2025 Sustainability Report 1
地址：湖南省长沙市湘府西路222号
邮编：410004
传真：0731-89952811
报告出版环境考虑
纸张：报告印刷用纸通过FSC认证和ECF认证
油墨：印刷油墨采用环保大豆油墨以减少空气污染2025 Sustainability Report 1
About this Report
Report Description
This report is the sixth annual Sustainability Report of Hunan Valin Steel Co. Ltd. (hereinafter
referred to as "Valin Steel" "the Company" or "we"). This report presents in a true and objective
manner the activities undertaken and specific information relating to the environmental social
and governance performance of Valin Steel and its controlled subsidiaries in 2025. Unless otherwise
specified all monetary amounts in this report are denominated in Renminbi (RMB).Reporting Scope
Reporting period: This Report is an annual report covering the period from January 1 2025 to
December 31 2025 (the "reporting period"). To enhance comparability and completeness certain
information may extend beyond the reporting period where appropriate.Organizational scope: Unless otherwise specified this report covers Hunan Valin Steel Co. Ltd. and
its principal subsidiaries including Hunan Valin Xiangtan Iron and Steel Co. Ltd. ("Xiangtan Steel")
Hunan Valin Lianyuan Iron & Steel Co. Ltd. ("LY Steel") Hengyang Valin Steel Tube Co. Ltd. ("HYST")
Valin ArcelorMittal Automotive Steel Co. Ltd. ("VAMA") and Yangchun New Iron and Steel Co. Ltd.("Yangchun New Steel").Basis of Preparation
This report has been prepared mainly with reference to the Self-Regulatory Guidelines No. 17 for
Companies Listed on Shenzhen Stock Exchange — Sustainability Report (For Trial Implementation)
and Self-Regulatory Guidance No. 3 for Companies Listed on Shenzhen Stock Exchange —
Preparation of Sustainability Report issued by the Shenzhen Stock Exchange the Guidelines
for Corporate Social Responsibility Report Preparation in China (CASS-ESG 6.0) issued by China
Enterprise Reform and Development Society and CSR Cloud Research Institute and Sustainability
Reporting Standards (GRI Standards) issued by the Global Reporting Initiative (GRI).Access to the Report
This report is available in Simplified Chinese for readers' reference. The electronic version may be
downloaded from CNINFO (www.cninfo.com.cn) and from the Company's official website (http://
www.valin.cn / the "ESG Report" page under the "Sustainability" section).Contents
Chairman's Message 04
About Valin Steel 06
Highlights 2025 10
Honors 2025 12
ESG Management 108
Future Outlook 114
Appendix G116 E S
Key Performance Table 116
Indicator Index 120 Taking Ecological Putting Strivers First Building on Sound Governance
Feedback 121 Stewardship as a Guiding and Empowering the to Safeguard the Steady
Valin Steel Honors in Previous Years 122 Principle and Advancing Co-Creation of Development of the Steel
the Mission of Green Social Value 48 Business 78
Metallurgy
20 Strengthening Quality Management 50 Upholding the Leadership of
Party Building 80
Responding to Climate Change 22 Reinforcing Safety Responsibilities 53 Standardizing Corporate
Strengthening Environmental Optimizing Customer Service 57 Governance 82
Protection Management 31 Preventing and Controlling
Advancing Energy Conservation Growing Together with Employees 62 Compliance Risks 86
and Emissions Reduction 34 Working with Partners for Mutual Safeguarding Shareholder
Green and Eco-Friendly Operations 46 Success 67 Rights and Interests 90
Deepening Digital and
Enhancing Public Well-Being 75 Intelligent Innovation 93
Advancing Intelligent
Manufacturing 1044 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 5
Chairman's Message
2025 marked the closing year of build differentiated competitive strengths. Xiangtan Steel developed 80 mm wear-resistant steel plate and copper-clad steel rolled clad
China's 14th Five-Year Plan. Over plate filling domestic gaps while its 1000 MPa high-strength steel for hydropower and 420 MPa offshore engineering steel were recognized Li Jianyu
the past f ive years Val in Steel as reaching internationally advanced levels. LY Steel rolled out the first coil of non-grain-oriented "hand-tearable steel" for new energy
h a s p r e s s e d a h e a d i n t h e f a c e applications and successfully established the full-process production route for grain-oriented silicon steel with high magnetic induction
of challenges with courage and under full low-temperature conditions achieving new breakthroughs in the high-end silicon steel market. HYST was accredited as a National
determination. Always mindful of the Enterprise Technology Center achieved extensive domestic substitution in the high-end steel tube segment and secured a leading position
mission of a state-owned enterprise for its non-API OCTG products in the deep earth engineering market. VAMA launched a range of innovative solutions including advanced
we have stayed focused on the high-strength steel integrated multi-part solutions and steel battery packs demonstrating its industry-leading role. At the same time the
grand vision of the "Three Highlands Company continued to empower its core steel business through digital and intelligent technologies deploying 46 artificial intelligence
and Four New Missions Strategy" application scenarios and a cumulative total of 261 robotic units. Several subsidiaries were selected for inclusion in the first group of national
aligned ourselves with the direction excellence-level intelligent factories demonstrating the tangible results of its digital and intelligent transformation.of high-quality development in
the steel industry and advanced Advancing Green and Low-Carbon Transformation in Depth and Demonstrating the Responsibility of a State-Owned Enterprise
transformation through the "four We have consistently regarded "ecological priority and green development" as a mandatory task. Guided by the goals of carbon peaking and
transformations" of high-end green carbon neutrality we have driven green transformation from basic compliance toward ultimate energy efficiency and low-carbon leadership.intelligent and service-oriented We have resolutely assumed principal responsibility for environmental governance. All of our production bases completed full-process ultra-
d e v e l o p m e n t . I n o v e r c o m i n g low-emission retrofits and public disclosure with environmental indicators continuing to outperform industry standards. Xiangtan Steel LY
difficulties we consolidated our Steel and VAMA were successfully rated as Class A for environmental performance demonstrating the Company's solid green development
strengths; through innovation and capabilities. We have systematically planned our low-carbon transformation by formulating and improving carbon peaking and carbon
breakthroughs we further enhanced neutrality action plans establishing carbon management organizations clarifying functional responsibilities and continuously tapping the
our capabilities delivering a strong potential of recovering and utilizing waste heat surplus pressure residual energy and steam from production processes. As a result we have
annual performance characterized steadily improved comprehensive energy utilization efficiency and clean self-generation capacity. During the year self-generated electricity
b y b o t h i m p r o v e d q u a l i t y a n d reached 10 TWh setting another historical record. Xiangtan Steel LY Steel and Yangchun New Steel were successfully selected as cultivation
e f f i c i e n c y a n d t h e s u c c e s s f u l enterprises for the industry's "Best Practice Energy Efficiency Benchmark Demonstration Plants" for carbon peaking and carbon neutrality.conversion of growth drivers. On We have actively responded to green transformation requirements and green trade barriers by steadily advancing carbon emissions data
behalf of Valin Steel I would like to extend my sincere gratitude to our customers partners leaders at all levels and management carbon footprint accounting carbon asset management and green low-carbon product certification. Our subsidiaries
friends from all sectors of society for their long-standing trust and support. I also wish to express my highest respect successfully completed carbon footprint certification for multiple products and issued multiple Environmental Product Declarations (EPDs)
to all our employees and officers who have worked tirelessly in every position. consolidating the Company's development foundation through green practices across the entire value chain.Party Building Providing Strategic Leadership and Cohesion for a New Chapter of Development Upholding Responsibility to Benefit All Stakeholders and Embarking on a New Journey Together
We have consistently taken Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as our guiding We have always integrated value creation and social contribution into the fabric of our development and in a complex market environment
principle thoroughly studied and implemented the guiding principles of the 20th National Congress of the Communist we have continued to increase returns to customers suppliers employees shareholders and society. For customers we comprehensively
Party of China and the plenary sessions of the 20th CPC Central Committee and translated the strengths of Party enhanced product quality service capability and market competitiveness to meet the needs of different customer segments creating added
building into strong momentum for development. In 2025 in pursuing the vision of "building a world-class steel value through integrated steel solutions combining "products + technology + services". For suppliers we advanced transparent and digital
enterprise" all of the Company's subsidiaries demonstrated strong development momentum. Xiangtan Steel was procurement across the board integrating compliance with applicable laws and regulations business integrity professional ethics and
included in the first public list of "Leading Standard-Compliant Enterprises" under the Normative Conditions for the social responsibility into supply chain management to foster a clean and healthy procurement ecosystem. For employees we effectively
Steel Industry (2025 Edition) while LY Steel HYST and Yangchun New Steel were included in the first public list of safeguarded their rights and interests established a well-structured training system and broad career development pathways celebrated
"Standard-Compliant Enterprises" under the Normative Conditions for the Steel Industry (2025 Edition). Guided by its the achievements of 3 national model workers and 4 provincial model workers in 2025 and welcomed more than 1000 new employees to
"Striving Pioneer" Party-building program Xiangtan Steel advanced technological breakthroughs in high-end wide the Company. For shareholders we maintained frequent communication increased the cash dividend payout ratio year by year made our
and heavy plate products with the related achievements winning a provincial first prize for scientific and technological first attempt at share repurchase actively introduced insurance institutions as long-term strategic shareholders holding more than 5% of
progress. LY Steel integrated "Party Building + Quality Improvement and Excellence Creation" into its steel production the Company's shares responded promptly to market concerns and effectively enhanced investor returns. We continued to deepen rural
lines driving key performance indicators to the forefront of the industry. HYST empowered its specialty steel revitalization efforts expanded effective models such as consumption-based assistance and industrial assistance and actively carried out
transformation through Party-building case practices strengthening the foundation for the R&D of steel tubes for public welfare initiatives including charitable donations and community services deeply integrating the responsibility of a state-owned
extreme operating conditions. Leveraging its "cooperation and win-win" Party-building model VAMA deepened enterprise into the enhancement of public well-being.international collaboration and achieved breakthroughs in both technology and market development. Yangchun New
Steel used Party building to drive breakthroughs in environmental protection taking the lead in the public disclosure Remembering where we came from we now embark on a new journey. In pursuing our aspirations across mountains and seas action must
of its full-process ultra-low-emission retrofit. The deep integration of Party building with production and operations come first. 2026 will be a crucial year for launching China's 15th Five-Year Plan. The steel industry will face multiple tests including deeper
has enabled us to maintain strategic resolve at all times stay firmly on course and move forward with steady steps. policy regulation and heightened international barriers while also embracing development opportunities arising from the release of demand
in high-end manufacturing and the realization of green transformation dividends. We will always keep in mind the mission of a state-owned
Innovation Drives Breakthroughs High-End Manufacturing Sets Industry Benchmarks enterprise strive ahead with determination and practical action foster new quality productive forces and press forward to secure success
in major tasks such as structural adjustment digital and intelligent upgrading and green and low-carbon development. We will move with
Focusing on the core task of "innovation-enabled high-end development" the Company achieved dual successes in resolve toward the goal of becoming "a comprehensive service provider of steel products dedicated to customer value" contribute to the
technological breakthroughs and product upgrades. During the year we obtained authorization for 640 new patents high-quality development of China's steel industry and to the implementation of the "Three Highlands and Four New" Strategy in Hunan
won 26 major science and technology awards and saw 2 products receive the title of "Golden Cup Premium Product". Province and work hand in hand with all stakeholders toward an even better new journey ahead.A number of products achieved either "first domestic launch" status or import substitution and the proportion of
key steel grades increased to 68.5%. Each subsidiary continued to deepen its presence in specialized segments and
Chairman and General Manager Hunan Valin Steel Co. Ltd.6 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 7
About Valin Steel Major Production Bases
Xiangtan Steel LY Steel
Company Profile
Valin Steel is a joint stock limited company established in 1997 with Hunan Iron & Steel Group Co. Ltd. the largest
provincial state-owned enterprise in Hunan Province as its principal sponsor. It was listed on the Shenzhen Stock
Exchange (SZSE) in August 1999. The Company is principally engaged in the production and sale of steel products
and possesses full-process technological equipment covering coking sintering ironmaking steelmaking rolling
and steel deep processing. Its core equipment and production processes are among the most advanced in the world.Headquartered in Changsha Hunan Province the Company operates five specialized production bases in Xiangtan Loudi
and Hengyang in Hunan Province and Yangjiang in Guangdong Province. HuNan XiangTan HuNan LouDi
Vision: Committed to building a modern steel Vision: Committed to becoming a domestically
enterprise with international competitiveness and leading world-class and sustainably competitive
broad respect comprehensive steel service provider
Organizational Structure HYST VAMA
Shareholders' Meeting
Strategy and ESG Committee
Board of Directors Audit Committee
HuNan HengYang HuNan LouDi
Executive Committee Nomination and Remuneration
Assessment Committee
Vision: Committed to building a world-class Vision: Committed to becoming the best supplier
Other Senior Executives General Manager specialized seamless steel tube enterprise of integrated automotive steel solutions in China
Yangchun New Steel
Strategy
Company Development Internal Control
Office Department Human Resources
(Corporate (Safety and Securities and Corporate Finance
and Audit
Department
Culture Environmental Department Management Department
Department) Protection Department
(Legal Affairs
Department)
Department)
Xiangtan LY Steel HYST VAMA Procurement Finance Factoring Valin Hong Kong
GuangDong YangJiang
Steel Center Company Company International
Trading Company Vision: Committed to becoming a major production
Yangchun base and industry leader for wire rod and bar
New Steel
products in South China
Organizational Structure of Valin Steel8 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 9
Major Products1 2025 2024年度可持续发展报告
2024年度可持续发展报告
The Company adheres to the strategy of "building strength through specialization and achieving regional leadership" Capable of meeting customers' personalized Accounting for68.5%
and continues to refine its three strategic support systems: lean production the integration of sales R&D and production end-use requirements—reached of total steel sales
and marketing and service. Focusing on market segments and targeting landmark projects and benchmark customers
the Company is committed to providing satisfactory steel products and services to customers worldwide. The Company's 其中，宽厚板已经形成造船板、锅炉压力容器1板5、.桥5梁0及高建板m、illi管on线 t钢on、n耐es磨钢、海洋平台用钢六大product mix is centered on steel plate products primarily serving the industrial steel market and aligning with the 系其列中；， 宽冷厚热板轧已薄经板形系成列造产船品板已、成锅功炉开压发力出容高器强板薄、规桥格梁工及程高机建械板用、钢管、线耐钢磨、钢耐、磨中钢高、碳海合洋金平钢台、用电钢工六钢大、future direction of China's manufacturing transformation and upgrading. Its products cover nearly 10000 varieties and
汽系列车；用钢冷、热镀轧锌薄家板电系用列钢产等品系已列成产功品开；发无出缝高钢强管薄产规品格覆工盖程大机、械中用、钢小、全耐组磨距钢，、涵中盖高油碳气合用金管钢、、压电力工容钢器、specifications across four major series: wide and heavy plate hot- and cold-rolled sheet wire rod and bar and seamless
steel tubes. 用汽管车、用机钢加、工镀用锌管家等电系用列钢。等公系司列以产优品异；的无产缝品钢、管稳产定品的覆质盖量大、、超预中期、的小服全务组，距在，能涵源盖与油油气气用、管造、船压和力海容工器、工用程管机、机械加和工桥用梁管、等汽系车列等。细公分司领以域优建异立的了P产领ro品先d、u优c稳t势 定C。a的te质go量ry、超预期的服务，在能源与油气、造船和海工、
2025
Steel Tubes 1.81 Bars 4.24 工程机械和桥梁、汽车等细分领域建立了领先优势。 Sales Volume（million tonnes） Percentage（%）8.01% 1.81 4.24 18.75%8.01% 18.75% 2024 年，公司产品中具有高技术含量、高Au附to加m值ot、iv高e s盈te利el能力，能满足客户终端个性化需求3.4的9 品种钢销 22.54
1.78 量20达24到年1，6公41司万产吨品，中品具种有钢高销技量术占含比量6、5%高。附加值、高盈利能力，能满足客户终端个性化需求的品种钢销Cold-rolled Coils7.86% Steel for energy and oil & gas 2.10 13.561.78 量达到 1641 万吨，品种钢销量占比 65%。7.86% Steel for shipbuilding and offshore 2025 Sales engineering 1.77 11.41
by Product 关键绩效
Coated Steel Sheets
13.34% 3.02 Category 关键绩效 Steel for construction machinery 1.65 10.663.02 Wide and Heavy 13.34% Plate 5.22 222.6633 5.22 2
3.05% 16E4lec1trical Steel 65 1.62 10.43U2nit:2 m6illi3on 23.05% 品种钢销量达到 万吨 品种钢销量占比 %
tonnes
品种钢销量St达ee到l fo1r b6rid4ges1 an万d吨 high-ri品se种 bu钢il销din量g占s 比 65% 1.40 9.06
Wire Rod 3.15 Steel for metal products 1.17 7.57
13.94% 3.15 Hot-rolled Coils 3.40
13.94% 3.40 15.05%15.05% 品种 Steel for home appliances 2024 年 1.17 7.58
单位品：种万吨2024年
1.30 0.16 Steel for equipment manufacturin
销g量 占1.0比1 6.53
单位：万吨
5.74% Home 1.30 0.71% 工程机械用钢
销18量31占1.2比%
Appliances Others
5.74% 0.16 0.71% 工程机械用钢 Others汽车用钢 138634 10 21..120 0.672.2%%
5.64% 1.28 4.27 18.87% 能源汽与车油用气钢用钢 Total 326147 2Other Equipment 1.28 4.27 1
1235...225%%0100.00
Manufacturing
5.64% Energy and Power 18.87% 能源与油气用钢 217 13.2%
7.83%1.77
桥梁与高建用钢1589.7%桥梁与高建用钢158
Metal Products 1.77 造船与海C工o用钢rporate Cultu1r7e0 1
90..74%%
7.83% 2025 Sales by 3.61 15.96% 造船与电海工工钢用钢 11790 10.4%
8.22%1.86
Downstream 8 12.1%
Automobiles 3.61
Construction 1.86 2Se2ct6o3r 15.96% 金属电制工V品a钢l用in钢 Steel vigorously explores and p11ro93m87 otes the value or1i8e2.n.41t%a%tion of "putting strivers first" and the enduring red cultural 8.22% Machinery 222.63 金属制h品er用it钢age of Huxiang. The Company re1g3a7rd s corporate cultu8re.4 a%s the soul and pillar of corporate development and remains 1.88 Unit: million 装备制c造om用m钢itted to observing and upholdi1n0g9 i ts corporate cultur6e.7 i%n all business activities using it as the foundation for uniting
8.31% Infrastructure 1.88 tonnes 2.67 11.80% 装备家制电e造用m用钢pl钢oyees and pooling collective str1e90n09g th. 65..75%%8.31% Shipbuilding and Offshore Engineering 2.67 11.80% 家电用钢
1.88其他1
90305..58%%
8.31% High-rise Buildings and 1.95 其他 13
Bridges
8.31%1.881.958.60%合计164110
00.8.%0%
Real Estate 8.60% 合计 1641 100.0%
Business Philosophy
Among these wide and heavy plate products have formed six major series: shipbuilding plate boiler and pressure vessel R&D and Marketing Strategy
plate bridge and high-rise building structural plate pipeline steel wear-resistant steel and offshore platform steel. Building Strength
The hot- and cold-rolled sheet series has successfully developed products including high-strength thin-gauge steel for Core Value through Specialization Deepening Industry Presence
construction machinery wear-resistant steel medium- and high-carbon alloy steel electrical steel automotive steel and Putting Strivers
galvanized steel for home appliances. Seamless steel tube products cover large medium and small size ranges including Regional LeadershipFirst Regional Market Leadership
product series for oil and gas applications pressure vessels and machining. With premium products stable quality and
services exceeding customer expectations the Company has established leading advantages in market segments such as Staying Half a Step Ahead
energy and oil and gas shipbuilding and offshore engineering construction machinery and bridges and automobiles.
1 Sales volumes and percentages by product category are rounded figures.10 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 11
was comprehensively strengthened. Adhering to a "high-end + differentiated" approach the Company continuously upgraded its production lines
Highlights 2025 and equipment toward the high end. At Xiangtan Steel projects including Phase I of the quality upgrading project for Plate Line II Phase III of the bar finishing line and the new large-bloom continuous caster in the steelmaking plant progressed in an orderly manner. At LY Steel the No. 3 cold-rolling
galvanizing line rapidly reached target output and acquired the capability to produce key products such as automotive outer panels and DP1180 while
In 2025 the steel industry remained in a phase of deep adjustment and continued to operate under a pattern of "development through volume the silicon steel production line achieved full production and target performance and successfully established the full-process route for producing high-
reduction and optimization of existing capacity." The imbalance between supply and demand remained pronounced and enterprises continued magnetic-induction grain-oriented silicon steel entirely under low-temperature conditions. HYST fully launched its industrialization and sustainable
to face significant operating pressure. In response to the complex and challenging market environment the Company maintained strong strategic development project for extra-large-diameter continuously rolled pipes providing solid hardware support for the continued move toward a more
resolve actively aligned itself with market demand vigorously advanced cost reduction and efficiency enhancement initiatives and accelerated high-end product mix. Second digital and intelligent upgrading was implemented across the board. The Company further advanced digital and
transformation and upgrading toward high-end intelligent and green development maintaining relatively stable production and operations. During intelligent development in depth. In 2025 46 AI large-model application scenarios were launched and the cumulative number of robot units deployed
the reporting period the Company recorded total operating revenue of RMB 121.741 billion. Total profit net profit and net profit attributable to in the core steel business reached 261. Xiangtan Steel was selected for inclusion in the first group of national excellence-level intelligent factories LY
owners of the parent company amounted to RMB 4.820 billion RMB 3.870 billion and RMB 2.611 billion respectively representing year-on-year Steel was included in the list of "5G factories" and HYST's smart industrial park was recognized as one of Hunan Province's landmark" digital new
increases of 16.37% 20.97% and 28.49% respectively. The Company continued to maintain a leading level of profitability within the steel industry. infrastructure" projects. Projects such as the financial digitalization at headquarters the intelligent equipment-process integration at Xiangtan Steel
the integrated smart energy-and-carbon management and control at LY Steel and the energy management system at HYST all accelerated. Third green
10.468
9.782 transformation and development advanced at full speed. The Company strictly implemented ultra-low-emission requirements. In 2025 all production
bases completed ultra-low-emission retrofits and full-process public disclosure. Compared with pre-retrofit levels emissions of particulate matter
sulfur dioxide and nitrogen oxides decreased by 60% 69% and 54% respectively. Xiangtan Steel LY Steel and VAMA successfully achieved Class A
6.6526.964
7.675 6.640 80.54 environmental performance. Xiangtan Steel LY Steel and Yangchun New Steel were included in the cultivation list for "Best Practice Energy Efficiency
5.295 Benchmark Demonstration Factories" under the carbon peaking and carbon neutrality initiative. More than 60 products completed carbon footprint
certification and published EPD reports.
3.2003.870
65.12
60.78
57.54 56.0251.67 53.46 Deepening Best-in-Class Benchmarking with Remarkable Results in Cost Reduction and Efficiency
52.28 51.88 Enhancement through Lean Operations.
76.7 101.4 107.3 116.5 171.6 168.6 164.5 144.7 121.7 1.851 1.538 0.942 0.598 0.263 -0.018 0.072 0.088 0.033 The Company continued to refine its benchmarking system strengthen refined management and deliver cost reduction and efficiency enhancement
2017 2018 2019 2020 2021 2022 2023 2024 2025 At the At the At the At the At the At the At the At the At the
end of end of end of end of end of end of end of end of end of across all operations. First process costs were continuously reduced. The Company adhered to the mechanism of holding one benchmarking meeting
2017 2018 2019 2020 2021 2022 2023 2024 2025 each month and granting rewards each quarter continuously improving its benchmarking system and optimizing techno-economic indicators.
Total Operating Revenue Net profit Finance Costs Asset-liability ratio (%) Major production lines maintained lean and stable operation with more than 60 techno-economic indicators setting new records. 6 furnaces and (RMB billions) (RMB billions) (RMB billions) production units received the titles of "Excellence Furnace" and "Pacesetter Furnace" in the national benchmarking competition on energy saving
and consumption reduction for key large-scale energy-consuming steel production equipment. The solid fuel consumption of Xiangtan Steel's 450 m2
Closely Aligning with High-End Demand Achieving Further Breakthroughs in Product Upgrading. sinter machine and the fuel rate of LY Steel's No. 7 blast furnace remained industry-leading while the hot metal cost of Yangchun New Steel ranked
among the top five in the industry. Second procurement cost competitiveness was enhanced. The Company consolidated its primary sourcing
Staying committed to innovation as the primary driver the Company obtained authorization for 640 new patents during the year including 242 channels and expanded new resource channels achieving notable results in the development of non-mainstream resources. The share of non-
invention patents and received 26 major science and technology awards including 7 at the provincial or ministerial level and 19 industry and other mainstream imported ore used reached 55.6% up 3.6 percentage points year on year. It also continued to optimize port deployment and ocean-
awards. Focusing on the high-end transformation of industrial steel the Company developed 163 new products achieved first launches of 19 high- shipping COA chartering. Despite challenges including strong currents during the Yangtze River flood season canal lock congestion shortages of
end precision and advanced products realized import substitution for 8 steel grades saw 1 product recognized as a national manufacturing single- empty vessels and two maintenance shutdowns at the Changsha hub the share of coal transported by water increased by 6 percentage points over
champion product and won 22 awards for metallurgical product physical quality. Sales of key steel products accounted for 68.5% of total sales the previous year. Third energy costs were further reduced. The Company continued to strengthen the recovery and utilization of secondary energy
representing a further increase of 3.5 percentage points over 2024. and maintained an industry-leading position in areas such as coke dry quenching sintering waste-heat power generation and waste-heat power
By product category in the wide and heavy plate segment Xiangtan Steel focused on high-strength extra-thick and corrosion-resistant applications generation from downstream steel processing. Total self-generated electricity reached 10 TWh for the year an increase of 333 GWh year on year
and developed 28 new products including deepwater subsea pipeline steel and 260 mm rack steel. Its 80 mm wear-resistant steel and copper-clad steel setting another new record. The newly commissioned 150 MW supercritical generating units at Xiangtan Steel and LY Steel operated stably. Fourth
rolled clad plate filled domestic gaps while its 1000 MPa steel for hydropower applications and 420 MPa steel for offshore engineering applications financial costs remained low. At the end of 2025 the Company's liability-to-asset ratio stood at 53.46% significantly lower than its historical peak for
were recognized as reaching an internationally advanced level. Sales of nickel-alloy steel high-strength wear-resistant steel and low-temperature the same period and down 2.55 percentage points from the end of the previous year reflecting a sound financial position. Financial expenses for the
shipbuilding steel increased by 36% 75% and 256% year on year respectively. In the sheet steel segment LY Steel's "cold-rolled hot-forming steel year amounted to RMB 32.66 million down RMB 55.05 million year on year representing a decrease of 62.77%. Overall financial costs remained well
sheet and strip" was awarded the title of "Golden Cup Premium Product". Its SK series products achieved a major technological breakthrough in rolling under control at a relatively low level and the Company's overall financing cost remained at a historical low.from 1 mm to 0.01 mm and together with customers realized China's only mass production of such products. Finished high-magnetic-induction
grain-oriented silicon steel achieved its first delivery and the first coil of non-grain-oriented ultra-thin steel for new energy applications—known as
"hand-tearable steel"—was successfully rolled off the line with a thickness of only 0.10 mm. Low-temperature high-manganese steel was supplied in Unleashing Reform Momentum and Sustaining the Vitality of Institutional and Operational Innovation.volume for fuel tanks used in green-powered vessels. Sales of high-margin products such as grain-oriented silicon steel high-strength coated steel The Company continued to improve its market-oriented operating mechanisms deepen state-owned enterprise reform and work to build a model
and quenched and tempered plate increased by 21% 103% and 93% year on year respectively. In response to supply chain integration vehicle body of modern governance for traditional manufacturing enterprises. First the Company continued to deepen reform of its institutional frameworks and
modularization and sustainability requirements in the automotive industry VAMA secured 24 additional technical licenses for new steel grades. Its operating mechanisms. The Company further optimized its corporate governance structure and advanced the reform of the board of supervisors. It
Yujian multi-part integration solution once again won industry recognition and received the "2025 Automotive Industry Rotary Award" while its steel also improved a market-oriented system featuring hard constraints and strong incentives implemented performance-linked remuneration widened
battery pack solution received the "Value Empowerment Award" at the International Forum of Automotive Traffic Safety supporting new breakthroughs income differentiation and further stimulated development momentum. The Company deepened reform of the labor personnel and remuneration
for China's automotive industry in lightweighting safety and cost efficiency. In the seamless steel tube segment HYST's "pilot-scale testing platform systems. The labor productivity in the core steel business remained at an advanced level in the industry. The Company continued to promote the
for high-performance OCTG" was recognized as a new materials pilot-scale testing platform by Hunan Province and its "OCTG for deep and ultra- culture of "putting strivers first" comprehensively advanced benchmarking and management enhancement against world-class standards and
deep wells" was included in the list of national manufacturing single-champion products. HYST achieved direct supply to Huaneng Group's four major received 10 management innovation awards at or above the provincial or ministerial level. In line with its strategic transformation objectives
piping systems further expanded into high-end energy markets along the Belt and Road passed QatarEnergy's certification for line pipe products Xiangtan Steel carried out management reform by establishing a new Industrial Development Department and a Digital and Intelligent Research
and obtained supply qualifications for both structural tubes and line pipes. It also passed TotalEnergies' certificate extension review and premium Institute while reorganizing its operations into three business divisions covering ironmaking specialty steel and plate products. At the same time
connection audit expanding the certified range from K55 N80Q L80-1 and P110 to corrosion-resistant casing grades including C90 T95 C110 and it revised 192 system documents and management policies and streamlined 28 business processes further improving operating efficiency. Second
Q125. In the industrial wire rod and bar segment Xiangtan Steel accelerated product quality upgrading and developed 52 new products including the Company continued to strengthen the development of management technical and skilled talent pipelines. The Company organized tiered and
80 kg-grade high-strength alloy welding wire and 2000 MPa-grade high-strength mono-leaf spring steel. China's first application of 1Ni weather- specialized training programs for management technical and skilled personnel; held knowledge forums for PhD recruits and chief specialists on
resistant steel for rivets was realized non-quenched-and-tempered crankshaft steel entered Toyota's supplier system bearing steel met the admission the "four new" areas—new technologies new processes new equipment and new materials; invited external experts to deliver special lectures on
standards of Luoyang Bearing Group and Grade 10.9 high-strength cold-heading steel was certified by Geely and Ford. Sales of high-end gear steel sintering steelmaking digitalization and other topics; introduced technical authorities industry experts and PhD graduates from leading universities
non-quenched-and-tempered steel and spring steel bars increased by 47% 132% and 331% year on year respectively. to strengthen its talent pool; and maintained recruitment from universities and disciplines designated under China's "Double First-Class" Initiative.Among newly hired graduates 25% held master's or doctoral degrees and 143 employees had been selected for the Yingpei Program on a cumulative
Focusing on High-End Intelligent and Green Transformation with Coordinated Progress in Intelligent basis. A total of 23 employees received honors at or above the provincial or ministerial level while 2 teams and 8 individuals were selected for the
Manufacturing and Green and Low-Carbon Development. Hunan Furong Talent Action Plan. In addition 3 employees were named National Model Workers 4 were named Provincial Model Workers and 1 was
Closely aligned with Hunan Province's "4×4" modern industrial system the Company developed new quality productive forces suited to local named a Great Country Craftsman all record highs further demonstrating the growing leadership role of the Company's talent base.conditions and intensified its transformation toward high-end intelligent and green development. First hardware support for high-end manufacturing12 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 13
Honors 2025 Golden Cup Premium / High-Quality Products
Platform Name Entity Level
Over the years Valin Steel has continued to advance and has earned broad recognition from governments institutions
industry organizations and wider society. In 2025 the Company and its subsidiaries received numerous honors in areas Weather-resistant structural steel plate for bridges (Q420qDNH) Xiangtan Steel Golden Cup Premium Products
such as product quality scientific and technological innovation and social responsibility.Cold-rolled hot-forming steel sheet and strip
(LG1500) LY Steel Golden Cup Premium Products
Structural steel with guaranteed hardenability
(20CrMnMoH) Xiangtan Steel Golden Cup High-Quality Products
Science and Technology Honors Heat-treated steel plate for ultra-high-strength
structures (Q1100E) Xiangtan Steel Golden Cup High-Quality Products
Innovation Platforms Hot-rolled wire rod for free-cutting steel (XY1215) Xiangtan Steel Golden Cup High-Quality Products
Hot-rolled alloy tube billet for high-pressure
Platform Name Entity Level boilers (15CrMoG) Xiangtan Steel Golden Cup High-Quality Products
National Enterprise Technology Center HYST National Steel plate for building structures (Q460GJ) Xiangtan Steel Golden Cup High-Quality Products
Chen Wenbin National-Level Skills Hot-rolled wire rod for steel used in cold LY Steel National heading and cold extrusion (SAE10B21A) Xiangtan Steel Golden Cup High-Quality ProductsMaster Studio
Pilot Enterprise for the Construction Weather-resistant structural steel plate for Xiangtan Steel Golden Cup High-Quality Products
of Hunan Provincial Innovation Xiangtan Steel LY Steel Provincial bridges (Q420qDNH)
Consortiums Steel for low-temperature pressure vessels
Hunan Provincial Manufacturing (16MnDR) LY Steel Golden Cup High-Quality Products
Innovation Center for High-Quality LY Steel Provincial
Silicon Steel High-manganese austenitic wear-resistant steel
plate (MN13) LY Steel Golden Cup High-Quality Products
Hunan Provincial Pilot-Scale Testing
Platform for High-Performance OCTG HYST Provincial Heat-treated steel plate for construction
machinery (LG800T) LY Steel Golden Cup High-Quality Products
Hot-rolled steel sheet and strip of quality
National Manufacturing Single Champion Enterprise carbon structural steel (20) LY Steel Golden Cup High-Quality Products
Continuously hot-dip galvanized high-strength
interstitial-free steel strip (HC220YD+Z) LY Steel Golden Cup High-Quality Products
Award-Winning Item Participating / Awarded Unit(s) Award Level
Continuously hot-dip galvanized low-alloy steel
The Ninth Batch of National strip (HC340LAD+Z)
LY Steel Golden Cup High-Quality Products
"OCTG for Deep / Ultra-Deep Wells" HYST Manufacturing Single Champions Seamless steel tubes for high-pressure boilers designated by the Ministry of Industry (12Cr1MoVG) HYST Golden Cup High-Quality Products
and Information Technology (MIIT)
Tubes for offshore engineering (X100Q) HYST Golden Cup High-Quality Products
Seamless steel tubes for crane booms (BJ890) HYST Golden Cup High-Quality Products
Steel pipes for casing used in oil and gas wells
in the petroleum and natural gas industry (P110 HYST Golden Cup High-Quality Products
(HS110TT P110TT 110V HS110V))
Seamless steel tubes for rotary drilling rig drill
rods (HG850) HYST Golden Cup High-Quality Products
Hot-rolled ribbed steel bars in straight lengths
for reinforced concrete (HRB500E) Yangchun New Steel Golden Cup High-Quality Products
Hot-rolled plain steel bars for reinforced
concrete (HPB300) Yangchun New Steel Golden Cup High-Quality Products14 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 15
Science and Technology Awards LY Steel's "Key Core Technologies
LY Steel's "R&D and Application of for Efficient Production of Wide LY Steel's "Magnetically Controlled
Key Technologies and Equipment High-Quality Medium- and High- Extraordinary Metallurgical Preparation
for Intelligent Leveling of Advanced Carbon Steel Strip" won the First Technology for High-Quality Steel
Xiangtan Steel and Valin V Cloud's High-Strength Steel" won the First Prize of the Metallurgical Science Materials" won the First Prize of
"Key Technologies and Equipment Prize of the Metallurgical Science and Technology Award from the the Metallurgical Science and
for Low-Carbon Equalizing Sintering and Technology Award from the China Iron and Steel Association Technology Award from the China
Xiangtan Steel's "Development Based on Fuel Segregation" won the China Iron and Steel Association and the Chinese Society for Metals. Iron and Steel Association and the
and Application of Complete First Prize of the 2025 Metallurgical and the Chinese Society for Metals. Chinese Society for Metals.Technologies for Ultra-Thick Science and Technology Award.Straight-Mold Arc Continuous
Slab Casters" won the Grand
Prize of the 2025 Metallurgical
Xiangtan Steel's "Steel for the Science and Technology Award.Haiji-2 Deepwater Jacket" won
a first prize for scientific and
technological progress in the
China Petroleum and Chemical
Industry Federation.Xiangtan Steel's "Development and
Yangchun New Steel's R&D and
Xiangtan Steel's "Development LY Steel's "Innovation and Practice Application of Key Technologies Xiangtan Steel's "R&D and Industrial Application of an Intelligent Control for Weather-Resistant Bridge Steel Xiangtan Steel's "Key Manufacturing and Application of Key Preparation Application of Key Technologies in Key Equipment Technologies System for Equipment Across the Technologies and Engineering
Technologies for High-Quality in Special Service Environments" for Ultra-Wide High-Strength High- for Heat Treatment Lines for High- Entire Steelmaking Process won the Application of 420/460 MPa-Grade
Rolled Clad Plates" won the First won the Second Prize of the 2025 Toughness and Easy-to-Weld Steel Quality Thin-Gauge Steel Plates" won First Prize of the 2025 Guangdong Extra-Thick Steel Plates for Deep-
Prize of the Metallurgical Science Plates" won the First Prize of the the First Prize of the Metallurgical
Metallurgical Science and Technology
Metallurgical Science and Technology Sea Jackets with High Service
and Technology Award from the 2025 Metallurgical Science and Science and Technology Award from
Award.Achievement Award from the Safety" won the Second Prize of
China Iron and Steel Association Technology Award. the China Iron and Steel Association Guangdong Association of Iron and the 2025 Metallurgical Science and
and the Chinese Society for Metals. and the Chinese Society for Metals. Steel Industry and the Guangdong Technology Award.Provincial Metal Association.16 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 17
Science and Technology Awards Other Science and Technology Awards
"Development of a New
Generation of Soft Magnetic
HYST and Xiangtan Steel's "Development and Materials for Extreme Application "Key Manufacturing Technology "420 MPa-Grade Series of Scenarios and Application in
Application of Key Technologies for High-Quality and Application of 420 MPa- High-Strength Low-Alloy High-Quality Motor Systems"
Continuous Casting and Quality Control of Steel" Grade Extra-Thick Steel for Structural Steel for Offshore won the Second Prize of the
Deepwater Jackets at Xiangtan
won the Second Prize of the Metallurgical Science Platforms" won the 2024 Mechanical Industry Science Steel" won the Grand Prize from Product Development and and Technology Award from
and Technology Award from the China Iron and Steel LY Steel's "Development and Application the China Machinery Metallurgy Market Expansion Award the China Machinery Industry
Association and the Chinese Society for Metals. of Key Technologies for Design and Control and Building Materials Workers' from the China Iron and Steel Federation and the Chinese
Technical Association.of Nitrogen Microalloying in High-Quality Association. Mechanical Engineering Society.Steel" won the Third Prize of the Metallurgical Xiangtan Steel Xiangtan Steel LY Steel
Science and Technology Award from the
China Iron and Steel Association and the
Chinese Society for Metals. "High-Quality Steel for Diverse
Extreme Environments in
Deep Sea and Deep Earth
Applications" was selected as
"Thin-Gauge Heat-Treated a Hunan Province advanced
Steel Plate for Crane Booms manufacturing "open
of LY Steel" won the Product "Thin-Gauge High-Strength competition for selecting
Development and Market High-Toughness and Wear- the best candidates" project
Expansion Award from Resistant Steel" received the issued by the Hunan Provincial
the China Iron and Steel "Innovative Product" award Department of Industry and
Association. from World Metals. Information Technology.LY Steel LY Steel HYST
"Development and Application of "Development and Application
Key Technologies for High-Quality of Key Technologies for Anti-H2S Three products including "Hot-
Low-Alloy Weather-Resistant Corrosion OCTG of 110 ksi and Rolled Plain Steel Bars for
HYST's "Development and Steel" won the Second Prize Above Steel Grades" won the Reinforcement in Concrete"
of the Science and Technology Second Prize for Scientific and received the 2025 Guangdong
Application of Key Technologies Award from the Chinese Society Technological Progress from the Famous High-Quality and
for Seamless Steel Tubes for for Corrosion and Protection. China Steel Construction Society. Innovative Products.High-End Automotive Axles" HYST's "Product Development and Yangchun New Steel's Construction
won the Third Prize of the National Standard Formulation for and Practice of an Integrated Cost HYST LY Steel Yangchun New Steel
Metallurgical Science and Precision Seamless Steel Tubes for Management and Control System
Technology Award from the Hydraulic Cylinders in Construction Across the Full-Process Chain in Steel
China Iron and Steel Association Machinery" won the Third Prize Enterprises won the Third Prize of the Product Quality / Management Innovation
and the Chinese Society for of the Metallurgical Science and 2025 Guangdong Metallurgical Science
Metals. Technology Award from the China and Technology Achievement Award
Iron and Steel Association and the from the Guangdong Association of Iron First Prize of the 22nd Modern "Development and Application
and Steel Industry and the Guangdong Management Innovation of Innovative Thin-Gauge High-Chinese Society for Metals.Provincial Metal Association. Achievement Awards for Nomination Award of the 8th Strength High-Toughness and Wear-
Metallurgical Enterprises Hunan Governor Quality Award Resistant Steel" received the "Three
awarded by the China Iron and presented by the People's Innovations Brand Achievement"
Steel Association Government of Hunan Province award from World Metals
Xiangtan Steel LY Steel LY Steel
Building an Integrated Risk Prevention and Control
System Based on the Interconnection of Discipline
Inspection Audit Legal Affairs and Business National Quality Brand for Machinery
Operations in a Large Steel Tube Enterprise received Steel of the Year awarded by Shanghai
the First Prize of the Hunan Modern Enterprise Ganglian E-Commerce Holdings Co. Ltd.Management Innovation Achievement Awards
HYST HYST18 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 19
Included in Hunan Advanced-Level Intelligent
Hunan Province Manufacturing Quality "National Manufacturing Quality Provincecs 2025 List Factory of Hunan Province
Benchmark; Hunan Province Manufacturing Benchmark" awarded by the China of Typical Application recognized by the Hunan Included in the 2025
Single Champion Association for Quality Scenarios for "Artificial Provincial Department of List of 5G Factories of First Prize in the Hunan
Intelligence + Citywide Industry and Information the Ministry of Industry IPv6 Application
Digital Transformation" Technology and Information Innovation Competition
VAMA VAMA Technology
Xiangtan Steel LY Steel LY Steel LY Steel
Green Production Included in Hunan
Included in the "100 Province's classification
Advanced Collective Landmark Projects for Digital list for cybersecurity of
Enterprise selected for Environmental New Infrastructure in Hunan industrial internet enterprise
for cultivation under Protection Statistics Province (2025)" list released networks released by Advanced-Level
the industry's "Best in China's steel by the Hunan Provincial the Hunan Provincial Intelligent Factory of
Practice Energy industry awarded by Department of Industry and Department of Industry and Guangdong Province
Advanced Collective Efficiency Benchmark the Information and Information Technology Information Technology
National Green
of the 2025 China Demonstration Plants" Statistics Department
Factory
Water Saving Awards for carbon peaking and of the China Iron and
carbon neutrality Steel Association HYST HYST Yangchun New Steel
Xiangtan Steel Xiangtan Steel Xiangtan Steel Xiangtan Steel
Enterprise selected External Recognition / Investor Relations
for cultivation under
the industry's "Best
Practice Energy Awarded the Shenzhen
Efficiency Benchmark "2025 Best Practice Stock Exchange's Recognized as the Assigned an ESG "AAA"
Successfully Demonstration Successfully achieved Award for Board Office" highest information "Outstanding IR Team" rating by the China
achieved Class A Plants" for carbon Class A environmental National Green Factory awarded by the China disclosure rating and received the Annual Metallurgical Industry
environmental peaking and carbon performance Association for Public of "A" for seven Investor Relations Gold Planning and Research
performance neutrality Companies (CAPCO) consecutive years Award from P5W Institute
Xiangtan Steel LY Steel LY Steel HYST Valin Steel Valin Steel Valin Steel Valin Steel
Enterprise selected Recognized as a "Contract-
for cultivation under Honoring and Credit- Second Prize of the AAA Enterprise for High- "Top 100 New Supply Chain
the industry's "Best Reliable Enterprise" in National Enterprise Culture Quality Development in Enterprises in China's
Practice Energy Hunan Province Achievement Awards China's steel industry Automotive Industry"
Successfully Efficiency Benchmark
National Green achieved Class A
National Green Factory Demonstration Plants"
Factory environmental for carbon peaking and HYST HYST HYST VAMA
performance carbon neutrality
VAMA VAMA Yangchun New Steel Yangchun New Steel
"Value Empowerment
Award" presented
by China Automotive
Engineering Research No. 84 in the 2025
Institute and CIRI No. 192 in the 2025 Top 100 Guangdong No. 73 in the 2025
Intelligent Manufacturing Automobile Technology Top 500 Guangdong Manufacturing Top 100 Guangdong
Institute Enterprises Enterprises Innovative Enterprises
Included in the "100 Grand Prize of
Optimization- Landmark Projects for the First China VAMA Yangchun New Steel Yangchun New Steel Yangchun New Steel
Level Intelligent Included in the Digital New Infrastructure Artificial Intelligence
Factory awarded by 2025 List of 5G in Hunan Province (2025)" Application Innovation
China Metallurgical Factories of the list released by the Hunan Competition 2025
Information and Ministry of Industry Provincial Department of awarded by the Chinese
Standardization and Information Industry and Information Society of Technical
Institute Technology Technology Economics
Xiangtan Steel Xiangtan Steel Xiangtan Steel Xiangtan Steel20 Hunan Valin Steel Co. Ltd.. 2025 Sustainability Report 21
Environment
Taking Ecological
Stewardship as a Guiding
Principle and Advancing
the Mission of Green
Metallurgy
Guided by the principle of "ecological priority and green development" Valin
Steel has developed an innovative city-enterprise integration model and
systematically advanced its low-carbon transformation. By carrying out ultra-
low-emission upgrades and energy-efficiency improvements across the entire
steelmaking process continuously enhancing the recycling and efficient use
of energy and resources and accelerating the development of garden-style
factories the Company has remained committed to a sustainable development
path that advances economic and ecological benefits in tandem.
22 Responding to Climate Change
31 Strengthening Environmental Protection Management
34 Advancing Energy Conservation and Emissions Reduction
46 Green and Eco-Friendly Operations
Responded to SDGs22 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 23
Responding to Climate Change Strengthening capacity building
The Company places great importance on building systematic capabilities for climate change management has
Valin Steel has actively responded to the national strategy for carbon peaking and carbon neutrality and regards intensified training on carbon management capabilities and has established a tiered and categorized training system.addressing climate change as a responsibility it is duty-bound to fulfill. The Company has unswervingly made green At the Company level special training sessions were organized with industry experts and policy researchers invited to
and low-carbon development a core strategic priority formulated its action plan and targets for carbon peaking and provide training on topics including new carbon tariff policies carbon footprint accounting standards and the frontiers of
carbon neutrality integrated climate governance into all aspects of its operations and comprehensively accelerated low-carbon technologies covering management and key technical personnel from both the Company and its subsidiaries.low-carbon transition. At the same time we have further strengthened governance structures strategy implementation
risk management and control and target achievement in the area of climate change while continuing to advance
technological application product innovation and operating model optimization in the green and low-carbon field
striving to become a global pioneer in green steel. In 2025 the Company's Green and Low-Carbon Research Center was Strategy
officially inaugurated injecting strong momentum into its green and low-carbon development and the enhancement of With the Action Plan for Carbon Peaking and Carbon Neutrality as its core guiding document the Company has anchored
its core competitiveness. its overarching goals of achieving carbon peaking before 2030 and carbon neutrality before 2060. It has continued to
refine six major decarbonization pathways—ultimate energy efficiency process optimization technological innovation
collaborative emissions reduction circular utilization and carbon capture and storage—and promoted differentiated
Key Performance implementation by subsidiaries based on their respective business characteristics.Xiangtan Steel LY Steel and Yangchun New Steel were all included in the cultivation list for the China Iron
and Steel Association's "Best Practice Energy Efficiency Benchmark Demonstration Plants" Annual Strategic Priorities
for carbon peaking and carbon neutrality.Pathways Key Tasks
Governance
The Company continued to improve its climate change governance by establishing a three-tier management Apply process Optimize Adjust the blast
technologies Improve energy Adopt high- Adopt raw material furnace burden frameworkf eaturing top-level roadmapping headquarters-led coordination and subsidiary-level implementation to resources structure and
ensure full-process and whole-value-chain coverage of its carbon peaking and carbon neutrality efforts. I. Ultimate Energy for energy processing and efficiency intelligent Efficiency conservation conversion power-saving digital control to support increase the
Increase the
and carbon efficiency technologies technologies low-carbon proportion of
scrap ratio
development at pellets / lump
Optimizing the organizational structure reduction the source ore
The Board of Directors serves as the highest decision-making body for climate change matters and is responsible for
overseeing and reviewing related work. The Company has established the Strategy and ESG Committee to coordinate
the formulation of climate change-related strategic plans institutional standards and resource allocation plans. At Low-carbon transport Advance the application II. Process Upgrade and improve of green-electricity-
the headquarters level the Strategic Development Department (Safety and Environmental Protection Department) Optimization existing equipment inside and outside the based short-process Extend the industrial chain
is responsible for overall coordination and the Company has established a Green and Low-Carbon Research Center plant technologies
composed of members of management relevant persons in charge and external experts. The Research Center formulated
the Action Plan for Carbon Peaking and Carbon Neutrality which clearly sets out the timeline targets for achieving carbon
peaking and carbon neutrality and outlines a series of key tasks and measures providing guidance for coordinated action Develop and produce green
by the Company's major steel-producing subsidiaries. Each subsidiary actively implements these arrangements and carries III. Technological Apply new low-carbon Innovation metallurgical technologies products across the full life Apply CCS / CCUS technologies
out climate change-related work in its respective location. cycle
Top-Level Planning
Guidance Build independently
IV. Collaborative or jointly distributed
Promote resource
Board of photovoltaic power recycling and reuse and Increase purchases of
Carry out carbon
Directors of the Decarbonization synergistic pollution and green electricity management and carbon
Company generation and hydrogen carbon reduction sink initiativesenergy projects
Strategy and ESG
Committee
Reuse secondary resources
V. Circular Utilization Optimize steel recycling generated in the production Recycle scrap steel from society
Coordinated Planning at process
Strategy Development Department Green and Low- Headquarters Level
(Safety and Environmental Carbon Research
Protection Department) Center
VI. Carbon Capture Explore technologies and theoretical research relating to CO2 cyclic enrichment low-energy-consumption
and Storage absorbents different carbon capture technology pathways CO2 resource utilization and large-scale CO2 transportation and storage
Subsidiaries Responsible
Production Plants of Each Functional Research Institute
Subsidiary departments for Implementation
Valin Steel Climate Change Governance Structure24 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 25
Identification of risks and opportunities and response strategies
Opportunity Potential Financial
The Company has established a normalized mechanism for identifying assessing and responding to climate change- Type Potential Impact Impact Response Strategy
related risks and opportunities. Taking into account industry development trends and the actual operating conditions
of its subsidiaries we systematically identify transition risks physical risks and various opportunities and formulate
targeted control and response measures. Improving energy efficiency and advancing Operating costs↓ Advance initiatives for ultimate energy efficiency and resource recycling and utilization to conserve
Resource efficiency continuously improve the comprehensive utilization
energy reduce carbon emissions and lower Additional income↑ of resources.operating costs
Risk Type Specific Potential Impact Potential Financial Category Impact Response Strategy
Study the development of distributed photovoltaic
Energy conservation and carbon reduction Increasing the use of renewable energy power generation and biomass energy projects
remain long-term policy objectives firmly Develop a carbon neutrality roadmap and invest including the purchase of green electricity through self-investment or joint development.advanced across the industry.Carbon in key initiatives such as ultimate energy efficiency Energy source to raise the share of renewables reduce Operating costs↓
emissions policies are becoming more process optimization technological innovation
Revenue↓ dependence on fossil fuels and lower energy
Increase the proportion of purchased green electricity
stringent increasing operating costs. and collaborative emissions reduction to ensure costs at appropriate times in line with business development
Policy and China's carbon market trading mechanism Operating costs↑ achievement of the Company's carbon peaking and so as to reduce carbon emissions intensity.legal risk is being improved and allowances are carbon neutrality goals.expected to tighten. With the formal Credit risk↑
implementation of the EU Carbon Border Optimize carbon asset management strategies and
Adjustment Mechanism (CBAM) exported advance product carbon footprint accounting and Closely monitor demand for low-carbon products in
products may face higher carbon costs certification to meet CBAM compliance requirements. key downstream sectors such as automobiles and
and compliance pressure. As domestic steel demand enters a plateau Revenue ↓ machinery.phase market demand for green and low-
Products and
carbon steel products is rising expanding Credit risk↑ Advance product carbon footprint certification and
services
Core technologies such as low-carbon market space for high-performance low- Environmental Product Declaration (EPD) certification.Market competitiveness↑
metallurgy and CCUS involve long R&D Revenue ↓ Track and study the application of emerging low- carbon products across the full life cycle.carbon metallurgical technologies keep abreast Provide integrated low-carbon steel solutions to
Technology cycles substantial investment and
risk rapid technological iteration. Failure
R&D investment↑ of the latest technological developments and strengthen relationships with core customers.to achieve timely breakthroughs or applications deepen collaboration among industry Market
application may affect the pace of academia and research institutions and strengthen competitiveness↓
Transition emissions reduction. related technology reserves.Risk Align with green procurement standards in downstream
industries and seek inclusion in core customers' green
supplier lists.Green supply chain requirements and carbon Revenue ↑
Demand from downstream industries Closely monitor decarbonization needs in key Market tariff policies create opportunities to enhance Expand overseas markets for green products to mitigate
for green and low-carbon steel products downstream sectors along the automotive and green product premiums and market share. Profit margin↑ carbon tariff barriers.continues to grow. Delays in upgrading Revenue ↓ machinery industry chains and continue to strengthen
Market risk products toward greener performance the market positioning of green steel products. Participate in the development of green steel trading
may result in loss of market share. The Credit risk ↑
premium potential of green products is Strengthen branding and communication for green
platforms to seize market opportunities.also affected by industry competition. products to enhance customer recognition.Track and study the application of emerging low-
Enhancing the ability to manage climate risks carbon metallurgical technologies and advance
and capture climate-related opportunities collaboration across the green industrial chain.Stakeholders are paying increasing Establish and improve stakeholder communication Revenue↓ while strengthening the brand image
Revenue ↑
Resilience
Reputation attention to corporate climate action.mechanisms and respond promptly to stakeholder associated with social responsibility through Deepen exchanges and cooperation with upstream
Inadequate response measures or Operating costs↑ concerns regarding climate change-related information.Credit risk↓
risks climate change-related business research
and downstream supply chain enterprises pursue
insufficient information disclosure may collaborative emissions reduction and strengthen
result in reputational damage. Credit risk↑
Disclose the sustainability report on a regular basis to and industry exchange
address stakeholder concerns. the Company's industry influence.More frequent extreme rainfall typhoons Improve emergency management plans for extreme
freezing conditions and other severe Revenue ↓ weather and carry out emergency drills.Short-term weather events may affect the operation
(acute) of production facilities raw material Operating costs↑
Upgrade the protection capabilities of production
transportat ion and supply chain facilities and establish emergency supplies reserves.stability potentially causing business Fixed asset value↓ Optimize supply chain deployment and expand the
interruptions. diversified supplier base.Physical
Risk
Long-term changes in natural patterns
Production Advance water-saving technological upgrades and
Long-term such as sea level rise and persistent high constraints↑ improve the recycling rate of water resources.(chronic) temperatures and drought may affect the Company's normal production and Operating costs↑ Assess the impact of long-term climate risks on
operations. facility layout and formulate optimization plans.26 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 27
Impact Risk and Opportunity Management
The Company rigorously completed all work related to carbon emissions
Closely aligned with its overarching carbon peaking and carbon neutrality goals the Company has promoted the accounting. Each subsidiary prepared its annual carbon emissions accounting report
formation of a carbon management framework among its subsidiaries characterized by coordinated action and and data quality control plan completed platform-based reporting formulated
synergistic efficiency gains focusing on key areas such as policy and regulatory compliance breakthroughs in rectification plans for carbon emissions accounting and metering equipment and
technological innovation green product upgrading and energy structure optimization. Based on their respective business improved various ledgers covering procurement sales and inventory metering
characteristics and stages of development the Company's subsidiaries have deeply embedded climate change response and statistics and carbon emissions metering equipment strengthening the data
into the full process of production and operations R&D and innovation and supply chain management laying a practical foundation for participation in the carbon market.foundation for effectively managing climate change-related risks and opportunities. Carbon Market In relation to carbon market management the Company closely monitored policies
Response regulations and industry allocation plans relating to carbon trading strictly fulfilled
mandatory compliance requirements and completed the surrender and settlement
The Company has advanced energy-saving and carbon-reduction technological of carbon emissions allowances in full and on schedule ensuring compliant
upgrades and equipment renewal across the entire production process. We have operations. The Company also preliminarily established an internal dynamic carbon
implemented mature projects such as energy efficiency improvement upgrades asset management ledger conducted simulation analysis of allowance surpluses
for high-energy-consuming equipment blast furnace blast air dehumidification and shortfalls under different production scenarios accumulated experience in
and oxygen-enriched combustion in reheating furnaces while further unlocking market trading and proactive management and enhanced its ability to anticipate
energy-saving potential in each production process. At the same time the Company and manage risks arising from fluctuations in carbon costs.has planned the phased advancement of follow-up technological transformation
Decarbonization projects such as waste heat recovery and energy-saving upgrades for pumps and
Technology fans while steadily carrying out R&D on cutting-edge decarbonization technologies
Upgrades including hydrogen-rich blast furnace metallurgy and carbon sequestration using Case Xiangtan Steel | A Multi-Dimensional Response to CBAM Strengthens Defenses Against Green
steel slag. Trade Barriers
In parallel the Company has focused on process-level improvements by implementing As an enterprise with direct or indirect exports to the European Union Xiangtan Steel actively established a full-
targeted energy-saving technological upgrades. These include upgrading intelligent chain response system for the EU Carbon Border Adjustment Mechanism (CBAM). Xiangtan Steel formulated the
combustion control systems to achieve dynamic optimization of heating curves and air- Action Plan for Responding to the EU CBAM "Carbon Tariff" clearly defining core tasks such as data reporting
fuel ratios and retrofitting the oxygen-enriched combustion systems of blast furnace carbon footprint accounting and supplier traceability. Xiangtan Steel reviewed the list of products falling
hot stoves to increase blast temperature and reduce coke ratio effectively lowering within the scope of CBAM collected emissions data from upstream and downstream suppliers to establish a
energy consumption in production. preliminary carbon footprint traceability mechanism and invited an EU-recognized third-party institution to
conduct pre-verification of CBAM report data for exported products so as to ensure full compliance. At the same
time Xiangtan Steel made early arrangements for carbon asset reserves by purchasing 100000 tonnes of carbon
allowances to address future compliance costs. Through standardized data management Xiangtan Steel also
Case LY Steel | Pilot Trial of CO Catalytic Combustion Technology Delivers Dual Breakthroughs in met carbon market verification requirements effectively mitigating the erosion of product margins caused by
Emissions Reduction and Energy Savings carbon tariffs and safeguarding the stability of its market share in the European Union.In response to the pain points of carbon monoxide emissions from the sintering process in the steel industry
and the high energy consumption of SCR denitrification systems LY Steel conducted a pilot trial of CO catalytic
combustion technology on its 360 m2 sinter machine. Using a dedicated catalyst the technology enabled
efficient and complete oxidation of CO featured a low ignition temperature and thorough combustion and The Company regards digital development as a core lever for improving energy and
directly supplied heat to the SCR denitrification system replacing conventional direct-fired furnaces. The project carbon management. The Company has preliminarily established a management
achieved deep reductions in CO emissions from the sintering process and lowered the operating cost of the platform for its carbon verification and reporting system enabling the collection
denitrification system through waste heat recovery providing the steel industry with a replicable low-carbon Digital Carbon accounting and reporting of data from energy consumption through to carbon
technical pathway for "treating waste with waste". Management emissions. Through digital means the Company has standardized refined and
electronically archived carbon emissions data laying a data foundation for precise
emissions reduction.28 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 29
Metrics and Targets Green Product R&D
The Company has established a clear and quantifiable system of carbon peaking and carbon neutrality metrics and In the R&D and upgrading of green product categories each business segment has made targeted arrangements across a
targets to ensure the orderly advancement of its decarbonization pathways. wide range of steel products. The Company developed cold-rolled galvanized sheet with a scrap ratio of more than 55%
achieving the first launch of RC50 chromium-free anti-fingerprint green steel produced via the long-process route. The
Company developed high-strength lightweight seamless steel tube products reducing steel consumption and energy use
in downstream applications through structural and compositional design. The Company also deepened its presence in
high-end automotive lightweight steel by optimizing the production processes for galvanized sheet cold-rolled sheet and
Overall Targets other products. The Company further developed low-carbon steel materials with low life-cycle emissions for industries
Strive to achieve such as shipbuilding automobiles construction machinery and wind power. Through the optimization of material
carbon neutrality composition and the enhancement of product strength the Company achieved further lightweighting of steel products.before 2060 In addition the Company continued to launch low-carbon high-strength rebar products to meet demand for green
By 2050 reduce construction materials in areas such as infrastructure development.carbon emissions
By 2040 reduce carbon by 65%
emissions by 39% from
Case Xiangtan Steel | High-Performance Hydropower Steel Products Support Low-Carbon the peak level Hydropower Development
Achieve carbon
peaking before 2030 In April 2025 a 1000 MPa-grade hydropower steel bifurcated pipe model for which Xiangtan Steel supplied the
materials Zhengzhou Research Institute of Mechanical Engineering Co. Ltd. undertook the design and testing
and Sinohydro Engineering Bureau 8 Co. Ltd. carried out the fabrication and installation successfully underwent
a hydraulic burst test in Yueyang with the burst pressure reaching 26.7 MPa. According to the expert panel's
assessment the overall performance of the bifurcated pipe reached an internationally advanced level providing
core material support for the construction of hydropower stations with a water head of over 700 meters. The
achievement also supported the upgrading of hydropower stations toward higher HD values under the carbon
peaking and carbon neutrality strategy marking an important transition for China in large-scale hydraulic
Green Product Innovation engineering materials — evolving from a follower to a global leader.Focusing on the core needs of downstream industries for lightweighting and emissions reduction the Company
coordinates its subsidiaries in advancing decarbonization efforts across the full life cycle of products and integrates the
concept of carbon reduction into the entire process of product design production and delivery. Through performance- Case HYST | Green Products Support a Major Breakthrough in National Clean Power Generation
oriented R&D and the provision of customized solutions the Company develops green steel products featuring low
emissions high strength and lightweight properties supported by dedicated services. In doing so the Company On November 28 2025 the 660 MW high-efficiency ultra-supercritical circulating fluidized bed boiler completed
helps downstream customers reduce the carbon footprint of both manufacturing and end-use processes and builds a one year of safe operation and passed authoritative appraisal marking a major breakthrough in China's clean
collaborative decarbonization ecosystem in which "upstream emissions reduction benefits downstream users". power generation technology. HYST supplied high-pressure boiler tubes for the project on a batch basis
supporting the achievement of ultra-high operating parameters ultra-low emissions and ultra-low energy
consumption.30 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 31
Green Product Certification Strengthening Environmental Protection Management
Xiangtan Steel LY Steel With a sound environmental management system as its foundation Valin Steel continued to strengthen environmental
risk prevention and control awareness across the workforce. By cascading environmental protection responsibilities at
As a pilot entity under the national product carbon With emissions reduction at the production
footprint labeling and certification program the end and public disclosure of product carbon every level establishing and improving emergency response mechanisms for environmental incidents and digital control
Company completed carbon footprint accounting emissions data to support downstream supply platforms and continuously advancing environmental management toward standardization normalization and long-
and labeling certification for seven pilot products chain carbon footprint traceability as key green term effectiveness the Company has further reinforced the foundation for its green development.including products produced through the blast measures the Company successfully rolled out
furnace-basic oxygen furnace long-process route cold-rolled galvanized sheet with a scrap ratio of
and the electric furnace short-process route. The more than 55% and achieved the first launch of Optimizing the Environmental Management System
Company also obtained China's first recognized RC50 chromium-free anti-fingerprint green steel
certificate carrying a green supplementary mark for produced via the long-process route. Valin Steel strictly complied with national laws and regulations including the Environmental Protection Law and the
the carbon footprint of marine products. Measures for Emergency Management of Environmental Incidents and comprehensively optimized its environmental
management structure. In 2025 the Company organized the revision of the Environmental Protection Management
Measures further strengthened accountability and assessment for various environmental incidents linked environmental
performance to the remuneration of subsidiary management reinforced awareness of ecological and environmental
protection red lines across the workforce and clarified environmental responsibilities throughout the full chain from
decision-making to execution.Principles of Environmental Responsibility Management of Valin Steel
HYST
The Company obtained a total of 32 carbon footprint certificates
covering the full range of products for pressure vessels and
machining tubes OCTG and line pipes issued respectively by the Shared responsibility of One position dual Multi-party Source control
international certification authority Bureau Veritas (BV) and the Party and administration responsibilities coordination
domestic leading certification body CTI.In 2025 Xiangtan Steel LY Steel HYST VAMA and Yangchun New Steel all maintained the validity of their ISO 14001
environmental management system certification. The coverage rate of ISO 14001-certified sites reached 100%. All
construction projects completed environmental impact assessment approval and all pollutant discharge permits
VAMA Yangchun New Steel remained valid achieving full coverage of licensed lawful and compliant pollutant discharge.The Company completed Environmental Product Yangchun New Steel's high-strength rebar products
Declaration (EPD) certification and published the complied with green development requirements
relevant information on the international EPD throughout the full life cycle. Following on-site
platform. The Company also completed life cycle evaluation and review by MCC Testing Certification
assessment (LCA) for five core products further Co. Ltd. the products were awarded a Green Key Performance
improving its product carbon footprint data system. Product Certification Certificate.Xiangtan Steel LY Steel and VAMA successfully achieved Class A environmental performance
Yangchun New Steel was continuously recognized as a Guangdong "Green Card" Environmental
Integrity Enterprise
Both environmental compliance and environmental performance ranked among the industry's leading
levels
Environmental protection investment amounted to RMB 2.8 billion representing 2.28% of operating
revenue32 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 33
Managing and Controlling Environmental Risks and Hidden Hazards Enhancing Environmental Awareness
The Company established a dual control mechanism combining "internal inspection + external professional support" The Company attaches great importance to environmental capability building and collaborative social governance.to identify and manage environmental compliance risks. Internally the Company established a normalized system for Through systematic environmental training the Company improves the professional capabilities of all employees while
identifying and investigating hidden environmental risks and hazards enabling timely identification rectification and proactively accepting public oversight to strengthen its environmental governance system on all fronts.elimination of environmental hazards at production sites through routine inspections and special reviews. Externally
the Company leveraged professional expertise by engaging the South China Institute of Environmental Sciences of the
Ministry of Ecology and Environment to provide environmental stewardship services. This enabled comprehensive review
and inspection of key areas such as production-site controls and environmental monitoring systematically improving the Formulating annual environmental training plans on a regular basis; organizing special
level of environmental compliance management. low-carbon and environmental protection training in 2025 for management personnel
and technical staff at all levels; focusing on requirements under the Measures for the
All subsidiaries formulated emergency response plans for environmental incidents in strict accordance with laws and Environmental Administration of Pollutant Discharge Permits and the Interim Regulations on the
regulations and completed filing with the competent authorities. During the year the Company organized 15 training training Administration of Carbon Emissions Trading as well as professional knowledge relating to
sessions and drills for environmental emergencies covering scenarios such as wastewater leaks abnormal exhaust gas solid waste disposal and carbon emissions management; extending training coverage to all
emissions and emergency situations involving solid waste disposal. These efforts enhanced the emergency response and employees; and significantly enhancing employees' awareness risk prevention capability
coordinated handling capabilities of personnel at all levels and reduced the impact of environmental incidents. and professional skills in environmental protection.Actively accepting environmental oversight from all sectors of society; organizing plant
visits and community outreach activities; maintaining open channels for feedback and
Key Performance Environmental communication with community residents; building communication bridges for positive
communication interaction between the enterprise and the public; and fostering a modern environmental
Number of environmental emergencies: 0 governance framework based on collaboration among the enterprise communities and
society.Advancing Smart Environmental Management
The Company is comprehensively advancing the development of a smart environmental management platform and Key Performance
building an integrated management system that combines environmental protection operations data management and
daily office functions. By empowering environmental management through digital information-based and intelligent Coverage rate of environment-related employee training: 100%
means the Company is promoting more science-based integrated decision-making more refined environmental
management and more precise emissions control while driving the full online operation of environmental protection
functions and innovation in environmental management. This platform has become a key support for the Company's
green transformation and development.At present Xiangtan Steel LY Steel HYST and Yangchun New Steel have all established and put into operation integrated
environmental protection control platforms. These platforms enable real-time monitoring and intelligent control over key
environmental management information including organized and fugitive emission sources emissions information for
vehicles entering and leaving plants the operating status of environmental protection facilities and ambient air quality
within plant areas significantly enhancing the level of digital environmental management.
201 air quality micro-monitoring Through the Internet of Things
stations formed a dynamic sensing 913 TSP devices built a platform digital twin management
network dust early warning system was implemented for 10202 emission points34 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 35
Advancing Energy Conservation and Energy Efficiency Benchmarking
Emissions Reduction With ultimate energy efficiency as a core lever the Company comprehensively advanced its benchmarking initiative for ultimate energy efficiency conducted competitions among production lines for ultimate efficiency and continuously
optimized its energy cost control system. Xiangtan Steel and LY Steel were successfully included in the cultivation list for
Guided by its strategy of resolutely advancing comprehensive conservation and green development Valin Steel has the industry's "Best Practice Energy Efficiency Benchmark Demonstration Plants" for carbon peaking and carbon neutrality.embedded energy conservation and emissions reduction into every aspect of its operations and management. The Key production equipment including the 3200 m3 blast furnace and 360 m2 sinter machine reached advanced levels in the
Company has systematically promoted the efficient use of energy and water resources the compliant treatment and national benchmarking competition on energy saving and consumption reduction for major large-scale steel production
resource utilization of waste and the development of a circular economy system covering the entire production process equipment setting exemplary benchmarks for energy efficiency in the industry.delivering coordinated improvements in both economic and environmental performance.Energy Recycling and Utilization
Efficient Energy Management
The Company regards efficient energy management as a strategic pillar of green development and has systematically The Company has further tapped the potential of captive power generation through recycling and has continued to increase
advanced energy efficiency benchmarking energy recycling and utilization and clean energy substitution. Supported by investment in and R&D for secondary energy recovery and utilization technologies maintaining an industry-leading position in
smart energy platforms for refined control the Company has continued to optimize its energy mix and improve energy use areas such as coke dry quenching sintering waste-heat power generation and waste-heat power generation from downstream
efficiency building a clean low-carbon and highly efficient energy system. steel processing. Xiangtan Steel and LY Steel phased out part of their medium-temperature and medium-pressure thermal
systems and invested in four 150 MW ultra-high-temperature generating units achieving zero flaring of low-calorific-value blast
The Company has continued to improve its institutional framework for energy management and prepared documents furnace gas substantially increasing self-generated electricity and significantly improving the comprehensive utilization of
including the Energy Measurement Management System Measures for the Management of Key Energy-Using Equipment secondary energy. In parallel the Company intensively implemented a series of nationally promoted energy-saving and waste
and Facilities Management System for Project Energy Conservation Review and Carbon Emissions Evaluation and heat recovery projects including coke oven riser waste heat recovery sinter main flue waste heat recovery and CO catalytic
Energy Management Measures Plan. At the same time the Company has continued to strengthen and refine its energy combustion further unlocking the potential of energy recycling and utilization.management system. Guided by the Energy Management System Manual and the accompanying series of Management
Procedures the Company has promoted the continual improvement of its energy management system. Key operating
entities including Xiangtan Steel LY Steel and HYST have all obtained ISO 50001 (GB/T 23331) energy management system Clean Energy Substitution
certification achieving full coverage of major production units. The Company has vigorously promoted the optimization of its energy mix with the large-scale deployment of photovoltaic
Each production base has established comprehensive energy management supervision procedures. Through the projects as a core focus. By making full use of office buildings plant rooftops and vacant land within plant areas the
online monitoring system of the Energy Management Center (EMS) the Company conducts daily monitoring of energy Company has built distributed photovoltaic power stations and comprehensively promoted distributed photovoltaic power
consumption tracks in real time the energy consumption data of each process and major equipment and automatically generation. In 2025 the Company completed 64 MW of self-owned photovoltaic clean energy generation capacity with
issues alerts for abnormalities. The Energy Management Department analyzes the energy performance of key units each annual power generation reaching 25.52 GWh further improving its energy self-sufficiency rate.month and prepares monthly energy reports to support regular reviews. Internal audits of the energy management system In addition the Company adopted high-efficiency electricity-saving technologies carried out green lighting upgrades
are conducted annually to examine the conformity and effectiveness of system operation. Management review meetings across its plants and promoted solar-powered street lighting improving energy efficiency while continuously enhancing
chaired by management are also held to assess the system's continuing suitability adequacy and effectiveness in light of the lighting environment within plant areas. At the same time the Company actively expanded clean energy application
changes in policy technology and performance and to determine directions for improvement. In addition compliance scenarios advanced the implementation of hydrogen energy projects and continuously reduced its dependence on fossil
evaluations are conducted regularly to verify whether the Company's energy activities comply with applicable laws energy.regulations and other requirements.Key Performance
Total energy consumption: 13913196.85 tonnes of standard coal Monitoring Developing distributed opportunities for the
photovoltaic power deployment of hydrogen
Steam consumption: 1650105.73 tonnes of standard coal generation projects energy projects at
appropriate times
Fuel oil consumption: 7014.81 tonnes Planning to increase the Advancing the proportion of purchased
Diesel consumption: 7006.23 integrated use of wind tonnes green electricitysolar and hydropower
Gasoline consumption: 8.58 tonnes
Coal consumption: 11620542.70 tonnes
Natural gas consumption: 255306016.93 m336 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 37
Smart Energy Platform
Key Performance
The Company has made all-out efforts to advance the development of its smart energy management system. The system
Total annual clean energy consumption: 1822530 MWh covers major energy media including water electricity air and gas and integrates multiple functional modules such
as energy monitoring screens operation management intelligent decision-making energy analysis refined process
Total electricity consumption: 15.2 TWh management carbon emissions management and energy-saving technologies. The system effectively breaks down
barriers between departments and professional functions. Through horizontal business integration and vertical data
Self-generated electricity: 9999.77 GWh connectivity it enables the integration of energy information across different processes. Supported by refined production
organization and energy planning management the system helps achieve precise energy supply and lean production
effectively reducing the Company's power and energy costs.Case LY Steel | Smart Energy Platform Improved Energy Management Efficiency
Xiangtan Steel LY Steel
LY Steel's energy management system was put into operation in 2009 and successfully enabled comprehensive
online monitoring and management of the Company's energy production conversion and supply. At present
In 2025 the clean energy used by the Company At present the Company uses 1.042 TWh of all operating equipment related to energy management has achieved online collection and real-time monitoring
included wind power solar power and hydropower photovoltaic power and hydropower representing of energy consumption data. Over the years the platform has been continuously improved with management
totaling 765.7 GWh accounting for 37.95% of 48% of the relevant total. Natural gas consumption functions such as energy balancing energy forecasting indicator management and energy efficiency
purchased electricity and 12.77% of total electricity amounted to 77.97 million m3 and natural gas management gradually added. In addition LY Steel implemented the project of integrating power metering data
consumption. energy consumption accounted for 1.6% of total into the energy network launched an overall upgrade of its energy system and advanced the overall planning of
energy consumption. intelligent manufacturing further improving the precision and efficiency of energy management.Innovative Application of Hydrogen Energy Technology
Case HYST | Photovoltaic Power Generation Improved Green Power Self-Sufficiency The Company has actively advanced the R&D and exploratory application of hydrogen energy technology regarding it as
an important pathway for optimizing the energy mix and achieving deep decarbonization. The Company has continuously
HYST actively advanced clean energy projects. In 2025 HYST cooperated with China City Investment Group promoted innovation research and practical application in this field to support the upgrade of its energy system toward
under an energy performance contracting model to develop two photovoltaic power generation projects with greener and lower-carbon development.installed capacities of 12.5 MW and 4 MW respectively. Both projects have now been successfully commissioned.The implementation of these photovoltaic projects effectively improved the Company's self-sufficiency in green
electricity. In 2026 the projects are expected to add 16 GWh of self-generated electricity helping the Company Case LY Steel | Industrial Application of Clean Hydrogen Built a Low-Carbon Steel Benchmark
optimize its energy consumption structure and reduce its dependence on fossil energy.LY Steel made the innovative application of hydrogen energy a key driver of its green transformation. Through
cooperation with Runze New Energy LY Steel implemented a hydrogen-oxygen flame cutting project for
continuous casting replacing traditional fuel gas with a greener production process. Together withS any Hydrogen
Energy LY Steel also built a 250 Nm3/h alkaline water electrolysis hydrogen production demonstration project
for its cold-rolled high-end home appliance sheet project driving a process breakthrough in "replacing carbon
with hydrogen" and building an independent green hydrogen supply chain. Both practices were selected as part
of the first batch of industrial low-carbon hydrogen application scenarios in Hunan Province providing the steel
industry with a replicable and scalable green application pathway integrating "hydrogen production + hydrogen
utilization".38 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 39
Refined Water Resource Management
The Company strictly implemented the Water Law of the People's Republic of China and guided by the Industrial Water Key Performance
Management Measures established a water resource management system featuring source control process control and
3
recycling and reuse. The management team of the Company is responsible for setting objectives and responsibilities for Total water consumption: 4383.69 million m Water recycling rate: 97.91%
water resource protection and utilization. The Energy Department is responsible for supervising the implementation of
such objectives while each subsidiary implements management responsibilities at different levels continuously improves
water use efficiency and keeps total freshwater withdrawal stable with a downward trend.Case VAMA | Combining Internal and External Measures to Achieve New Breakthroughs in Water
Conservation
Key Performance VAMA formulated and implemented rules and regulations such as the Water Resources Management Plan and
the Measures for Water Conservation Management improved the recycling efficiency of water resources and
Xiangtan Steel was recognized as an Advanced Collective of the 2025 China Water Saving Awards by achieved water savings.the Ministry of Water Resources
P romoting source-side water conservation through technological upgrading. VAMA invested in and optimized
Xiangtan Steel LY Steel and HYST all continued to retain the title of "Water-Saving Enterprise" in the make-up supply of demineralized water for the clean circulating water system increasing the concentration
Hunan Province ratio from 3.0 to 4.0 and reducing the annual make-up volume of freshwater for the clean circulating water
system by 172800 m3.Advancing condensate recovery and reuse. VAMA transformed the steam condensate generated in the pickle
line tandem cold mill galvanizing and continuous annealing workshops from direct discharge to recovery
and reuse. In the pickle line tandem cold mill the condensate was used for emulsion preparation while in
the galvanizing and continuous annealing workshops it was used in the degreasing section thereby reducing
the make-up demand for demineralized water. In 2025 VAMA recovered and reused 10000 m3 of steam
condensate reducing freshwater make-up by 13000 m3.Water Withdrawal Management
The Company established a scientific management and
control system for water withdrawal and strengthened
water withdrawal management during special periods. Case HYST | Multi-Dimensional Technical Upgrades Enabled Efficient Water Resource Management
In response to difficulties in water withdrawal during
dry seasons the Company formulated dedicated water HYST completed the renovation of multiple above-ground pipeline sections including the main inlet water pipe
withdrawal plans reduced freshwater intake through for the southern pressurized system and the main water pipe at the ironmaking plant with a cumulative upgraded
comprehensive internal water management and recycling length of more than 2300 meters reducing pipeline leakage. HYST also optimized its wastewater reuse system
and ensured that neither the quality nor the quantity
of river water was adversely affected. In addition the by overhauling key equipment and adding overflow alarms which improved the production capacity of reused Water Conservation Management
Company systematically identified short- medium- water. In addition liquid-level alarms were installed for water storage tanks and operators were trained in refined
and long-term risks and opportunities in water resource control practices. Following the implementation of these measures monthly water savings reached nearly 4000
management formulated targeted response strategies The Company improved the efficiency of wastewater reuse. In tonnes freshwater consumption in ironmaking decreased by 20000 tonnes year on year and after October water
safeguarded the stability of water withdrawal through 2025 we invested more than RMB 40 million in key-area projects loss stabilized at around 5.5% demonstrating significant water-saving results.measures such as water source expansion and technology for separating rainwater and sewage enabling the annual
deployment and promoted the transformation of water recovery and reuse of more than 20000 m
3 of rainwater. The
resource management toward a value-centered approach. Company also treated reclaimed water reuse as a core alternative
water source by establishing dedicated treatment facilities
to enable full treatment and large-scale reuse of industrial
wastewater substantially increasing the recycling rate of water
resources.The Company further promoted the conversion of once-through
process water systems into recirculating systems applied
high-density tank wastewater treatment technology and
addressed leakage seepage dripping or overflow issues. Online
monitoring equipment was added at key nodes and connected
to the platform to enable real-time monitoring of wastewater
discharge and abnormality alerts enhancing water conservation
management and control through digital solutions.Connection works for the renovation of the main inlet water Renovation of the fire water system for the main water pipe
pipe for the southern pressurized system supplying the ironmaking plant40 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 41
Delivering Targeted and Effective Pollution Prevention and Control Focus on three core measures namely upgrading sinter machine bodies for energy efficiency and
Sintering
In the course of production and operations Valin Steel strictly complied with national laws and regulations regional environmental performance advancing flue gas desulfurization and denitrification and strengthening Process
emissions policies and industry standards including the Law of the People's Republic of China on the Prevention and control of fugitive emissions from materials; complete full-process retrofits of sinter machines;
Control of Atmospheric Pollution the Law of the People's Republic of China on the Prevention and Control of Water implement dedicated sintering flue gas desulfurization and denitrification projects; construct enclosed
Pollution the Law of the People's Republic of China on the Prevention and Control of Environmental Pollution by Solid facilities for integrated sinter raw material yards; and ensure organized emissions consistently meet
Waste the Law of the People's Republic of China on the Prevention and Control of Noise Pollution and the Law of the ultra-low emission standards while achieving full control of fugitive emissions.People's Republic of China on Prevention and Control of Soil Pollution. The Company also formulated a series of internal
policies including procedures for wastewater pollution prevention and control and air pollution prevention and control
and has progressively established a pollution prevention and control system covering the entire process. Case LY Steel | Advancing Ultra-Low Emissions Through Environmental Upgrading of Sinter Machines
The Company carried out self-monitoring of the environment in strict accordance with high standards. Its subsidiaries
prepared and implemented monitoring plans and engaged qualified institutions to conduct monitoring of exhaust gas Since 2023 LY Steel has invested a cumulative total of more than RMB 5 billion in a three-year action
wastewater and boundary noise to ensure that pollutant emissions met applicable standards. At the same time in plan for ultra-low emissions retrofits. In May 2025 with the commissioning for trial operation of the
22
accordance with the Measures for Self-Monitoring and Information Disclosure by State Key Monitored Enterprises the energy-saving and environmental upgrading projects for the 130 m and 180 m sinter machines
Company disclosed monitoring data and maintained communication with environmental protection authorities to ensure LY Steel's ultra-low emissions retrofit program reached a milestone marking the completion of a
that data remained stable and compliant. series of organized emissions control projects represented by the environmental upgrading of its
large sinter machines.Ultra-Low Emissions Retrofit The sinter machine retrofit project enabled all organized and fugitive emissions to meet ultra-low
emissions standards on a stable basis. Compared with the older sinter facilities the new sinter
In response to the national campaign for air pollution prevention and control the Company invested a cumulative total facilities are expected to reduce annual emissions of particulate matter sulfur dioxide and nitrogen
of nearly RMB 15 billion over six consecutive years to comprehensively advance ultra-low emissions retrofits across key oxides by more than 2000 tonnes representing a reduction of more than 75% and making an
production processes. In 2025 the Company successfully completed the construction of more than 80 retrofit projects. important contribution to regional air quality improvement.Benchmarking against the standards applicable to enterprises with Class A environmental performance the Company
completed flue gas desulfurization and denitrification upgraded and built dust removal systems and carried out enclosed
retrofits of raw material yards stockyards and conveyor corridors.Following these retrofits atmospheric pollutant emissions were substantially reduced the ultra-low emissions targets were
fully achieved and pollution control results were significant.Key Performance
All four of the Company's steel production bases—Yangchun New Steel Xiangtan Steel LY Steel and
HYST—achieved full-process ultra-low emissions and were publicly announced by the China Iron and Steel
Association
Panoramic view of the 416 m2 sinter machine
Flue gas desulfurization and denitrification retrofit of the 360 m2 sinter machine42 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 43
Ironmaking Combine source reduction with end-of-pipe treatment; implementing targeted desulfurization of Raw Material Implement fully enclosed retrofits for raw material yards and stockyards; construct fully enclosed
and blast furnace hot stoves and deep desulfurization of blast furnace gas; optimizing the mix of raw Storage and
Steelmaking conveyor corridors; advance enclosed retrofits for material transportation processes; implement
materials and fuels to reduce sulfur content; reducing the generation of nitrogen oxides and sulfur TransportationProcesses dedicated dust suppression and dust reduction projects; and achieve full-chain control of fugitive
compounds at source; achieving full control of atmospheric pollutant emissions from ironmaking dust emissions.processes.Upgrade dust removal systems; implementing dedicated dust removal projects for steelmaking HYST | Ultra-Low Emissions Retrofit Supported "Enterprise-City Integration
refining; fully upgrading existing dust removal facilities across metallurgical systems. Case and Green Development"
On December 18 2025 HYST's full-process ultra-low emissions retrofit successfully passed
review and acceptance and was publicly announced on the website of the China Iron and Steel
Association marking that HYST had achieved ultra-low emissions requirements across all
Case Yangchun New Steel | Entering a New Stage of Ultra-Low Emissions in processes and operating procedures. HYST invested a cumulative total of RMB 1.3 billion in a
Metallurgical Processes Through "Source Control + Process Upgrading" series of ultra-low emissions retrofit projects including enclosed retrofits for material storage
and transportation. As a result pollutant emissions were reduced by nearly 70% greatly
Yangchun New Steel has continued to deepen retrofits in improving the environment both within and around the plant.its metallurgical processes and since 2018 has invested
a cumulative total of more than RMB 1.5 billion in related
projects. The Company focused on optimizing the mix
of raw materials and fuels and substantially reducing
their sulfur content while carrying out low-nitrogen Key Performance
combustion retrofits for blast furnace hot stoves to reduce
pollutant generation at source. At the same time the Sulfur dioxide (SO2) emissions: 3769 tonnes Particulate matter (PM) emissions: 9545 tonnes
Company built efficient end-of-pipe treatment facilities enabling both organized and fugitive
emissions from its metallurgical processes to meet ultra-low emissions standards. Nitrogen oxides (NOx) emissions: 9111 tonnes
Wastewater Pollution Prevention and Control
Carry out dedicated treatment of tail gas from phenol- and cyanide-containing wastewater; The Company has established a full-process and refined control system for wastewater management spanning source
Coking construct tail gas collection projects; improve tail gas collection pipeline networks and treatment control at the production end technological upgrading at the treatment end real-time supervision at the monitoring
Process facilities; achieve comprehensive collection and centralized treatment of tail gas generated during end and cascading recycling at the utilization end enabling both efficient wastewater treatment and resource utilization.coking; and eliminate fugitive tail gas emissions at source. In 2025 the Company's total wastewater pollutant discharges fully complied with all applicable total discharge control
requirements.Xiangtan Steel | Tail Gas Collection Retrofit for Phenol- and Cyanide-Containing In the production process the Company used dedicated pipelines to separately convey and treat wastewater from Case
Wastewater Contributed to Continued Improvement in Ambient Air Quality processes such as sintering coking cold rolling and steel slag treatment preventing cross-contamination at source.For specific wastewater streams such as phenol- and cyanide-containing coking wastewater the Company adopted the
Xiangtan Steel invested nearly RMB 6 billion in ultra-low emissions retrofits. All 139 air pollution A2O2 biochemical process combined with ozone-based advanced treatment. We also established integrated wastewater
prevention and control projects involving both organized and fugitive emissions were put treatment systems and cold-rolling wastewater treatment systems. Through a process route of physicochemical
into operation on schedule and in November 2025 Xiangtan Steel successfully completed coagulation-sedimentation combined with sand filtration the Company ensured that all categories of discharged
the public announcement process for full-process ultra-low emissions. As part of its ultra- wastewater met applicable standards.low emissions retrofit program Xiangtan Steel implemented a tail gas collection project for
phenol- and cyanide-containing wastewater in the
coking process completing the installation of tail gas
collection pipeline networks and treatment facilities Key Performance
for the entire coking process. This enabled compliant
collection and treatment of the relevant tail gas Wastewater discharge volume: 26732136 tonnes
resolved the issue of fugitive tail gas emissions in the
coking process and further improved ambient air Chemical oxygen demand (COD) emissions: 282.65 tonnes
quality in the surrounding steelmaking area. Ammonia nitrogen (NH3-N) emissions: 14.50 tonnes
Tail gas collection project for phenol- and
cyanide-containing wastewater44 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 45
Closed-Loop Waste Management Circular Economy Practices
Adhering to the principles of reduction harmlessness and resource Key Performance Valin Steel has deeply embedded the concept of circular economy development into its operations integrating efficient
utilization the Company strictly complied with the Law of the People's resource utilization and the conversion of waste into reusable resources throughout the entire production process.Republic of China on the Prevention and Control of Environmental Hazardous waste disposal The Company has actively promoted the R&D and application of new technologies for the comprehensive utilization
Pollution by Solid Waste and implemented controls in accordance with volume165494 tonnes of solid waste established a development model featuring internal closed-loop resource recycling and coordinated
the Standard for Pollution Control on the Storage and Disposal Site for
Solid waste utilization circulation across the external industrial chain and advanced the cascading utilization of waste gas waste heat and General Industrial Solid Wastes and the Standard for Pollution Control on
volume13123827 tonnes other resources generated at various stages of production. In doing so the Company has built a circular economy chain of Hazardous Waste Storage ensuring that all solid waste was utilized and "resources-products-waste-recycled resources" maximized resource efficiency and supported the green and low-carbon
disposed of in a safe and compliant manner. transformation of the steel industry.The Company has established a scientific and well-developed solid waste management system. On the one hand it
has strengthened full-process control over solid waste disposal; on the other hand it has vigorously advanced resource
recycling models. Through process optimization and technological upgrading the Company has improved the efficiency of
solid waste recovery and utilization and promoted the conversion of industrial solid waste into recyclable resources.For hazardous waste the Company formulated the Hazardous Waste Management Plan completed filing with local
environmental protection authorities in a timely manner in strict accordance with national environmental requirements
Yangchun New Steel
and prepared emergency response plans for hazardous waste while regularly organizing drills to strengthen its capability to
handle emergency situations involving hazardous waste. The Company has established compliant hazardous waste storage Xiangtan Steel LY Steel Introduce advanced treatment
sites and achieved classified storage and standardized management of hazardous waste. Hazardous waste generated technologies expand the
during production such as waste oil and spent lead-acid batteries is entirely entrusted to qualified professional entities for Establish a recycling resources company Invest RMB 130 million in the recovery and utilization of
compliant recovery utilization or disposal ensuring full life-cycle control of hazardous waste with no blind spots. to centralize scrap steel operations and environmental upgrade project waste gas channel surplus
strengthen in-house processing and for converter steel slag raise blast furnace gas into power
Clean Transportation Upgrades handling of internally generated scrap annual treatment capacity to generation and improve the
Valin Steel advanced its clean transportation upgrade through a multi-pronged strategy. This included optimizing 2 million tonnes and expand combined utilization of waste
logistics routes increasing the share of waterway transportation and phasing out outdated vehicles and non-road mobile Commission the roller-press hot-stifling utilization channels through gas and waste heat through
machinery that failed to meet ultra-low emission standards. Concurrently the company renewed its fleet with new energy project and continue advancing the downstream processing of slag newly installed gas engines
and China VI-compliant vehicles established access control and monitoring systems and worked towards building a recycling project for desulfurization powder
clean transportation logistics network. waste liquor
Xiangtan Steel HYST
A ccelerate the replacement of in-plant transport vehicles
Key Performance
Fully enclose material storage and handling areas
with new energy vehicles phase out non-road mobile and upgrade associated transport Comprehensive utilization rate of solid waste: above
machinery below China III standards and maintain the 98%
share of clean transportation at above 80% C onduct clean-transport training via third-party Comprehensive utilization rate of steel slag: 100%
specialists
Comprehensive utilization rate of dust and sludge: 100%
LY Steel Yangchun New Steel
Procure a cumulative total of 121 new energy and China Increase the share of rail transport in inbound raw
VI-compliant vehicles and raise the share of clean material deliveries and outbound finished product
transportation by rail and new energy vehicles to nearly shipments while replacing in-plant vehicles and
90% non-road mobile machinery with new energy
models or equipment meeting more stringent
A dvance in-plant clean transportation upgrades and emissions standards
use suction and discharge vehicles for the transport of
all types of dust Integrate weighing and inspection systems video
surveillance and access control systems to enable
end-to-end monitoring of vehicles entering and
leaving the plant46 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 47
Green and Eco-Friendly Operations Ecological Environment and Biodiversity Protection
Before project construction the Company strictly assessed potential impacts on the ecological environment and avoided
Valin Steel has unswervingly advanced ecological civilization development protected the ecological environment ecologically fragile areas. During project operation the Company continuously carried out monitoring of the surrounding
and biodiversity in an all-round manner and promoted the deep integration of modern eco-steel cities with urban ecological environment to ensure that production activities did not damage the regional ecology while steadily improving
development. Xiangtan Steel VAMA and Yangchun New Steel were selected as national Green Factories while LY Steel regional environmental quality and laying a solid foundation for ecological protection.and HYST were selected as provincial Green Factories in Hunan Province. Yangchun New Steel was also awarded the title The Company prepared science communication materials such as the World Environment Day – Biodiversity Knowledge
of National Environmentally Friendly Enterprise. Bulletin and organized employees to participate in biodiversity protection training and practical activities. In plant
greening projects the Company gave priority to native and locally adapted plant species and built diversified plant
communities to provide habitats for birds insects and other living organisms.Improving the Plant Environment
With the goal of "enterprise-city integration" the Company continued to increase investment in improving the plant
environment and promoted the transformation of steelworks toward a greener and more livable environment through Xiangtan
measures such as road hardening plant building beautification and lighting upgrades. LY Steel VAMASteel
Key Performance
Carry out discharge control Strictly protect the ecological environment Advance plant-wide greening up-
The Company implemented nearly 70 greening beautification and lighting enhancement projects added and water quality monitoring of the upstream drinking water source grades raise green coverage to over
approximately 100000 m2 of green area and raised plant-wide green coverage to over 40%. along the Xiangjiang River protection area of the Lianshui River within 90% and create a favorable habitat (Xiangtan section) within the the plant area rigorously implement attracting as many as 56 species of
Xiangtan Steel continued to retain its designation as a National AAA Tourist Attraction further plant area to ensure com- environmental impact assessment birds and reptiles including hares
advancing the deep integration of a modern eco-steel city with urban development. pliance with government requirements for construction projects pheasants and weasels
regulatory requirements and strengthen environmental control
over the riverfront section involved in the Carry out emergency feeding measures
Leverage activities such as LY Steel high-end home appliance sheet during winter when wild animals face
World Environment Day on project difficulty foraging and place corn and
June 5 to promote knowledge other food at designated locations in
of wildlife protection and raise Implement greening works for steel slag areas frequently visited by wildlife
public awareness hills carry out ecological restoration of
exposed slopes and restore a cumulative
area of approximately 10000 m2
Xiangtan Steel tree-planting volunteer activity on Arbor Day Yangchun New Steel plant environment improvement campaign
Exploring a green path toward high-quality and sustainable development for steel plants
Egrets were seen visiting the HYST plant48 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 49
S ocial
Putting Strivers First
Empowering the Co-
Creation of Social Value
Valin Steel has always adhered to the value orientation of "putting
strivers first". Anchored in work safety and committed to excellence in
quality the Company has built an ecosystem that supports employee
growth earns customer trust promotes industrial collaboration
and delivers win-win outcomes across the supply chain. As a state-
owned enterprise the Company has also actively contributed to
rural revitalization and community development working with
stakeholders to create integrated value and share the benefits of
development through collective effort.
50 Strengthening Quality Management
53 Ensuring Work Safety
57 Optimizing Customer Service
62 Growing Together with Employees
67 Working with Partners for Mutual Success
75 Enhancing Public Well-Being
Responded to SDGs50 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 51
Strengthening Quality Management
Key Performance
Valin Steel strictly complied with laws and regulations including the Product Quality Law of the People's Republic of China and the During the reporting period supported by the full-process quality control system all of the Company's products
Standardization Law of the People's Republic of China and established a sound quality management system and process control strictly complied with applicable health and safety standards and industry certification requirements. The percentage
documentation. The Company continued to strengthen quality control over raw and auxiliary materials and promoted full coverage of products withdrawn or recalled for health and safety reasons was 0% .of internal control standards. At the same time the Company vigorously advanced intelligent quality control established a quality
data monitoring platform deepened the digitalization of quality management and built a market-driven smart industrial internet The Company received 22 awards for the physical quality of metallurgical products including two products—cold-
platform covering lean production and continuous quality improvement across the full process supporting quality enhancement and rolled hot-forming steel sheet and strip and weather-resistant structural steel for bridges—that were designated as
transformation-driven development. "Golden Cup Premium Products".Quality System Quality Improvement
The Company firmly believes that quality is the lifeline of the enterprise. By continuously improving product quality and expanding
the scope of certifications the Company has established a quality management system covering the entire steel production process The Company has established a full-chain quality management network covering raw material procurement production and
ensuring that product quality continues to meet industry standards and customer expectations. The Company has obtained a number manufacturing and customer service enabling continuous quality improvement. The Company and its subsidiaries have established
of authoritative certifications including ISO 9001 Quality Management System Certification and IATF 16949 Automotive Quality a comprehensive set of quality inspection and control systems across the steel industry chain. These systems which include the
Management System Certification. The coverage and certification levels of the Company's quality management systems are fully Measures for the Quality Management of Bulk Raw Materials the Measures for the Management of Purchased Scrap Steel the
aligned with internationally advanced standards laying a solid foundation for further expansion in domestic and overseas markets. Procedures for Product Testing and Release and the Measures for Process Monitoring Management ensure that all quality activities
are governed by clear rules and procedures.Major system and qualification certifications obtained by the Company Through diversified approaches such as project-based problem solving dedicated quality optimization initiatives quality culture
training and quality case sharing the subsidiaries not only improved product quality but also fostered quality awareness among all
ISO 9001 Quality Management System Certification GJB 9001C Quality Management System Certification employees comprehensively reinforcing the Company's quality management capabilities.ISO 10012 Measurement Management System JIS Quality Management System Certification
Certification EU CE Certification
Certifications from ten major international Case VAMA | Full-Process Quality Risk ManagementDNV SCS JIS AD2000 COC API 5CT API 5L API 5DP
classification societies and other certifications "Four-Zero" Management Goals
IATF 16949 Automotive Quality Management System
Certification Based on its assessment of industry trends and internal
capabilities the production bases under VAMA have
established the "Four-Zero" management goals. These zero zero zero zero
goals are centered on achieving zero product defects zero product equipment inventory in safety
The Company has established a customer-oriented quality management system and deeply embedded the concept of "zero defects" equipment failures zero inventory in delivery and zero safety defects failures delivery incidents
throughout full-process management. By implementing zero-defect projects "open competition for selecting the best candidates" incidents. A scientific control and improvement mechanism
projects and quality improvement projects the Company has systematically promoted the upgrading of product quality. Guided has also been put in place to support these objectives.by the principles of prioritizing the quality of steel grades and optimizing alignment with customer standards and with quality
performance as the key orientation the Company implemented performance mechanisms such as top executive accountability for "Three Major Improvement Mechanisms"
quality and economic responsibility systems ensuring the efficient operation of the quality management system.Xiangtan Steel LY Steel HYST VAMA Yangchun New Steel Cross-Industry--Chain Collaborative Nurturing Talent and a Quality Data-Driven Knowledge
Innovation Culture Management
We have established industry- We launched the "VAMA Certified We have systematically consoli-
Xiangtan Steel obtained LY Steel's galvanized HYST obtained VAMA advanced Yangchun New university-research partnerships with Internal Trainer" program to datedp roduction data optimization
PED certification for 39 products obtained QatarEnergy supplier carbon verification Steel completed leading automakers universities and develop cross-functional talentp ro- cases and failure analysest o build
ASTM-grade clad steel internationally qualification for and published China Customs AEO institutes to jointly address challenges ficient in both steelmaking processes the corporate "Lessons Learned
plates including the recognized SCS Recycled structural tubes and Environmental Product Advanced Certification like enhancing the formability of high- and business operations. Simul- Repository". This is not merely a
SA516 and S355 series Content Certification line pipes and passed Declarations (EPDs) accelerated Cares strength steel sheets. This integrated taneously through initiatives like database but an expert system
securing qualification ("Kite Mark") and TotalEnergies certificate on the international Ecars and EPD R&D model covering the "material- the "Improvement Star Award" capable of providing intelligent
for exports to the achieved a 50% scrap extension review and EPD platform fully certification and part-vehicle" chain ensures our quality and company-wide continuous solution recommendations for new
European Union. content ratio in converter- premium connection supporting domestic initiated product export enhancements are continuously improvement campaigns we have projects and new issues enabling
process galvanized audit. automakers' green steel activities. synchronized with end-market needs. ingrained a zero-defect mindset in valuable experience to be preserved
products the first such initiatives. every employee. and reused.achievement in China.52 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 53
Reinforcing Safety Responsibilities
Valin Steel regards employee safety and work safety as top priorities. The Company has strengthened the implementation of safety
responsibilities continuously improved its safety control system enhanced its safety supervision and emergency management
capabilities and advanced safety education training and safety culture development further consolidating the foundation for safe
development.Strengthening Safety Management
Valin Steel strictly complied with laws and regulations including the Work Safety Law of the People's Republic of China the Law of the
People's Republic of China on the Prevention and Control of Occupational Diseases and the Hunan Province Work Safety Regulations.VAMA the joint venture has been recognized as a benchmark within ArcelorMittal's global operations and was honored with the group's 2025
Operational Excellence Award Adhering to the management principles of "leadership engagement line accountability and full employee participation" the
Company effectively fulfilled its primary responsibility for work safety.Case LY Steel | Digital and Intelligent Technologies Empowered Quality Improvement Safety Management Structure
The Company established a Work Safety Management Committee under the direct leadership of the Chairman with participation
LY Steel established a full-process quality control platform to enable a complete functional chain covering the collection from relevant functional departments and subsidiaries forming a work safety management structure featuring vertical integration and
of product quality and process parameters across the entire process from steelmaking to rolling pre-event prediction in- horizontal coordination. The Company signed Work Safety Target Responsibility Statements with each subsidiary and implemented
process monitoring and judgment and post-event traceability and analysis. monthly assessments to effectively enforce the work safety responsibility system.Quality Intelligence Control Center (Phase I) project was completed. The Company established and improved the evaluation mechanism for work safety responsibilities advanced the Work Safety
A cumulative total of 22530 data collection points 45 production line monitoring screens and 107 key process parameters Management Committee's paired-point working mechanism and strengthened supervision guidance and support for work safety
were established enabling the production quality aggregation and categorization of 147 data tables across the Level 2 system and occupational health at secondary-level units. At the same time the Company implemented grid-based safety management to
downstream steel manufacturing management system integrated business platform and the full production process. ensure that safety responsibilities were assigned down to the smallest operational unit.LY Steel further improved quality data traceability and data analysis reports covering desulfurization converter operations
argon station operations refining continuous casting hot rolling and cold rolling. Customized reporting functions were also
enabled allowing process data to be selected based on specific data requirements for the preparation of analytical reports.Work Safety Management Framework
Company Office
of Valin Steel
Quality Training Company Work Safety Committee Strategic Development Department
Director: Chairman
To standardize operating procedures and strengthen employees' quality awareness the Company formulated annual quality training Finance Department Functional
plans and tasks and carried out quality system training for key quality-related positions and personnel. By inviting external experts Office of the Work Safety Committee departments
to deliver training conducting benchmarking studies participating in professional academic exchanges and organizing quality Securities Department
knowledge competitions the Company comprehensively enhanced quality management awareness across the workforce. Director: Vice President
Deputy Director: Head of the Safety and Audit and Risk Control Department
Environmental Protection Department (Legal Affairs Department)
Product Experts from Human Resources and Corporate
certification bodies
were invited to Internal
external research Management Department
deliver quality presentations were
institutions
were engaged to
briefings organized on cases involving quality provide training Decision-Making Level
objections
Work Safety Committees of Secondary
Units
Safety and Environmental Protection Responsible functional
Department department
Execution Level54 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 55
Safety Management Measures Emergency Management and Safety Training
Adopt a comprehensive protection strategy combining "human defense technical defense and management defense" The Company continued to improve its emergency response management system and capability-building system. We formulated
the Emergency Response Plan for Production Safety Accidents and completed filing with the provincial emergency management
authority clearly specifying key elements such as emergency response organizations and responsibilities response procedures
and emergency response processes. To enhance its capability to respond to accidents the Company organized emergency drills
and training every year covering a range of potential accident scenarios including confined spaces gas-related incidents and
heatstroke.Enhancing intrinsic safety Strengthening Precise Risk Control Advancing intelligent supervision To strengthen employees' safety awareness and improve their safety knowledge the Company formulated an annual safety
The Company fully allocated and The Company deepened the identification The Company accelerated the training plan to ensure that all units fully implemented the "five in place" requirements with respect to safety investment safety
utilized work safety expenses and remediation of hidden hazards imple- development of its smart safety training safety management emergency rescue and assessment. The Company also focused on building a long-term mechanism
continued to invest in automation mented a reward mechanism for hazard management system and adopted a for work safety and continued to carry out warning education based on safety accidents with the aim of reducing and preventing
and intelligent equipment upgrades reporting and encouraged participation from model combining online and offline major safety accidents.and enclosed operating areas to all employees in hazard identification efforts. oversight. Through daily inspections
reduce risks at source. The Company The Company also strengthened hierarchical by safety coordinators special
also comprehensively implemented risk classification and control conducted inspections and video spot checks Enhancing Safety Awareness
5S management at production sites dynamic identification of operational risks the Company established a closed- Focusing on the three main lines of lawful and Key Performance
standardized material storage and and refined the four-level risk control checklist loop management mechanism compliant operations capability enhancement
safety signage and fostered a safe advancing precision in risk management. covering inspection recording and responsibility implementation the Participation in Work Safety Training 252940 person-times
and orderly working environment. Daily inspections and monthly specialized rectification and review ensuring a Company systematically carried out
remediation efforts were implemented for 100% rectification rate for identified categorized specialized and tiered safety Duration of Work Safety Training 197428 hours
critical areas and during specific periods. hazards. education and training. Through systematic Average Duration of Safety Training per Employee 8.54 hours
and targeted training the Company
continuously improved the safety competence
Key Performance of all employees.During the reporting period the Company continued to maintain a strong focus on work safety with particular emphasis
on hazard identification and remediation in areas such as construction projects hazardous chemicals and fire safety
and overall work safety remained stable. Certification
Special operations
Work safety investment during the year: RMB 232.42 million; Work safety investment as a percentage of operating training for safety Safety awareness training for special
0.19% management trainingrevenue: equipment qualifications
Number of work-related fatalities: 1 Work-related fatalities per RMB billion of revenue: 0.00008
Number of major and above accidents: 0; Fatality rate from major and above accidents: 0%
Safety training was provided
Special drills were conducted for special equipment accidents for line managers Spot checks on safety knowledge were conducted
Youth-themed activities were
Fire emergency drills were carried out organized for Work Safety Month Safety warning education sessions were held56 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 57
Strengthening Safety Management Optimizing Customer Service
for Related Parties Standardizing qualification
For contractors and other related parties review for related parties Valin Steel adheres to a customer-centric approach and has developed an integrated service system guided by customer needs and
the Company formulated dedicated systems Strictly reviewing the safety integrating production sales R&D and application. Through intelligent manufacturing and a digital system integrating sales R&D
including the Related Party Management qualifications and professional production and delivery the Company has comprehensively optimized scheduling production quality and logistics to ensure precise
Procedures the Measures for the Safety capabilities of related parties to and efficient product delivery. At the same time the Company carries out R&D and improvement activities based on market and
Management of Labor Employment ensure that they possess lawful and customer needs while its 24-hour customer service center and EVI/CTS teams provide rapid response and support throughout the
and the Safety Management System for compliant operating qualifications entire process continuously enhancing customer experience and service value.Outsourced Projects and Outsourced Labor.From the perspectives of implementing Customer Information Security and Privacy Protection
primary responsibility for work safety The Company attaches great importance to the protection of customers'
building management systems reviewing
qualifications managing assessments Strengthening safety Reinforcing on-site
intellectual property rights and trade secrets. By formulating dedicated Key Performance
training and education safety supervision confidentiality measures and clauses and continuously improving its maintaining records and documentation confidentiality management system the Company ensures that customer
and providing safety and technical training Providing systematic safety Assigning dedicated personnel information and trade secrets are subject to strict oversight and compliant use. Number of information security
the Company comprehensively strengthened training for related party to oversee related party
The Company has established a comprehensive information management breach incidents: 0safety management over related parties. personnel to enhance their operations on site to ensure
safety awareness and improve the effective implementation system covering business processes customer information and cooperation
their safety skills of all safety measures arrangements. The Company implements registration and full-process Number of customer privacy breach
traceability management for all types of documents and materials; applies graded incidents: 0
authorization and confidential access control to customer information; and signs
legally binding confidentiality agreements with customers to clearly define liability
Prioritizing Occupational Health for breach systematically preventing the risk of information leakage.The Company has continued to improve its occupational health and safety
management system. Its subsidiaries including Xiangtan Steel LY Steel HYST VAMA
and Yangchun New Steel have all obtained GB/T 45001 or GB/T 28001 occupational Key Performance Xiangtan Steel has continuously improved its customer privacy protection system. In 2025
health and safety management system certification. The Company regularly the Data Guardian System (DGS) was launched to provide enhanced protection for customer-
organized testing for occupational hazard factors. For identified occupational hazards related information and no customer privacy breaches occurred during the year. In terms of data
arising in the production process—such as high temperatures dust noise carbon Health examination coverage
100% security management the Company further improved its data security management framework. monoxide benzene and coke oven fugitive emissions—the Company adopted a rate: In accordance with the Data Security Law of the People's Republic of China and the Measures
range of measures to effectively safeguard employees' occupational health and for Data Security Management in the Industry and Information Technology Sector (For Trial
continuously improve the management of occupational health and safety. Xiangtan Steel Implementation) Xiangtan Steel formulated the Data Security Management System clarifying
requirements in areas including the responsibilities of various entities system development
data classification and grading management full life-cycle data security management and data
The Company strictly followed the requirements of the "one list and four mechanisms" approach for addressing security operation and maintenance.major hidden risks of accidents with a focus on targeted remediation in key areas such as hazardous chemicals high-
temperature molten metal gas-related hazards and confined spaces effectively safeguarding the occupational safety of
frontline production employees.HYST coordinated the implementation of both institutional and technical measures forming
The Company further deepened the Ankang Cup competition and carried out contests on safety standardization and a dual protection mechanism combining institutional controls and technical safeguards.benchmark safety teams to strengthen safety awareness at the frontline team level. A closed-loop management system was established around data security supported by
improved network management rules including those relating to data and information. These
rules clearly define requirements for data classification and grading access authorization and
Occupational hazard notice boards were installed regular training on occupational disease prevention was organized full life-cycle management providing an institutional basis for data security management.and occupational health examinations were carried out for newly hired and departing employees ensuring effective At the technical protection level HYST advanced the full deployment of IMC and endpoint
screening for occupational diseases. protection software enabling unified management and security monitoring of terminal HYST
devices. The Data Guardian System continued to operate and encrypted core internal file data
reducing the risk of data leakage. At the same time HYST further optimized network isolation
The Company also established occupational health surveillance files for employees and organized occupational health by dividing networks into different zones based on business scenarios and setting access
examinations special examinations for female employees and mental health counseling in stages. boundaries to prevent unauthorized penetration between networks at different levels.58 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 59
Responsible Marketing
The Company upholds the principles of responsible marketing fully complies with laws and regulations such as the Advertising Law Case HYST | Always Putting Customer Service First
of the People's Republic of China and the Law of the People's Republic of China on the Protection of Consumer Rights and Interests
and has established and improved responsible marketing management systems and internal compliance guidelines for publicity and HYST has established a comprehensive and highly efficient marketing and service system. In terms of service response
communications. The Company standardizes advertising and promotional activities provides customers with complete accurate domestic sales personnel remained stationed on the front lines with customers conducted regular visits and responded
objective and readily understandable information and continuously strengthens compliance control across the entire marketing rapidly to customer needs. In particular for oilfield customers HYST provided wellsite support for a cumulative total of 620
value chain including marketing pricing channels and operations. During the reporting period the Company was not involved in any wells during the year winning strong customer recognition through full-process technical support. In terms of collaborative
litigation or penalties relating to responsible marketing. mechanisms HYST fully leveraged the role of its IPD teams to effectively cover the entire pre-sales and in-sales cycle. In terms
The Company remains committed to providing customers with transparent product information and professional technical support of digital enablement HYST continuously optimized its marketing and service platform enabling real-time contract progress
helping them understand product performance characteristics as well as methods of use maintenance and servicing. The Company inquiries and online issuance of invoices and quality certificates greatly improving service convenience and significantly
also organized technical seminars and similar activities to improve customers' understanding and application of customized products. enhancing customer experience and satisfaction.Enhancing After-Sales Service
Maintaining Customer Relationships
The Company formulated the Product Service Management Procedures and the Measures for the Management of Quality Objections
for Shipped Products to standardize services across the entire process including pre-sales in-sales and after-sales. The sales The Company consistently places customer needs first and has formulated
department uniformly receives customer complaints or quality objections submitted through various channels and communicates dedicated systems such as the Customer Satisfaction Measurement
them to the relevant internal units in the form of reports which then complete rectification and handling in a timely manner in Management Procedures and the Management System for Monitoring
accordance with established procedures. and Measuring Customer Satisfaction to more effectively obtain customer
satisfaction data and feedback on products and services. The Company
Each subsidiary attaches great importance to service capability development and has established sound and efficient customer organized its subsidiaries to carry out systematic customer satisfaction
feedback mechanisms to obtain customer evaluations and suggestions regarding product quality and service satisfaction in a timely evaluations using quantified results to identify service shortcomings more
manner. Through continuous service skills training and optimization of service workflows the Company has promoted coordinated directly and implement targeted improvements steadily enhancing customer
responses among multiple departments such as Technology Production and Quality. satisfaction.The Company pays close attention to customers' diverse needs and based
Responding to Customer Feedback on factors such as customer type cooperation arrangements and specific
Formulating improvement measures Handling customer complaints Providing technical services requirements designs tailored sales contracts that clearly define key terms
including product quality standards delivery schedules and after-sales
The Company systematically collects The Company further optimizes The Company provides customers services. The Company also regularly organizes customer engagement
feedback through multiple channels complaint handling procedures with training on product application activities such as industry seminars and new product launch events to deepen
including satisfaction surveys complaint and response times clearly defines and assists them in the proper interaction mutual trust and win-win cooperation and to work together with
handling and market research. The responsible persons and completion design and use of products. For key customers in advancing the sustainable development of the steel industry.Company promptly reviews and milestones at each stage and ensures products the Company provides
analyzes such information accurately a rapid response to customer concerns pre-sales EVI support and trial die
Case LY Steel | Holding an Annual Customer Conference to Broaden the Path of Mutually Beneficial identifies issues in products and relating to product quality. For major management building a proactive Development
services and develops corresponding complaints the Company establishes service system that enables a more
improvement measures. At the same dedicated quality task forces to accurate understanding of product On November 11 2025 LY Steel invited leaders from customer organizations and business partners to attend its 2026 annual
time the Company regularly updates conduct in-depth investigations and application scenarios and customer customer conference held under the theme "Intelligence Converges in Boao Steel Opens a New Chapter." The conference
customers on the progress of rectification root cause analyses ensuring the quality requirements. featured four technical exchange sessions dedicated to green low-carbon and high-strength steel and high-end hot-rolled
continuously enhancing customer effective implementation of corrective automotive products high-strength galvanized and cold-rolled products high-alloy steel and special wear- and corrosion-
satisfaction. measures. resistant steel and high-end medium- and high-carbon products. These sessions provided detailed introductions to the
Company's product R&D and application achievements helped the Company better understand market demand and laid a
solid foundation for consolidating strategic trust with customers and expanding cooperation in high-end markets.Case Xiangtan Steel | Responding Efficiently to Customer Needs and Honoring Six Commitments
Xiangtan Steel has consistently adhered to the business philosophy of being customer-centric and formulated the Case VAMA | Actively Expanding Emerging Customers and Continuously Improving Customer
Procedures for Control of Product and Service Requirements and the Sales Service Management System to respond Satisfaction
efficiently to customer delivery and service needs and handle customer complaints promptly. Quality objections metering While continuing its strategic cooperation with core customers VAMA actively expanded relationships with emerging
objections and various service requests were all accepted and confirmed within one working day. Among them the partners and steadily increased business volumes with multiple new-energy and emerging automotive brands. In 2025
average case closure cycle for quality objections was 15 days metering objections were resolved within 5 days and VAMA signed more than 50 cooperation agreements in total. Its business covered the mid- to high-end automotive sheet
responses or solutions to customer complaints and service requests were provided within 2 working days. In addition market and included strategic customers in key categories such as automotive outer panels high-strength steel and hot
Xiangtan Steel introduced six service commitments covering delivery billing complaint handling and digital services for all forming further enhancing customer satisfaction and loyalty.customers effectively safeguarding customer rights and interests.60 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 61
Customer Service Performance Key Performance Selected Customers
Over the years the Company has established leading
advantages in key market segments such as energy Customer satisfaction: 94.39%
and oil and gas shipbuilding and offshore engineering
machinery and bridges and automobiles and home Global customer servic Key Strategic Customers
appliances driven by superior product performance serving more than 150 Fortune Global 500 companies worldwide
stable quality control and service experiences
International market presence
that exceed customer expectations. The Company
has also built deep cooperative relationships with products exported to more than 60 countries and regions
benchmark customers in major industries. During the Industry position
reporting period the Company and its subsidiaries leading market share in multiple downstream sectors
received multiple honors such as "Excellent Supplier"
"Outstanding Supplier" and "Strategic Partner" in Energy and Shipbuilding Offshore Automobiles
recognition of their strong performance earning Power Engineering
widespread market acclaim and high recognition.Construction High-rise Bridges Home Appliances
Machinery Buildings
Selected Honors and Awards
Excellent Supplier of China 2025 Outstanding Supplier of
Caterpillar Outstanding National Chemical Engineering Zoomlion Engineering Crane
Supplier Group Corporation Company
Xiangtan Steel
Xiangtan Steel LY Steel
Annual Quality Trusted Supplier 2024 Excellent Supplier of
(Small-Diameter Tubes) of the 725th Research Institute 2025 Strategic Partner of
Dongfang Boiler Co. Ltd. of China State Shipbuilding Foshan Yonglitai Axle Co. Ltd.Dongfang Electric Corporation Corporation Limited HYST
HYST HYST
Annual Quality Trusted Supplier Excellent Supplier of Hunan
(Small-Diameter Tubes) of Zoomlion Crawler Crane Co. Excellent Supplier of Sany
Dongfang Boiler Co. Ltd. Ltd. Heavy Lifting Business Un
Dongfang Electric Corporation HYSTHYST
HYST
2025 Performance Excellence Strategic Partner of Luliang
Award of ArcelorMittal Jingxing Coal Coking Co. Ltd.VAMA Yangchun New Steel62 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 63
Sales personnel
Growing Together with Employees Procurement personnel Doctoral degree holders Master's degree holders 478 persons 313 persons 79 persons 791 persons
Valin Steel consistently implements the strategy of strengthening the enterprise through talent upholds employee rights and interests Administrative personnel Finance personnel
establishes and improves fair and equitable mechanisms for talent selection and appointment and continues to foster an open 888 persons 276 persons
inclusive and diverse workplace environment. On the premise of safeguarding occupational health the Company eenables every Bachelor's degree holders
employee to grow and advance in their career based on their own capabilities. 7380 personsTechnical personnel
3414 persons
Safeguarding Employee Rights and Interests By educational
By professional background
Compliant Employment Equality and Inclusion category
The Company has always regarded equal employment as a core principle of human resources management. The Company strictly
complies with laws and regulations including the Labor Law of the People's Republic of China the Labor Contract Law of the People's
Republic of China the Provisions on the Prohibition of Child Labor and the Special Provisions on Labor Protection for Female
Employees. At the same time the Company also refers to labor and human rights standards such as the Universal Declaration of
Human Rights and the International Labour Organization's Declaration on Fundamental Principles and Rights at Work so that every
employee can create value in a sound workplace environment. Production personnel Others
17761 persons
The Company adheres to the employment principle of "capability-based selection and equal opportunity" and does not differentiate 14880 persons
on the basis of ethnicity race gender religious belief age disability marital status or social origin in recruitment promotion Compensation and Benefits
compensation and benefits training or career development. At the same time the Company actively promotes the employment of
persons with disabilities and provides necessary labor protection and career development pathways for special groups. The Company The Company continues to improve a compensation and benefits system aligned with its development strategy and closely linked
strictly implements national requirements prohibiting child labor rigorously verifies identity information during hiring and prohibits to value contribution. In strict compliance with national social security laws and regulations the Company pays salaries in full and on
the employment of minors. The Company also firmly opposes all forms of forced labor and does not engage in support or tolerate any time makes full contributions to five types of social insurance and two housing-related funds and ensures that statutory leave and
forced employment practices involving violence threats or unlawful restriction of personal freedom ensuring that all labor is based on overtime entitlements are implemented in accordance with the law bringing together talent to support the Company's high-quality
the principle of mutual consent. During the reporting period the Company did not record any incidents related to child labor forced development.labor human trafficking discrimination or harassment.The Company integrates the principles of diversity equity and inclusion into its talent strategy and systematically builds inclusive
management mechanisms around key areas such as recruitment and selection performance evaluation promotion and development
and organizational culture. Through measures such as employee diversity training and enhanced employee care the Company Enhanced benefits protection
continues to foster a cultural environment of "respecting differences unlocking potential and sharing growth." Five types of social insurance and
The Company has formulated internal policies relating to human rights clarifying basic principles in areas such as employee two housing-related funds for all
management the workplace environment and benefits and treatment. In line with the requirements of the Responsible Business employees
Diversified compensation structure
Alliance (RBA) the Company has carried out human rights due diligence and continuously improved its human rights management Tiered and differentiated incentives S upplementary insurance such as
processes. The Company has established communication mechanisms for employee grievances and complaints. Employees may M anagement employees: tilting W ages and bonuses such as
incentives toward high performers enterprise annuity supplementary report issues they encounter either by name or anonymously to the trade union the office or the discipline inspection function position-based salary performance-medical insurance home property
by telephone letter email face-to-face communication or online channels. Relevant units keep employee information strictly who achieve performance targets based salary and special bonusesinsurance and personal accident
confidential. At the same time through internal training and communication initiatives the Company regularly provides all employees Technical employees: tilting insurance Various allowances and subsidies
with training on human rights and labor rights and interests enhancing their awareness and capability for self-protection. incentives toward innovative talent such as position allowance
B enefits programs such as regular F rontline employees: tilting professional title allowance housing health examinations free working
incentives toward production roles subsidy and settling-in allowanceTotal number of employees 23130 persons Female employees 3195 persons meals and dedicated parking areas
that are hard dirty hazardous or Medium- and long-term incentives
physically demanding Leave system including statutory
Ethnic minority employees 479 persons Employees with disabilities 304 persons holidays weekends paid leave
T erm-based incentives among
home leave recuperation leave others
childcare leave and other leave
entitlements
Percentage of Labor contract Percentage of ethnic Percentage of employees
female employees signing rate minority employees with disabilities
13.81%100%2.07%1.31%
Key Performance
Social insurance coverage rate: 100% Average paid leave per employee: 10.42 days64 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 65
Employee Satisfaction Surveys and Continuous Improvement
Case Xiangtan Steel | Building a Tailored Compensation System Regard employee satisfaction as an important gauge of management effectiveness and organizational health; establish an annual
employee satisfaction survey mechanism; conduct in principle one survey each year through a combination of anonymous online
Xiangtan Steel followed the principle of linking compensation levels to operating performance and established a questionnaires and offline forums and interviews; capture employee needs with greater precision; and drive continuous management
differentiated and tailored compensation system. For chief-level core talent Xiangtan Steel implemented an annual salary improvement.system. For urgently needed talent introduced from outside Xiangtan Steel adopted an agreed salary arrangement. For
technical and skilled personnel Xiangtan Steel established project-based incentives for tackling key technical challenges. Accelerate the development of the employee satisfaction and engagement survey system; enable online data collection automated
Employees who won various competitions were granted additional rewards of up to RMB 50000 and employees in analysis and closed-loop rectification; improve the workplace experience through a normalized and digitalized survey mechanism;
designated positions who obtained professional qualification certificates received allowances continuously encouraging and enhance employees' sense of belonging fulfillment and well-being.employees to enhance their professional capabilities.Case LY Steel | Improving Employee Satisfaction
Case VAMA | Innovating a Dual-Track Performance Incentive System
LY Steel surveyed employee perceptions in areas including corporate culture learning working and living environment
VAMA directly linked its incentive mechanisms to employees' performance-based pay year-end bonuses and other direct attendance management rest and leave arrangements occupational safety and health labor protection measures
remuneration with coverage extending to all employees. Project-based incentives focused on four core areas—sales growth compensation and income benefits and career development pathways. In 2025 LY Steel's employee satisfaction score
inventory control equipment stability and delivery assurance. VAMA also established dedicated rewards and granted flexible reached 83.41 representing an increase of 0.61 points over the previous year.bonuses based on project milestones creating a long-term incentive model under which all employees share responsibility
for strategic goals while key initiatives deliver targeted breakthroughs.Democratic Management Empowering Employee Growth
Valin Steel has continuously advanced democratic management and improved an institutional system for employee participation Improving the Talent System
centered on the employee representative congress. The Company regularly convenes employee representative congresses carries
out collective consultation and employee representative inspections in a standardized manner and extensively listens to employees' The Company has built a multi-dimensional talent system and formulated the Human Resources Development Plan during the 15th
opinions and suggestions on corporate development production and operations and the protection of rights and interests. The Five-Year period using institutional innovation to strengthen the foundation for stable employment. In 2025 the Company recruited
Company also strictly implements the system of open factory affairs and discloses matters involving employees' vital interests and 1053 new employees through campus recruitment social recruitment and the introduction of experienced talent including 10
major corporate decisions in a timely manner through multiple channels including the corporate intranet notice boards in plant doctoral graduates and 203 master's graduates. In campus recruitment the Company closely aligned recruitment with internal
living areas the official website and official social media accounts so as to effectively safeguard employees' rights to know the right job demand and innovated a government-enterprise collaborative talent recruitment mechanism covering multiple levels from
to participate the right to express opinions and the right to exercise oversight At the same time the Company has given full play to management positions to frontline operational roles. In 2025 866 fresh graduates joined the Company. In employment for special
the bridging role of labor unions kept channels for employee feedback and communication open and built a new framework for groups the Company developed disability-friendly positions through job redesign and facility modification established channels for
democratic management featuring balanced rights and responsibilities joint consultation and shared decision-making. receiving and placing demobilized soldiers and carried out a dedicated recruitment initiative in support of Tibet strengthening the
talent foundation for the Company's high-quality development.Key Performance
Number of employee departures: 156 Number of new employees hired: 1053
The 12th Session of the 15th Employee Representative Congress and the The 2026 Work Conference and the 2nd Session of the 3rd Trade Union Valuing Employee Development
2026 Work Conference of LY Steel Members' Representative Congress of Yangchun New Steel
The Company has consistently aligned talent growth with corporate development and built clear and diversified career development
Implementing the rights and responsibilities of the employee representative congress pathways for all employees. The Company has developed a multi-dimensional career development map spanning management
technical skilled and business functions breaking down barriers to growth so that employees in different positions and fields can
Advance grassroots democratic management with the employee representative congress as the principal vehicle; solicit find suitable advancement pathways. At the same time the Company has established standardized and transparent mechanisms
employee views in advance on key and difficult issues of concern to employees including fundamental institutional for horizontal rotation and vertical promotion and improved a talent development system to enable both advancement and
development cadre appointments remuneration and benefits and other matters affecting employees' vital interests; accept adjustment as well as structured recruitment and exit. Through a fair development environment and broad growth platform the
employee oversight afterward; and safeguard employees' rights to know and participate to the fullest extent possible. Company empowers employees to make the best use of their strengths and talents enabling each employee to achieve growth and
Conduct collective consultation on an equal footing; conclude the 2025 collective wage consultation agreement and breakthroughs in individual career value alongside the development of the enterprise and truly ensuring that capable employees are
collective contract; and actively mediate labor disputes involving employees. given both opportunity and recognition.66 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 67
Strengthening Employee Training
The Company aligned talent development more closely with its development strategy and role-specific capability requirements
strengthened its management technical and skilled talent pipelines and built a multi-tiered talent development system. At the
management level it focused on leadership enhancement and introduced innovative training models combining online and offline
learning. For technical personnel it strengthened professional capabilities in collaboration with external institutions while also
covering key areas such as digital office applications marketing and the integration of business and finance. For the operating
workforce it prioritized rotating training for team leaders and work safety training for young employees while also implementing
specialized training and skills evaluation for key positions and promoting skill enhancement across the workforce through competition-
based learning.Case HYST | Building the "Six Navigation" Branded Training System
Under the overarching framework of the "Six Navigation Plan" HYST has meticulously built a branded training system. Visits were paid to employees in need Employee basketball games were held
Leveraging three key platforms—the Hengshan Forum lecture series micro-classrooms and the Craft Star Academy—HYST
has integrated a wide range of topics including Party building management technology skills and safety systematically
advanced talent development across all talent streams and achieved dual improvements in training continuity and brand
impact injecting strong momentum into the Company's sustainable development.Key Performance
Employee training coverage rate: 100% Total employee training hours: 971460 hours
Average training hours per employee: 42 hours Percentage of employees receiving vocational and skills training:
100%
Improving employee caring
A mini-marathon was held in the plant area "Her Classroom" development activities were organized for female
The Company has earnestly carried out the "I Do Practical Things for the People" initiative improved employees' working and living employees
environments and upgraded their sense of well-being in an all-round way. The Company also organized popular sports and cultural
activities such as employee basketball tournaments badminton matches air volleyball competitions and e-sports tournaments
enriching employees' cultural life outside work.Working with Partners for Mutual Success
Assisting Caring for Guided by the principle of collaborative win-win development the Company has strengthened supply chain management deepened
employees with female strategic cooperation and participated in industry co-building establishing and improving an open and inclusive partnership
difficulties employees mechanism. In doing so the Company has continuously enhanced the resilience and vitality of the industrial chain and worked hand in
hand with all partners to create a new landscape of high-quality development.LY Steel developed tailored support plans for employee In 2025 VAMA made a dedicated investment of RMB
families facing financial hardship due to illness disability 90000 to provide comprehensive screening services for Supplier Management
education expenses or unexpected disasters and breast cancer and cervical cancer to 116 eligible female The Company has introduced institutional documents covering the full life cycle of the supply chain including the Supplier
provided assistance through hardship relief funds or employees. Management System the Supplier Management Procedures for Procurement the Measures for the Management of Authorized
medical assistance funds. Yangchun New Steel together with the Yangchun (Entrusted) Agencies and the Management Measures for the Handling of Quality Objections and Settlement Disputes. The Company
Xiangtan Steel continued to carry out support programs Maternal and Child Health Hospital organized lectures carries out supplier onboarding review evaluation and exit management and is committed to building a responsible supply chain.for employees in difficulty. In 2025 the Company on women's health conducted gynecological health
invested more than RMB 4.55 million in assistance funds examinations for female employees and distributed more
benefiting 2012 employee visits. than RMB 170000 in hygiene and healthcare allowances
to female employees and employees with a single child.68 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 69
Supplier Onboarding Incorporating ESG into Ongoing Supplier Tracking and Evaluation
The Company has established a sound onboarding evaluation system and strictly implements supplier onboarding review procedures. The Company incorporates ESG requirements into its ongoing supplier tracking and dynamic evaluation mechanism strengthens
For new suppliers the Company conducts comprehensive reviews of relevant qualifications and overall service capability preventing sustainability risk management across the supply chain and promotes the coordinated adoption of sustainable development
suppliers with weak credit standing poor performance capability or frequent legal disputes from entering the qualified supplier list principles across upstream and downstream partners.safeguarding a high-quality and sustainable supply chain.Qualification review by On-site inspection or on-site Admission review by the Incorporating high-priority topics into evaluation criteria such as supply chain financial health
procurement department testing and trial use Supplier Review Committee Establishing (for example compliance with 45-day or 60-day payment terms) and full-life-cycle carbon
evaluation criteria footprint management capability including the ability to respond to mechanisms such as the
EU Carbon Border Adjustment Mechanism (CBAM).Submit for approval by the Submit to the Marketing Department
responsible company executive Process one-off procurement to process the onboarding procedure Setting bottom Clearly defining non-negotiable "one-vote veto" items such as the use of child labor or forced
lines and red lines labor major environmental or safety accidents and serious commercial bribery.Tiered Supplier Management
Designing a tiered Classifying suppliers based on evaluation scores and implementing differentiated
The Company implements dynamic supplier management across dimensions including product quality price competitiveness management management.contract performance overall capability after-sales service and tendering performance. Comprehensive supplier evaluations and system
grading are conducted on a quarterly and annual basis with annual decisions made on supplier elimination and upgrading. Based on
overall evaluation results suppliers are classified into three categories—strategic key and general—and are managed accordingly.Strategic suppliers Key suppliers
Priority payment and increased Normal payment and procurement Grade Positioning and Characteristics Management Strategy and Cooperation Approach
procurement volume according to plan
Strategic Cooperation Outstanding ESG performance and a partner in green Deepen cooperation: jointly develop low-carbon materials innovation share carbon data and jointly
Rectification / Removal
Strong ESG performance systematic management with Provide focused guidance: offer training on weak areas
For suppliers with average or lower overall evaluation Priority Improvement some areas requiring improvement assist in formulating improvement plans and consider
results the Company supports capability improvement medium- and long-term ordersGeneral suppliers
or issues rectification requirements and requires
Controlled procurement volume and Observation and Passable ESG performance or identifiable risks but with Require rectification within a specified period: sign rectification within a specified period. Suppliers may
stricter payment approval continue supplying only after rectification is completed Rectification willingness and basic capacity to improve
rectification commitments increase audit frequency and
reduce order share
and accepted. If no improvement is achieved within
the required timeframe cooperation will be gradually
Phase-out Clearance ESG performance fails to meet requirements touches red Initiate exit: launch elimination procedures and identify reduced until supplier qualification is withdrawn lines or rectification proves ineffective alternative suppliers70 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 71
Advancing Transparent Procurement
Xiangtan Steel Review the qualification status of registered enterprises against the latest national laws and In procurement operations the Company adheres to the principle of "transparent and standardized operations" implements
regulations imposing mandatory licensing requirements and adjust the basic Supplier Onboarding
institutional documents such as the Measures for the Administration of Tendering (and Competitive Negotiation) and the Procurement
criteria in a timely manner as required. Control Management Procedures comprehensively promotes public tendering discloses public inquiry information and broadens
Incorporate the fulfillment of social responsibility into annual performance evaluation criteria and access to high-quality resources. The Company signs the Transparent Cooperation Agreement the Integrity and Ethical Commitment
award additional points to suppliers that have obtained certifications in quality environment and Letter and the Clean Transaction Responsibility Letter with suppliers communicating expectations relating to compliance with
occupational health and safety management systems or actively participate in industry association national laws integrity in business professional ethics clean and transparent operations and fulfillment of social responsibility.development establishing a positive incentive mechanism.Strengthening Oversight of Procurement Processes Advancing Procurement Standardization
S trengthen oversight of key procedures and Use valve procurement as a pilot category for
Optimize processes and revise systems such as the Measures for the Management of Bulk Raw sensitive positions including procurement standardized and refined procurement; evaluate
LY Steel Material Prices; implement dynamic supplier management; conduct quarterly supplier evaluations; tendering and incoming inspection of raw tenders across dimensions such as weight
and increase the development of high-quality new resources. In 2025 add 87 new suppliers and materials and fuels. material selection and brand; refine itemized
product categories for bulk raw materials and eliminate 45 suppliers and product categories. Raise sampling inspection rates refine sampling criteria; and progressively achieve value-for-
methods increase penalties strengthen money procurement.source quality control and implement monthly
evaluations to effectively curb fraudulent practices.Introduce additional requirements for key service providers including on-site assessments and
HYST compliance verification in relation to laws and regulations patents safety and environmental
protection; and further strengthen tiered management of such providers across the processes of
Safeguarding Integrity in Procurement Digital Procurement Management and Control
Supplier Onboarding confirmation change performance evaluation re-evaluation elimination
Require suppliers to sign the Integrity and Ethical A and reinstatement. dvance the development of an electronic signature
Cooperation Agreement and employees to sign service platform; integrate the platform with the
Revise the HYST Supplier Management System; standardize tiered Supplier Onboarding and the Commitment to Integrity and Self-Discipline; existing ERP integrated system and other relevant
management; and clarify the processes for evaluation confirmation and cooperation incentives impose severe penalties on any attempt by systems; and achieve seamless connectivity across
applicable to suppliers with outstanding overall strength and demonstrably high quality. suppliers to improperly influence procurement business processes.personnel through bribery or other inducements; Progressively promote and standardize digital price
and strive to achieve zero disciplinary violations and comparison procurement for bulk raw materials
zero non-compliance. and fuels making the coal procurement process
VAMA Integrate ESG requirements into Supplier Onboarding criteria; require all suppliers to sign the more open transparent efficient and traceable.Supplier Code of Conduct or a Supplemental Agreement on Sustainable Due Diligence; and
formally incorporate ESG control requirements into contractual terms of cooperation.Implement dynamic supplier management; conduct comprehensive evaluations across
dimensions including supply quality price delivery and service; define procurement priority levels Advancing Green Procurement
corresponding to Grades A B C and D; and apply a last-place elimination mechanism. The Company actively promotes green procurement with the aim of reducing the environmental impact of production activities and
lowering resource consumption driving the supply chain toward an energy-saving and low-carbon transition.Implement dynamic management for suppliers of key procured materials such as scrap steel and For materials such as environmental protection equipment safety equipment and labor protection supplies the Yangchun New Steel
coke; conduct monthly scoring rating and tiered management; require rectification within a Company strictly prohibits the procurement of non-compliant products banned by the state. Suppliers of special
specified period for unqualified suppliers or terminate cooperation where necessary; and strictly labor protection products are required to provide safety appraisal certificates or inspection reports.control supply quality.Recycled raw materials such as scrap steel must comply with the requirements of relevant national authorities. Suppliers
must hold the requisite business qualifications and purchase and sales contracts must clearly stipulate and enforce
control clauses relating to hazardous substances such as explosives and radioactive materials.For the transportation of toxic and hazardous chemicals oils and similar materials suppliers must hold the
corresponding qualifications and implement protective measures against damage and leakage. For flammable
explosive and hazardous goods fire- and explosion-prevention measures must be taken and suppliers are required
to provide safety data sheets.72 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 73
Case LY Steel | Showcasing at the 4th Changsha International Construction Equipment Exhibition
Key Performance
In May 2025 LY Steel presented a number of
Number of local suppliers: 996 Localization rate of procurement: 23.34% flagship products at the 4th Changsha International
Construction Equipment Exhibition. At the exhibition
LY Steel highlighted six categories of advanced
Supply Chain Decarbonization materials including steel for construction machinery
wear-resistant steel silicon steel galvanized sheet
In terms of supply chain decarbonization the Company has developed a detailed visit and research plan for key suppliers. Over the medium- and high-carbon steel and hot- and cold-
next few years the Company will strengthen management in the following two areas: formed structural steel as well as its two brands
Acetough wear-resistant steel and Aceshield protective
steel. Through these exhibits LY Steel showcased
to global customers its innovation capabilities and
Cultivating green Establishing green green development philosophy in the field of high-end
strategic suppliers procurement standards equipment manufacturing.Case HYST | Exhibiting at the Karamay Petroleum Equipment Exhibition and Signing an Agreement with
Establishing long-term partnerships with core Using carbon footprint as an important procurement Xinjiang Oilfield Company
upstream steel producers and other key suppliers decision-making indicator conducting carbon In August 2025 the 7th China (Karamay) International
jointly investing in low-carbon technologies accounting for suppliers and gradually phasing out Oil & Gas and Petrochemical Technology & Equipment
and securing part of the capacity for green raw high-carbon suppliers. Exhibition opened. During the exhibition HYST
materials. highlighted high-performance premium connections
such as gas-tight high-torque and direct-connect
types as well as high-grade OCTG products including
Advancing Industry Cooperation 13Cr. HYST also signed a procurement framework
Upholding the development philosophy of openness and collaboration the Company has continued to cultivate the broader industry agreement with CNPC Xinjiang Oilfield Company
ecosystem on all fronts. By actively participating in various industry exchanges the Company has engaged in frequent and in-depth further deepening cooperation between the two
discussions with industry peers on frontier trends and paths for technological innovation jointly exploring new opportunities for parties.development.Case Xiangtan Steel | Joining Hands with a Well-Known Enterprise to Establish a Joint R&D Center
Case VAMA | Actively Co-Organizing and Participating in Multiple Major Industry Events
In May 2025 Xiangtan Steel signed a In November 2025 VAMA attended the 19th
strategic cooperation agreement with International Forum of Automotive and Traffic
Haina Special Steel Co. Ltd. and jointly Safety and received the Value Empowerment Award
inaugurated the Xiangtan Steel-Haina highlighting the contribution of steel battery packs to
Special Steel Joint R&D Center. The center safety in new energy vehicles. In December 2025 VAMA
will enhance both parties' innovation co-organized the Chery-VAMA & GONVVAMA Supply
capabilities in high-end materials R&D Chain Technology Co-Creation Exchange Day focusing
accelerate the commercialization of on advanced high-strength steel multi-part integration
technological achievements and realize and battery pack solutions. VAMA discussed trends in
resource sharing and complementary vehicle body electrification with experts from Chery
advantages. demonstrating its leading role in technology co-
creation and industry empowerment.Inauguration of the Xiangtan Steel-Haina Special Steel Joint R&D Center74 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 75
Participating in Standards Development Enhancing Public Well-Being
Leveraging its distinctive strengths advanced manufacturing processes process technologies and well-established standards system
the Company led participated in or revised a total of 28 national industry and group standards during the reporting period including Valin Steel has consistently integrated a strong sense of social responsibility with the pursuit of high-quality corporate development.GB/T 6730.45-2025 Iron Ores—Determination of Arsenic Content—Arsine Separation-Molybdenum Blue Spectrophotometric Method Through concrete actions the Company has fulfilled its obligations as a corporate citizen and written a meaningful chapter in
and GB/T 9948-2025 Seamless Steel Tubes for Petroleum Cracking and Chemical Equipment effectively promoting the improvement advancing public well-being.and upgrading of the industry's standards system.Implementing Standard Approval Advancing Rural Revitalization
Standard Title Role Standard No.Entity Category Date
Valin Steel has earnestly carried out rural revitalization Key Performance
Xiangtan Steel Wire rod for super-large-span load-bearing bridge cables Group standard Participating in drafting 2025-03-12 T/CISA 518-2025 initiatives continuously promoting industrial assistance
educational assistance and consumption-based assistance to Total investment in rural revitalization: RMB
Xiangtan Steel Hot-rolled wire rod for cold heading steel National standard Participating in drafting 2025-03-28 GB/T 28906-2025
raise the overall level of rural revitalization and demonstrate 10.22 million
Xiangtan Steel Hot-rolled wire rod of quality carbon steel National standard Participating in drafting 2025-03-28 GB/T 4354-2025 the responsibility of a state-owned enterprise in advancing all- Number of beneficiaries of rural revitalization
Xiangtan Steel Alloy spring steel wire Industry standard Participating in drafting 2025-04-10 YB/T 5318-2025 around rural revitalization. initiatives: 9521
Iron ores—Determination of arsenic content—Arsine
Xiangtan Steel separation-molybdenum blue spectrophotometric National standard Leading drafting 2025-06-30 GB/T 6730.45-
method 2025 Consumption-Based Assistance
Xiangtan Steel Stainless steel clad plates and strips National standard Participating in drafting 2025-06-30 GB/T 8165-2025 By leveraging the resource advantages of the assisted regions the Company has continuously promoted local economic development
Xiangtan Steel Nickel and nickel alloy welding electrodes National standard Participating in drafting 2025-06-30 GB/T 13814-2025 and social progress in rural areas. In 2025 Valin Steel and its subsidiaries purchased consumption-based assistance products through
multiple channels with cumulative spending of RMB 9.86 million effectively helping local farmers increase their income.Xiangtan Steel Nickel and nickel alloy solid welding wires and strips National standard Participating in drafting 2025-06-30 GB/T 15620-2025
Steel plates and strips for pressure equipment—Part
Xiangtan Steel 8: Roll-bonded clad steel plates of homogeneous and National standard Participating in drafting 2025-08-01 GB/T 713.8-2025
dissimilar metals
Case Xiangtan Steel | Targeted Procurement Supported Consumption-Based Assistance
Xiangtan Steel General requirements for packaging marking and quality certificates for steel plates and strips National standard Participating in drafting 2025-08-01 GB/T 247-2025
Xiangtan Steel introduced an innovative targeted procurement assistance model proactively supporting distinctive local
Xiangtan Steel Flux-cored wires for gas-shielded arc welding National standard Participating in drafting 2025-08-01 GB/T45857-2025
industries and establishing long-term stable procurement partnerships with multiple assisted villages and townships.Iron ores—Determination of arsenic content—
Xiangtan Steel Distillation separation-molybdenum blue National standard Leading drafting 2025-08-29 GB/T 6730.46- For high-quality local agricultural products handicrafts and other specialty products Xiangtan Steel carried out targeted
spectrophotometric method 2025 procurement through employee welfare purchases and direct sourcing for staff canteens while also organizing volunteer
Xiangtan Steel Structural steel plates for wind power towers National standard Participating in drafting 2025-08-29 GB/T 28410-2025 teams to provide on-site support in rural areas helping local residents increase their income in a tangible way.Xiangtan Steel Steel wire rod for welding National standard Participating in drafting 2025-08-29 GB/T 3429-2025
Xiangtan Steel Permissible deviations in product chemical composition of steel and alloys National standard Participating in drafting 2025-08-29 GB/T 222-2025 Industrial Assistance
Xiangtan Steel Thiocyanate method for chromium determination National standard Participating in drafting 2025-08-29 GB/T 4236-2025 Through targeted assistance the Company has helped stimulate endogenous momentum for rural revitalization. We have both
LY Steel Stainless steel clad plates and strips National standard Participating in drafting 2025-06-30 GB/T 8165-2025 injected new vitality into specialty agricultural industries and built growth pathways for projects integrating agriculture culture and
LY Steel Full-process cold-rolled electrical steel—Part 2: Grain-
tourism promoting a virtuous cycle in which enterprises drive development farmers participate production and sales are smoothly
oriented electrical steel strip (sheet) National standard Participating in drafting 2025-08-29 GB/T 2521.2-2025 connected and collective income increases so that the results of industrial assistance truly benefit local communities.LY Steel General requirements for surface quality of hot-rolled steel plates National standard Participating in drafting 2025-08-29 GB/T 14977-2025 Conducting on-site assessments and identifying Pooling resources to improve industrial efficiency
LY Steel Cold-rolled steel sheets and strips for home appliances National standard Participating in drafting 2025-08-29 GB/T 30068-2025 development pathways
LY Steel Steel plates and strips for hydrogen transportation and storage pipelines National standard Participating in drafting 2025-10-31 GB/T 46598-2025 VAMA management visited Yunpan Village Doulishan LY Steel supported Shuangyuan Village in Shuangfeng County
LY Steel Structural steel for bridges National standard Participating in drafting 2025-10-31 GB/T 714-2025 Town Lianyuan City to hold discussions on industrial Loudi City in tapping into its natural landscape and red
development. In response to the challenges faced VAMA cultural resources improving exhibition halls and scenic area
LY Steel Methods of measurement for geometrical characteristics of electrical steel strip and sheet National standard Participating in drafting 2025-10-31 GB/T 46476-2025 management proposed preliminary suggestions such infrastructure and investing more than RMB 300000 in tourism
Large-diameter extra-heavy-wall seamless steel tubes as introducing soilless fodder cultivation and expanding facilities which increased annual collective village income HYST for thermal power generating units Group standard Participating in drafting 2025-01-15 T/CIET 985-2025 e-commerce sales channels while also gaining an in-depth by more than RMB 50000. LY Steel also supported Tanshan
Seamless steel tubes for petroleum cracking and understanding of the existing "cooperative + farmers" Village in Qiaotouhe Town in leveraging the "Vegetable Town" HYST chemical equipment National standard Leading drafting 2025-06-30 GB/T 9948-2025 operating model and the state of the village collective brand to integrate cultivation and sales with growers expected
HYST Seamless machined steel tubes for structural use National standard Participating in drafting 2025-06-30 GB/T 45781-2025 economy so as to support coordinated industrial planning. to increase income by RMB 15000 per mu. In addition LY Steel
HYST Seamless steel tubes for ships National standard Participating in drafting 2025-08-29 GB/T 5312—2025 provided focused support to Wuyunshan Agriculture Co. Ltd.'s
white tea base of more than 300 mu which achieved an annual
HYST Technical specification for quality control of continuous casting billets Group standard Participating in drafting 2025-09-24
T/CAPS 048—
2025 output value of more than RMB 3 million.76 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 77
Contributing to Public Welfare
Valin Steel actively fulfills its corporate social responsibility by making efforts across multiple areas including public welfare and
charity volunteer services and emergency rescue. Each subsidiary carried out diversified public welfare initiatives in light of its own
circumstances conveying the warmth of a state-owned enterprise through concrete action.Among them Xiangtan Steel focused its public welfare efforts on student support elderly care and disability assistance raising and
distributing charitable funds and materials with a total value of nearly RMB 200000. During the same period Xiangtan Steel carried out
274 volunteer service activities with participation totaling 4347 person-times and service hours totaling 11556.5 and was shortlisted
as a candidate for the national "Four 100" Best Volunteer Service Organization list. LY Steel's labor union distributed more than RMB 1.65
million in various subsidies and support payments benefiting more than 6000 person-times including hospitalized patients retirees
and persons with disabilities while also organizing Lei Feng volunteer activities voluntary blood donation and sponsorship of local
cultural and sports events. HYST organized multiple voluntary blood donation activities for employees throughout the year. VAMA's
safety experts were invited on multiple occasions to provide safety training and exchanges for surrounding enterprises supporting
the safe development of the industry through professional expertise. Yangchun New Steel organized 65 employees to participate
in voluntary blood donation while its fire protection brigade handled 6 fire incidents during the year and successfully rescued one
trapped individual in a traffic accident making a broad contribution to society.Key Performance
Funds invested in social contribution activities: RMB 24.62 million
Participants in social contribution activities: 14065 person-times
LY Steel supported a 300-mu white tea base in Lianyuan City Total volunteer service hours: 30773 hours
Average volunteer service hours per volunteer: 1.33 hours
Employment Assistance
The Company has consistently treated employment assistance as a core means of fulfilling its social responsibility actively taking on LY Steel visited and extended support to elderly people living alone
the responsibility of stabilizing employment and safeguarding livelihoods. Focusing on key groups such as residents in priority rural
revitalization areas urban groups facing employment difficulties and college graduates the Company established a green channel for
employment assistance through an integrated model of "skills training + targeted recruitment + job incubation". Case HYST | Voluntary Blood Donation Delivered Social Warmth
In August 2025 HYST organized nearly 300 employees to participate in Hengyang's 2025 voluntary blood donation campaign
and received a special note of appreciation from the Hengyang Central Blood Station demonstrating the Company's
LY Steel VAMA Yangchun New Steel compassion and sense of responsibility through voluntary blood donation.Throughout the year the Company The Company also visited Yunpan In addition the Company jointly Building Harmonious Communities
provided employment information Village in Mayang County to organized a recruitment event for
more than 10 times delivered extend support to 3 outstanding veterans successfully recruited 2 Valin Steel adheres to the concept of integrated development between communities and enterprises promoting positive interaction
employment training to more graduating college students veterans and contributed to local between its subsidiaries and surrounding communities. Through regular co-building activities targeted services and diversified
than 150 person-times created providing financial assistance employment stability. initiatives the Company has worked to create a harmonious community environment featuring joint participation joint governance
public welfare positions such as and development guidance to and shared benefits. At the same time through regular community forums factory open days suggestion boxes and other measures
cleaners and forest rangers and support rural education and talent the Company has ensured convenient and efficient communication with communities.recommended individuals for work cultivation. Among them Xiangtan Steel established a regular co-building mechanism with Chunchongtang Community including a weekly "Co-
in poverty alleviation workshops Building Activity Day" every Friday and monthly civility promotion activities on designated road sections. Through actions such as
within villages and elsewhere sanitation cleaning facility repair waste sorting promotion and the establishment of a "Caring Hair Salon" Xiangtan Steel improved
within and outside the province. In the community living environment and extended holiday visits to more than 400 households in special-needs groups during traditional
total more than 100 employment festivals. LY Steel regularly held district work meetings to promote knowledge relating to safety fire prevention and anti-fraud and
placements were arranged for led visits to 3 communities to hold discussion-based research meetings on better approaches to integrated community-enterprise
formerly impoverished individuals development while also providing regular assistance to more than 2300 person-times of elderly people facing hardship living alone
helping local residents achieve or suffering serious illness. HYST organized all employees to participate in the 2025 "One-Day Charity Donation" campaign raising RMB
stable income growth. 116029.10 and also carried out regular Lei Feng volunteer activities and fire assistance programs. VAMA built a community governance
model featuring multi-party coordination and source-based governance visited more than 300 community merchants and residents
helped resolve neighborhood disputes and environmental issues and provided legal awareness and risk prevention training to
community residents effectively improving community safety awareness.78 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 79
G overnance
Building on Sound
Governance to
Safeguard the Steady
Development of the
Steel Business
Valin Steel regards outstanding corporate governance as the
foundation for its steady development. The Company upholds and
strengthens the Party's overall leadership continuously improves
a modern corporate governance system with clear powers and
responsibilities and coordinated operation and integrates compliance
management and risk control into the full process of decision-making
and operations. Through sound decision-making effective supervision
and clear accountability the Company safeguards its long-term and
steady progress on the path of high-quality development.
80 Upholding the Leadership of Party Building
82 Standardizing Corporate Governance
86 Preventing and Controlling Compliance Risks
90 Safeguarding Company Rights and Interests
93 Deepening Digital and Intelligent Innovation
104 Advancing Intelligent Manufacturing
Responded to SDGs80 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 81
Upholding the Leadership of Party Building Strengthening the Grassroots Foundation and Consolidating Fighting Fortresses
The Company has maintained a clear focus on strengthening the grassroots foundation optimized the setup of grassroots
Valin Steel adheres to Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as its guide fully aligns Party organizations and in line with the principles of business relevance geographic proximity and ease of management
with the overall requirements for Party building in the new era and deeply integrates Party building with corporate reform established Party organizations in parallel across key projects critical areas and upstream and downstream segments
of the industrial chain achieving full coverage of Party organizations and Party work with no blind spots. The Company
and development production and operations as well as transformation and upgrading. This integration provides a strong improved the institutional framework for grassroots Party building strengthened basic mechanisms such as the
driving force of Party leadership for the Company in addressing market challenges and pursuing high-quality development. "Three Meetings and One Lecture" system and democratic evaluation of Party members stimulated the vitality of
mass organizations and formed a working pattern featuring Party building leadership and coordinated action by mass
Building Consensus Through Ideological Guidance organizations.The Company upholds the study and implementation of Xi Jinping Thought on Socialism with Chinese Characteristics The Company also continued to deepen the integration of Party building with production and operations. Focusing on key
for a New Era as its primary political task. We have refined the practice of treating the Party's latest theoretical tasks such as major priorities and difficult issues in production and operations project breakthroughs and cost reduction
developments as the "first item for study and deliberation" in relevant meetings. Through various channels—including and efficiency enhancement the Company carried out more than 1200 initiatives such as "Secretaries Tackling Difficult Problems" and "Party Members Delivering Outstanding Results" translating Party building achievements into tangible
theoretical study sessions of the Party committee thematic reading workshops Party lecture series and warning business performance. 4 cases were selected as outstanding cases in the provincial SASAC's "Hundreds Thousands and
education—the Company delivers tailored learning programs to different management levels and employee groups. Tens of Thousands" (large-scale model case selection initiative) program while 15 grassroots Party organizations 17 Party
These efforts ensure the Party's innovation theories are not only deeply comprehended but also translated into concrete members and 6 Party affairs workers received "Two Excellent and One Advanced" commendations from the provincial
action. SASAC.Xiangtan
Steel Organize 42 sessions on the "first item for study and deliberation" and 19 Party committee theoretical study Building Party Brands to Enhance Corporate Image
group sessions reaching over 8000 participant attendances among Party members management and
The Company has cultivated a Party building brand system with distinctive corporate characteristics continuously
personnel in sensitive positions. identifying role models organizing cultural activities and strengthening communication and promotion bringing people
together through brand building and projecting a strong corporate image.LY Steel Take the study of the guiding principles of the 20th CPC National Congress and the third and fourth plenary
sessions of the 20th CPC Central Committee as a core political task. organize centralized study and discussion
sessions in 245 Xiangtan Steel LY Steel HYST Party branches; and arrange for more than 280 Party organization secretaries to deliver
Deepen the development of the "Striving Pioneer" Develop distinctive Party-building brands such Organize thematic training on
thematic Party lectures. Party-building brand; build a digital and integrated as "Party Building Leadership Deepening Safety building high-quality Party-building
media communications matrix; appear 6 times Culture"; win the Second Prize for Innovation and b r a n d s ; i s s u e m o r e t h a n 1 9 6
HYST Conduct 27 study sessions on the "first item for study and deliberation" and 17 Party committee theoretical throughout the year on CCTV News and in the People's Technical Achievement in SOE Party Building; and editions of the Company Updates
study group sessions throughout the year; and organize 4 reading workshops and launch the "Hengshan Forum" Daily; and win the First Prize of the National Corporate strengthen cohesion through cultural activities Bulletin; and continuously enhance
Culture Achievement Awards for the project Forging such as the "Steel BA" basketball event and plant- recognition of its Party-building
Party building quality and branding training program. the Soul of Culture Tempering the Steel of the Brand. area mini-marathons. brands.VAMA Deliver 5 thematic Party lectures by members of the Party committee leadership team and 50 micro-Party VAMA Yangchun New Steel
lectures by Party members; organize 52 centralized study and discussion sessions by Party branches; and
Develop a "cooperation and win-win" Party- Closely align with the requirements of the
achieve a 100% participation rate in online training programs. building brand; promote the integration of "Striving Pioneer" Party-building brand;
Party building into five major areas including strengthen brand communication through
Yangchun strategic objectives and business management; Party affairs disclosure boards knowledge Organize 4 reading workshops for the leadership team; carry out more than 200 learning activities through
New Steel carry out activities such as "three highlights and competitions and similar activities; deepen
themed Party Day programs; complete 686 person-times of thematic online training on the SASAC e-learning three comparisons"; recognize 25 recipients of the integration of Party building with the
platform; and promote the implementation of the Party's innovative theories through knowledge competitions "Two Excellent and One Advanced" honors; and development of a refined enterprise; and
set new records in both Alusi output and ultra- project an image of lean production excellence.and similar activities. thin-gauge output.Strengthening Discipline and Work Conduct to Safeguard the Bottom Line of Development
The Company unswervingly advanced full and rigorous Party self-governance placed political development at the forefront
and treated the in-depth study and implementation of the spirit of the Central Party leadership's eight-point decision on
improving work conduct as an important political task building a closed-loop working system of learning review rectification
and governance. The Company strengthened its institutional safeguards revised systems and procedures in key areas such
as tendering and competitive negotiation official reception and supplier management and closed management loopholes.The Company also improved long-term mechanisms for inspection rectification to ensure that corrective actions are thorough
and effective. Focusing on key areas and critical links the Company regularly carried out targeted rectification in areas such as
Submission ceremony for responsibility letters on Party Study session on the guiding principles of the Fourth Plenary
Session of the 20th CPC Central Committee improper personal gains derived from association with the enterprise and risks in overseas projects fostering a pattern of precise
and sustained rectification and creating a clean and upright political ecology and business environment.82 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 83
Standardizing Corporate Governance Board Development
The Company continued to strengthen Board development revised the Independent Director System steadily advanced
Valin Steel has continuously strengthened corporate governance adhered to the principle of operating with integrity Board diversity improved mechanisms safeguarding the performance of independent directors' duties effectively
treated investors shareholders customers and suppliers with consistent sincerity and shared the fruits of development protected the interests of minority shareholders and promoted standardized corporate operation.with all stakeholders. At the same time the Company strictly complies with laws regulations and regulatory requirements
applicable to listed companies and has established a systematic and well-developed modern corporate governance
system to support high-quality development through sound governance.Consider factors such as gender age educational background professional competence
professional qualities and work experience in the selection and appointment of directors
Improving the Governance Structure ensuring that independent and external directors together account for more than half of the
The Company strictly follows the requirements of laws regulations and normative documents including the Company Board with a balanced mix of experienced and newly appointed members and an appropriate combination of professional backgrounds.Law of the People's Republic of China and the Securities Law of the People's Republic of China. In accordance with the
Increase the proportion of independent directors and female directors and continue advancing
Articles of Association and internal control systems the Company standardizes business decision-making processes Board Diversity gender diversity on the Board so as to strengthen strategic decision-making through more
continuously improves its corporate governance structure and has established and refined a corporate governance diverse perspectives.mechanism centered on the Board of Directors with clearly defined responsibilities and effective checks and balances Formulate the Rules of Procedure of the Board of Directors to further enhance governance
among the shareholders' meeting the Board of Directors the board of supervisors and management. The Company's transparency; require the presence of more than half of all directors for a Board meeting to be
CEO serves as Chairman of the Board. The Board consists of 9 directors including 3 independent directors and 2 external convened; set the minimum attendance rate for Board meetings at 50%. During the reporting
directors. Its members bring professional backgrounds spanning management technology finance and financial services period the average attendance rate of the Company's Board members at Board meetings
providing diversified professional support for strategic decision-making and risk control. The Board has established reached 100%.three categories of specialized committees to carry corporate governance principles through all levels of operation and
to ensure both compliant management and efficient business execution. With the exception of the Strategy and ESG
Committee independent directors hold a majority of seats on all Board specialized committees and serve as conveners.Within the scope of their authority they diligently perform their duties effectively safeguarding the independence and
fairness of audit internal control and the assessment and appointment of directors and senior executives.Require independent directors to strictly comply with the Company Law other relevant laws
The Company actively advanced the optimization of its governance system. At the 30th meeting of the Eighth Board of and regulations and the Articles of Association; perform their duties with loyalty and diligence;
conduct prudent reviews of major matters such as director nominations appointments of senior
Directors the Company reviewed and approved the Proposal on Revising the Articles of Association and Eliminating the executives profit distribution and related-party transactions; and safeguard the lawful rights
Board of Supervisors under which the board of supervisors will no longer be established. The Company also promoted Safeguards for and interests of all shareholders especially minority shareholders.the renaming of the Strategy Committee to the Strategy and ESG Committee adding sustainability- and ESG-related the Performance Provide comprehensive support for the performance of independent directors' duties including
management functions to support the Board in formulating dedicated policies and overseeing their implementation. of Independent regular research visits monthly operating information briefings and thematic communication
Directors' Duties sessions; ensure that independent directors hold a majority of seats on all Board specialized
committees and serve as conveners; enable them to provide professional opinions on
matters including macro-strategic research safety and environmental protection control
and capital operation planning; and secure strong attention to and active adoption of their
Key Performance recommendations by management.Number of shareholders' meetings held: 4; Number of proposals approved at shareholders' meetings: 24
Number of Board meetings held: 10; Number of proposals approved by the Board: 57
Number of Nomination and Remuneration Assessment Committee meetings held: 3; Number of Audit
Committee meetings held: 4; Number of Strategy and ESG Committee meetings held: 3; Number of special
meetings of independent directors held: 6
Average tenure of Board members: 3.57 years84 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 85
Composition of the Board of Directors of Valin Steel
Male 8 88.89%
Nomination and
Position Representative Gender Professional Background Board of
Strategy
and ESG Audit Remuneration
Gender Female 1 11.11%
Directors Committee Committee Assessment Committee
Internal directors (including
Industry management (Senior the Chairman) 4 44.44%
Chairman Li Jianyu Male Engineer; experience in steel
production and operations) Director Category Independent director 5 55.56%
Industry management and financial Industry/Technology
Director Yang Xianghong Male management (former Chief Financial Management 7 77.78%
Officer; MBA)
Finance/Financial
Professional Management 3 33.33%
Background
Industry management (Senior
Director Xie Jiuyuan Male Engineer; experience in strategy and Law/Risk Management 2 22.22%
manufacturing management)
Doctoral degree holders 2 22.22%
management and financial
Director Ma Peiqian Male management (experience in bank
credit and investment management) Master's degree holders 4 44.44%Highest Education
Attained
Bachelor's degree holders 3 33.33%
Industry management (Senior
Director Zheng Shengbin Male Engineer; experience in steel
production management)
Aged 35-45 2 22.22%
Risk management (LL.B.; experience
Director Zhang Xuhong Male in corporate compliance and Aged 46-55 4 44.44%
management) Age Structure
Aged 56 and above 3 33.33%
Financial management (Master of
Independent Accounting; Ph.D. in Management
director Jiang Yanhui Female Science and Engineering; accounting
expert) Key Performance
Number of independent and external directors: 5 representing 55.56%2
Industry management (Senior Number of female directors: 1 representing 11.11%
Independent Xiao Haihang Male Engineer; electrical and automation director specialist; industry association Proportion of independent directors serving more than six years: 0%; Proportion of independent directors
expert) serving on the boards of more than three listed companies: 0%
Proportion of independent directors on the Audit Committee: 66.67%; Proportion of independent
directors on the Nomination and Remuneration Assessment Committee: 66.77%
Independent Industry management (Ph.D. in
director Yuan Guo Male Materials Processing Engineering; expert in digital steel)
2 A s approved at the Company's first extraordinary general meeting of shareholders of 2026 on February 9 2026 Zhang Xuhong was elected as a non-independent
director of the Ninth Board of Directors and serves as an external director.86 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 87
Preventing and Controlling Compliance Risks Implementing tiered and categorized risk management
Internal Control and Risk Management The Company clearly assigns primary responsibility for "risk management" and "managing risks" respectively to
the Internal Control and Audit Department and the functional departments establishing an overall internal control
Valin Steel has established and advanced its internal control and enterprise-wide risk management framework in strict framework centered on the Internal Control and Audit Department management the Audit Committee and the
accordance with regulatory requirements including the Basic Standard for Enterprise Internal Control and the Guidelines Board of Directors.on Enterprise-wide Risk Management for Central Enterprises and in alignment with the Articles of Association. To this end
the Company formulated two core policies: the Measures for Internal Control Management and the Enterprise-wide Risk
Management Policy. The Company places strong emphasis on strengthening risk awareness compliance consciousness Tiered management: Establishing a three-tier risk control structure
and the development of professional talent. We have guided subsidiaries at all levels to deliver compliance training closely
aligned with their business needs covering topics such as the new Company Law investment management anti-money The Company has established a three-tier risk management structure covering headquarters first-level enterprises and
laundering contract management and regulatory policies while also carrying out diversified legal awareness activities. second-level and lower-level enterprises and implements tiered risk response measures and graded risk control based on
the business characteristics and key risk exposures at each level.Key Performance Categorized management: Building the three lines of defense for risk management
Participants in internal control risk management and compliance training: more than 1200 person-times In accordance with the principle of risk ownership by function the Company allocates different categories of risk to the
corresponding business units and functional departments achieving categorized risk management and building a clear
three-lines-of-defense structure.Across key operational and management areas such as sales procurement production investment capital management
and budgeting the Company has established supporting internal control systems covering strategic planning equity First line of defense：Business units Second line of defense：Risk
investment contract management and other areas. These systems clearly define approval authorities operating Third line of defense：The Board of and functional departments as the management departments and
procedures and control standards for each process strengthen process control and supervision and ensure that internal Directors and its Audit Committee primary risk owners are responsible management are responsible for
controls are embedded throughout all stages and aspects of business management effectively preventing and mitigating are responsible for final oversight of for frontline risk prevention and overall coordination supervision
operational risks and ensuring that the Company's operations are conducted in a compliant orderly and efficient risks and approval of key decisions.control. and guidance of risk management.manner.Following the logic of "standards first identification and assessment response and treatment focused monitoring
and reporting and review" the Company has established a closed-loop risk management system. Based on unified
risk standards the Company identifies risks and develops a risk database risk registers and risk maps; formulates and
implements response measures for identified risks; builds a closed loop of identification rectification and verification;
and carries out monitoring reporting post-event review and annual assessment of major risk events achieving full-
process closed-loop management and continuous improvement. Audit Oversight
Based on the above risk management logic and framework the Company has fully embedded ESG risk factors into the The Company engaged ShineWing Certified Public Accountants (Special General Partnership) as its internal control audit
entire risk management process. With overall coordination by the Board's Strategy and ESG Committee the Company firm for 2025. The firm issued a standard unqualified opinion on the effectiveness of the Company's internal control
incorporates ESG requirements into strategic planning the review of major investment decisions and day-to-day over financial reporting confirming that the Company maintained effective internal control over financial reporting in
production and operations. ESG dimensions such as green and low-carbon development and social responsibility are all material respects while also reviewing the status of internal control over non-financial reporting. The Company's
included in risk classification and assessment criteria enabling coordinated management of ESG risks and other business previous internal control audit firm was Tianjian Certified Public Accountants (Special General Partnership). This change
risks. Based on the Company's risk management framework no material risks have been identified at present. was intended to better align financial statement audits with internal control audits and improve overall efficiency. The
Company communicated with Tianjian in advance and obtained its confirmation of no objection. The change complied
with the Measures for the Selection and Appointment of Accounting Firms by State-owned Enterprises and Listed
Companies and was reviewed without objection by the Audit Committee and the Board of Directors.In addition through measures such as continuously optimizing internal control processes and achieving full three-
year coverage of internal control effectiveness evaluations across subsidiaries at all levels the Company has effectively
safeguarded the operational effectiveness of its internal control system.In 2025 audit departments at all levels strictly implemented regulatory requirements and focused closely on the
objectives of "strengthening internal audit preventing risks promoting compliance and creating value." Concentrating
on key areas and critical links they worked to break down the boundaries between audit risk management and legal and
compliance functions building an integrated framework for risk oversight across the Company.88 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 89
Business Ethics
Key Performance
Anti-Bribery and Anti-Corruption
The Company has continued to deepen the development of a "Clean Steel" culture actively practiced the core value of Coverage rate of operational sites subject to corruption risk assessment: 100%
"putting strivers first" and strongly promoted the values of responsibility integrity in professional conduct and honest
business operations. Requirements for integrity have been comprehensively embedded in all aspects and areas of the
Company's internal management and external cooperation. The Company formulated and improved integrity-related Whistleblowing and Complaint Channels
systems including the Implementation Measures for Enforcing the Decision-Making System for Major Matters Major Valin Steel consistently upholds the principle of putting people first fully respects employees who report concerns
Personnel Appointments and Removals Major Project Arrangements and Large-Sum Fund Operations the Measures provide leads or cooperate with investigations and is committed to conducting thorough reviews and prompt handling
for Post-Investment Management of Equity Investments the Measures for Accountability for Losses Arising from Non- of all reports of misconduct. In accordance with applicable rules discipline and laws the Company adopts targeted
Compliant Operations and Investments and the Notice on Issuing the "Red Line" Rules for the Performance of Duties corrective measures including but not limited to policy clarification strengthened education and training process and
by Senior and Mid-level Management Personnel. These systems clearly define anti-corruption requirements for internal mechanism optimization and serious accountability measures.and external stakeholders and systematically advance the development of a "Clean Steel" culture. At the same time
the Company has incorporated matters such as employees' professional ethics fraud for personal gain and integrity The Company fully respects every employee who raises concerns or makes a report and in accordance with the law
in performing public duties into its employee reward and disciplinary system strictly upholding disciplinary red lines protects the lawful rights and interests of employees who are subject to investigation. The Company also ensures in
resolutely prohibiting any form of improper benefit transfer and continuously reinforcing an organization-wide line of accordance with applicable laws rules and discipline requirements that employees are not subjected to improper
defense for integrity and honesty. treatment for reasonably expressing concerns or reporting misconduct or illegal acts. Any individual or relevant party that
retaliates against a whistleblower will be held seriously accountable in accordance with the rules and in serious cases the
For third-party partners such as suppliers contractors and service providers the Company has established a full-process labor contract will be terminated.multi-level anti-corruption oversight system clearly communicated compliance expectations and sought to prevent risks
such as third-party commercial bribery and improper transfer of benefits.Valin Steel Whistleblowing and Complaint Channels
Deepening Learning and Education. The Company carried out in-depth study and education on Mailing address: Room 1102 Discipline Inspection Commission Valin Steel No. 222 Xiangfu West Road Tianxin
implementing the spirit of the Central Party leadership's eight-point decision on improving work conduct District Changsha Hunan 410004
advanced learning review and rectification in an integrated manner convened 395 warning education
sessions and identified and rectified 135 issues. Whistleblowing box location: Beside the elevator on the 1st floor of the main building of Valin Steel No. 222
Xiangfu West Road Tianxin District Changsha Hunan
Sustaining Integrity Education as a Standard Practice. The Company innovatively organized themed Reporting hotline: 0731-12388
activities such as "Good Family Traditions Good Inheritance" and extensively carried out the "Five Ones"
integrity education program: delivering one integrity-focused Party lecture conducting one integrity-
themed home visit issuing one integrity risk reminder letter holding one high-quality integrity conversation
and presenting one set of integrity-themed books. During the year 214 pre-appointment integrity interviews Anti-Unfair Competition
were conducted helping integrate integrity values into daily work and embed them in employees' thinking.The Company places great importance on preventing unfair competition and fostering a fair competitive environment and
has strengthened its compliance safeguards from multiple dimensions. Through a dedicated compliance management
Strengthening Targeted Control of Integrity Risks. The Company improved its dynamic integrity risk system the Company regularly conducts internal audits and compliance inspections to promptly prevent acts of unfair
reminder mechanism. Discipline inspection and supervision bodies at all levels issued 88 integrity risk competition. The Company also actively strengthens industry self-discipline opposes improper practices such as
reminders and urged rectification of 164 issues continuously reinforcing the integrity risk prevention and malicious low-price competition and false advertising improves its price management system to regulate pricing and
control network. strengthens intellectual property protection to guard against infringement and information leakage. Through transparent
tendering procedures and integrity agreements the Company has also reinforced its defenses against commercial
bribery. At the same time the Company closely monitors market developments protects its rights in accordance with the
law reports malicious competitive conduct promotes the establishment of a fair competition environment and carries
out regular compliance training with a focus on anti-monopoly and fair competition topics to strengthen employees'
risk awareness and prevention capabilities. In addition the Company advances digital and transparent management to
enhance the traceability and oversight of business processes. During the reporting period the Company did not incur any
fines relating to unfair competition anti-money laundering anti-terrorism conflicts of interest or insider trading.In January 2025 the Secretary of the Discipline Inspection In February 2025 LY Steel organized the 2025 Conference on Party
Commission of Yangchun New Steel conducted integrity education Conduct and Clean Governance and Anti-Corruption Work
training for mid-level managers general supervisors and part-time
discipline inspection officers90 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 91
Safeguarding Shareholder Rights and Interests Implementing Share Repurchase and Cancellation
In response to investor concerns the Company convened the 28th meeting of the Eighth Board of Directors on January
Valin Steel attaches great importance to the protection of shareholder rights and interests effectively safeguards 20 2025 and the first extraordinary general meeting of shareholders of 2025 on February 14 2025 at which it approved its
shareholders' lawful rights ensures that shareholders can lawfully exercise decision-making and oversight rights strictly first-ever share repurchase plan since listing. The plan clearly specified that the repurchased shares would be cancelled
regulates information disclosure management fully protects shareholders' right to know and maintains diversified and the registered capital reduced accordingly.communication channels to safeguard the lawful rights and interests of all shareholders. The Company completed the repurchase of a cumulative total of 56.02 million shares for a total repurchase amount of
RMB 279 million. Together with the cash dividends declared under the 2024 profit distribution plan during the reporting
period shareholder returns accounted for 47.5% of the Company's net profit attributable to shareholders of the parent
Shareholder Rights company for 2024 reaching a record high since listing and ranking in roughly the top one-third among more than 5000
The shareholders' meeting is the Company's supreme authority. The Company Key Performance A-share listed companies and within the steel sector.attaches great importance to protecting shareholders' lawful rights and
interests actively builds communication bridges and invites shareholders Shareholding ratio of
to participate in shareholders' meetings. Through the official website the senior executives: 0% Information Disclosure
Company promptly discloses key materials including annual reports semi-
annual reports quarterly reports and various ad hoc announcements and Share pledge ratio: 0% The Company strictly complies with laws and regulations including the Company Law of the People's Republic of China
circulars providing shareholders with convenient access to information. the Securities Law of the People's Republic of China the Rules Governing the Listing of Stocks on the Shenzhen Stock
During the reporting period the Company convened a total of 4 shareholders' Exchange and the Guidelines for Fair Information Disclosure of Listed Companies and revised its Information Disclosure
meetings. Management System. The Company has established a regular internal review process for information disclosure and
continuously improves the efficiency and quality of information disclosure to ensure that disclosed information is true
accurate complete timely and fair and to eliminate false records misleading statements or material omissions
Returning Value to Shareholders effectively safeguarding investors' lawful rights and interests. At the same time through designated channels including the
Increasing the Cash Dividend Payout Ratio China Securities Journal the Securities Times CNINFO and the website of the Shenzhen Stock Exchange the Company
promptly discloses information that may have a material impact on investor decision-making and the Company's share
The Company adheres to a prudent and sustainable dividend policy and dynamically updates its Three-Year Shareholder price and fully reveals potential risks.Return Plan. In principle the cumulative profit distributed in cash over the most recent three years shall be no less than
30% of the average annual distributable profit realized in those three years. In addition the total cash dividends for the
year including any interim cash dividends already distributed shall be no less than 20% of the Company's net profit
attributable to shareholders of the parent company for that year. Key Performance
From 2021 to 2024 the Company's cash dividend payout ratios were 21% 26% 31% and 34% respectively achieving Number of statutory announcements prepared and disclosed: 142; Information disclosure rating from the
steady year-by-year growth. For 2025 while balancing capital expenditures and dividends the Company continued to Shenzhen Stock Exchange: Class A for the seventh consecutive year
return value to investors with strong commitment. The Company has declared a cash dividend of RMB 1.60 (tax inclusive)
for every 10 shares amounting to total cash dividends of RMB 1.096 billion. The cash dividend payout ratio reached 42% Ranking among companies listed in Shanghai and Shenzhen: top 3.28%
of the Company's net profit attributable to shareholders of the parent company for 2025 representing a further increase
of 8 percentage points over the previous year. Award received: "2025 Best Practice Award for Board Office" from the China Association for
Public Companies (CAPCO)
Dividend
Dividend payout ratio
Dividend Dividend payout ratio 42%
Dividend Dividend payout ratio
payout ratio 34%
31%
payout ratio payout ratio 26%
20%21%
202020212022202320242025
Cash dividend per Cash dividend per Cash dividend per Cash dividend per Cash dividend per Cash dividend per
10 shares: RMB 2.1 10 shares: RMB 2.9 10 shares: RMB 2.4 10 shares: RMB 2.3 10 shares: RMB 1.0 10 shares: RMB 1.6
(tax inclusive) (tax inclusive) (tax inclusive) (tax inclusive) (tax inclusive) (tax inclusive)92 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 93
Shareholder Communication Deepening Digital and Intelligent Innovation
Introducing Long-Term Active Shareholders
The Company actively responded to the policy call to improve the modern enterprise system with Chinese characteristics Optimizing the Innovation System
and support listed companies in introducing institutional investors holding more than 5% of shares as active shareholders Strengthening Innovation Management
and proactively engaged in communication with long-term capitalp roviders such as insurance institution.Valin Steel has continued to strengthen its innovation management system by formulating policies and procedures
During the reporting period the Company successfully introduced Xintai Life under Hunan Province-owned enterprise including the Measures for Basic Research Management the Research and Development Control Procedures the Detailed
Wuchan Zhongda as an active shareholder holding more than 5% of the Company's shares. Through continued purchases Rules for the Management of Science and Technology Projects and the Measures for the Management of R&D Projects. In
in the secondary market Xintai Life increased its holding to 7.97%. Xintai Life has nominated one director to the Company. doing so the Company has established a management mechanism covering the full chain from R&D project initiation and
With a financial background this director contributes to the continued diversification of the Board and brings more process control to the commercialization of results ensuring that research projects are advanced in an orderly manner
diverse perspectives to the Company's strategic decision-making. and executed efficiently in accordance with plan. At the same time in order to fully stimulate the innovation motivation of
R&D personnel the Company's subsidiaries in accordance with documents such as the Measures for Awards for Scientific
and Technological Progress and the Measures for Awards for Technological Innovation have defined dedicated R&D
Strengthening Investor Relations Management incentive measures and granted additional rewards based on researchers' contributions and R&D achievements creating
The Company actively implements the principle of being investor-oriented and continuously improves and strengthens a dual support mechanism of institutional safeguards and incentive-driven motivation.investor relations management. Through various means such as investor roadshows participation in investor strategy
meetings and reception of investor research visits the Company has maintained a visible presence in the capital market.The Company also regularly holds performance briefings through written interaction livestreaming and other channels
and promptly communicates operating information. The Company actively collects and analyzes market views on the Key Performance
investment value of the listed company reasonably guides investor expectations and proactively listens to investors'
opinions and suggestions. Through channels such as the investor hotline email the Shenzhen Stock Exchange's During the reporting period:
Interactive Easy platform and shareholders' meetings the Company responds to investor inquiries and concerns and R&D investment: RMB 5.378 billion accounting for 4.44% of total operating revenue for the year
continues to build a sound two-way communication mechanism with investors.Number of R&D personnel on staff: 3308; Proportion of R&D personnel: 14.30%
During the reporting period the Company organized 79 investor communication activities of various kinds covering 243
mainstream institutions received 33 recommendation reports from steel industry analysts and responded to 665 investor
questions on the Shenzhen Stock Exchange's Interactive Easy platform.
4.4
Maintain high-frequency investor engagement 4.2
12003.84.0
1091
3.5
1000
800784
728
665
600
543
400
3163226.0856.4536.8275.7265.378
263289243
200
20212022202320242025
3720353533
R&D investment (RMB billions)
Number of institutions engaged Number of Interactive Easy Number of recommendation R&D investment as a percentage of total operating revenue (%)
(times) replies (times) reports (times)
2021 2022 2023 2024 202594 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 95
R&D Platform Development
The Company has pooled high-quality internal and external resources
and vigorously advanced the development of its innovation platform
system. By the end of 2025 we had established 11 national-level R&D National Provincial
platforms including three national enterprise technology centers
Xiangtan Steel LY Steel HYST VAMA Yangchun New Steel at Xiangtan Steel LY Steel and HYST as well as two postdoctoral level:12 level: 23High-level
Leverage Science and Formulate dedicated pat- Integrate and establish Establish incentive mech- Optimize resource alloca- research workstations. In parallel the Company has also put in place diversified
Technology Week activities ent development plans; set a technology innovation anisms such as the VAMA tion under the IPD model; multiple provincial-level and above R&D platforms including the
to recognize outstanding patent targets for each unit; incentive system; reward Patent Incentive Measures; strengthen research on Hunan Engineering Technology Research Center for High-Strength innovation
research projects tech- and implement supporting achievements in scientific and provide both financial common technologies and Structural Steel and Steel for Construction Machinery and the Hunan platforms
nological achievements incentive and evaluation honors standards and rewards and honorary brand building; and im-
and teams; grant awards mechanisms to stimulate patents in 2025; and im- recognition to teams and plement dedicated bonus Key Laboratory of Welding Technology forming a multi-level high-
totaling over RMB 8 million; innovation. plement an annual perfor- individuals with outstand- allocation mechanisms to caliber scientific research support system. In addition the Company's
and confer plaques to the mance evaluation system ing contributions to tech- incentivize key R&D initia- Physical and Chemical Testing Center has obtained certification Enterprise
first batch of 10 "Innovation for IPD R&D personnel with nological innovation. tives. under the ISO CMA and CNAS systems and is recognized within the
Studios". multi-dimensional bonus industry as an authoritative testing laboratory. level:N
criteria to incentivize results
in real time.Case HYST | Recognition as a National Enterprise Technology Center Demonstrated National-
Level Recognition of Its Innovation Strength
In April 2025 HYST was successfully included in the 2024 (31st batch) list of newly recognized national
enterprise technology centers with its innovation capability commercialization of achievements and
Intellectual property protection industry leadership receiving authoritative national recognition. HYST has consistently adhered to the path
of independent innovation achieved large-scale import substitution in the high-end steel tube segment
The Company strictly complies with laws and regulations including the Patent Law of the People's Republic of China successfully broken through multiple critical "bottleneck" technologies in key national fields and participated
the Trademark Law of the People's Republic of China and the Copyright Law of the People's Republic of China. We extensively in major national engineering and strategic projects injecting strong momentum into the
have formulated the Intellectual Property Management Measures and continues to improve its intellectual property development of a manufacturing powerhouse and the high-quality development of the steel industry through
management system strengthening the protection of core intellectual property assets such as trademarks patents its hard-core technological strength.and copyrights on a comprehensive basis. Among the Company's organizational functions the Science and Technology
Management Department serves as the central function for intellectual property management and is responsible for
overall coordination. The subsidiaries undertake day-to-day intellectual property management and have formulated
supporting rules and procedures including the Patent Management Measures. Commercialization of Scientific and Technological Achievements
The Company implements the strategy of "strengthening the enterprise through science and innovation" and regards
The Company also conducts regular dedicated training on intellectual property strengthens awareness of intellectual the commercialization of scientific and technological achievements as a core pillar of high-quality development. The
property management and protection across the workforce and has built an intellectual property protection framework Company continues to deepen its technological innovation system and collaboration among industry academia research
characterized by sound systems effective execution and full employee participation effectively safeguarding the and application increase R&D investment improve commercialization mechanisms and promote the industrialization of
Company's core intellectual property assets. core technologies tempowering the transformation and upgrading of its core business.The subsidiaries delivered notable and substantial results in the area of scientific and technological achievements. In
Improving the efficiency of domestic Strengthening the forward-looking overseas 2025 Xiangtan Steel completed the evaluation of five scientific and technological achievements including R&D and
intellectual property protection deployment of intellectual property Industrial Application of Key Technologies for Ultra-Wide High-Strength High-Toughness and Easy-to-Weld Steel Plates
for Lightweight Construction Machinery all of which were assessed as reaching an internationally leading level. LY Steel
Revise the Patent Management Measures; Engage patent agencies to conduct freedom- received 4 first prizes in the 2025 Metallurgical Science and Technology Awards including one project led by LY Steel
proactively engage with provincial and municipal to-operate (FTO) analyses for the overseas marking another historic breakthrough for the Company. HYST received 3 Metallurgical Science and Technology Awards
intellectual property authorities; secure inclusion deployment of core products including premium 1 second prize of the Science and Technology Award of the China Steel Construction Society and 1 second prize of the
in the Hunan Intellectual Property Protection threaded connections; file one PCT international Science and Technology Award of the Chinese Society for Corrosion and Protection.Center's fast-track channel for expedited pre- patent application; and build a legal protection
examination rights confirmation and rights framework to support the global expansion of the
protection; and shorten patent grant cycles by Company's products and technologies.
70% compared with conventional timelines.96 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 97
R&D Achievements in Specialty Steel Products
Xiangtan Steel
In recent years Xiangtan Steel has remained committed to its strategy of advancing toward higher-end quality
and branding continuously upgrading and optimizing its product mix and extending product structure adjustment Steel for Hydropower Applications
toward the higher end of the industrial and value chains. In 2025 Xiangtan Steel delivered fruitful R&D results. In the Xiangtan Steel has continued to strengthen
plate segment it focused on areas such as steel for polar low-temperature vessels preheat-free engineering steel its position in the field of hydropower
corrosion-resistant bridge steel and steel for the storage and transportation of clean energy and developed 28 steel with product quality moving further
new high-end grades. Among them 80 mm wear-resistant steel and copper-clad steel rolled clad plate successfully upmarket. Its products have been widely
filled domestic gaps while 1000 MPa steel for hydropower applications 420 MPa steel for offshore engineering used in key domestic and international
applications and 5.5Ni and 7Ni nickel-alloy low-temperature steel were recognized as reaching an internationally hydropower projects such as the Yangjiang
leading level. These products have been widely applied in major projects including the world's largest metamorphic
buried-hill oilfield the Huajiang Grand Canyon Bridge—the world's highest bridge—and the "Light of the Sea" Opera P u m p e d S t o r a g e P o w e r S t a t i o n t h e
House in Shenzhen. In the wire rod and bar segment Xiangtan Steel accelerated quality improvement and efficiency Jatigede Hydropower Station in Indonesia
enhancement focusing on the needs of high-end manufacturing and developing 52 new products including 80 kg- and Phase IV of the Tarbela Hydropower Yangjiang Pumped Jatigede Hydropower Tarbela Hydropower
grade high-strength alloy welding wire and 2000 MPa-grade high-strength mono-leaf spring steel. It also achieved the Station in Pakistan achieving essentially Storage Power Station Station in Indonesia Station in Pakistan
first domestic application of 1Ni weather-resistant steel for rivets saw its non-quenched-and-tempered crankshaft full coverage of all strength grades for (Phase IV)
steel enter Toyota's supplier system enabled its bearing steel to meet the admission standards of Luoyang Bearing hydropower steel.Group and secured certification from Geely and Ford for Grade 10.9 high-strength cold-heading steel continuously
enhancing its high-end and precision-oriented supply capabilities.High-Strength Wear-Resistant Steel
Backed by a strong technical team Xiangtan Steel has achieved key breakthroughs in high-strength wear-resistant steel
Steel for Shipbuilding and Offshore Engineering successfully developing 80 mm full-thickness NM600 high-grade wear-resistant steel that can substitute for imported
Xiangtan Steel positions steel for shipbuilding and offshore engineering as a mid- to high-end product category Hardox 600 products. Bulk delivery at this thickness represented an industry first significantly enhancing Xiangtan
and has continued to deepen integrated upgrading in both technology and high-end products. Closely aligned with Steel's reputation in heavy-duty applications. The product has been widely supplied to high-end customers both in
industry trends toward larger scale lightweighting and greener development Xiangtan Steel has focused its R&D and China and overseas including Caterpillar and Liebherr internationally and SANY and XCMG domestically. Xiangtan
upgrading efforts on frontier areas such as special-purpose vessels steel for polar applications deepwater jackets Steel's Caterpillar 1E4187 product has successfully replaced comparable products from SSAB and JFE. At the same time
and offshore wind power and has established strategic cooperation with internationally renowned companies orders for Q960-grade and above ultra-high-strength structural steel exceeded 41000 tonnes and Xiangtan Steel jointly
including CNOOC and Saudi Aramco. Its products have obtained approvals from ten major international classification achieved breakthroughs with XCMG Mining Machinery in the application of ultra-low-temperature steel breaking foreign
societies as well as certification under the U.S. API system and EU EN 10225 and have consistently maintained the dominance in this field.leading domestic market share while securing a strong position in the high-end international market.At the same time Xiangtan Steel has taken the lead in industry standard-setting leading the drafting of China's first Jointly Breaking Through the Application Bottleneck of Ultra-Low-Temperature Engineering
standards for Steel Plates for Offshore Platform Structures and Steel Plates for Offshore Platform Jackets filling Case Steel with XCMG Mining Machinery
domestic gaps in the relevant standards. Building on its technological strengths Xiangtan Steel has accelerated its
move toward higher-end quality and branding in this segment achieved continued breakthroughs overcome 12 In 2025 Xiangtan Steel together with XCMG Mining Machinery completed the development and industrial
internationally leading technologies completed 15 first domestic launches and realized supporting capability across application of the full series of Q355–Q690 high-strength structural steels and NM450F wear-resistant steel
all product categories all specifications and all vessel types. In 2025 its High-Strength Extra-Thick High-Quality for service temperatures of -50°C/-60°C achieving full coverage of specifications. The delivery of this series of
Steel for Deep-Sea Offshore Engineering was recognized as reaching an internationally leading level. equipment for extreme cold conditions broke foreign monopolies and filled the domestic gap in large-scale
engineering equipment for service temperatures below -50°C providing strong support for construction and
Case First Domestic Application of Ultra-High-Strength Wear-Resistant Ship Plate mineral development in high-latitude regions.In February 2025 the 20000-ton transfer barge MINRES ROSILY which uses
Xiangtan Steel's AB/AQ98 ultra-high-strength wear-resistant ship plate was Clad Plate
successfully delivered marking the first domestic application of this type Xiangtan Steel achieved a major breakthrough in roll-bonded cladding technology with the successful development
of ship plate. The vessel is used for iron ore transshipment and operates of copper-clad steel plate providing a new materials solution for industries such as new energy power chemicals
in a highly demanding service environment requiring exceptionally high and metallurgy. Xiangtan Steel became the first steel enterprise in China to master the full-process technology
strength and wear resistance from the steel plate. Leveraging its advanced for roll-bonded copper-clad steel. The Company has launched high-end products including high-grade clad plate
equipment strong R&D capability and efficient delivery performance Successful delivery of the 20000- for bridges clad plate for nuclear power chrome-moly clad plate nickel-based alloy clad plate and clad plate for
Xiangtan Steel secured the entire 5000-ton order and the product received ton transfer barge MINRES ROSILY shipbuilding which have been widely used in key projects such as the Tongling Bridge in Anhui Bailong Nuclear
high recognition from the customer. Power Station and the Pinglu Canal in Guangxi. Its clad plate R&D capabilities are at a leading level in China.98 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 99
LY Steel
LY Steel has continued to optimize its product mix and strengthen technological innovation. In the silicon steel
segment it successfully mastered the production process for grain-oriented silicon steel with high magnetic induction
under a full low-temperature conditions and made breakthroughs in the rolling technology for thin-gauge SK series Case
products achieving exclusive mass production in China of products as thin as 0.01 mm. In the construction machinery Grain-Oriented Silicon Steel Achieved a Key Breakthrough in Localized Production in Hunan
steel segment LY Steel developed a series of key grades featuring high strength and toughness with multiple
products achieving import substitution and strongly supporting market expansion and profitability improvement in In November 2025 the first coil of grain-
this segment. In 2025 LY Steel achieved breakthrough progress in specialty steel development with annual output oriented silicon steel was successfully
and sales of specialty steel reaching 6.29 million tonnes up 4.9% year on year. High-end products accounted for 38% rolled off LY Steel's No. 4 rolling mill
of total sales volume. A cumulative total of 39 new products were developed and the proportion of plate products marking a key leap toward localized
exceeded 80% further strengthening product competitiveness. production of high-grade grain-oriented
silicon steel in Hunan. This achievement
filled the gap in high-end electrical steel
Silicon Steel
in Central South China and supported by
LY Steel's silicon steel business has undergone multi-stage leapfrog development with continuous improvement breakthroughs across the full production
in industrial layout and steady enhancement of technological capability. In 2007 its first heat of silicon steel was process provided core material support
successfully smelted. In 2018 it joined the first tier of domestic substrate suppliers and ranked first in market share for downstream industries such as
in the industry. In December 2022 the Electromagnetic Materials Company was formally established laying a solid power transmission and transformation
foundation for the industrialization of high-end silicon steel. In June 2023 the first coil of non-oriented silicon steel
was successfully rolled off the line marking a breakthrough in a key process link. In June 2025 the first coil of grain- and new energy vehicles contributing
oriented silicon steel with high magnetic induction was successfully rolled off the line. LY Steel set industry records for to the upgrading of Hunan's electrical
both project construction speed and the speed of commissioning the process route for high-magnetic-induction grain- equipment industry.oriented silicon steel filling the gap in high-end electrical steel in Central South China and providing core material The first coil of grain-oriented silicon steel was successfully rolled off LY
support for downstream industries such as power transmission and transformation and new energy vehicles. Steel's No. 4 rolling mill
LY Steel completed the development
of 46 grades across four major product
series. These products are widely used Wear-Resistant Steel
in home appliances motors and other Thin-gauge wear-resistant steel plate is an important raw material for major equipment key engineering projects
fields. Its product portfolio of non- and national defense. In response to the urgent demand from large-scale engineering equipment for wear-resistant
Non-Oriented oriented silicon steel for new energy steel with higher strength thinner gauges and better toughness and against the backdrop of long-term dominance
Silicon Steel vehicle drive motors has continued by international players LY Steel actively pursued independent innovation and collaboration among industry
to expand and has achieved batch
Non-oriented silicon steel products academia research and application. It successfully developed the roller-type quenching equipment capable of
application by leading automakers. processing plates as thin as 2 mm high-precision tempering equipment operating at temperatures as low as 150°C
Thin-gauge products of 0.20 mm 0.15 mm and 0.10 mm for emerging sectors such as and ecological descaling technology and equipment for high-performance steel plates using high-pressure water-jet
the low-altitude economy were successfully rolled off the line in succession with iron shot blasting. It also developed a series of functional wear-resistant steels and built the heat-treatment production
loss reduced to below 10 W/kg supporting the rapid development of emerging national base for thin-gauge steel plate.industries.Case Innovative Thin-Gauge High-Strength High-Toughness Wear-Resistant Steel Honored with
the "Three Innovations Brand" Title
LY Steel completed the development of multiple grades including high-magnetic-induction
series and refined magnetic domain LY Steel's project Development and Application of Innovative Thin-Gauge High-Strength High-Toughness
series. Leveraging its comprehensive and Wear-Resistant Steel was awarded the "Three Innovations Brand" title. Through sustained technological
strengths in product quality technical innovation and strong industry leadership the project achieved outstanding results in promoting equipment
Grain-Oriented exchange and commercial service lightweighting and domestic substitution delivering remarkable economic and social benefits. This honor
Silicon Steel it completed supply chain admission represents high recognition of LY Steel's more than ten years of dedication to high-end wear-resistant materials
procedures and its products are now and its contribution to breaking international technological monopolies.widely used by a number of benchmark
enterprises in the industry.Grain-oriented silicon steel products100 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 101
HYST
Guided by its strategy of moving upmarket and differentiating its offerings HYST achieved a series of key technological
breakthroughs in core segments such as OCTG line pipes pressure vessel tubes and tubes for machining. It successfully Case Gas-Tight Premium Connection Safeguarded the Safe Operation of China's First Underground
developed a number of domestically leading and in some cases exclusive products including 165V-grade casing ultra-low- Hydrogen Storage Facility
carbon line pipe extra-large-diameter pressure vessel tube and high-grade structural tube for construction significantly
enhancing its core competitiveness and overall profitability in high-end markets such as energy construction and storage. HYST tailored its HSTW gas-tight premium connection for China's first underground hydrogen storage facility
Sinopec's Chongqing Banshan Ring Road Comprehensive Energy Station providing critical support for the rapid
In 2025 the overall technology of HYST's project Development and Application of Key Manufacturing Technologies for Seamless development of domestic hydrogen storage technology through superior product quality. The facility incorporates
Steel Tubes for High-Temperature and High-Pressure Service reached an internationally advanced level among which the the world's first 45 MPa high-pressure underground hydrogen storage well technology and is designed for a service
technology for controlling full-size performance uniformity in large-diameter products reached an internationally leading level. life of 25 years. To precisely meet the project's demanding gas-tight sealing requirements HYST's technical team
The project Efficient Low-Carbon Smelting Technology and Intelligent Model Application for High-Quality Seamless Tube Steel developed the HSTW gas-tight premium connection which is easy to make up and offers strong operational
via the EAF Short Process also reached an internationally advanced level overall with the intelligent coordinated control model stability. The product is capable of maintaining safe reliable sealing performance under high-pressure and corrosive
for the EAF-LF-VD-CC section based on a mechanism-and-data dual-driven approach reaching an internationally leading level. conditions safeguarding the safe operation of the hydrogen storage facility.OCTG Line Pipe
HYST achieved the first production of 165V-grade casing setting a HYST successfully developed ultra-
new record for the highest steel grade in the Company's history. It also low-carbon line pipe with a carbon HYST "Golden Cup High-Quality Products"
simultaneously developed its first direct-connect premium connection content of 0.05%–0.07%. It also
to pass the A-series sealability evaluation under API RP 5C5 / ISO 13679; developed reeled risers meeting the
developed the new N80-1 grade 33Mn2V improving impact performance performance requirements for 1.5%
by 30%; successfully developed C125 sour-service casing and passed SSC strain and became the exclusive Seamless steel tubes for high-
testing; launched the new high-performance premium connection HSG4 supplier to develop and provide base p r e s s u r e b o i l e r s : H i g h i n
which passed third-party CAL IV qualification testing; and completed the pipe for ultra-thin-wall clad pipe. technical content and value Tubes for offshore engineering:
development of premium connections for salt cavern energy storage added these products are These products meet the widely used in utility boilers
laying the foundation for expanding into the energy storage market. demand for high-quality steel and chemical projects strongly tubes from offshore oil and
supporting the development gas production platforms and
of the power boiler industry offshore wind power projects
and national infrastructure at home and abroad and have
construction. been applied in more than 30
offshore engineering projects.Pressure Vessel Tube Tubes for Machining
HYST completed the development of extra-large- HYST achieved batch supply of 50MnVS tubing for
diameter P-series products and obtained TS hydraulic cylinders becoming the second company Seamless steel tubes for crane
certification while successfully delivering medium- in China to master the production technology for booms: These products filled a Seamless steel tubes for rotary
diameter extra-thick-wall P-series products. It also this high-sulfur asteel grade. It also successfully domestic gap strongly supported drilling rig drill rods: These
successfully developed Gr10 steel tubes for service developed 690-grade high-end round tubes and the development of the crane products successfully replaced
at -70°C and completed factory trial production of rectangular hollow sections for construction industry and national infrastructure imports met the demand of
a new generation of ultra-high-strength and high- becoming the first manufacturer in the industry to construction were recognized as China's high-end equipment
toughness gas cylinder tubes. enter the high-grade construction tube segment. a Hunan Province Manufacturing manufacturing sector for
Single Champion and have been premium seamless steel tubes
applied in the world's largest 4500- and have already been applied
ton crawler crane and the world's in the world's largest rotary
largest 4000-ton all-terrain crane. drilling rig setting records for
Case Development and Industrialization of High-Strength Special-Shaped Tubes for Construction maximum drilling diameter and
depth.In response to the demand for lightweighting and cost reduction in steel building structures HYST tackled the
technical challenges associated with forming and heat treatment for high-strength special-shaped tubes and
successfully developed a series of high-strength special-shaped tubes and round tubes for construction at steel
grades of 460 MPa and above becoming the first manufacturer in China to enter this high-end segment. Among
them the 690 MPa-grade special-shaped tube demonstrated stable performance reached an internationally Steel pipes for casing used in oil and gas wells in the petroleum
leading level overall and passed rigorous customer certification. These products have already been and natural gas industry: These products have been successfully applied in multiple major oil and gas development projects in
successfully applied in landmark projects such as the Shenzhen Opera House and Yuen Long Sports Centre China and overseas received broad recognition from oilfield
in Hong Kong. A total of 6 invention patents have been filed under the project 3 of which have already been users and made a positive contribution to the development of
granted forming an independent intellectual property portfolio. China's oil and gas industry and national energy security.102 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 103
VAMA
Anchored in innovation VAMA has delivered notable results in the R&D of specialty steels and continues to provide
customers with high-value-added automotive steel solutions. In 2025 VAMA launched a number of new automotive steel Case Yujian Won an Industry Award Empowering the Upgrade of Automotive Manufacturing
products including Usibor2000 CP980 and DP600DH which combine high strength high toughness and good weldability Through an Integrated Solution
and are widely used in vehicle manufacturing. Through the innovative integration of multi-part integration laser welded In December 2025 the Yujian Multi-Part Integration
blank and hot forming technologies together with the innovative application of related core components VAMA has Solution jointly launched by VAMA and GONVVAMA
expanded beyond the traditional value boundaries of a conventional steel supplier. It has now built a broad specialty steel won the "2025 Automotive Industry Rotary Award".portfolio covering advanced high-strength steel ultra-high-strength steel and aluminum-silicon-coated hot-forming steel. Built on ArcelorMittal's deep expertise in advanced
high-strength steel and hot-forming technology
TM the solution delivers full-chain upgrading from Yujian Multi-Part Integration Solution
steel materials to forming processes. It has set a
In April 2025 VAMA and GONVVAMA jointly launched the Yujian Multi-Part Integration Solution. Its core objective is to benchmark in body lightweighting safety and
enhance automotive manufacturing efficiency and reduce manufacturing costs through advanced steel technologies and manufacturing efficiency. Verified in local projects
integrated design providing a full-chain competitive solution for integrated and lightweight vehicle manufacturing that the solution is adaptable to flexible production across
supports the green and intelligent transformation of the automotive industry. multiple platforms helping automakers improve
manufacturing agility and providing reliable support
for the green and intelligent transformation of the The Yujian Multi-Part Integration Solution won the "2025
automotive industry. Automotive Industry Rotary Award".◆ T he solution is built on ArcelorMittal's latest technological achievements in automotive
steels and is supported by two core steel grades that balance lightweighting safety
and formability.◆ D uctibor 1500: A new third-generation aluminum-silicon-coated hot-forming steel that
pushes beyond the traditional trade-off between strength and toughness combining
Core Enablers ultra-high strength with outstanding impact toughness and energy absorption "YujianTM integration is not only a breakthrough in manufacturing technology but also an innovation in
performance. design thinking helping automakers achieve multiple goals in weight reduction cost reduction and
◆ F ortiform series: a third-generation family of cold-forming advanced high-strength emissions reduction."
steels offering an excellent balance of strength and formability. With stamping ——Huang Qiang Product Service Manager of GONVVAMA
performance superior to dual-phase steels of the same strength class the series is well
suited to complex cold-formed structural parts and helps ensure vehicle structural
strength and durability.◆ T he application of hot-forming steel has been extended from occupant compartment
protection to power battery systems offering steel solutions with stronger core
Expanding
performance and greater economic value. The solution can help reduce the overall
Applications
structural cost of battery packs by more than 40% while delivering a higher level of
safety protection.◆ C ost savings through optimization of materials tooling and welding; Outstanding
safety through precise matching of steel grades and improved crash protection;
Key Part integration through fewer parts and simplified processes; Modular adaptability
Advantages across multiple platforms and steel grades; Sustainability through carbon reduction VAMA is steadily expanding its vehicle body materials ecosystem and building a new "Hot Forming+" ecosystem centered on hot-
and material recycling; Lightweighting through optimized body-in-white weight and forming technology and extending toward whole-vehicle material solutions. With the continued integration of local R&D and global
improved vehicle performance. expertise VAMA is providing more comprehensive value-added solutions for the further development of automotive manufacturing
through its Yujian approach to simplifying complexity.104 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 105
Advancing Intelligent Manufacturing Case VAMA | Building an Intelligent Computing Center to Empower Digital Development
The Company has continued to deepen its digital and intelligent transformation strengthen the development of its digital VAMA established a modern computing center of medium scale featuring intelligent management and
systems and coordinate the efforts of its steel plants in advancing digital and intelligent initiatives. It has continuously high efficiency with 36 standard server racks deployed. Through the DCIM system the center enables 24/7
implemented digital and intelligent projects deployed a wide range of industrial robots expanded the application of 5G+ intelligent monitoring and is equipped with automated operation and maintenance automatic fault alerts and
industrial internet technologies and built large-model applications and full-process intelligent quality control centers for dual-power supply capability ensuring stable and reliable system operation. The center primarily supports AI
the steel industry. Leveraging technologies such as big data and artificial intelligence the Company has accelerated the R&D big data analysis cloud computing and the operation of critical business systems. It also adopts high-
implementation of intelligent application scenarios enabling intelligent upgrading in areas such as production inspection efficiency cooling and modular design to lower the PUE value providing solid green-computing support for the
and operational control. These efforts have improved production efficiency and labor productivity reduced production digital transformation and high-quality development.costs and quality losses and established a full-process intelligent control system setting a benchmark for intelligent
manufacturing in the steel industry.Deepening the Development of Digital Systems
The Company has systematically advanced the iterative upgrading of its digital systems treating data governance and value
realization as priorities and reinforcing the foundation for digital development. The Company has preliminarily established
master data standards data coding rules data formats and data quality standards and is gradually standardizing its data
management system. We have also broken down data barriers between headquarters and subsidiaries and among different
business segments enabling interconnection and interoperability of data and unlocking the value of data as a production
factor.At the same time the Company has accelerated the implementation of major digital projects in an orderly manner
including the headquarters' financial information system Xiangtan Steel's intelligent equipment process system LY Steel's
integrated smart management and control system for energy and carbon and HYST's energy management system. These
projects have further improved the Company's digital application framework and promoted coordinated enhancement of
intelligent capabilities across all business segments.Case Xiangtan Steel | Establishing the Steel Industry's First Artificial Intelligence Large Model
Xiangtan Steel's Pangu large model consists of two components: the foundational model layer and the
large-model platform. The foundational layer comprises three parts: a resource scheduling platform a data Case LY Steel | DeepSeek Empowering the Digital Future of Steel
integration platform and an AI infrastructure platform. The platform layer includes a vision model and a
predictive model. Unified AI operations management is provided through the artificial intelligence large-model Amid the wave of intelligent transformation in the steel industry LY Steel together with Loudi Valin V Cloud
platform which can also leverage platform capabilities to provide the resources and service support required and Institute of Engineering Technology USTB completed the localized private deployment of the DeepSeek
across the Company's production operations and management activities with total computing capacity of 5.8P. large model by leveraging the high-performance computing capacity of its cloud data center. With the model's
Following the completion of the Xiangtan Steel Pangu large model scenario-based models can be developed strong capabilities in data mining and intelligent prediction the Company established a quality risk early-
using the workflow development toolkit on the large-model platform supporting Xiangtan Steel's intelligent warning and intelligent process control system covering the entire production process enabling intelligent
transformation establishing an artificial intelligence large-model training center for Xiangtan Steel and analysis of massive volumes of process data and precise prediction of production risks. This has providedenabling large-scale deployment across the Company. strong support for quality control process optimization and intelligent management creating a “smartbrain” for steel production and driving the effective implementation of digital and intelligent transformation.Advance Advance
upgrades industrial robot
in basic
Advance deployment Advance the
automation
unmanned development of
transformation a large-model
platform106 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 107
Accelerating the Application of Intelligent Scenarios
Supported by both the steel large model and the industrial internet the Company has systematically advanced the
implementation of artificial intelligence across core business scenarios such as production management optimal raw
material and fuel allocation product R&D and quality improvement. During the reporting period the Company successfully
launched 46 artificial intelligence application scenarios achieving deep integration of AI technologies with core production
Together with Institute of Engineering Technology
and operating processes. At the same time the Company continued to increase investment in robotics bringing the
of the University of Science and Technology
cumulative number of robots deployed in the core steel business to 261 units effectively replacing labor-intensive manual
Beijing Xiangtan Steel built a full-process quality
work and improving both production efficiency and operational safety.control system for steelmaking and rolling based
on a quality big data platform enabling real-
time monitoring of process data precise push
notifications of abnormal information and
Case Xiangtan Steel | Empowering All Areas to Build a Benchmark for Digital and Intelligent
Transformation in the Steel Industry product performance prediction.In 2025 Xiangtan Steel advanced enterprise-wide digital and intelligent upgrading with a focus on practical and
tangible results and built a benchmark for digital and intelligent transformation through targeted investment
and ecosystem collaboration. Xiangtan Steel invested RMB 280 million in more than 30 core projects including
the upgrade of the wire rod and bar MES and a full-process quality control system. The “Xiangtan Steel Pangu”
large model has now covered the full process from coking to rolling. Its flying shear system uses vision AI to
achieve millimeter-level defect identification and automatic cutting saving from approximately RMB 100000
to RMB 200000 in costs per month. In the finished products workshop 16 cameras automatically identify lifting
tag information raising the efficiency of unmanned warehousing by more than 60%. In addition Xiangtan
Steel strengthened upstream and downstream collaboration achieving full-process information sharing in In November 2025 the intelligent factory optimization
production dispatch and after-sales service with enterprises such as COSCO Shipping Heavy Industry building and upgrading project of Yangchun New Steel
a digital and intelligent marketing ecosystem. officially commenced. By introducing frontier
technologies such as big data artificial intelligence
In 2025 the “Xiangtan Steel 5G Digital and Intelligent Factory” was included in the National 5G Factory List and and the industrial internet the project aims to deeply
was recognized as one of the first “Optimization-Level” intelligent factories in the steel industry nationwide. optimize and upgrade the Company’s production
Projects including the artificial intelligence large model were also included in Hunan Province's list of digital new management and operation and maintenance
infrastructure projects and typical application scenarios. activities and to build an intelligent benchmark
factory with advanced industry standards.LY Steel advanced digital transformation and
intelligent upgrading with its AI inspection system
identifying micron-level surface defects on steel plates
The “Xiangtan Steel 5G Digital and Intelligent Factory” was recognized as one of the first within 0.3 seconds robotic dogs replacing manual
“Optimization-Level” intelligent factories in the steel industry nationwide inspections in high-temperature areas of up to 600°C
production efficiency increasing by 39.2% cost per
tonne of steel falling by 11% and comprehensive
energy consumption declining by 3%.108 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 109
ESG Management Stakeholder communication
Valin Steel has consistently adhered to the management philosophy of "forging ahead to shape the future" continuously
In line with its strategic development needs Valin Steel has integrated the concept of sustainable development improved its ESG management paid close attention to the needs and expectations of stakeholders actively responded to
into corporate strategy and decision-making continuously improved its ESG governance structure and operating their concerns and adjusted its development strategy in a timely manner.mechanisms steadily enhanced its ESG management capabilities and worked with stakeholders on the basis of mutual At present the Company has identified six major stakeholder groups that maintain close relationships with the Company and
benefit and harmonious development. have decision-making authority or influence over it. The Company has established a normalized communication mechanism
to listen to the views of all parties and respond proactively through multiple channels.ESG Governance Structure
The Company has continued to improve a top-down ESG governance structure with clearly defined responsibilities
establishing a three-tier ESG governance framework consisting of the Board of Directors the Strategy and ESG Stakeholders Topics of Concern Communication and Response
Committee of the Board and the ESG Working Group. In 2025 in accordance with relevant laws regulations and the
Articles of Association the 30th meeting of the Eighth Board of Directors approved the renaming of the former Strategy Corporate governance Shareholders' meetings / extraordinary
Committee as the Strategy and ESG Committee providing a solid organizational foundation for advancing the Company's Compliance and risk management general meetings
sustainability and ESG-related work. Business ethics and anti-corruption Results briefings
Information security News releases / announcements /
Within this framework the Board of Directors serves as the highest responsible body for ESG management operation ESG Management annual reports
and information disclosure. The Strategy and ESG Committee is responsible for formulating ESG objectives and related Shareholders / Investors Product quality assurance Roadshows
systems. The ESG Working Group composed of various functional departments and subsidiaries serves as the principal I nnovation-driven development I nvestor engagement activities
coordinating and execution body responsible for coordinating and advancing the implementation of ESG-related
matters.Protection of employee rights and
interests Employee representative congresses
Occupational health and safety Employee satisfaction surveys Employee meetings
? Review and approve the Company's ESG strategy objectives and policies Employees Career development and training
Employee care Employee activities
? Review and approve public disclosure relating to the Company's ESG performance and the
Company's ESG report
Board of Directors
Decision-Making ? R eview major ESG-related risks with significant impact and response plans for major negative Sustainable supply chain
Level ESG events I ntellectual property management
Supplier training
Business ethics and anti-corruption Supplier audits / site visits
Suppliers / Partners Green products and technologies Industry exchange conferences
? Review and provide recommendations on the Company's ESG strategy and objectives
organizational structure and management systems; study major ESG matters and Product quality assurance
propose ESG governance-related recommendations or plans Green products and technologies Customer satisfaction surveys
Customer service Customer complaints
? Identify assess and propose recommendations or solutions for the risks and opportunities Customers Privacy and security
Strategy and companies face in ESG
ESG Committee ? I dentify and assess ESG-related risks and opportunities faced by the Company and
Management propose recommendations or plans; Review the Company's ESG report/sustainability Environmental compliance
Level report and related disclosure information and provide recommendations management
? Supervise and inspect the implementation of major ESG matters and review the Water resources management
achievement of ESG-related strategies and objectives Circular economy
Energy Management O n-site inspections / research visits
Pollutant emissions Regular communication
Government / Regulatory Waste disposal Periodic disclosures
Authorities Climate change and carbon
? Formulate and implement work plans aligned with the management
Company's strategic plan and ESG objectives Ecosystem and biodiversity protection
? M anage ESG-related risks arising in the Company's day-to-day B usiness ethics and anti-corruption
operations
ESG working
group ? C oordinate and advance the implementation of ESG-related
matters Rural revitalization News releases / announcements
Execution Level Social contribution Volunteer services
? Collect and compile publicly disclosed information relating to Ecosystem and biodiversity protection Regular / ad hoc communication
the Company's ESG performance Communities110 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 111
Identification of Material Topics Results of the Materiality Analysis
With reference to the requirements of the Self-Regulatory Guidelines No. 17 for Companies Listed on Shenzhen Stock
Exchange — Sustainability Report (For Trial Implementation) and taking into account leading domestic and international
industry practices the Company's ESG development strategy business characteristics and market positioning the Materiality dimension No. Topic Category
Company extensively collected the needs of internal and external stakeholders identified annual ESG topics and
conducted a double materiality analysis to define the priorities and direction of its annual ESG work. Topics that are
financially material are addressed and responded to as key topics in this report. 1 Climate change and carbon management Environment
2 Energy Management Environment
3 Pollutant emissions Environment
Step 1: Background analysis and topic Topics that are material from
identification both a financial and an impact 4 Occupational health and safety Social
perspective
Based on the three dimensions of 5 Product quality assurance Social
environment social and governance identify
25 potentially material topics and establish 6 Innovation-driven development Social
the Company's ESG topic pool.
7 Corporate governance Governance
1 Business ethics and anti-corruption Governance
Step 2:
Topics that are financially
Assess material but not impact material 2 Environmental compliance management EnvironmentImpact materiality assessment:
severity through stakeholder surveys and 3 Sustainable supply chain Social
assess likelihood through evaluations
conducted by internal and external ESG 1 Rural revitalization Social
experts.
2 Compliance and risk management Governance
Financial materiality assessment：Assess
the financial materiality of each topic from 3 Water resources management Environment
two dimensions by internal finance experts Double Materiality
followed by review and confirmation by Assessment 4 Circular economy Environment
multiple departments. Process
5 Ecosystem and biodiversity protection Environment
6 Waste disposal Environment
Step 3: Double materiality assessment and Topics that are impact material
analysis but not financially material 7 Career development and training Social
Based on the assessment data generated in 8 Customer service Social
Step 2 determine the ESG topics that are
material for the year. 9 Intellectual property management Governance
10 Social contribution Social
11 Protection of employee rights and interests Social
Step 4: Use the results to guide ESG
Information security and privacy
disclosure and practice 12 protection Governance
Review and confirm the analysis results by the 13 ESG Management Governance
Strategy and ESG Committee. Guided by these
results the Company carries out targeted Topics that are neither 1 Green products and technologies Environment
disclosure and practice enhancement. financially material nor impact
material 2 Employee care Social112 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 113
Material Topic3 Governance Strategy Impact Risk and Opportunity Management Metrics and Targets Material Topic1 Governance Strategy Impact Risk and Opportunity Management Metrics and Targets
At the Company level the Strategy Following the dual approach Establish an innovation management Treat scientific and technological Risks: Fluctuations in international energy Risks: Core technology R&D cycles are long
Department establishes an energy of "energy conservation and structure led by the Science and innovation as a core corporate Continue increasing prices may drive up production costs; and capital-intensive; the commercialization of
management benchmarking efficiency enhancement + Technology Committee. Set up an office strategy and focus on areas regional energy supply shortages may affect technological achievements may be slow and
investment in core
system and coordinates efforts structural optimization" the under the Science and Technology such as green and low-carbon production continuity; and energy-saving difficult to convert quickly into production capacity;
technology R&D; focus
to improve energy efficiency. Company promotes energy- The Company will Committee within the Technology development intelligent on innovation in key upgrades for aging equipment require continue to improve Innovation- and the accelerating pace of technological iteration Each subsidiary has set up an saving technologies such as Research Institute to take the lead in manufacturing and new areas such as low-carbon substantial investment and involve long
energy management leading waste heat recovery to improve energy utilization
driven in the industry requires sustained R&D intensity.development implementing matters approved by the materials. Advance digital metallurgy and digital payback periods.group with a dedicated energy utilization efficiency; efficiency optimize the Committee and handling its day-to-day transformation; develop
Opportunities: Breakthroughs in core technologies operations; and promote
Energy can create technological barriers and strengthen Energy and Environmental gradually reduces dependence Opportunities: Energy-saving upgrades energy consumption work; and enable each subsidiary to intelligent factories and the commercialization Management industry competitiveness; and digital and intelligent Protection Department / Energy on high-carbon energy sources can reduce unit energy consumption and mix expand the use carry out independent scientific and industrial internet platforms; and and application of R&D
Section responsible for overall such as coal while expanding deliver both cost reduction and efficiency of clean energy and technological innovation under the enhance production efficiency
upgrades can improve production efficiency and achievements.reduce operating costs.coordination and energy the use of clean energy such as enhancement; the use of green electricity can steadily reduce unit Committee's leadership. and manufacturing capability.administrators assigned to each green electricity; and develops an provide advantages in electricity pricing and energy consumption
process forming a three-tier integrated Energy Management carbon reduction accounting; and improved per product.energy management can help the Company Improve the corporate governance management network covering System (EMS) to enable digitalized
the Company plants and work control across the full energy obtain industry energy-efficiency benchmark
structure comprising the shareholders'
certification and enhance brand influence. meeting the Board of Directors the teams. management process. board of supervisors and management; Optimize the ownership Risks: An incomplete corporate governance
standardize decision-making procedures structure and protect the structure may lead to inefficient decision-making
in strict accordance with the Company Law rights and interests of minority or internal control failures. Tightening regulatory Improve corporate
Risks: Intensified environmental inspections and the Measures for the Formulation and shareholders. Integrate ESG requirements for state-owned enterprises may also governance structure
may lead to production suspension for Corporate Administration of Articles of Association into the corporate governance increase compliance pressure. and management
rectification or administrative penalties in governance of State-owned Enterprises; establish framework and strengthen standards; strengthen
the event of excessive emissions; improper Fully achieve the ultra- the Strategy and ESG Committee under sustainable development Opportunities: Standardized corporate Advance full coverage of ultra- compliant operations
Establish a full-process control low-emissions retrofits; upgrade disposal of solid waste may give rise to low emissions targets the direct leadership of the Board to governance capabilities. Advance
governance can enhance investor confidence and and risk control.system for pollutant emissions environmental protection environmental disputes; and the introduction for the steel industry set coordinate ESG strategic planning and digital transformation to improve
reduce financing costs. A strong governance profile
of updated environmental regulations may by the state and Hunan implementation; and improve the internal governance efficiency. can also strengthen brand reputation.and strictly implement the facilities in sintering ironmaking
Pollutant pollutant discharge permit and steelmaking processes;
increase compliance costs. Province; ensure 100% control and compliance management
emissions regime. Conduct real-time implement zero-wastewater-
compliant disposal and
: Once ultra-low emissions systems while conducting regular internal Opportunities
monitoring and regular testing discharge retrofits; and promote utilization of solid waste; certification is obtained the Company audits and compliance inspections.of waste gas wastewater and the resource utilization of and advance zero-may benefit from policy incentives such
solid waste to ensure compliant steelmaking solid waste and the pollution enterprise-as tax reductions and transport priority; Risks: In the course of commercial dealings in
discharge. development of value-added city integration and the resource utilization of solid waste can the industry there are risks of unfair competition green and low-carbon Continue to strengthen products. create new profit growth drivers; and a green development. Establish and improve anti-commercial Incorporate integrity and
and commercial bribery; internal employees may organization-wide
production profile can attract high-end bribery and anti-corruption management honesty into the Company's abuse their authority for personal gain giving education on business
customers with stringent environmental Business systems; define prohibited conduct and values; strictly enforce integrity
rise to corruption incidents; and any corruption ethics and integrity in
requirements. accountability mechanisms; carry out admission requirements in uncovered may lead to administrative penalties Ethics professional conduct
and Anti- regular integrity and warning education; supply chain cooperation
and reputational damage. standardize business
Corruption establish a conflict-of-interest declaration project tendering and customer Opportunities: A corporate image of integrity and cooperation and internal
Establish a Work Safety mechanism; and implement integrity cooperation; and ensure honesty can attract high-quality partners and help management processes
Management Committee under risk controls for key positions and major openness and transparency in : Steel production involves risks of build a healthy business ecosystem; it can also
and eliminate major
Risks
the direct leadership of the Embed the principle of "safety projects. key business processes. support recognition from government authorities incidents of commercial mechanical injury fire and explosion falls
Chairman with participation from first and prevention first" from height and occupational diseases; weak and industry associations as a benchmark for
bribery and corruption.all subsidiaries. Sign Work Safety throughout the full production Effectively reduce safety awareness among employees may also integrity.Target Responsibility Statements and operations process; improve the risk of work lead to non-compliant operations.Occupational with each subsidiary; conduct working conditions; strengthen
safety accidents and Continue to improve its environmental
monthly assessments; effectively the provision of labor protection Opportunities: Improved work safety occupational diseases governance structure and promote
Treat environmental compliance Risks: Increasingly stringent environmental
health and implement the work safety equipment; and carry out management can reduce accident losses and continuously the development of its environmental
as a prerequisite for production regulations and emissions standards may continue
safety and operations and embed it Establish and improve responsibility system; link safety regular work safety training and and downtime costs; a sound occupational improve employees' governance system toward greater to drive up compliance costs; failure to keep pace throughout project initiation
performance to monthly and emergency drills to enhance health environment can enhance employees' safety protection and standardization and refinement. with regulatory updates may result in penalties
a sound environmental
annual performance appraisals; employees' safe operating sense of belonging and productivity; and emergency response Revise the Environmental Protection
construction and operation. or production restrictions; and the normalization compliance risk
and build a vertically integrated skills and emergency response compliance with work safety standardization capabilities. Environmental Management Measures; further
Respond proactively to changes of environmental inspections may intensify prevention and control
and horizontally coordinated capabilities. requirements can bring government compliance clarify environmental protection
in environmental policies compliance pressure. mechanism; ensure full-
work safety management recognition and market credibility. management responsibilities at all levels; strengthen
by planning ahead for the process environmentally
upgrading of environmental Opportunities: Compliant operations can reduce
network. the assessment and accountability
compliant operations;
protection facilities and the the risk of production suspension for rectification mechanism for environmental incidents; and prevent any
link environmental performance to the optimization of production
and safeguard business continuity; and strong material environmental
processes ensuring continued environmental compliance performance can remuneration of subsidiary management; compliance violations.compliance with the latest establish the Company as an industry benchmark Risks: Fluctuations in raw material quality and reinforce the red line for ecological and and enhance brand value.may affect final product quality; substandard requirements.Establish a customer-oriented Advance the national quality- product quality may lead to customer Take "zero defects" as
environmental protection.quality management system strength strategy; adhere to the
covering the full product strategic direction of "becoming
complaints order losses and even legal the quality objective;
more specialized and stronger claims; and intensifying product homogeneity continuously improve the
Build a green safe and
life cycle and ensure the and leading in the region" and in the industry places greater demands on the stability and reliability of
Formulate and implement management responsible supply chain and Risks: Fluctuations in upstream raw material
continued effectiveness of ISO systems including the Supplier prioritize partners with strong prices and supply shortages may affect production Product 9001 certification; strengthen the business philosophy of
stability of product quality. product quality; optimize
the supply mix of high-end Management System; establish a full- ESG performance. Work with stability; and differences in environmental and quality leadership accountability through "deeply engaging in industries Opportunities: Breakthroughs in high-end products; meet the life-cycle supply chain management suppliers to develop a circular labor standards across international supply chains
Enhance supply
assurance chain stability and quality performance orientation; leading market in the region products can generate price premiums and diversified and customized may create compliance challenges.Sustainable framework covering supplier onboarding economy system and promote resilience and build
and implement mechanisms such and staying half a step ahead"; improve profitability; a strong reputation evaluation incentives and exit; packaging recovery and resource
as top executive accountability and reinforce the principles of
needs of downstream Opportunities: Sustainable supply chain
for product quality can enhance customer supply chain and incorporate indicators such as sharing. Support suppliers a green resilient and
for quality and the economic prioritizing specialty steel quality
customers; and maintain certification can win recognition from high-end
loyalty and expand market share in high- a strong reputation for environmental compliance carbon in strengthening their ESG
collaborative sustainable
and optimizing alignment with downstream customers and expand market share; responsibility system. end segments; and participation in industry management and occupational health management capabilities and
supply chain.customer standards. quality. coordinated decarbonization across the supply standard-setting can strengthen the and safety into the supplier evaluation advance coordinated sustainable chain can reduce overall operating costs; and a
Company's market influence. system. development across the resilient supply chain can strengthen risk resistance.industrial chain.
3 N ote: The analysis of the topic "Climate Change Response and Carbon Management" has been presented in detail in the section "Responding to Climate
Change" in Chapter I of this report.114 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 115
General Secretary Xi Jinping has emphasized that In 2026 the Company will remain closely aligned Enhancing Quality and Efficiency Through Lean Collaboration Deepening Reform to Unlock Vitality and Build Stronger
state-owned enterprises are an important force in with the strategic plan of Hunan Iron and Steel Group and Empowering Production Upgrading Through Digital and Overall Development Momentumc.strengthening China's overall national strength Co. Ltd. stay committed to its three strategic support Intelligent Technologies With the goals of ultimate efficiency
promoting economic and social development and systems of lean production integration of sales and optimal cost performance. The Company will implement the requirements of state-
safeguarding and improving people's well-being. Valin R&D and production and marketing and service owned enterprise reform and further stimulate endogenous
Steel remains committed to the original mission of a and stay focused on high-end green intelligent The Company will promote production transformation toward momentum for development. First we will optimize
state-owned manufacturing enterprise. Leveraging the and lean development. The Company will continue lean and intelligent operations. First we will deepen full-process control models and corporate governance mechanisms
Group's collaborative strengths the Company actively to strengthen efforts in scientific and technological lean management implement production line competition deepen pilot reforms under the business division structure
fulfills its responsibilities in serving national industrial innovation production quality enhancement green mechanisms benchmark against the Company's best historical comprehensively carry out management benchmarking
upgrading and local economic development. transformation and reform-driven empowerment performance and industry-leading peers strengthen lean and management enhancement build a value-empowering
with the goal of building a world-class steel production and full-process management continuously headquarters effectively advance the governance model
At present the external environment remains complex enterprise. optimize techno-economic indicators and ensure that lagging for specialized committees in accordance with the new
and challenging. The steel industry is undergoing a units catch up while leading units move even further ahead. Company Law and regulatory requirements and improve
period of deep adjustment characterized by "reduced Driving High-End Development Through Second we will strengthen collaboration across the full chain internal audit and compliance oversight systems. Second
volume growth and optimization of existing capacity" Innovation and Strengthening Core Competitive establish coordinated mechanisms linking procurement we will strengthen market-oriented mechanisms adhere
while structural growth in downstream sectors such Momentum. production logistics and sales improve full-life-cycle equipment to the principles of "hard constraints and strong incentives"
as automobiles and new energy continues to provide management and enhance supply chain resilience. Third we and the last-place elimination mechanism continue to
solid support for high-quality development. From an The Company will continue to regard innovation will accelerate digital and intelligent transformation. Supported deepen reform of the labor personnel and remuneration
industry perspective the broader pattern of "three as the primary driving force and build a full- by the steel large model and the industrial internet the Company systems explore the implementation of medium- and long-
highs and three lows" — high output high costs chain innovation system centered on "high-end will systematically plan the implementation path for lighthouse term incentive mechanisms and build a diversified system of
and high inventories alongside weak demand low development + differentiation". First we will factories and intelligent factories and promote the rollout of more incentives and constraints to stimulate innovation and value
prices and low profitability —has not fundamentally improve collaborative platforms integrating industry than 30 new artificial intelligence application scenarios. Fourth creation across the workforce. Third we will enhance capital
changed. Competition over existing market demand has academia research and application pool internal we will advance major technical upgrading projects to ensure that operation capabilities implement the new "State Council
intensified and the basis of competition is shifting from and external resources focus on forward-looking multiple product lines achieve designed capacity as quickly as Nine-Point Guidelines" consolidate strong profitability
scale toward quality efficiency and core capabilities. At and foundational technology research build 10 core possible while accelerating construction of key projects such as and sound development momentum continue to improve
the same time green and low-carbon transformation patent clusters and strengthen intellectual property Xiangtan Steel's rod flat bar and wire product upgrades LY Steel's information disclosure and investor relations management
digitalization and intelligent upgrading are accelerating protection and patent commercialization. Second cold-rolled grain-oriented silicon steel project HYST's extra-large- strike an effective balance between capital expenditure and
while demand for steel products is moving toward we will deepen integrated collaboration among diameter seamless steel tube project and Yangchun New Steel's dividends continuously enhance long-term shareholder
higher-end and more functional offerings. The industry sales R&D and production use the IPD system as high-speed wire rod quality enhancement project strengthening returns and improve the investment value of the listed
is therefore transitioning from scale-based competition a foundation focus on key products such as high- premium manufacturing capabilities. company.to value-based competition. Valin Steel will proactively strength crack-arrest steel high-grade silicon steel
align itself with these trends consolidate its strengths and high-performance premium connections
in niche segments and achieve new breakthroughs in strive to develop 10 to 15 sophisticated high-end Safeguarding the Bottom Line Through Green Development
serving national strategies. steel grades to replace imports and cultivate a and Work Safety and Demonstrating the Responsibility of a Great Achievements Stem from Lofty Aspiration and
number of flagship premium products. Third we will State-Owned Enterprise. Broad Success is Built Through Diligent Effort.continue to deepen its presence in niche markets
remain customer-centric further strengthen the The Company will hold firm to the bottom line in work safety and The foundation of manufacturing lies in steadfast
EVI and CTS service models reinforce full-process environmental protection and continue to practice the philosophy commitment and the responsibility of a state-owned
quality management target landmark projects of green development. First we will strengthen the work safety enterprise lies in practical action. Keeping the nation's
benchmark customers and leading downstream defense line implement the principle that responsibility for overarching priorities firmly in mind Valin Steel will stay
enterprises and pursue precise high-quality market managing operations industries and business activities must focused on four strategic directions for development build
alignment so as to raise the share of high-end include responsibility for work safety improve information-based cohesion through Party leadership tackle challenges through
specialty steel. Fourth we will improve innovation management platforms strengthen hazard identification and innovation improve quality and efficiency through lean
incentive mechanisms link innovation outcomes to rectification as well as oversight of outsourced contractors and management secure long-term development through green
remuneration and professional titles promote the related parties and firmly safeguard the work safety bottom line. transformation and unlock vitality through reform. Amid
spirit of craftsmanship and foster a stronger culture Second we will advance green and low-carbon transformation use profound adjustment across the industry the Company
of innovation. digital and intelligent means to support the efficient cost-effective will shoulder its responsibilities with resolve deepen value
and stable operation of environmental protection facilities reduce creation remain rooted in Hunan while looking to the
environmental operating costs per tonne of steel year on year and world and with the steadiness of steel and the drive of
ensure the long-term stable achievement of ultra-low emissions practical action continue writing a new chapter in high-
standards. Third we will implement dual-control requirements quality development contributing Valin Steel's strength to
for carbon emissions leverage the Green and Low-Carbon building a manufacturing powerhouse advancing regional
Research Center as a key driver improve the carbon management revitalization and strengthening China's national industry.framework and the energy and carbon measurement system
strengthen carbon asset management and green product
certification participate actively in the national carbon market
and reduce the cost of carbon compliance. Fourth we will optimize
ecological governance systematically rectify environmental issues
improve ESG ratings and build green steel plants with LY Steel
striving to become a national Green Factory and HYST striving to
achieve Class A environmental performance.Future Outlook116 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 117
Appendix
Key Performance Table
Indicator Name Unit 2023 2024 2025 Indicator Name Unit 2023 2024 2025
Economic Performance Gasoline consumption tonnes - - 8.58
Operating revenue RMB billions 163.897 144.112 121.138 Coal consumption tonnes - - 11620542.70
Total profit RMB billions 7.487 4.141 4.820 Natural gas consumption m3 - - 255306016.93
Net profit RMB billions 6.64 3.20 3.87 Total electricity consumption TWh 15.1 15.3 15.2
Technological innovation Self-generated electricity GWh 9222.86 9666.82 9999.77
R&D investment RMB billions 6.828 5.726 5.378 Installed self-owned clean energy generation capacity MW - - 64
(photovoltaic)
R&D investment as a percentage of operating
% 4.17 3.97 4.44 Annual self-owned clean energy generation
revenue GWh - - 25.52(photovoltaic)
Number of R&D employees persons 3260 3300 3308 Water resource utilization
Proportion of R&D employees % 13.77 14.09 14.30 Total water consumption million m3 4653.13 4203.36 4383.69
Total number of valid patents item(s) 1830 2149 2646 Total water consumption per RMB million of
m3 / RMB million of revenue 28400 29200 36200
Number of valid patents per RMB million of revenue
item(s) 0.0112 0.0149 0.0218
revenue Freshwater withdrawal tonnes 95337685 91150352 91508559
Number of newly filed invention patent
item(s) 583 783 941
applications during the year Circulating water consumption tonnes 4557787501 4112211237 4292181001
Number of newly granted invention patents during
item(s) 116 120 242 Water recycling rate % 97.95 97.83 97.91
the year
Pollutant emissions
Number of software copyrights item(s) 59 92 108
Wastewater discharge volume tonnes 26007761 25806847 26732136
Number of software copyrights per RMB million
item(s) 0.0004 0.0006 0.0009
of revenue Chemical oxygen demand (COD) emissions tonnes 354.77 299.71 282.65
Environmental Performance Ammonia nitrogen (NH3-N) emissions tonnes 18.03 14.50 14.50
Environmental compliance management Sulfur dioxide (SO2) emissions tonnes 5740 4537 3769
Environmental protection investment RMB billions 1.9 3.9 2.8 tonnes / RMB million of
Sulfur oxide emissions per RMB million of revenue 0.04 0.03 0.03
revenue
Environmental protection investment as a
%1.162.712.28
percentage of operating revenue Nitrogen oxides (NOx) emissions tonnes 15867 14437 9111
Number of environmental pollution incidents item(s) 0 0 0 Nitrogen oxide (NOX) emissions per RMB million tonnes / RMB million of 0.10 0.10 0.08
of revenue revenue
Coverage rate of environmental training for
% 100 100 100 Particulate matter (PM) emissions tonnes 21744 20006 9545
employees
Proportion of sites certified to ISO 14001 Suspended particles and particulate matter (PM) tonnes / RMB million of
%1001001000.130.140.08
Environmental Management System emissions per RMB million of revenue revenue
Plant green coverage rate % - - Above 40 Resource utilization
Energy utilization Hazardous waste disposal volume tonnes 199277 235855 165494
Total energy consumption tonnes of standard coal 14297053.76 14081213.51 13913196.85 Solid waste utilization volume tonnes 12987443 12997971 13123827
Total energy consumption per RMB million of tonnes of standard coal / RMB tonnes / RMB million of
87.23 97.71 114.85 Solid waste utilization per RMB million of revenue 79.24 90.19 108.34
revenue million of revenue revenue
Steam consumption tonnes of standard coal - - 1650105.73 Comprehensive utilization rate of solid waste % - - Above 98
Total fuel oil consumption tonnes - - 7014.81 Comprehensive utilization rate of steel slag % 100 100 100
Diesel consumption tonnes - - 7006.23 Dust and sludge recycling rate % 100 100 100118 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 119
Indicator Name Unit 2023 2024 2025 Indicator Name Unit 2023 2024 2025
Social Performance Supply chain safety
Employment Number of suppliers suppliers 4179 4264 4268
Total number of employees persons 23676 23419 23130 Localization rate of procurement % 24.86 23.08 23.34
Number of female employees persons 2811 2720 3195 Number of local suppliers suppliers 1039 984 996
Percentage of female employees % 11.87 11.61 13.81 Social contribution
Ethnic minority employees persons 481 477 479 Total volunteer service hours hours 27227 28337 30773
Percentage of ethnic minority employees % 2.03 2.04 2.07 Average volunteer service hours per volunteer hours 1.15 1.21 1.33
Number of employee departures persons 187 179 156 Funds invested in social contribution activities RMB million 15.69 16.40 24.62
Number of employees in difficulty receiving
persons 913 1094 950 Participants in social contribution activities person-times 12800 13650 14065
assistance
Total investment in rural revitalization RMB million 9.42 5.01 10.22
Number of employees in difficulty receiving
persons 0.0056 0.0076 0.0078
assistance per RMB million of revenue Scope and number of beneficiaries of rural
persons 6116 5716 9521
revitalization
Labor contract signing rate % 100 100 100
Governance Performance
Social insurance coverage rate % 100 100 100
Average paid leave days per employee days 10.14 10.24 10.42 Proportion of independent directors % 33.33 33.33 33.33
Employee training coverage rate % 100 100 100 Proportion of independent and external directors % 44.44 44.44 44.44
4
Total employee training hours hours 609286 819665 971460 Proportion of female directors % 11.11 11.11 11.11
Standard deviation of the ages of directors
Average training hours per employee hours 26 35 42 years 5.53 5.94 6.89 supervisors and senior executives
Percentage of employees receiving vocational and
% 100 100 100 Proportion of independent directors serving more
skills training % 0 0 0than six years
Health examination coverage rate % 100 100 100 Proportion of independent directors serving more % 0 0 0
than nine years
Number of employees with disabilities persons 335 327 304
Proportion of independent directors serving on the
%000
Percentage of employees with disabilities % 1.41 1.40 1.31 boards of more than three listed companies
Proportion of independent directors serving on the
Occupational health and safety % 0 0 0boards of more than six listed companies
Number of work-related fatalities persons 0 2 1 Average tenure of Board members years 3.02 3.62 3.57
Number of work-related fatalities per RMB billion
persons 0 0.00014 0.00008 Number of Board meetings meeting(s) 9 9 10
of revenue
Attendance rate of Board members % 100 100 100
Work safety investment RMB million 250.31 284.45 232.42
Number of directors attending fewer than 75% of
Work safety investment as a percentage of persons 0 0 0
% 0.15 0.18 0.19 meetings
operating revenue
Number of Audit Committee meetings meeting(s) 5 6 4
Number of major and above accidents case(s) 0 0 0
Proportion of independent directors on the Audit
Fatality rate from major and above accidents % 0 0 0 % 66.67 66.67 66.67Committee
Participants in work safety training person-times 271025 246585 252940 Number of Nomination and Remuneration meeting(s) 3 1 3
Committee meetings
Duration of Work Safety Training hours 203140 190396 197428 Proportion of independent directors on the
%66.6766.6766.67
Average Duration of Safety Training per Employee hours 8.58 8.13 8.54 Nomination and Remuneration Committee
Percentage of products withdrawn or recalled for Proportion of female senior executives % 33.33 33.33 33.33
%000
health and safety reasons Proportion of operational sites subject to
%100100100
Protection of customer rights and interests corruption risk assessment
Shareholding ratio of senior executives % 0.0017 0 0
Customer satisfaction % 93.93 95.43 94.39
Share pledge ratio % 0 0 0
4 This figure represents the average proportion for 2025. In February 2026 following the election of directors the proportion was adjusted to 55.56% (see
Chapter III "Standardizing Corporate Governance" of this report for details).120 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 121
Indicator Index Feedback
Dear Readers
Self-Regulatory Guidelines No. 17 for Companies
Contents GRI Standards Listed on Shenzhen Stock Exchange — Thank you for reading the Valin Steel 2025 Sustainability Report. To continuously improve our report preparation we
Sustainability Report (For Trial Implementation) sincerely welcome your opinions and suggestions. We would appreciate your assistance in completing the questions set
About this Report GRI2-3 Article 4 out in the feedback form below and returning your feedback to us through one of the following channels.Chairman's Message GRI2-22 - Company address: No. 222 Xiangfu West Road Changsha Hunan
About Valin Steel GRI2-1 GRI2-2 GRI2-6 GRI2-9 GRI202 - Postal code: 410004
Highlights 2025 - -
Responding to Climate Tel: 0731-89952811
Change GRI305 Articles 8 14 21 22 23 24 and 27Taking
Ecological Strengthening Email: valinsteel@163.com
Stewardship Environmental Protection GRI303 GRI305 GRI306 Article 20
as a Guiding Management
Principle and Advancing Energy
Advancing Conservation and GRI301 GRI302 GRI303 GRI305
the Mission Emissions Reduction GRI306
Articles 20 24 27 28 30 31 34 35 36 and 37
1. This report comprehensively and accurately reflects the Company's significant impacts on the economy society and
of Green
Metallurgy Green and Eco-Friendly
the environment.Operations GRI304 Articles 29 and 32
○Excellent???○Good???○Average???○Poor
Strengthening Quality
Management GRI416 Article 47
2. This report's response to and disclosure of issues of concern to stakeholders.
Ensuring Work Safety GRI403 Article 50
Putting
Strivers Optimizing Customer ○Excellent???○Good???○Average???○PoorService GRI416 GRI417 GRI418 Articles 47 and 48First and
Empowering Growing Together with GRI2-7 GRI2-30 GRI401 GRI402
3. The information indicators and data disclosed in this report are clear accurate and complete.
the Co- Employees GRI403 GRI404 GRI405 GRI406 Articles 49 and 50Creation of GRI407GRI408 GRI409
Social Value ○Excellent???○Gooda???○Average???○Poor
Working with Partners for
Mutual Success GRI204 GRI308 GRI414 Articles 44 and 45 4. The readability of this report including its logical structure content design language and layout design.Enhancing Public Well-
Being GRI203 GRI413 Articles 38 39 and 40 ○Excellent???○Good???○Average???○Poor
Upholding the Leadership
of Party Building - - 5. What aspects of this report are you most satisfied with
Building Standardizing Corporate
on Sound Governance GRI2-10~2-14 GRI2-18 GRI405 Article 12
Governance ________________________________________________________________________________________________
to Safeguard Preventing and Controlling GRI2-15 GRI2-27 GRI205
the Steady Compliance Risks GRI206 Articles 55 and 56 6. What other information do you think you are concerned about is not disclosed in this report
Development
of the Steel Safeguarding Shareholder
Rights and Interests - Article 53Business ________________________________________________________________________________________________
Deepening Digital and
Intelligent Innovation - Articles 41 and 42 7. What suggestions do you have for our future preparation of sustainability reports
ESG Management GRI2-16 GRI2-26 GRI2-29 GRI3-1~3-3 GRI205 Articles 5 11 12 13 14 15 16 18 51 and 53 ________________________________________________________________________________________________
Future Outlook GRI2-23 Article 14
Key Performance Table GRI201 GRI301 GRI302 Articles 6 and 19
Indicator Index - Article 57
Appendix
Feedback - -
Valin Steel Honors in
Previous Years GRI2-28 -
Scan to share your opinion122 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 123
Valin Steel Honors in Previous Years (2022–2024)
2022 High-strength wear-resistant steel plates and strips for construction machinery were awarded the title of Enterprise Standard "Leader" LY Steel
2022 Obtained ISO 9001:2015 quality management system certification LY Steel
Product Manufacturing
2022 Obtained the LRQA quality management system certificate LY Steel
2022 Structural steel for bridges was awarded the title of Enterprise Standard "Leader" Xiangtan Steel
2022 Awarded the title of China Outstanding Steel Enterprise Brand LY Steel
2022 Obtained the IATF quality management system certificate Xiangtan Steel
2022 Awarded the title of National Demonstration Enterprise for Product and Service Quality 2022 Obtained QMS-ENGUS-ENAC certification (EU) Xiangtan Steel Integrity LY Steel
2022 Obtained QMS-ENGUS-UKAS certification (UK) Xiangtan Steel 2022 National Quality-Leading Enterprise in the Steel Industry LY Steel
2022 Awarded the title of "Gold Medal Supplier" by GSI Xiangtan Steel 2022 National Product with Stable and Qualified Quality Inspection Results LY Steel
2022 Awarded the title of "Strategic Partner" by Beijing China Railway Construction Engineering Xiangtan Steel 2022 National Trustworthy Product in Quality Inspection LY SteelGroup
2022 Awarded the title of National Quality-Leading Brand in the Steel Industry LY Steel
2022 Awarded the title of "Strategic Supplier" by Zhanghua Machinery Xiangtan Steel
2022 National Product with Guaranteed Quality Reputation LY Steel
2022 Awarded the title of "Strategic Cooperation Unit" by Zhengzhou Yuguang Xiangtan Steel
2022 National Benchmark Enterprise for Quality Integrity LY Steel
2022 Awarded the title of "Gold Medal Supplier" by Sunward Intelligent Xiangtan Steel
2022 National Enterprise for Integrity in Quality Inspection LY Steel
2022 Awarded the title of "Gold Medal Supplier" by China State Shipbuilding Corporation LY Steel
2022 China Outstanding Steel Enterprise Brand HYST
2022 Awarded the title of "Best Strategic Partner" by Hong Kong Kimberly Group Limited LY Steel
2022 Obtained JIS Q 19001 and JIS 3444 certificates for structural tubes HYST
2022 Received the "Outstanding Contribution Award" from Zoomlion Engineering Crane Company LY Steel
2022 Obtained API Q1 (American Petroleum Institute) certificate HYST
2022 Received the "Outstanding Contribution Award" from SANY Hoisting LY Steel
Recognized by LGMI as one of the Top 10 High-Quality Brands of State-Owned Construction 2022 Received the Commendation Award of the 6th China Grand Awards for Industry HYST2022 Steel among the 2022 National Gold Medal Suppliers LY Steel
2022 Cold-rolled continuous hot-forming steel sheet and strip for automotive use was recognized VAMA
2022 Awarded the title of "Class A Excellent Supplier" by Dongfang Boiler Co. Ltd. Dongfang
as a 2022 Standard Leader by the State Administration for Market Regulation
Electric Corporation HYST
2022 The testing center obtained CNAS national laboratory accreditation Yangchun New Steel
2022 Received the honor of "High-Quality Cooperation Partner" from China Petroleum Technology & Development Corporation HYST 2023 Golden Cup High-Quality Product: Alloy steel for cold heading Xiangtan Steel
2022 Awarded the title of "Tier-1 Strategic Supplier" by China Huanqiu Contracting & Engineering Co. Ltd. HYST 2023 Golden Cup High-Quality Product: Quenched and tempered 07MnMoVR steel plate for pressure vessels Xiangtan Steel
2022 Awarded the title of "Tier-1 Strategic Supplier" by China Huanqiu Contracting & Engineering Co. Ltd. HYST 2023 Golden Cup High-Quality Product: Hot-rolled alloy tube billet for boilers and heat exchangers Xiangtan Steel
2022 Received a commemorative plaque of appreciation from Dongfeng Honda for localization 2023 Golden Cup High-Quality Product: Wide and heavy steel plate for oil and natural gas Xiangtan Steeland supply assurance under its import project VAMA
2022 Awarded the title of "Annual Strategic Partner" by Guangzhou Branch of Materials Industry & 2023
Golden Cup High-Quality Product: Ultra-high-strength steel for shipbuilding and offshore Xiangtan Steel
Trade Co. Ltd.of China Railway No. 4 Engineering Group Yangchun New Steel engineering structures
2022 Received the honor of "Annual Strategic Partner" from Sino-hydro Corporation Engineering
Golden Cup High-Quality Product: Hot-rolled wire rod for prestressed steel wire and steel
Bureau 15 Co Ltd. Yangchun New Steel
2023 strand Xiangtan Steel
Golden Cup High-Quality Product: High-strength wear-resistant steel plate for construction
2022 Obtained CNAS accreditation certificate for the physical and chemical testing laboratory Xiangtan Steel 2023 machinery LY Steel
2022 "Import Substitution Development and Serialization of Crane Boom Steel" was recognized in LY Steel 2023 Golden Cup High-Quality Product: Hot-rolled ribbed steel bars in straight lengths for the project list of the 7th China Grand Awards for Industry reinforced concrete LY Steel124 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 125
2023 Golden Cup High-Quality Product: Hot-rolled alloy structural steel strip LY Steel 2023 National Enterprise for Integrity in Quality Inspection in the Steel Industry Xiangtan Steel
2023 Golden Cup High-Quality Product: Hot-rolled steel strip for diamond saw blade substrates LY Steel 2023 Quality-Leading Enterprise LY Steel
2023 Golden Cup High-Quality Product: Continuously hot-dip galvanized dual-phase steel strip LY Steel 2023 National Product with Stable and Qualified Quality Inspection Results LY Steel
2023 Golden Cup High-Quality Product: Cold-rolled hot-forming steel sheet and strip LY Steel 2023 National Quality-Leading Brand in the Steel Industry Xiangtan Steel
2023 Golden Cup High-Quality Product: Seamless steel tubes for gas cylinders HYST 2023 National Product with Guaranteed Quality Reputation in Quality Inspection LY Steel
2023 Golden Cup High-Quality Product: Seamless casing pipes for oil and gas wells in the 2023 National Benchmark Enterprise for Quality Integrity LY Steelpetroleum and natural gas industry HYST
2023 Golden Cup High-Quality Product: Hot-rolled ribbed steel bars for reinforced concrete Yangchun New Steel 2023 Excellent Supplier of SANY Heavy Lifting HYST
2023 China Outstanding Steel Enterprise Brand Xiangtan Steel 2023 National High-Quality Seamless Tube Producer of Mysteel HYST
2023 China Outstanding Steel Enterprise Brand LY Steel 2023 Leading Brand of Engineering Pipes in China HYST
2023 China Outstanding Steel Enterprise Brand HYST 2023 Ford Global Q1 Quality System Award Plaque VAMA
2023 China Excellent Steel Enterprise Brand Yangchun New Steel 2023 Excellent Supplier Award of Ningbo Huaxiang VAMA
Most Innovative Award at SERES's 3rd Lightweighting Conference and Advanced Technology
2022-2023 Brand of Major Circulating Steel Mills in Hunan Province Xiangtan Steel 2023 Exhibition VAMA
2023 Annual Gold Medal Supplier of Sunward Intelligent Xiangtan Steel 2023 Excellent Supplier of China Railway Seventh Group Co. Ltd. Yangchun New Steel
2023 Annual Gold Medal Supplier of China State Shipbuilding Corporation Xiangtan Steel 2024 Golden Cup Premium Product: Cold-rolled hot-forming steel sheet and strip LY Steel
2023 Class A Supplier (Nantong COSCO Shipping Shipyard Engineering Co. Ltd.; Qidong COSCO 2024 Golden Cup Premium Product: Weather-resistant structural steel plate for bridges Xiangtan SteelShipping Offshore Engineering Co. Ltd.) Xiangtan Steel
2023 Key Supplier (China Railway Baoji Bridge Group Co. Ltd.) Xiangtan Steel 2024 Golden Cup High-Quality Product: Structural steel with guaranteed hardenability Xiangtan Steel
2023 High-Quality Producer of Wind Power Steel in China Xiangtan Steel 2024 Golden Cup High-Quality Product: Heat-treated steel plate for ultra-high-strength structures Xiangtan Steel
2023 Excellent Supplier of GSI Xiangtan Steel 2024 Golden Cup High-Quality Product: Hot-rolled wire rod for free-cutting steel Xiangtan Steel
2023 Excellent Supplier of COSCO SHIPPING Xiangtan Steel 2024 Golden Cup High-Quality Product: Hot-rolled alloy tube billet for high-pressure boilers Xiangtan Steel
2023 Excellent Supplier of the Pump Truck Business Unit of SANY Heavy Industry Xiangtan Steel 2024 Golden Cup High-Quality Product: Steel plate for building structures Xiangtan Steel
Golden Cup High-Quality Product: Hot-rolled wire rod for steel used in cold heading and cold
2023 Excellent Supplier of Sany Heavy Lifting Business Unit Xiangtan Steel 2024 extrusion Xiangtan Steel
2023 Strategic Partner of China Merchants Industry Group Xiangtan Steel 2024 Golden Cup High-Quality Product: Weather-resistant structural steel plate for bridges Xiangtan Steel
2023 Best Support Award of Zoomlion Xiangtan Steel 2024 The 8th Batch of National Manufacturing Single Champions Xiangtan Steel
2023 Commemorative Award for 15 Years of Cooperation in Quality Certification with LRQA Xiangtan Steel 2024 China Outstanding Steel Enterprise Brand Xiangtan Steel
2023 Outstanding Unit in Quality Standardization Work in the Steel Industry LY Steel 2024 National Quality-Leading Brand in the Steel Industry Xiangtan Steel
2023 Enterprise Standard "Leader" LY Steel 2024 Double First-Class Brand Management System for Large Steel Enterprises Xiangtan Steel
2023 National Benchmark Enterprise for Quality Integrity LY Steel 2024 National Enterprise for Integrity in Quality Inspection Xiangtan Steel
2023 National Product with Guaranteed Quality Reputation LY Steel126 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 127
2024 China Steel Industry Product Market Development Award Xiangtan Steel Innovation and R&D
2024 5th Outstanding Innovation Achievement in Modern Industrial Enterprises Xiangtan Steel 2022 First Prize of the Metallurgical Science and Technology Award Xiangtan Steel
2024 Pilot Enterprise for the Construction of Hunan Provincial Innovation Consortiums Xiangtan Steel 2022 First Prize of the Hunan Provincial Technological Invention Award of Jiangxi University of Science and Technology Xiangtan Steel
2024 Golden Cup Premium Products: LG1500 LY Steel 2022 First Prize of the Marine Science and Technology Award Xiangtan Steel
2024 Golden Cup High-Quality Product: High-manganese austenitic wear-resistant steel plate LY Steel 2022 Second Prize of the Hunan Provincial Science and Technology Progress Award Xiangtan Steel
2024 Golden Cup High-Quality Product: Heat-treated steel plate for construction machinery LY Steel 2022 National Enterprise Technology Center LY Steel
2024 Golden Cup High-Quality Product: Hot-rolled steel sheet and strip of quality carbon structural steel LY Steel 2022 First Prize of the Hunan Advanced Technology Transformation and Application Competition LY Steel
Golden Cup High-Quality Product: Continuously hot-dip galvanized high-strength interstitial- 2022 First Prize and Third Prize of the National Metallurgical Science and Technology Progress 2024 LY Steel Awards LY Steelfree steel strip
2024 Golden Cup High-Quality Product: Continuously hot-dip galvanized low-alloy steel strip LY Steel 2022 First Prize of the Science and Technology Award of the Chinese Society for Corrosion and Protection LY Steel
2024 Golden Cup High-Quality Product: Steel for low-temperature pressure vessels LY Steel 2022 First Prize of the Hunan Provincial Science and Technology Progress Award LY Steel
2024 "Three Innovations" Brand LY Steel 2022 Third Prize of the Mechanical Industry Science and Technology Progress Award HYST
2024 Most Influential Steel Brand in Wuhan LY Steel 2022 First Prize of the Guangdong Metallurgical Science and Technology Achievement Award Yangchun New Steel
2024 National Product with Stable and Qualified Quality Inspection Results LY Steel 2023 National Enterprise Technology Center Xiangtan Steel
2024 High-manganese steel obtained DNV Works Approval Certificate LY Steel 2023 Grand Prize First Prize and Third Prize of the Metallurgical Science and Technology Award Xiangtan Steel
2024 Golden Cup High-Quality Product: Seamless steel tubes for high-pressure boilers HYST 2023 First Prize Second Prize and Third Prize of the Science and Technology Award LY Steel
2024 Golden Cup High-Quality Product: Tubes for offshore engineering HYST 2023 First Prize of the Jiangxi Provincial Science and Technology Progress Award in Metallurgy Xiangtan Steel
2024 Golden Cup High-Quality Product: Seamless steel tubes for crane booms HYST 2023 First Prize of the Invention and Entrepreneurship Award of the China Association of Invention Xiangtan Steel
2024 Golden Cup High-Quality Product: Steel pipes for casing used in oil and gas wells in the petroleum and natural gas industry HYST 2023 Second Prize and Third Prize of the Hunan Patent Award LY Steel
2024 Golden Cup High-Quality Product: Seamless steel tubes for rotary drilling rig drill rods HYST 2023 First Prize of the Shanghai Technological Invention Award LY Steel
2024 Mysteel National High-Quality Seamless Tube HYST 2023 First Prize of the Science Award of the Chinese Society for Corrosion and Protection LY Steel
2024 Recognized as a Hunan Province Benchmark Enterprise for the "Three Products" Initiative in HYST 2023 Second Prize of the Science and Technology Award of the China Steel Construction Society HYSTRaw Materials
2024 Golden Cup High-Quality Product: Hot-rolled ribbed steel bars in straight lengths for
2023 Commendation Award of the 7th China Grand Awards for Industry LY Steel
reinforced concrete Yangchun New Steel
2023 Bronze Award of the 5th China Advanced Technology Transformation and Application LY Steel
2024 Golden Cup High-Quality Product: Hot-rolled plain steel bars for reinforced concrete Yangchun New Steel Competition
2023 First Prize of the Hunan Advanced Technology Transformation and Application Competition LY Steel
2024 Chinese Steel Enterprise with Strong Patent Innovation Potential Yangchun New Steel
2023 First Prize of the Science and Technology Award of Metallurgical Corporation of China Limited LY Steel
2024 Hunan Province Quality Benchmark in Manufacturing VAMA
2024 Third Prize of the Shaanxi Provincial Science and Technology Progress Award HYST
2024 Outstanding Enterprise in Quality Control Circle Activities in Hunan Province VAMA
2024 First Prize of the Metallurgical Science and Technology Award Xiangtan Steel
2024 Second Prize for Quality Improvement Achievements VAMA128 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 129
2024 First Prize of the Metallurgical Science and Technology Award LY Steel Green Production / Safety and Intelligent Manufacturing
2024 Second Prize of the Metallurgical Science and Technology Award Xiangtan Steel 2022 Awarded the title of "Benchmark Enterprise for Green Development in the Steel Industry" in China Metallurgical News's "Searching for the Most Beautiful Green Steel City" campaign LY Steel
2024 Second Prize and Third Prize of the Metallurgical Science and Technology Award HYST 2022 Hunan Province Green Factory LY Steel
2024 Second Prize of the Invention and Innovation Award of the China Association of Invention HYST 2022 Demonstration Unit of Hunan Province Green Manufacturing System – Green Factory HYST
2024 Second Prize of the Science and Technology Award of the Chinese Society for Corrosion and Protection LY Steel 2022 Awarded the title of "Hunan Province Benchmark Water-Saving Enterprise" HYST
Second Prize of the Science and Technology Progress Award of the China Steel Construction 2022 Rated by the Guangdong Provincial Department of Ecology and Environment as a Green Brand 2024 Society HYST "Environmental Integrity Enterprise" for five consecutive years
Yangchun New Steel
2024 Second Prize of the Mechanical Industry Science and Technology Progress Award LY Steel 2022 Rebar products obtained the "Certificate for Products Selected for Green Buildings" LY Steel
2024 First Prize of the Guangdong Metallurgical Science and Technology Achievement Award Yangchun New Steel 2022 Rebar products were included in the "Directory of Products Selected for Green Buildings" and obtained corresponding certification LY Steel
2024 First Prize of the Hunan Provincial Science and Technology Progress Award Xiangtan Steel、HYST 2022 Awarded the title of "National Demonstration Enterprise for Safety Culture Development" VAMA
2024 First Prize of the Hubei Provincial Science and Technology Progress Award LY Steel、HYST 2022 Hunan Province Benchmark Enterprise for Intelligent Manufacturing Xiangtan Steel
2024 Second Prize and Third Prize of the Hunan Provincial Science and Technology Progress Award Xiangtan Steel
2022 The "5G + AI Surface Quality Inspection for Bar Products" project was selected as a National Excellent Intelligent Manufacturing Scenario Case in 2022 Xiangtan Steel
2024 Second Prize of the Hubei Provincial Science and Technology Progress Award LY Steel
2022 The "Automatic Slab Transfer" case was selected as a Steel Industry Intelligent Manufacturing Solution in 2022 Xiangtan Steel
2024 Second Prize of the Hunan Provincial Science and Technology Progress Award HYST
2022 Outstanding Enterprise in Smart Steel City Development LY Steel
2024 National Enterprise Technology Center Xiangtan Steel
2023 National Green Factory for Steel Enterprises Xiangtan Steel
2024 National Metrology Data Construction and Application Base (Advanced Steel Materials) Xiangtan Steel
2023 National Smart Factory Xiangtan Steel
2024 Hunan Innovation Consortium for R&D and Application of Metallic Materials for Special and Complex Marine Environments Xiangtan Steel
2023 Hunan Province Intelligent Manufacturing Demonstration Factory for Medium and Heavy Plate Xiangtan Steel
2024 Hunan Manufacturing Innovation Center – High-Quality Silicon Steel Manufacturing Process LY Steel
2023 Benchmark Enterprise for Green Development in the Steel Industry by China Metallurgical News LY Steel
2024 Hunan Engineering Research Center for Thin-Gauge High-Frequency Silicon Steel LY Steel
2023 Hunan Province Demonstration Factory for "5G + Industrial Internet" LY Steel
2024 Hunan Innovation Consortium for High-Quality Grain-Oriented Silicon Steel LY Steel
The treatment and application of highly efficient reuse of circulating water in steel enterprises
2024 Hunan Industrial Design Center HYST 2023 won the First Prize of the Guangdong Metallurgical Science and Technology Achievement Yangchun New Steel
Award
2024 Hunan Province Pilot-Scale Testing Platform for Green High-Performance Silicon Steel LY Steel
2024 Highest Rating in the SASAC Special Assessment for "Sci-Tech Reform Enterprises" LY Steel
2024 The steel smart energy management and control platform was awarded the title of "2024 Hunan Province Digital New Infrastructure" LY Steel
2024 The cold-rolled lean digital production system won the 2024 Steel Industry Intelligent Manufacturing Solution Award from the China Iron and Steel Association LY Steel
2024 Included in the cultivation list for the industry's "Best Practice Energy Efficiency Benchmark Demonstration Plant" for carbon peaking and carbon neutrality LY Steel
2024 The full-process quality control center was awarded the title of "Zhifu Wanqi Hunan Province Benchmark Project for Digital Transformation" LY Steel130 Hunan Valin Steel Co. Ltd. 2025 Sustainability Report 131
2024 The equipment intelligent operation and maintenance system project was recognized as a 2024 Corporate Governance / Investor RelationsBenchmark Informationization Project for Provincially Supervised SOEs LY Steel
The Pangu Large Model won the 2024 International Telecommunication Union Global AI 2022 Ranked first on the 2022 Hunan A-share Listed Companies Scale Ranking Valin Steel2024 Innovation Excellence Award Xiangtan Steel
2022 Included among the top 10 on the 2022 Hunan A-share Listed Companies Innovation Capability Valin Steel
2024 The "Intelligent Monitoring System Based on Digital Twins and Video Fusion" was recognized as
Ranking
a 2024 Hunan Province Benchmark Project for Manufacturing Digital Transformation Xiangtan Steel
2022 Included among the top 10 on the 2022 Hunan A-share Listed Companies Social Responsibility Ranking Valin Steel
2024 One of the first Excellence-Level Intelligent Factories in China (Cloud + AI Intelligent Factory for the Full Process of Medium and Heavy Plate Manufacturing) Xiangtan Steel 2022 Top 100 Growth Listed Companies in China (16th edition) Valin Steel
2024 "Building a World-Class Smart Steel Plant for Steel Enterprises" won the First Prize for Xiangtan Steel 2022 Included in the 2022 A-share Listed Companies Cash Dividend Ranking – Generous Shareholder Modernized Management Innovation Achievements in National Enterprises Return List Valin Steel
2024 The "Intelligent Belt Monitoring System Based on Machine Vision" was recognized as one of the 2022 Received the honor of "Investor Relations Pioneer Award" Valin SteelTop Ten Typical Application Scenarios in Hunan Province's "Zhifu Wanqi" initiative in 2024 Xiangtan Steel
2024 "R&D and Application of a Digital Twin-Based Visualized Centralized Control Platform for
2022 Received the CAPCO Classic Case Award for Capital Market Risk Resolution Valin Steel
Rolling Production Lines" won First Prize from the China Association of Plant Engineering Xiangtan Steel
2023 Best Practice Award for ESG Value Creation Valin Steel
2024 The "5G + AI Drone-Based Integrated Air-and-Space Inspection System" was recognized as a Typical Application Scenario for AI-Empowered New Industrialization in Hunan Province in 2024 Xiangtan Steel 2023 Highest "5A" Rating in Board Secretary Performance Evaluation Valin Steel
2024 Outstanding Enterprise for Green Development in the Steel Industry Xiangtan Steel
2023 "Best Practice Award for Board Office" Valin Steel
2024 National Industrial Tourism Demonstration Base Xiangtan Steel
2023 Top 100 on the Paper's 2023 China Listed Companies Value List Valin Steel
2024 Included in the cultivation list for the industry's "Best Practice Energy Efficiency Benchmark Demonstration Plant" for carbon peaking and carbon neutrality Xiangtan Steel 2023 Included among the top 10 on the Hunan Listed Companies Scale Ranking Valin Steel
2024 Successfully achieved Class A environmental performance VAMA 2023 Included among the top 10 on the Hunan Listed Companies Innovation Capability Ranking Valin Steel
2024 Hunan Province Industrial Internet Platform HYST 2023 Included among the top 10 on the Hunan Listed Companies Social Responsibility Ranking Valin Steel
2024 Hunan Province Benchmark Factory for "5G + Industrial Internet" HYST 2023 Ranked No. 82 on the Fortune China 500 Listed Companies list Valin Steel
2024 Highest "5A" Rating in the 2024 Board Secretary Performance Evaluation Valin Steel
2024 15th Tianma Award for Investor Relations of Listed Companies Valin Steel
2024 Included among the top 10 Hunan listed companies by annual dividend yield Valin Steel
2024 Outstanding Board Office Award Valin Steel
2024 Included among the top 10 Hunan listed companies by annual revenue and profit Valin Steel
2024 "Hunan University Business School – Twenty Years of Excellence Creating Brilliance Together" Award Valin Steel
2024 Outstanding Case of Social Responsibility in the Steel Industry (2024) Valin Steel
2024 Included among the top 10 Hunan listed companies by annual innovation investment Valin Steel
2024 Included among the top 10 Hunan listed companies by tax contribution and employment contribution Valin Steel
2024 Tonghuashun Best Investor Relations Award Valin SteelHunan Valin Steel Co. Ltd.
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