Unit 2025 2024 2023 Indicator Unit 2025 2024 2023

Total number of employee training sessions sessions 177 135 - Safety Training Note 4

Total number of employee training participants person-times 4648 4465 - Total duration of safety training hours 4302 194.50 -

Employee training expenditure RMB 10000 12.00 4.20 - Average safety training hours per employee hours 6 0.31 -

Employee training coverage rate % 100 100 - Note 1: Statistics were optimized and the 2024 data were revised.Average training hours per employee hours 38.61 12.03 - Note 2: Recordable injury rate = Number of recordable work-related injuries × 200000 / Total working hours

Note 3: Injury rate per million working hours = Number of recordable work-related injuries × 1000000 / Total working hours

Average training hours per employee by Female hours 37.74 8.50 - Note 4: The statistical scope was expanded and optimized in 2025 resulting in an increase in safety training hours compared with 2024.gender Male hours 39.09 15.56 -

Average training hours per employee by Frontline employees hours 35.28 10.10 -

employee category Management hours 51.39 56.00 - Quality Management

Percentage of employees receiving regular performance Indicator Unit 2025 2024 2023

and career development reviews % 52.37 53.07 53.98

Ex-factory product pass rate % 99.90 99.50 99.35

Percentage of employees receiving regular Female % 21.23 21.78 22.26

performance and career development reviews Product sampling pass rate % 99.00 99.00 98.50

by gender Male % 31.15 31.29 31.73 Batch inspection coverage rate % 100 100 100

Percentage of employees receiving regular Frontline employees % 43.85 43.71 -

performance and career development reviews

by employee category Management % 8.52 9.36 -

Supply Chain Management

Indicator Unit 2025 2024 2023

Occupational Health and Safety Total number of suppliers suppliers 50 49 48

Indicator Unit 2025 2024 2023 Percentage of suppliers that underwent 100 100 100

environmental and social impact assessments %

Safety Investment

Work safety investment RMB 10000 497.65 402.86 - Number of suppliers identified as having actual

Work-related injury insurance investment RMB 10000 62.77 57.11 - or potential major negative environmental and suppliers 0 0 0

social impacts

Employee coverage rate of work-related injury insurance % 100 100 -

Work safety liability insurance investment RMB 9589.62 14304.36 - Number of suppliers participating in training suppliers 50 49 48

Employee coverage rate of work safety liability insurance % 18.30 17.80 -

Work-Related Injury and Occupational Disease Management Note 1

Rural Revitalization and Public Welfare

Number of work-related injuries with serious 0 0

consequences (excluding fatalities) persons 0 Indicator Unit 2025 2024 2023

Number of work-related fatalities persons 0 0 0 Investment in rural revitalization activities RMB 10000 40.28 - -

Incidence rate of occupational diseases % 0 0 - Number of people benefited from rural revitalization persons 42 - -

Number of recordable work-related injuries cases 14 7 3 Public welfare and charitable donations RMB 10000 90.49 - -

Recordable injury rate Note 2 / 1.52 0.86 - Total number of volunteer activities carried out times 3 - -

Injury rate per million working hours Note 3 / 7.60 4.30 - Number of employees participating in volunteer activities persons 10 - -

Lost workdays due to work-related injuries days 587 215 - Total employee volunteer service hours hours 30 - -

67 68Governance Performance Shanghai Stock Exchange Self-Regulatory Guidelines No. 14

for Listed Companies — Sustainability Report (Trial) Index

Technological Innovation and Patent Management

Indicator Unit 2025 2024 2023

Dimension Topic Relevant Section

R&D investment RMB 10000 8529.52 7427.19 5301.20

Addressing Climate Change Addressing Climate Change

R&D investment as a percentage of main

business revenue % 3.34 - - Pollutant Emissions Controlling Pollutant Emissions

Waste Management Controlling Pollutant Emissions

Number of R&D personnel persons 99 - -

Ecosystems and Biodiversity Protection Protecting Biodiversity

Percentage of R&D personnel % 13.83 - - Environment

Environmental Compliance Management Strict Compliance

Total number of valid patents (as of end

Note1

of the reporting period) items 104 104 102 Energy Utilization Improving Resource Efficiency

Water Resource Utilization Improving Resource Efficiency

Of which: invention patents items 47 48 -

Circular Economy Promoting Circular Development

Number of patent applications items 32 - -

Rural Revitalization Contributing to Society

Number of patents granted items 6 - -

Social Contribution Contributing to Society

Note1: As of the end of the reporting period the Company had obtained a cumulative total of 129 authorized patents of which 25 had expired. Special Topic: Three Decades of Technological Innovation

Innovation-Driven Development Intelligent Manufacturing for the Future

Technology Ethics Not Applicable

Social

Anti-Corruption and Anti-Bribery Supply Chain Security Building a Balanced Supply Ecosystem

Indicator Unit 2025 2024 2023 Fair Treatment of SMEs Building a Balanced Supply Ecosystem

Product and Service Safety and Quality Quality Assurance; Customer Service and Information Security

Number of corruption litigation cases during

the reporting period cases 0 - - Data Security and Customer Privacy Protection Quality Assurance; Customer Service and Information Security

Employees Occupational Health and Safety; Employee Development

Total number of persons involved persons 0 - -

Due Diligence Stakeholder Engagement and Due Diligence

Stakeholder Engagement Stakeholder Engagement and Due Diligence

Governance

Anti-Unfair Competition Anti-Bribery and Anti-Corruption Upholding Integrity

Anti-Unfair Competition Upholding Integrity

Indicator Unit 2025 2024 2023

Number of litigation or penalty cases arising from cases 0 - -

unfair competition during the reporting period

Amount involved RMB 0 - -

69 70GRI Standard Disclosure Relevant Section

Global Reporting Initiative (GRI Standards 2021) Indirect Economic

GRI 3: Material Topics 2021 3-3 Management of material topics Contributing to Society

GRI 203: Indirect Economic 203-1 Infrastructure investments and services supported Contributing to Society

Impacts 2016 203-2 Significant indirect economic impacts Contributing to Society

Hua Guang prepared this report with reference to the GRI Standards covering the period from Anti-Corruption

Statement of Use January 1 2025 to December 31 2025 GRI3: Material Topics 2021 3-3 Management of material topics Upholding Integrity

GRI Used GRI 1: Foundation 2021 205-1 Operations assessed for corruption risks Upholding Integrity

GRI 205: Anti-Corruption 205-2 Communication and training about anti-corruption policies

Upholding Integrity

GRI Standard Disclosure Relevant Section 2016 and procedures

General Disclosures 205-3 Confirmed incidents of corruption and actions taken Upholding Integrity

2-1 Organization details Company Profile Anti-Competitive Behaviour

2-2 Entities included in the organization’s sustainability reporting Reporting Scope GRI3: Material Topics 2021 3-3 Management of material topics Upholding Integrity

2-3 Reporting period frequency and contact point Reporting Scope; Feedback GRI 206: Anti-Competitive 206-1 Legal actions for anti-competitive behavior anti-trust and Upholding Integrity

2-6 Activities value chain and other business relationships Company Profile Behavior 2016 monopoly practices

2-7 Employees Social Performance Energy

2-9 Governance structure and composition Advancing Governance System GRI3: Material Topics 2021 3-3 Management of material topics Improving Resource Efficiency

2-10 Nomination and selection of the highest governance body Advancing Governance System 302-1 Energy consumption within the organization Performance Report

2-11 Chair of the highest governance body Advancing Governance System GRI 302: Energy 2016 302-3 Energy intensity Performance Report

GRI 2:

2-12 Role of the highest governance body in overseeing impact management Advancing Governance System 302-4 Reduction of energy consumption Improving Resource Efficiency

General

2-13 Delegation of responsibility for managing impacts Advancing Governance System Water and Effluents

Disclosures

2-14 Role of the highest governance body in sustainability reporting Advancing Governance System; ESG Governance System GRI3: Material Topics 2021 3-3 Management of material topics Improving Resource Efficiency

2021

2-15 Conflicts of interest Advancing Governance System 303-1 Interactions with water as a shared resource Improving Resource Efficiency

2-16 Communication of critical concerns Stakeholder Engagement and Due Diligence 303-2 Management of water discharge impacts Improving Resource EfficiencyGRI 303: Water and

2-17 Collective knowledge of the highest governance body ESG Governance System 303-3 Water withdrawal Performance ReportEffluents 2018

2-18 Evaluation of the performance of the highest governance body ESG Governance System 303-4 Water discharge Performance Report

2-19 Remuneration policies Advancing Governance System 303-5 Water consumption Performance Report

2-20 Process to determine remuneration Advancing Governance System Biodiversity

2-22 Statement on sustainable development strategy Chairman’s Statement GRI3: Material Topics 2021 3-3 Management of material topics Protecting Biodiversity

2-29 Approach to stakeholder engagement Stakeholder Engagement and Due Diligence 304-2 Significant impacts on biodiversity Protecting BiodiversityGRI 304: Biodiversity 2016

2-30 Collective bargaining agreements Empowering Employee Development 304-3 Habitats protected or restored Protecting Biodiversity

Material Topics Emissions

GRI 3: Material 3-1 Process to determine material topics Materiality Analysis GRI3: Material Topics 2021 3-3 Management of material topics Addressing Climate Change

Topics 2021 3-2 List of material topics Materiality Analysis 305-1 Scope 1 emissions Performance Report

Economic Performance 305-2 Scope 2 emissions Performance Report

GRI 305: Emissions 2016

GRI 201: Economic 305-3 Scope 3 emissions Performance Report

201-1 Direct economic value generated and distributed Performance Report ? Economic Performance

Performance 2016 305-4 Emissions intensity Performance Report

71 72GRI Standard Disclosure Relevant Section GRI Standard Disclosure Relevant Section

Emissions Training and Education

305-5 Emissions reduction Performance Report 404-1 Average hours of training per employee Key Performance Data

GRI 305: Emissions 2016 305-6 ODS emissions Performance Report 404-2 Programs for upgrading employee skills and transition

GRI 404: Training and Empowering Employee Development

305-7 Air pollutants emissions Performance Report assistance

Education 2016

Waste 404-3 Percentage of employees receiving performance and career

Key Performance Data

GRI3: Material Topics 2021 3-3 Management of material topics Controlling Pollutant Emissions development reviews

306-1 Waste generation Controlling Pollutant Emissions Diversity and Equal Opportunity

306-2 Waste impact management Controlling Pollutant Emissions GRI 3: Material Topics 2021 3-3 Management of material topics Empowering Employee Development

GRI 306: Waste 2020 306-3 Waste generated Performance Report GRI 405: Diversity and

405-1 Diversity of governance bodies and employees Empowering Employee Development

306-4 Waste diverted Performance Report Equal Opportunity 2016

306-5 Waste directed to disposal Performance Report Anti-Discrimination

Supplier Environmental Assessment GRI 3: Material Topics 2021 3-3 Management of material topics Empowering Employee Development

Building A Balanced Supply GRI 406: Anti-Discrimina-

GRI 3: Material Topics 2021 3-3 Management of material topics 406-1 Incidents of discrimination and corrective actions Empowering Employee Development

Ecosystem tion 2016

308-1 New suppliers screened using environmental criteria Performance Report Freedom of Association and Collective Bargaining

GRI 308: Supplier Environ-

308-2 Negative environmental impacts in the supply chain and GRI 3: Material Topics 2021 3-3 Management of material topics Empowering Employee Development

mental Assessment 2016 Building A Balanced Supply

actions taken Child Labor

Employment GRI 3: Material Topics 2021 3-3 Management of material topics Empowering Employee Development

GRI 3: Material Topics 2021 3-3 Management of material topics Empowering Employee Development GRI 408: Child Labor 2016 408-1 Operations and suppliers at risk for child labor Empowering Employee Development

401-1 New employee hires and employee turnover Performance Report Forced or Compulsory Labor

GRI 401: Employment 2016 401-2 Benefits provided to full-time employees Empowering Employee Development GRI 3: Material Topics 2021 3-3 Management of material topics Empowering Employee Development

401-3 Parental leave Performance Report GRI 409: Forced or

409-1 Operations and suppliers at risk for forced labor Empowering Employee Development

Occupational Health and Safety Compulsory Labor 2016

GRI 3: Material Topics 2021 3-3 Management of material topics Occupational Health and Safety Local Communities

403-1 Occupational health and safety management system Occupational Health and Safety GRI 3: Material Topics 2021 3-3 Management of material topics Contributing to Society

403-2 Hazard identification risk assessment and incident investigation Occupational Health and Safety Supplier Social Assessment

403-3 Occupational health services Occupational Health and Safety GRI 3: Material Topics 2021 3-3 Management of material topics Empowering Employee Development

403-4 Worker participation consultation and communication Occupational Health and Safety GRI 414: Supplier Social 414-1 New suppliers screened using social criteria Empowering Employee Development

GRI 403: Occupational 403-5 Worker training on occupational health and safety Occupational Health and Safety Assessment 2016 414-2 Negative social impacts in supply chain and actions taken Empowering Employee Development

Health and Safety 2018 403-6 Promotion of worker health Occupational Health and Safety Customer Privacy

403-7 Prevention and mitigation of occupational health and safety impacts Occupational Health and Safety Customer Service and Informa-

GRI 3: Material Topics 2021 3-3 Management of material topics

403-8 Workers covered by OHS management system Key Performance Data tion Security

403-9 Work-related injuries Key Performance Data GRI 418: Customer Privacy 418-1 Substantiated complaints concerning breaches of customer Customer Service and Informa-

403-10 Work-related ill health Occupational Health and Safety 2016 privacy and losses of customer data tion Security

Training and Education

GRI 3: Material Topics 2021 3-3 Management of material topics Empowering Employee Development

7374